Medical Claims and Benefits Payable

6 Months Ended

Jun. 30, 2020

Other Liabilities Disclosure [Abstract]

The following table provides the details of our medical claims and benefits payable as of the dates indicated.


	June 30, 2020		December 31, 2019

	(In millions)
Fee-for-service claims incurred but not paid (“IBNP”)	$	1,432	$	1,406
Pharmacy payable	132		126
Capitation payable	74		55
Other	322		267
Total	$	1,960	$	1,854

“Other” medical claims and benefits payable includes amounts payable to certain providers for which we act as an intermediary on behalf of various government agencies without assuming financial risk. Such receipts and payments do not impact our consolidated statements of income. Non-risk provider payables amounted to $86 million and $132 million as of June 30, 2020, and December 31, 2019, respectively.

The following table presents the components of the change in our medical claims and benefits payable for the periods indicated. The amounts presented for “Components of medical care costs related to: Prior years” represent the amounts by which our original estimate of medical claims and benefits payable at the beginning of the year were more than the actual amount of the liability, based on information (principally the payment of claims) developed since that liability was first reported.


	Six Months Ended June 30,
	2020		2019

	(In millions)
Medical claims and benefits payable, beginning balance	$	1,854	$	1,961
Components of medical care costs related to:
Current year	7,372		7,069
Prior years	(58)		(232)
Total medical care costs	7,314		6,837
Change in non-risk and other provider payables	(34)		4
Payments for medical care costs related to:
Current year	5,688		5,585
Prior years	1,486		1,450
Total paid	7,174		7,035
Medical claims and benefits payable, ending balance	$	1,960	$	1,767

Our estimates of medical claims and benefits payable recorded at December 31, 2019, and 2018 developed favorably by approximately $58 million and $232 million as of June 30, 2020, and 2019, respectively.

In the six months ended June 30, 2020, medical care costs related to the prior year reflect the release of additional reserves for moderately adverse conditions included in our prior year estimates, partially offset by higher than expected costs for settling certain claims with certain providers. The differences between our original estimates for such claims in 2019, and the ultimate costs in 2020, were not discernible until additional information was provided to us in 2020 and the effect became clearer over time as claim payments were processed. The release of additional reserves for moderately adverse conditions included in our prior year estimates was substantially offset by the replenishment of the reserve recorded in medical care costs related to the current year.