Medical Claims and Benefits Payable

3 Months Ended

Mar. 31, 2021

Other Liabilities Disclosure [Abstract]

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


	March 31, 2021		December 31, 2020

	(In millions)
Fee-for-service claims incurred but not paid (“IBNP”)	$	2,008	$	1,647
Pharmacy payable	217		157
Capitation payable	93		70
Other	521		528
Magellan Complete Care acquisition opening balance	—		294
Total	$	2,839	$	2,696

“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 $222 million and $235 million as of March 31, 2021, and December 31, 2020, respectively.

The following table presents the components of the change in our medical claims and benefits payable for the periods indicated, with the prior period recast to conform to the current year presentation. 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.


	Three Months Ended March 31, 2021
	Medicaid		Medicare		Marketplace		Consolidated

	(In millions)
Medical claims and benefits payable, beginning balance	$	2,129	$	392	$	175	$	2,696
Components of medical care costs related to:
Current year	4,394		738		536		5,668
Prior years	(158)		(16)		(20)		(194)
Total medical care costs	4,236		722		516		5,474
Payments for medical care costs related to:
Current year	2,790		410		313		3,513
Prior years	1,364		304		113		1,781
Total paid	4,154		714		426		5,294
Change in acquired balances	8		(33)		—		(25)
Change in non-risk and other provider payables	(11)		(1)		—		(12)
Medical claims and benefits payable, ending balance	$	2,208	$	366	$	265	$	2,839


	Three Months Ended March 31, 2020
	Medicaid		Medicare		Marketplace		Consolidated

	(In millions)
Medical claims and benefits payable, beginning balance	$	1,465	$	267	$	122	$	1,854
Components of medical care costs related to:
Current year	2,991		543		283		3,817
Prior years	(70)		(26)		(5)		(101)
Total medical care costs	2,921		517		278		3,716
Payments for medical care costs related to:
Current year	1,786		324		164		2,274
Prior years	1,014		205		86		1,305
Total paid	2,800		529		250		3,579
Change in non-risk and other provider payables	(10)		—		—		(10)
Medical claims and benefits payable, ending balance	$	1,576	$	255	$	150	$	1,981

Our estimates of medical claims and benefits payable recorded at December 31, 2020, and 2019 developed favorably by approximately $194 million and $101 million as of March 31, 2021, and 2020, respectively.

The favorable prior period development recognized in the first quarter of 2021 was primarily due to lower than expected utilization of medical services by our Medicaid members and improved operating performance. Consequently, the ultimate costs recognized in 2021, as claims payments were processed, were lower than our original estimates in 2020.