Health Care Costs Payable

12 Months Ended

Dec. 31, 2022

Health Care and Other Insurance Liabilities [Abstract]

The following is information about incurred and cumulative paid health care claims development as of December 31, 2022, net of reinsurance, and the total IBNR liabilities plus expected development on reported claims included within the net incurred claims amounts. See Note 1 ‘‘Significant Accounting Policies’’ for information on how the Company estimates IBNR reserves and health care costs payable as well as changes to those methodologies, if any. The Company’s estimate of IBNR liabilities is primarily based on trend and completion factors. Claim frequency is not used in the calculation of the Company’s liability. In addition, it is impracticable to disclose claim frequency information for health care claims due to the Company’s inability to gather consistent claim frequency information across its multiple claims processing systems. Any claim frequency count disclosure would not be comparable across the Company’s different claim processing systems and would not be consistent from period to period based on the volume of claims processed through each system. As a result, health care claim count frequency is not included in the disclosures below.

The information about incurred and paid health care claims development for the year ended December 31, 2021 is presented as required unaudited supplemental information.


In millions	Incurred Health Care Claims, Net of Reinsurance For the Years Ended December 31,
Date of Service	2021		2022
	(Unaudited)
2021	$	62,830	$	62,259
2022			69,185
	Total		$	131,444

In millions	Cumulative Paid Health Care Claims, Net of Reinsurance For the Years Ended December 31,
Date of Service	2021		2022
	(Unaudited)
2021	$	54,600	$	62,144
2022			59,570
	Total		$	121,714
All outstanding liabilities for health care costs payable prior to 2021, net of reinsurance			196
Total outstanding liabilities for health care costs payable, net of reinsurance			$	9,926

At December 31, 2022, the Company’s liabilities for IBNR plus expected development on reported claims totaled approximately $7.8 billion. Substantially all of the Company’s liabilities for IBNR plus expected development on reported claims at December 31, 2022 related to the current calendar year.

The reconciliation of the December 31, 2022 health care net incurred and paid claims development tables to the health care costs payable liability on the consolidated balance sheet were as follows:


In millions	December 31, 2022
Short-duration health care costs payable, net of reinsurance	$	9,926
Reinsurance recoverables	5

Insurance lines other than short duration	475
Total health care costs payable	$	10,406

The following table shows the components of the change in health care costs payable during the years ended December 31, 2022, 2021 and 2020:


In millions	2022		2021		2020
Health care costs payable, beginning of period	$	8,808	$	7,936	$	6,879
Less: Reinsurance recoverables	8		10		5
Health care costs payable, beginning of period, net	8,800		7,926		6,874
Acquisitions, net	—		—		414

Add: Components of incurred health care costs
Current year	71,541		64,761		55,835
Prior years	(654)		(788)		(429)
Total incurred health care costs (1)	70,887		63,973		55,406
Less: Claims paid
Current year	61,640		56,323		48,770
Prior years	7,646		6,792		6,009
Total claims paid	69,286		63,115		54,779
Add: Premium deficiency reserve	—		16		11
Health care costs payable, end of period, net	10,401		8,800		7,926
Add: Reinsurance recoverables	5		8		10
Health care costs payable, end of period	$	10,406	$	8,808	$	7,936

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(1)Total incurred health care costs for the years ended December 31, 2022, 2021 and 2020 in the table above exclude $75 million, $59 million and $41 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the consolidated balance sheets and $319 million, $212 million and $221 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the consolidated balance sheets. The incurred health care costs for the years ended December 31, 2021 and 2020 also exclude $16 million and $11 million, respectively, for premium deficiency reserves related to the Company’s Medicaid products.

The Company’s estimates of prior years’ health care costs payable decreased by $654 million, $788 million and $429 million in 2022, 2021 and 2020, respectively, because claims were settled for amounts less than originally estimated (i.e., the amount of claims incurred was lower than originally estimated), primarily due to lower health care cost trends as well as the actual claim submission time being faster than originally assumed (i.e., the Company’s completion factors were higher than originally assumed) in estimating health care costs payable at the end of the prior year. This development does not directly correspond to an increase in the Company’s operating results as these reductions were offset by estimated current period health care costs when the Company established the estimate of the current year health care costs payable.