Medical Claims Liability

3 Months Ended

Mar. 31, 2026

The following table summarizes the change in medical claims liability for the three months ended March 31, 2026 ($ in millions):


	Medicaid		Medicare		Commercial		Other		Consolidated Total
Balance, January 1, 2026	$	10,375	$	4,401	$	5,683	$	85	$	20,544
Less: Reinsurance recoverable	16		—		60		—		76
Balance, January 1, 2026, net	10,359		4,401		5,623		85		20,468

Incurred related to:
Current year	22,608		9,013		7,490		386		39,497
Prior years	(653)		(241)		(292)		(8)		(1,194)
Total incurred	21,955		8,772		7,198		378		38,303
Paid related to:
Current year	14,092		6,397		4,521		358		25,368
Prior years	6,820		2,710		3,252		76		12,858
Total paid	20,912		9,107		7,773		434		38,226

Balance, March 31, 2026, net	11,402		4,066		5,048		29		20,545
Plus: Reinsurance recoverable	14				68				82
Balance, March 31, 2026	$	11,416	$	4,066	$	5,116	$	29	$	20,627

The following table summarizes the change in medical claims liability for the three months ended March 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 recoverable	18		—		47		—		65
Balance, January 1, 2025, net	10,281		3,358		4,416		188		18,243

Incurred related to:
Current year	21,419		7,553		7,972		514		37,458
Prior years	(576)		(176)		(365)		(16)		(1,133)
Total incurred	20,843		7,377		7,607		498		36,325
Paid related to:
Current year	12,996		5,243		4,731		359		23,329
Prior years	6,849		1,923		2,648		150		11,570
Total paid	19,845		7,166		7,379		509		34,899
Plus: Premium deficiency reserve	—		178		—		—		178
Balance, March 31, 2025, net	11,279		3,747		4,644		177		19,847
Plus: Reinsurance recoverable	18		—		46		—		64
Balance, March 31, 2025	$	11,297	$	3,747	$	4,690	$	177	$	19,911

Reinsurance recoverables related to medical claims are included in premium and trade receivables. Changes in estimates of incurred claims for prior years are primarily attributable to reserving under moderately adverse conditions. Additionally, as a result of development within "Incurred related to: Prior years," the Company recorded $21 million and $34 million as a reduction to premium revenue in the three months ended March 31, 2026 and 2025, respectively, for minimum medical loss ratio (MLR) and other return of premium programs.

Incurred but not reported (IBNR) plus expected development on reported claims as of March 31, 2026 was $13,510 million. 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.

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 2024, the Company recorded a premium deficiency reserve of $92 million related to the 2025 Medicare Advantage contract year, which was increased to $270 million in the first quarter of 2025 based on the progression of earnings during the year (with higher earnings at the beginning of the year and lower at the end of the year, given cost sharing progression), including anticipated impacts of the Inflation Reduction Act to the Part D benefit within the Company's Medicare Advantage business. As of March 2026, the Company did not record a premium deficiency reserve related to the 2026 Medicare Advantage contract year.

- Definition

The entire disclosure for the types of coverages and products sold, and the assets, obligations, recorded liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References + Details