Medical Claims and Benefits Payable

9 Months Ended

Sep. 30, 2020

Other Liabilities Disclosure [Abstract]

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


	September 30, 2020		December 31, 2019

	(In millions)
Fee-for-service claims incurred but not paid (“IBNP”)	$	1,615	$	1,406
Pharmacy payable	148		126
Capitation payable	73		55
Other	453		267
Total	$	2,289	$	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 $168 million and $132 million as of September 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 estimates of medical claims and benefits payable at the beginning of the year were more than the actual liabilities, based on information (principally the payment of claims) developed since those liabilities were first reported.


	Nine Months Ended September 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	11,478		10,613
Prior years	(66)		(253)
Total medical care costs	11,412		10,360
Change in non-risk and other provider payables	50		131
Payments for medical care costs related to:
Current year	9,500		8,996
Prior years	1,527		1,481
Total paid	11,027		10,477
Medical claims and benefits payable, ending balance	$	2,289	$	1,975

Our estimates of medical claims and benefits payable recorded at December 31, 2019, and 2018 developed favorably by approximately $66 million and $253 million as of September 30, 2020, and 2019, respectively.

In the nine months ended September 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.