Aetna 2015 Annual Report Download - page 108

Annual Report- Page 102
6. Health Care Costs Payable
The following table shows the components of the change in health care costs payable during 2015, 2014 and 2013:
(Millions) 2015 2014 2013
Health care costs payable, beginning of the period $ 5,621.1 $ 4,547.4 $ 2,992.5
Less: Reinsurance recoverables 5.8 8.5 3.8
Health care costs payable, beginning of the period, net 5,615.3 4,538.9 2,988.7
Acquisition of businesses —29.2 1,417.2
Add: Components of incurred health care costs
Current year 42,552.6 41,327.5 33,344.8
Prior years (840.6) (580.8) (448.8)
Total incurred health care costs 41,712.0 40,746.7 32,896.0
Less: Claims paid
Current year 36,389.5 35,850.7 30,112.7
Prior years 4,636.2 3,848.8 2,608.0
Total claims paid 41,025.7 39,699.5 32,720.7
Disposition of business —— (42.3)
Health care costs payable, end of period, net 6,301.6 5,615.3 4,538.9
Add: Reinsurance recoverables 4.1 5.8 8.5
Health care costs payable, end of the period $ 6,305.7 $ 5,621.1 $ 4,547.4
Our estimates of prior years’ health care costs payable decreased in each of 2015, 2014 and 2013, respectively,
because claims settled for amounts less than originally estimated, primarily due to lower health care cost trends as
well as the actual claim submission time being faster than we assumed in establishing our health care costs payable
in the prior year. This development does not directly correspond to an increase in our current year operating results
as these reductions were offset by estimated current period health care costs when we established our estimate of
the current year health care costs payable.
The acquisition of Coventry resulted in a $1.4 billion increase in health care costs payable at the Coventry
Acquisition Date, which significantly impacts the year-over-year comparability of changes in health care costs
payable (refer to Note 3 beginning on page 99 for additional information).
7. Goodwill and Other Acquired Intangible Assets
As discussed in Note 3, we completed the acquisitions of InterGlobal and bswift in 2014. In accordance with
applicable accounting guidance, we allocated the amount paid to the fair value of the net assets acquired, with any
excess amounts recorded as goodwill. The change in goodwill in 2015 and 2014 is as follows:
(Millions) 2015 2014
Balance, beginning of the period $ 10,613.2 $ 10,227.5
Goodwill acquired:
bswift 11.3 318.0
InterGlobal —67.7
Other 12.3 —
Balance, end of the period (1) $ 10,636.8 $ 10,613.2
(1) At both December 31, 2015 and 2014, $113 million was assigned to the Group Insurance segment, with the remainder assigned to the
Health Care segment.