Medical Claims Liability
|6 Months Ended|
Jun. 30, 2022
|Medical Claims Liability||Medical Claims Liability
The following table summarizes the change in medical claims liability ($ in millions):
Reinsurance recoverables related to medical claims are included in premium and trade receivables. Changes in estimates of incurred claims for prior years are primarily attributable to reserving under moderately adverse conditions. The impact from COVID-19 on healthcare utilization and medical claims submission patterns continues to provide increased estimation uncertainty on the incurred but not reported liability. Additionally, as a result of minimum health benefits ratio (HBR) and other return of premium programs, the Company recorded $48 million and $350 million as a reduction to premium revenue in the six months ended June 30, 2022 and 2021, respectively.
Incurred but not reported (IBNR) plus expected development on reported claims as of June 30, 2022 was $10,752 million. Total IBNR plus expected development on reported claims represents estimates for claims incurred but not reported, development on reported claims, and estimates for the costs necessary to process unpaid claims at the end of each period. The Company estimates its liability using actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice. These actuarial methods consider factors such as historical data for payment patterns, cost trends, product mix, seasonality, utilization of healthcare services and other relevant factors.
The entire disclosure for the types of coverages and products sold, and the assets, obligations, recorded liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef