Aetna 2008 Annual Report Download - page 62

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6. Health Care Costs Payable
The following table shows the components of the change in health care costs payable during 2008, 2007 and 2006:
(Millions) 2008 2007 2006
Health care costs payable, beginning of the period 2,177.4$ 1,927.5$ 1,817.0$
Less: Reinsurance recoverables 2.9 3.7 5.5
Health care costs payable, beginning of the period - net 2,174.5 1,923.8 1,811.5
Acquisition of businesses - 58.1 -
Add: Components of incurred health care costs
Current year 20,948.5 17,472.0 15,495.4
Prior years
(1)
(163.0) (177.2) (194.4)
Total incurred health care costs 20,785.5 17,294.8 15,301.0
Less: Claims paid
Current year 18,726.4 15,528.5 13,761.9
Prior years 1,842.4 1,573.7 1,426.8
Total claims paid 20,568.8 17,102.2 15,188.7
Health care costs payable, end of period - net 2,391.2 2,174.5 1,923.8
Add: Reinsurance recoverables 2.0 2.9 3.7
Health care costs payable, end of the period 2,393.2$ 2,177.4$ 1,927.5$
(1) The favorable development of prior period health care cost estimates was primarily the result of the actual claim submission time
being faster than we anticipated as well as lower than expected health care cost trends. We had no significant development of prior
period health care cost estimates that affected results of operations in 2008, 2007 or 2006.
7. Goodwill and Other Acquired Intangible Assets
We increased the carrying value of goodwill in 2008 and 2007 as follows:
(Millions) 2008 2007
Balance, beginning of the period 5,081.0$ 4,603.6$
Goodwill acquired:
Schaller Anderson 1.0 377.0
Goodhealth 3.6 73.4
Other - 27.0
Balance, end of the period
(1)
5,085.6$ 5,081.0$
(1) Approximately $5.0 billion of goodwill was assigned to the Health Care segment and $104 million of goodwill was assigned to the
Group Insurance segment at both December 31, 2008 and 2007.
Other acquired intangible assets at December 31, 2008 and 2007 were comprised of the following:
Accumulated Amortization
(Millions) Cost Amortization Net Balance Period (Years)
2008
Other acquired intangible assets:
Provider networks 703.2$ (1) 340.2$ 363.0$ 12-25
Customer lists 399.9 (1) 150.8 249.1 4-10
Technology 25.3 14.7 10.6 3-5
Other 38.1 (1) 15.7 22.4 2-15
Trademarks 22.3 - 22.3 Indefinite
Total other acquired intangible assets 1,188.8$ 521.4$ 667.4$
2007
Other acquired intangible assets:
Provider networks 701.0$ (1) 310.8$ 390.2$ 12-25
Customer lists 384.4 (1) 93.6 290.8 4-10
Technology 61.8 (1) 37.9 23.9 3-5
Other 71.0 (1) 17.8 53.2 3-15
Trademarks 22.3 - 22.3 Indefinite
Total other acquired intangible assets 1,240.5$ 460.1$ 780.4$
(1) As a result of our acquisitions in 2007, we preliminarily assigned $133.8 million to customer lists, $42.5 million to other, $5.3 million
to technology and $4.8 million to provider networks. We completed the valuation for these acquisitions in 2008, and as a result, we
assigned an additional $15.5 million to customer lists and $2.2 million to provider networks and reduced other by $22.5 million.
Annual Report - Page 57