Health Care Costs Payable

3 Months Ended

Mar. 31, 2022

Health Care and Other Insurance Liabilities [Abstract]

The following table shows the components of the change in health care costs payable during the three months ended March 31, 2022 and 2021:


	Three Months Ended March 31,
In millions	2022		2021
Health care costs payable, beginning of the period	$	8,808	$	7,936
Less: Reinsurance recoverables	8		10
Health care costs payable, beginning of the period, net	8,800		7,926

Add: Components of incurred health care costs
Current year	18,536		16,291
Prior years	(676)		(652)
Total incurred health care costs (1)	17,860		15,639
Less: Claims paid
Current year	10,225		9,538
Prior years	6,183		5,767
Total claims paid	16,408		15,305
Add: Premium deficiency reserve	13		7
Other (2)	(13)		—
Health care costs payable, end of the period, net	10,252		8,267
Add: Reinsurance recoverables	8		5
Health care costs payable, end of the period	$	10,260	$	8,272

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(1)Total incurred health care costs for the three months ended March 31, 2022 and 2021 in the table above exclude (i) $13 million and $7 million, respectively, for a premium deficiency reserve related to the Company’s Medicaid products, (ii) $19 million and $13 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets and (iii) $59 million and $45 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets.

(2)As a result of the planned divestiture of the Thailand business, the net assets associated with this business were accounted for as assets held for sale and the associated health care costs payable balance is included in accrued expenses on the unaudited condensed consolidated balance sheet at March 31, 2022.

The Company’s estimates of prior years’ health care costs payable decreased by $676 million and $652 million, respectively, in the three months ended March 31, 2022 and 2021, 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.

At March 31, 2022, the Company’s liabilities for the ultimate cost of (i) services rendered to the Company’s Insured members but not yet reported to the Company and (ii) claims which have been reported to the Company but not yet paid (collectively, “IBNR”) plus expected development on reported claims totaled approximately $7.9 billion. The majority of the Company’s liabilities for IBNR plus expected development on reported claims at March 31, 2022 related to the current year.