
	Three Months Ended March 31,
In millions	2026		2025
Health care costs payable, beginning of the period	$	15,399	$	15,064
Less: Reinsurance recoverables	90		81
Less: Impact of discount rate on long-duration insurance reserves (1)	(20)		(1)
Health care costs payable, beginning of the period, net	15,329		14,984

Add: Components of incurred health care costs
Current year	30,374		30,293
Prior years	(1,093)		(1,651)
Total incurred health care costs (2)	29,281		28,642
Less: Claims paid
Current year	18,255		19,312
Prior years	10,951		9,749
Total claims paid	29,206		29,061


Health care costs payable, end of the period, net	15,404		14,565
Add: Premium deficiency reserve	—		431
Add: Reinsurance recoverables	132		114
Add: Impact of discount rate on long-duration insurance reserves (1)	(18)		2
Health care costs payable, end of the period	$	15,518	$	15,112

(1)Reflects the difference between the current discount rate and the locked-in discount rate on long-duration insurance reserves which is recorded within accumulated other comprehensive income on the unaudited condensed consolidated balance sheets.

(2)Total incurred health care costs for the three months ended March 31, 2026 and 2025 in the table above exclude $31 million and $16 million, respectively, of health care costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets, as well as $46 million of health care costs recorded in the Corporate/Other segment for both the three months ended March 31, 2026 and 2025 that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets. Total incurred health care costs for the three months ended March 31, 2025 also exclude $431 million for a premium deficiency reserve for the 2025 coverage year related to the Company’s individual exchange product line.

The Company’s estimates of prior years’ health care costs payable decreased by $1.1 billion and $1.7 billion, respectively, in the three months ended March 31, 2026 and 2025, because claims were settled for amounts less than originally estimated (i.e., the amount of claims incurred was lower than originally estimated), primarily due to lower health care cost trends as well as the actual claim submission time being faster than originally assumed (i.e., the Company’s completion factors were higher than originally assumed) in estimating health care costs payable at the end of the prior year.

As of March 31, 2026, the Company’s liabilities for the ultimate cost of (i) services rendered to the Company’s Insured members but not yet reported to the Company and (ii) claims which have been reported to the Company but not yet paid (collectively, “IBNR”) plus expected development on reported claims totaled approximately $10.6 billion. The majority of the Company’s liabilities for IBNR plus expected development on reported claims as of March 31, 2026 related to the current year.

Future policy benefits consist primarily of reserves for products for which the Company no longer solicits or accepts new customers, including limited payment pension and annuity contracts (referred to as “large case pensions”) and long-term care insurance contracts. Contracts are grouped into cohorts by contract type and issue year. The liability for future policy benefits is adjusted for differences between actual and expected experience. During the three months ended March 31, 2026 and 2025, changes in the liability for future policy benefits were not material.


	March 31, 2026	March 31, 2025
Large case pensions
Interest accretion rate	4.21%	4.20%
Current discount rate	5.34%	5.31%

Long-term care
Interest accretion rate	5.11%	5.11%
Current discount rate	5.68%	5.60%