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Medical Claims Liability | 12 Months Ended
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Dec. 31, 2025
Insurance [Abstract] |
Medical Claims Liability | Medical Claims Liability The following table summarizes the change in medical claims liability for the year ended December 31, 2025 ($ in millions):
| Medicaid |  | Medicare |  | Commercial |  | Other |  | Consolidated Total
Balance, January 1, 2025 | $ | 10,299 |  |  | $ | 3,358 |  |  | $ | 4,463 |  |  | $ | 188 |  |  | $ | 18,308 |
Less: Reinsurance recoverables | 18 |  |  | — |  |  | 47 |  |  | — |  |  | 65 |
Balance, January 1, 2025, net | 10,281 |  |  | 3,358 |  |  | 4,416 |  |  | 188 |  |  | 18,243 |
Incurred related to: |  |  |  |  |  |  |  |  |
Current year | 85,697 |  |  | 34,869 |  |  | 37,397 |  |  | 2,146 |  |  | 160,109 |
Prior years | (1,247) |  |  | (550) |  |  | (495) |  |  | (23) |  |  | (2,315) |
Total incurred | 84,450 |  |  | 34,319 |  |  | 36,902 |  |  | 2,123 |  |  | 157,794 |
Paid related to: |  |  |  |  |  |  |  |  |
Current year | 75,872 |  |  | 30,651 |  |  | 32,213 |  |  | 1,955 |  |  | 140,691 |
Prior years | 8,500 |  |  | 2,533 |  |  | 3,482 |  |  | 162 |  |  | 14,677 |
Total paid | 84,372 |  |  | 33,184 |  |  | 35,695 |  |  | 2,117 |  |  | 155,368 |
Plus: Premium deficiency reserve | — |  |  | (92) |  |  | — |  |  | — |  |  | (92) |
Plus: Divestitures | — |  |  | — |  |  | — |  |  | (109) |  |  | (109) |
Balance, December 31, 2025, net | 10,359 |  |  | 4,401 |  |  | 5,623 |  |  | 85 |  |  | 20,468 |
Plus: Reinsurance recoverables | 16 |  |  | — |  |  | 60 |  |  | — |  |  | 76 |
Balance, December 31, 2025 | $ | 10,375 |  |  | $ | 4,401 |  |  | $ | 5,683 |  |  | $ | 85 |  |  | $ | 20,544 |
The following table summarizes the change in medical claims liability for the year ended December 31, 2024 ($ in millions):
| Medicaid |  | Medicare |  | Commercial |  | Other |  | Consolidated Total
Balance, January 1, 2024 | $ | 10,814 |  |  | $ | 3,612 |  |  | $ | 3,460 |  |  | $ | 114 |  |  | $ | 18,000 |
Less: Reinsurance recoverables | 5 |  |  | — |  |  | 44 |  |  | — |  |  | 49 |
Balance, January 1, 2024, net | 10,809 |  |  | 3,612 |  |  | 3,416 |  |  | 114 |  |  | 17,951 |
Incurred related to: |  |  |  |  |  |  |  |  |
Current year | 78,886 |  |  | 21,170 |  |  | 26,548 |  |  | 1,708 |  |  | 128,312 |
Prior years | (1,370) |  |  | (575) |  |  | (509) |  |  | 7 |  |  | (2,447) |
Total incurred | 77,516 |  |  | 20,595 |  |  | 26,039 |  |  | 1,715 |  |  | 125,865 |
Paid related to: |  |  |  |  |  |  |  |  |
Current year | 69,351 |  |  | 18,036 |  |  | 22,547 |  |  | 1,522 |  |  | 111,456 |
Prior years | 8,693 |  |  | 2,655 |  |  | 2,492 |  |  | 119 |  |  | 13,959 |
Total paid | 78,044 |  |  | 20,691 |  |  | 25,039 |  |  | 1,641 |  |  | 125,415 |
Plus: Premium deficiency reserve | — |  |  | (158) |  |  | — |  |  | — |  |  | (158) |
Balance, December 31, 2024, net | 10,281 |  |  | 3,358 |  |  | 4,416 |  |  | 188 |  |  | 18,243 |
Plus: Reinsurance recoverables | 18 |  |  | — |  |  | 47 |  |  | — |  |  | 65 |
Balance, December 31, 2024 | $ | 10,299 |  |  | $ | 3,358 |  |  | $ | 4,463 |  |  | $ | 188 |  |  | $ | 18,308 |
The following table summarizes the change in medical claims liability for the year ended December 31, 2023 ($ in millions):
| Medicaid |  | Medicare |  | Commercial |  | Other |  | Consolidated Total
Balance, January 1, 2023 | $ | 11,253 |  |  | $ | 3,431 |  |  | $ | 1,921 |  |  | $ | 140 |  |  | $ | 16,745 |
Less: Reinsurance recoverables | 7 |  |  | — |  |  | 19 |  |  | — |  |  | 26 |
Balance, January 1, 2023, net | 11,246 |  |  | 3,431 |  |  | 1,902 |  |  | 140 |  |  | 16,719 |
Incurred related to: |  |  |  |  |  |  |  |  |
Current year | 79,747 |  |  | 19,487 |  |  | 19,966 |  |  | 1,480 |  |  | 120,680 |
Prior years | (1,537) |  |  | (343) |  |  | (150) |  |  | (6) |  |  | (2,036) |
Total incurred | 78,210 |  |  | 19,144 |  |  | 19,816 |  |  | 1,474 |  |  | 118,644 |
Paid related to: |  |  |  |  |  |  |  |  |
Current year | 69,904 |  |  | 16,631 |  |  | 16,823 |  |  | 1,367 |  |  | 104,725 |
Prior years | 8,743 |  |  | 2,582 |  |  | 1,479 |  |  | 133 |  |  | 12,937 |
Total paid | 78,647 |  |  | 19,213 |  |  | 18,302 |  |  | 1,500 |  |  | 117,662 |
Plus: Premium deficiency reserve | — |  |  | 250 |  |  | — |  |  | — |  |  | 250 |
Balance, December 31, 2023, net | 10,809 |  |  | 3,612 |  |  | 3,416 |  |  | 114 |  |  | 17,951 |
Plus: Reinsurance recoverables | 5 |  |  | — |  |  | 44 |  |  | — |  |  | 49 |
Balance, December 31, 2023 | $ | 10,814 |  |  | $ | 3,612 |  |  | $ | 3,460 |  |  | $ | 114 |  |  | $ | 18,000 |
Reinsurance recoverables related to medical claims are included in premium and trade receivables. Changes in estimates of incurred claims for prior years were primarily attributable to reserving under moderately adverse conditions, including residual pandemic impacts. Additionally, as a result of minimum MLR and other return of premium programs, the Company recorded approximately $93 million, $243 million and $382 million of the "Incurred related to: Prior years" as a reduction to premium revenues in 2025, 2024 and 2023, respectively. Further, claims processing and coordination of benefits initiatives yielded claim payment recoveries related to dates of service from prior years. Changes in medical utilization, claims submission patterns, and cost trends and the effect of population health management initiatives may also contribute to changes in medical claim liability estimates. While the Company has evidence that population health management initiatives are effective on a case by case basis, population health management initiatives primarily focus on events and behaviors prior to the incurrence of the medical event and generation of a claim. Accordingly, any change in behavior, leveling of care or coordination of treatment occurs prior to claim generation and as a result, the costs prior to the population health management initiative are not known by the Company. Additionally, certain population health management initiatives are focused on member and provider education with the intent of influencing behavior to appropriately align the medical services provided with the member's acuity. In these cases, determining whether the population health management initiative changed the behavior cannot be determined. Because of the complexity of its business, the number of states in which it operates and the volume of claims that it processes, the Company is unable to practically quantify the impact of these initiatives on its changes in estimates of IBNR. The Company reviews actual and anticipated experience compared to the assumptions used to establish medical costs. The Company establishes premium deficiency reserves if actual and anticipated experience indicates that existing policy liabilities together with the present value of future gross premiums will not be sufficient to cover the present value of future benefits, settlement and maintenance costs. For purposes of determining premium deficiencies, contracts are grouped in a manner consistent with the method of acquiring, servicing and measuring the profitability of such contracts and expected investment income is excluded. In December 2023, the Company recorded a premium deficiency reserve of $250 million related to the 2024 Medicare Advantage contract year. In December 2024, the Company recorded a premium deficiency reserve of $92 million related to the 2025 Medicare Advantage contract year. As of December 2025, the Company did not record a premium deficiency reserve related to the 2026 Medicare Advantage contract year. Information about incurred and paid claims development as of December 31, 2025 is included in the table below. The claims development information for all periods preceding the most recent reporting period is considered required supplementary information. Consolidated incurred and paid claims development as of December 31, 2025 is as follows ($ in millions):
Cumulative Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Claim Year |  | 2023 (unaudited) |  | 2024 (unaudited) |  | 2025
2023 |  | $ | 120,680 |  |  | $ | 118,709 |  |  | $ | 118,324 |
2024 |  |  |  | 128,312 |  |  | 126,382 |
2025 |  |  |  |  |  | 160,109 |
|  | Total incurred claims |  | $ | 404,815 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Claim Year |  | 2023 (unaudited) |  | 2024 (unaudited) |  | 2025
2023 |  | $ | 104,725 |  |  | $ | 117,635 |  |  | $ | 118,114 |
2024 |  |  |  | 111,456 |  |  | 125,631 |
2025 |  |  |  |  |  | 140,691 |
|  | Total payment of incurred claims |  | 384,436 |
|  | All outstanding liabilities prior to 2023, net of reinsurance |  | 290 |
|  | Magellan Health medical claims liabilities held for sale |  | (109) |
|  | Medical claims liability, net of reinsurance |  | $ | 20,560 |
Incurred and paid claims development for the Medicaid segment as of December 31, 2025 is as follows ($ in millions):
Cumulative Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Claim Year |  | 2023 (unaudited) |  | 2024 (unaudited) |  | 2025
2023 |  | $ | 79,747 |  |  | $ | 78,517 |  |  | $ | 78,282 |
2024 |  |  |  | 78,885 |  |  | 77,872 |
2025 |  |  |  |  |  | 85,697 |
|  | Total incurred claims |  | $ | 241,851 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Claim Year |  | 2023 (unaudited) |  | 2024 (unaudited) |  | 2025
2023 |  | $ | 69,904 |  |  | $ | 77,952 |  |  | $ | 78,194 |
2024 |  |  |  | 69,351 |  |  | 77,527 |
2025 |  |  |  |  |  | 75,872 |
|  | Total payment of incurred claims |  | 231,593 |
|  | All outstanding liabilities prior to 2023, net of reinsurance |  | 101 |
|  | Medical claims liability, net of reinsurance |  | $ | 10,359 |
Incurred and paid claims development for the Medicare segment as of December 31, 2025 is as follows ($ in millions):
Cumulative Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Claim Year |  | 2023 (unaudited) |  | 2024 (unaudited) |  | 2025
2023 |  | $ | 19,487 |  |  | $ | 19,008 |  |  | $ | 18,830 |
2024 |  |  |  | 21,171 |  |  | 20,798 |
2025 |  |  |  |  |  | 34,869 |
|  | Total incurred claims |  | $ | 74,497 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Claim Year |  | 2023 (unaudited) |  | 2024 (unaudited) |  | 2025
2023 |  | $ | 16,631 |  |  | $ | 18,778 |  |  | $ | 18,783 |
2024 |  |  |  | 18,036 |  |  | 20,674 |
2025 |  |  |  |  |  | 30,651 |
|  | Total payment of incurred claims |  | 70,108 |
|  | All outstanding liabilities prior to 2023, net of reinsurance |  | 104 |
|  | Medical claims liability, net of reinsurance |  | $ | 4,493 |
Incurred and paid claims development for the Commercial segment as of December 31, 2025 is as follows ($ in millions):
Cumulative Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Claim Year |  | 2023 (unaudited) |  | 2024 (unaudited) |  | 2025
2023 |  | $ | 19,966 |  |  | $ | 19,698 |  |  | $ | 19,725 |
2024 |  |  |  | 26,548 |  |  | 26,027 |
2025 |  |  |  |  |  | 37,397 |
|  | Total incurred claims |  | $ | 83,149 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Claim Year |  | 2023 (unaudited) |  | 2024 (unaudited) |  | 2025
2023 |  | $ | 16,823 |  |  | $ | 19,420 |  |  | $ | 19,650 |
2024 |  |  |  | 22,547 |  |  | 25,748 |
2025 |  |  |  |  |  | 32,213 |
|  | Total payment of incurred claims |  | 77,611 |
|  | All outstanding liabilities prior to 2023, net of reinsurance |  | 85 |
|  | Medical claims liability, net of reinsurance |  | $ | 5,623 |
Incurred and paid claims development for the Other segment as of December 31, 2025 is as follows ($ in millions):
Cumulative Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Claim Year |  | 2023 (unaudited) |  | 2024 (unaudited) |  | 2025
2023 |  | $ | 1,480 |  |  | $ | 1,486 |  |  | $ | 1,487 |
2024 |  |  |  | 1,708 |  |  | 1,685 |
2025 |  |  |  |  |  | 2,146 |
|  | Total incurred claims |  | $ | 5,318 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Claim Year |  | 2023 (unaudited) |  | 2024 (unaudited) |  | 2025
2023 |  | $ | 1,367 |  |  | $ | 1,485 |  |  | $ | 1,487 |
2024 |  |  |  | 1,522 |  |  | 1,682 |
2025 |  |  |  |  |  | 1,955 |
|  | Total payment of incurred claims |  | 5,124 |
|  | All outstanding liabilities prior to 2023, net of reinsurance |  | — |
|  | Magellan Health medical claims liabilities held for sale |  | (109) |
|  | Medical claims liability, net of reinsurance |  | $ | 85 |
Incurred claims and allocated claim adjustment expenses, net of reinsurance, total IBNR plus expected development on reported claims and cumulative claims data as of December 31, 2025 are included in the following table. For claims frequency information summarized below, a claim is defined as the financial settlement of a single medical event in which remuneration was paid to the servicing provider. Total IBNR plus expected development on reported claims represents estimates for claims incurred but not reported, development on reported claims and estimates for the costs necessary to process unpaid claims at the end of each period. The Company estimates its liability using actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice. These actuarial methods consider factors such as historical data for payment patterns, cost trends, product mix, seasonality, utilization of healthcare services and other relevant factors. Consolidated information is summarized as follows (in millions):
|  | December 31, 2025
Claim Year |  | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance |  | Total IBNR Plus Expected Development on Reported Claims |  | Cumulative Paid Claims
2023 |  | $ | 118,324 |  |  | $ | 4 |  |  | 624.1 |
2024 |  | 126,382 |  |  | 347 |  |  | 665.0 |
2025 |  | 160,109 |  |  | 13,125 |  |  | 709.9 |
Information for the Medicaid segment is summarized as follows (in millions):
|  | December 31, 2025
Claim Year |  | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance |  | Total IBNR Plus Expected Development on Reported Claims |  | Cumulative Paid Claims
2023 |  | $ | 78,282 |  |  | $ | 4 |  |  | 346.0 |
2024 |  | 77,872 |  |  | 155 |  |  | 317.9 |
2025 |  | 85,697 |  |  | 7,244 |  |  | 308.1 |
Information for the Medicare segment is summarized as follows (in millions):
|  | December 31, 2025
Claim Year |  | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance |  | Total IBNR Plus Expected Development on Reported Claims |  | Cumulative Paid Claims
2023 |  | $ | 18,830 |  |  | $ | — |  |  | 200.7 |
2024 |  | 20,798 |  |  | 82 |  |  | 255.1 |
2025 |  | 34,869 |  |  | 1,567 |  |  | 282.8 |
Information for the Commercial segment is summarized as follows (in millions):
|  | December 31, 2025
Claim Year |  | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance |  | Total IBNR Plus Expected Development on Reported Claims |  | Cumulative Paid Claims
2023 |  | $ | 19,725 |  |  | $ | — |  |  | 72.9 |
2024 |  | 26,027 |  |  | 107 |  |  | 86.4 |
2025 |  | 37,397 |  |  | 4,242 |  |  | 112.5 |
Information for the Other segment is summarized as follows (in millions):
|  | December 31, 2025
Claim Year |  | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance |  | Total IBNR Plus Expected Development on Reported Claims |  | Cumulative Paid Claims
2023 |  | $ | 1,487 |  |  | $ | — |  |  | 4.5 |
2024 |  | 1,685 |  |  | 3 |  |  | 5.6 |
2025 |  | 2,146 |  |  | 72 |  |  | 6.5 |

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