6.	Health care costs payable

The following table includes 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. The Company does not include inpatient and other ancillary costs for contracts held by its California licensed health plan and for contracts held by its California medical group entities; only professional medical services are included as state regulation does not allow those medical group entities to assume risk for inpatient services. Health care costs payable are included in medical payables in the condensed consolidated balance sheet.

The following table shows the components of changes in health care costs payable for the three months ended March 31, 2016:

	Three months ended
	March 31, 2016
Health care costs payable, beginning of the period	$	212,641
Add: Components of incurred health care costs
Current year		409,170
Prior years		5,354
Total incurred health care costs		414,524
Less: Claims paid
Current year		232,310
Prior years		180,185
Total claims paid		412,495
Health care costs payable, end of the period	$	214,670

The Company’s prior year estimates of health care costs payable increased by $5,354 resulting from certain medical claims being settled for amounts more than originally estimated. When significant increases (decreases) in prior-year health care cost estimates occur that the Company believes significantly impacts its current year operating results, the Company discloses that amount as unfavorable (favorable) development of prior-year’s health care cost estimates. Actual claim payments for prior year services have not been materially different from the Company’s year-end estimates.