United Healthcare 2002 Annual Report Download - page 53

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{ 52 }
UnitedHealth Group
7MEDICAL COSTS PAYABLE
The following table shows the components of the change in medical costs payable for the years ended
December 31, excluding amounts related to the AARP business:
For the Year Ended December 31,
(in millions) 2002 2001 2000
MEDICAL COSTS PAYABLE, BEGINNING OF PERIOD
$ 2,593 $2,411 $2,124
ACQUISITIONS1
180 17 –
REPORTED MEDICAL COSTS
Current Year 14,860 14,367 12,996
Prior Years (70) (30) (15)
Total Reported Medical Costs 14,790 14,337 12,981
CLAIM PAYMENTS
Payments for Current Year (12,435) (11,933) (10,711)
Payments for Prior Years (2,280) (2,239) (1,983)
Total Claim Payments (14,715) (14,172) (12,694)
MEDICAL COSTS PAYABLE, END OF PERIOD
$ 2,848 $2,593 $2,411
1Represents the medical costs payable balance as of the applicable acquisition date. Subsequent changes in estimates related to
acquired medical costs payable are recorded as adjustments to Goodwill.
Amounts relating to the AARP business have been excluded since the underwriting gains or losses related
to this contract are recorded as an increase or decrease to a rate stabilization fund, which is more fully
described in Note 4. Medical costs payable balances relating to the AARP business were $893 million,
$867 million, $855 million and $791 million as of December 31, 2002, 2001, 2000 and 1999, respectively.
Medical costs relating to the AARP business were $3,402 million, $3,307 million and $3,174 million for
the years ended December 31, 2002, 2001 and 2000, respectively.