12.

Medical payables

The health care costs shown in the following table include estimates for the cost of professional medical services provided by non-employed physicians and other providers, as well as inpatient and other ancillary costs for all markets, other than California, where state regulation allows for the assumption of global risk. Health care costs payable are included in medical payables.

The following table shows the components of changes in the health care costs payable for the year ended December 31, 2013:


	Year ended December 31, 2013
Health care costs payable, beginning of the year	$	119,512

Acquisitions and other adjustments		26,575

Add: Components of incurred health care costs
Current year		1,329,887
Prior years		(16,587	)

Total incurred health care costs		1,313,300

Less: Claims paid
Current year		1,169,455
Prior years		117,622

Total claims paid		1,287,077

Health care costs payable, end of the year	$	172,310

Our prior year estimates of health care costs payable decreased by $16,587 resulting from certain medical claims being settled for amounts less than originally estimated. When significant (decreases) increases in prior-year health care cost estimates occur that we believe significantly impact our current year operating results, we disclose that amount as (favorable) unfavorable development of prior-year’s health care cost estimates. Actual claim payments for prior year services have not been materially different from our year-end estimates.