Medical costs payable for the Global Health Care segment reflects estimates of the ultimate cost of claims that have been incurred but not yet reported, those that have been reported but not yet paid (reported claims in process), and other medical care expenses and services payable that are primarily comprised of accruals for incentives and other amounts payable to health care professionals and facilities, as follows:

	June 30,		December 31,
(In millions)	2015		2014
Incurred but not yet reported	$	1,862	$	1,777
Reported claims in process		431		288
Physician incentives and other medical care expenses and services payable		139		115
Medical costs payable	$	2,432	$	2,180

	For the period ended
	June 30,		December 31,
(In millions)	2015		2014
Balance at January 1,	$	2,180	$	2,050
Less: Reinsurance and other amounts recoverable		252		194
Balance at January 1, net		1,928		1,856
Incurred costs related to:
Current year		9,363		16,853
Prior years		(182)		(159)
Total incurred		9,181		16,694
Paid costs related to:
Current year		7,394		14,966
Prior years		1,513		1,656
Total paid		8,907		16,622
Ending Balance, net		2,202		1,928
Add: Reinsurance and other amounts recoverable		230		252
Ending Balance	$	2,432	$	2,180

Reinsurance and other amounts recoverable includes amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims for minimum premium products and certain administrative services only business where the right of offset does not exist. See Note 5 for additional information on reinsurance. For the six months ended June 30, 2015, actual experience differed from the Company's key assumptions resulting in favorable incurred costs related to prior years' medical costs payable of $182 million, or 1.1% of the current year incurred costs as reported for the year ended December 31, 2014. Actual completion factors accounted for $49 million, or 0.3% of the favorability, actual medical cost trend resulted in $100 million, or 0.6%, and the remaining $33 million, or 0.2%, was primarily related to a change in 2014 reinsurance reimbursements under Health Care Reform.

For the year ended December 31, 2014, actual experience differed from the Company's key assumptions, resulting in favorable incurred costs related to prior years' medical costs payable of $159 million, or 1.0% of the current year incurred costs as reported for the year ended December 31, 2013. Actual completion factors accounted for $61 million, or 0.4% of favorability, while actual medical cost trend resulted in the remaining $98 million, or 0.6%.

The impact of prior year development on shareholders' net income was $44 million for the six months ended June 30, 2015 compared with $46 million for the six months ended June 30, 2014. The favorable effect of prior year development for both years primarily reflects low utilization of medical services. The change in the amount of the incurred costs related to prior years in the medical costs payable liability does not directly correspond to an increase or decrease in the Company's shareholders' net income recognized for the following reasons:

First, the Company consistently recognizes the actuarial best estimate of the ultimate liability within a level of confidence, as required by actuarial standards of practice that require the liabilities be adequate under moderately adverse conditions. As the Company establishes the liability for each incurral year, the Company ensures that its assumptions appropriately consider moderately adverse conditions. When a portion of the development relates to a release of the prior year's provision for moderately adverse conditions, the Company does not consider that amount as impacting shareholders' net income to the extent that it is offset by an increase determined appropriate to address moderately adverse conditions for the current year incurred claims.

Second, as a result of the medical loss ratio (“MLR”) and risk mitigation provisions of Health Care Reform, changes in medical cost estimates due to prior year development may be offset by a change in accruals related to Health Care Reform.

Third, changes in reserves for the Company's retrospectively experience-rated business for accounts in surplus are generally offset by a change in the payment due to the policyholder (see page 3 of the Company's 2014 Form 10-K).

The determination of liabilities for the Global Health Care medical costs payable requires the Company to make critical accounting estimates. See Note 2(N) to the Consolidated Financial Statements in the Company's 2014 Form 10-K.