Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 13, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CENTENE CORP | |
Entity Central Index Key | 1,071,739 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 172,566,531 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 4,281 | $ 3,930 |
Premium and related receivables | 3,955 | 3,098 |
Short-term investments | 595 | 505 |
Other current assets | 829 | 832 |
Total current assets | 9,660 | 8,365 |
Long-term investments | 4,927 | 4,545 |
Restricted deposits | 138 | 138 |
Property, software and equipment, net | 1,003 | 797 |
Goodwill | 4,712 | 4,712 |
Intangible assets, net | 1,428 | 1,545 |
Other long-term assets | 132 | 95 |
Total assets | 22,000 | 20,197 |
Current liabilities: | ||
Medical claims liability | 4,333 | 3,929 |
Accounts payable and accrued expenses | 4,804 | 4,377 |
Unearned revenue | 568 | 313 |
Current portion of long-term debt | 4 | 4 |
Total current liabilities | 9,709 | 8,623 |
Long-term debt | 4,717 | 4,651 |
Other long-term liabilities | 901 | 869 |
Total liabilities | 15,327 | 14,143 |
Commitments and contingencies | ||
Redeemable noncontrolling interests | 20 | 145 |
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; authorized 10,000 shares; no shares issued or outstanding at September 30, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.001 par value; authorized 400,000 shares; 179,033 issued and 172,566 outstanding at September 30, 2017, and 178,134 issued and 171,919 outstanding at December 31, 2016 | 0 | 0 |
Additional paid-in capital | 4,310 | 4,190 |
Accumulated other comprehensive earnings (loss) | 9 | (36) |
Retained earnings | 2,518 | 1,920 |
Treasury stock, at cost (6,467 and 6,215 shares, respectively) | (197) | (179) |
Total Centene stockholders’ equity | 6,640 | 5,895 |
Noncontrolling interest | 13 | 14 |
Total stockholders’ equity | 6,653 | 5,909 |
Total liabilities, redeemable noncontrolling interests and stockholders’ equity | $ 22,000 | $ 20,197 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Stockholders' equity | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000 | 400,000 |
Common stock, shares issued | 179,033 | 178,134 |
Common stock, shares outstanding | 172,566 | 171,919 |
Treasury stock (in shares) | 6,467 | 6,215 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Premium | $ 10,850 | $ 9,625 | $ 32,393 | $ 25,299 |
Service | 571 | 590 | 1,634 | 1,603 |
Premium and service revenues | 11,421 | 10,215 | 34,027 | 26,902 |
Premium tax and health insurer fee | 477 | 631 | 1,549 | 1,794 |
Total revenues | 11,898 | 10,846 | 35,576 | 28,696 |
Expenses: | ||||
Medical costs | 9,543 | 8,376 | 28,278 | 22,072 |
Cost of services | 437 | 504 | 1,334 | 1,386 |
Selling, general and administrative expenses | 1,030 | 940 | 3,186 | 2,611 |
Amortization of acquired intangible assets | 38 | 43 | 117 | 95 |
Premium tax expense | 510 | 512 | 1,643 | 1,460 |
Health insurer fee expense | 0 | 129 | 0 | 333 |
Total operating expenses | 11,558 | 10,504 | 34,558 | 27,957 |
Earnings from operations | 340 | 342 | 1,018 | 739 |
Other income (expense): | ||||
Investment and other income | 51 | 33 | 137 | 80 |
Interest expense | (65) | (57) | (189) | (142) |
Earnings from continuing operations, before income tax expense | 326 | 318 | 966 | 677 |
Income tax expense | 125 | 169 | 381 | 372 |
Earnings from continuing operations, net of income tax expense | 201 | 149 | 585 | 305 |
Discontinued operations, net of income tax benefit | 0 | (1) | 0 | (3) |
Net earnings | 201 | 148 | 585 | 302 |
(Earnings) loss attributable to noncontrolling interests | 4 | (1) | 13 | (1) |
Net earnings | 205 | 147 | 598 | 301 |
Amounts attributable to Centene Corporation common shareholders: | ||||
Earnings from continuing operations, net of income tax expense | 205 | 148 | 598 | 304 |
Discontinued operations, net of income tax benefit | 0 | (1) | 0 | (3) |
Net earnings | $ 205 | $ 147 | $ 598 | $ 301 |
Basic: | ||||
Continuing operations (in dollars per share) | $ 1.19 | $ 0.87 | $ 3.47 | $ 1.95 |
Discontinued operations (in dollars per share) | 0 | (0.01) | 0 | (0.02) |
Basic earnings per common share (in dollars per share) | 1.19 | 0.86 | 3.47 | 1.93 |
Diluted: | ||||
Continuing operations (in dollars per share) | 1.16 | 0.84 | 3.39 | 1.90 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.02) |
Diluted earnings per common share (in dollars per share) | $ 1.16 | $ 0.84 | $ 3.39 | $ 1.88 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Earnings - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 201 | $ 148 | $ 585 | $ 302 |
Reclassification adjustment, net of tax | 0 | (1) | (1) | 0 |
Change in unrealized gain on investments, net of tax | 7 | 5 | 41 | 57 |
Foreign currency translation adjustments | 1 | (1) | 5 | (1) |
Other comprehensive earnings | 8 | 3 | 45 | 56 |
Comprehensive earnings | 209 | 151 | 630 | 358 |
Comprehensive (earnings) loss attributable to noncontrolling interests | 4 | (1) | 13 | (1) |
Comprehensive earnings attributable to Centene Corporation | $ 213 | $ 150 | $ 643 | $ 357 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - 9 months ended Sep. 30, 2017 - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Earnings (Loss) | Retained Earnings | Treasury Stock | Non- controlling Interest |
Balance at Dec. 31, 2016 | $ 5,909 | $ 0 | $ 4,190 | $ (36) | $ 1,920 | $ (179) | $ 14 |
Balance (in shares) at Dec. 31, 2016 | 171,919 | 178,134 | |||||
Treasury stock (in shares) at Dec. 31, 2016 | 6,215 | 6,215 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | $ 597 | 598 | (1) | ||||
Other comprehensive earnings, net of $23 tax | 45 | 45 | |||||
Common stock issued for employee benefit plans | 8 | $ 0 | 8 | ||||
Common stock issued for employee benefit plans (in shares) | 899 | ||||||
Common stock repurchases | (18) | $ (18) | |||||
Common stock repurchases (in shares) | 252 | ||||||
Stock compensation expense | 99 | 99 | |||||
Purchase of noncontrolling interest | 13 | 13 | |||||
Balance at Sep. 30, 2017 | $ 6,653 | $ 0 | $ 4,310 | $ 9 | $ 2,518 | $ (197) | $ 13 |
Balance (in shares) at Sep. 30, 2017 | 172,566 | 179,033 | |||||
Treasury stock (in shares) at Sep. 30, 2017 | 6,467 |
Consolidated Statement of Stoc7
Consolidated Statement of Stockholders' Equity (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Other comprehensive earnings, tax | $ 23 | |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | 0.001 |
Treasury Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net earnings | $ 585 | $ 302 |
Adjustments to reconcile net earnings to net cash provided by operating activities | ||
Depreciation and amortization | 264 | 189 |
Stock compensation expense | 99 | 112 |
Deferred income taxes | (32) | (17) |
Changes in assets and liabilities | ||
Premium and related receivables | (749) | (906) |
Other assets | (39) | 7 |
Medical claims liabilities | 406 | 15 |
Unearned revenue | 255 | 301 |
Accounts payable and accrued expenses | 205 | 99 |
Other long-term liabilities | 45 | 156 |
Other operating activities, net | 0 | 1 |
Net cash provided by operating activities | 1,039 | 259 |
Cash flows from investing activities: | ||
Capital expenditures | (301) | (211) |
Purchases of investments | (1,720) | (1,528) |
Sales and maturities of investments | 1,335 | 955 |
Investments in acquisitions, net of cash acquired | 0 | (848) |
Net cash used in investing activities | (686) | (1,632) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 1,170 | 6,956 |
Payments of long-term debt | (1,124) | (4,257) |
Common stock repurchases | (18) | (29) |
Purchase of noncontrolling interest | (33) | (14) |
Debt issuance costs | 0 | (59) |
Other financing activities, net | 2 | (3) |
Net cash (used in) provided by financing activities | (3) | 2,594 |
Effect of exchange rate changes on cash and cash equivalents | 1 | 1 |
Net increase in cash and cash equivalents | 351 | 1,222 |
Cash and cash equivalents, beginning of period | 3,930 | 1,760 |
Cash and cash equivalents, end of period | 4,281 | 2,982 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 210 | 113 |
Income taxes paid | 358 | 394 |
Equity issued in connection with acquisitions | $ 0 | $ 3,105 |
Organization and Operations
Organization and Operations | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | Organization and Operations Basis of Presentation The accompanying interim financial statements have been prepared under the presumption that users of the interim financial information have either read or have access to the audited financial statements included in the Form 10-K for the fiscal year ended December 31, 2016 . The unaudited interim financial statements herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, footnote disclosures which would substantially duplicate the disclosures contained in the December 31, 2016 audited financial statements have been omitted from these interim financial statements, where appropriate. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the results of the interim periods presented. Certain 2016 amounts in the consolidated financial statements and notes to the consolidated financial statements have been reclassified to conform to the 2017 presentation. The Company adopted Accounting Standards Update (ASU) 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting during the fourth quarter of 2016. The ASU simplifies several aspects of the accounting for employee share-based payment transactions. Among other elements, the ASU requires an entity to recognize all excess tax benefits and deficiencies related to stock-based compensation expense as income tax expense or benefit in the statements of operations. The ASU requires adjustments be reflected as of the beginning of the fiscal year of adoption and as a result, prior periods have been adjusted accordingly. The adoption resulted in a decrease to income tax expense of $2 million and $4 million for the three and nine months ended September 30, 2016 . In January 2017, the Company reclassified Cenpatico Behavioral Health of Arizona, LLC and the related Cenpatico Integrated Care health plan from the Specialty Services segment to the Managed Care segment due to a reorganization of the Arizona management structure following the Health Net integration. As a result, the financial results of Cenpatico Behavioral Health of Arizona, LLC and the related Cenpatico Integrated Care health plan have been reclassified from the Specialty Services segment to the Managed Care segment for all periods presented. On March 24, 2016 , the Company completed the acquisition of Health Net, Inc. (Health Net) for $6.0 billion , including the assumption of debt. The acquisition was accounted for as a business combination, which requires that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The valuation of all the assets acquired and liabilities assumed was finalized in the fourth quarter of 2016. As a result of the completion of the Health Net acquisition, the Company's results of operations for the nine months ended September 30, 2016 include the results of operations of Health Net from March 24, 2016 to September 30, 2016 . Accounting Guidance Not Yet Adopted In August 2017, the Financial Accounting Standards Board (FASB) issued an ASU which amends the hedge accounting model to enable entities to better align the economics of risk management activities and financial reporting. In addition, the new standard enhances the understandability of hedge results and simplifies the application of hedge accounting in certain situations. The new guidance is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The new guidance is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In March 2017, the FASB issued an ASU which changes the period over which premiums on callable debt securities are amortized. The new standard requires the premiums on callable debt securities to be amortized to the earliest call date rather than to the contractual maturity date of the instrument. The new guidance more closely aligns the amortization period of premiums to expectations incorporated in the market pricing on the underlying securities. The new guidance is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The new guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows. In May 2014, the FASB issued an ASU which supersedes existing revenue recognition standards with a single model, unless those contracts are within the scope of other standards (e.g., an insurance entity's insurance contracts). Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. The guidance is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The Company anticipates adopting the new guidance in the first quarter of 2018 using the modified retrospective approach with a cumulative-effect adjustment to retained earnings in the period of initial application. The Company also plans to elect the practical expedient of applying the new guidance only to contracts that are not completed as of the date of initial application. The majority of the Company's revenues are derived from insurance contracts and are excluded from the new standard. While the Company continues to analyze contracts within the scope of the standard, the new guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows. |
Fidelis Care Transaction
Fidelis Care Transaction | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Fidelis Care Transaction | Fidelis Care Transaction In September 2017, the Company signed a definitive agreement under which Fidelis Care will become the Company's health plan in New York State. Under the terms of the agreement, the Company will acquire substantially all of the assets of Fidelis Care for $3.75 billion , subject to certain adjustments. |
Acquisitions and Noncontrolling
Acquisitions and Noncontrolling Interest | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions and Noncontrolling Interest | Acquisitions and Noncontrolling Interest In August 2017, the Company acquired the remaining 32% interest of U.S. Medical Management (USMM), a management services organization and provider of in-home health services for high acuity populations, for $86 million in total consideration. The transaction consideration consisted of $33 million of cash, $33 million of deferred consideration and $20 million related to the settlement of a receivable from the former noncontrolling interest holder. Redeemable Noncontrolling Interest As a result of put option agreements, noncontrolling interest is considered redeemable and is classified in the Redeemable Noncontrolling Interest section of the Consolidated Balance Sheets. A reconciliation of the changes in the Redeemable Noncontrolling Interest is as follows ($ in millions): Balance, December 31, 2016 $ 145 Noncontrolling interest purchased related to USMM (115 ) Contribution from redeemable noncontrolling interest 2 Net losses attributable to noncontrolling interests (12 ) Balance, September 30, 2017 $ 20 |
Short-term and Long-term Invest
Short-term and Long-term Investments, Restricted Deposits | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term and Long-term Investments, Restricted Deposits | Short-term and Long-term Investments, Restricted Deposits Short-term and long-term investments and restricted deposits by investment type consist of the following ($ in millions): September 30, 2017 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 330 $ — $ (1 ) $ 329 $ 364 $ — $ (1 ) $ 363 Corporate securities 2,098 18 (6 ) 2,110 1,933 12 (13 ) 1,932 Restricted certificates of deposit 4 — — 4 5 — — 5 Restricted cash equivalents 6 — — 6 6 — — 6 Municipal securities 1,979 16 (6 ) 1,989 1,767 1 (35 ) 1,733 Asset-backed securities 376 2 — 378 317 1 (1 ) 317 Residential mortgage-backed securities 309 1 (4 ) 306 219 1 (5 ) 215 Commercial mortgage-backed securities 238 1 (3 ) 236 343 — (5 ) 338 Cost and equity method investments 171 — — 171 163 — — 163 Life insurance contracts 131 — — 131 116 — — 116 Total $ 5,642 $ 38 $ (20 ) $ 5,660 $ 5,233 $ 15 $ (60 ) $ 5,188 The Company’s investments are classified as available-for-sale with the exception of life insurance contracts and certain cost and equity method investments. The Company’s investment policies are designed to provide liquidity, preserve capital and maximize total return on invested assets with the focus on high credit quality securities. The Company limits the size of investment in any single issuer other than U.S. treasury securities and obligations of U.S. government corporations and agencies. As of September 30, 2017 , 95% of the Company’s investments in rated securities carry an investment grade rating by nationally recognized statistical rating organizations. At September 30, 2017 , the Company held certificates of deposit, life insurance contracts and cost and equity method investments which did not carry a credit rating. The Company's residential mortgage-backed securities are primarily issued by the Federal National Mortgage Association, Government National Mortgage Association or Federal Home Loan Mortgage Corporation, which carry implicit or explicit guarantees of the U.S. government. The Company's commercial mortgage-backed securities are primarily senior tranches with a weighted average rating of AA+ and a weighted average duration of 4.1 years at September 30, 2017 . The fair value of available-for-sale investments with gross unrealized losses by investment type and length of time that individual securities have been in a continuous unrealized loss position were as follows ($ in millions): September 30, 2017 December 31, 2016 Less Than 12 Months 12 Months or More Less Than 12 Months 12 Months or More Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value U.S. Treasury securities and obligations of U.S. government corporations and agencies $ (1 ) $ 277 $ — $ 3 $ (1 ) $ 215 $ — $ 2 Corporate securities (4 ) 587 (2 ) 83 (12 ) 1,020 (1 ) 39 Municipal securities (4 ) 457 (2 ) 96 (35 ) 1,423 — 30 Asset-backed securities — 126 — 13 (1 ) 101 — 18 Residential mortgage-backed securities (3 ) 190 (1 ) 49 (5 ) 188 — — Commercial mortgage-backed securities (1 ) 99 (2 ) 31 (5 ) 271 — — Total $ (13 ) $ 1,736 $ (7 ) $ 275 $ (59 ) $ 3,218 $ (1 ) $ 89 As of September 30, 2017 , the gross unrealized losses were generated from 1,201 positions out of a total of 3,192 positions. The change in fair value of fixed income securities is primarily a result of movement in interest rates subsequent to the purchase of the security. For each security in an unrealized loss position, the Company assesses whether it intends to sell the security or if it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If the security meets this criterion, the decline in fair value is other-than-temporary and is recorded in earnings. The Company does not intend to sell these securities prior to maturity and it is not likely that the Company will be required to sell these securities prior to maturity; therefore, there is no indication of other-than-temporary impairment for these securities. The contractual maturities of short-term and long-term investments and restricted deposits are as follows ($ in millions): September 30, 2017 December 31, 2016 Investments Restricted Deposits Investments Restricted Deposits Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value One year or less $ 533 $ 533 $ 65 $ 65 $ 500 $ 500 $ 91 $ 91 One year through five years 2,149 2,162 73 73 1,982 1,974 47 47 Five years through ten years 1,680 1,687 — — 1,101 1,089 — — Greater than ten years 219 220 — — 633 617 — — Asset-backed securities 923 920 — — 879 870 — — Total $ 5,504 $ 5,522 $ 138 $ 138 $ 5,095 $ 5,050 $ 138 $ 138 Actual maturities may differ from contractual maturities due to call or prepayment options. Cost and equity method investments and life insurance contracts are included in the five years through ten years category. The Company has an option to redeem at amortized cost substantially all of the securities included in the greater than ten years category listed above. The Company continuously monitors investments for other-than-temporary impairment. Certain investments have experienced a decline in fair value due to changes in credit quality, market interest rates and/or general economic conditions. The Company recognizes an impairment loss for cost and equity method investments when evidence demonstrates that it is other-than-temporarily impaired. Evidence of a loss in value that is other-than-temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are categorized based upon observable or unobservable inputs used to estimate fair value. Level inputs are as follows: Level Input: Input Definition: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The following table summarizes fair value measurements by level at September 30, 2017 , for assets and liabilities measured at fair value on a recurring basis ($ in millions): Level I Level II Level III Total Assets Cash and cash equivalents $ 4,281 $ — $ — $ 4,281 Investments available for sale: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 201 $ — $ — $ 201 Corporate securities — 2,110 — 2,110 Municipal securities — 1,989 — 1,989 Asset-backed securities — 378 — 378 Residential mortgage-backed securities — 306 — 306 Commercial mortgage-backed securities — 236 — 236 Total investments $ 201 $ 5,019 $ — $ 5,220 Restricted deposits available for sale: Cash and cash equivalents $ 6 $ — $ — $ 6 Certificates of deposit 4 — — 4 U.S. Treasury securities and obligations of U.S. government corporations and agencies 128 — — 128 Total restricted deposits $ 138 $ — $ — $ 138 Other long-term assets: Interest rate swap agreements $ — $ 4 $ — $ 4 Total assets at fair value $ 4,620 $ 5,023 $ — $ 9,643 Liabilities Other long-term liabilities: Interest rate swap agreements $ — $ 53 $ — $ 53 Total liabilities at fair value $ — $ 53 $ — $ 53 The following table summarizes fair value measurements by level at December 31, 2016 , for assets and liabilities measured at fair value on a recurring basis ($ in millions): Level I Level II Level III Total Assets Cash and cash equivalents $ 3,930 $ — $ — $ 3,930 Investments available for sale: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 221 $ 15 $ — $ 236 Corporate securities — 1,932 — 1,932 Municipal securities — 1,733 — 1,733 Asset-backed securities — 317 — 317 Residential mortgage-backed securities — 215 — 215 Commercial mortgage-backed securities — 338 — 338 Total investments $ 221 $ 4,550 $ — $ 4,771 Restricted deposits available for sale: Cash and cash equivalents $ 6 $ — $ — $ 6 Certificates of deposit 5 — — 5 U.S. Treasury securities and obligations of U.S. government corporations and agencies 127 — — 127 Total restricted deposits $ 138 $ — $ — $ 138 Other long-term assets: Interest rate swap agreements $ — $ 4 $ — $ 4 Total assets at fair value $ 4,289 $ 4,554 $ — $ 8,843 Liabilities Other long-term liabilities: Interest rate swap agreements $ — $ 62 $ — $ 62 Total liabilities at fair value $ — $ 62 $ — $ 62 The Company periodically transfers U.S. Treasury securities and obligations of U.S. government corporations and agencies between Level I and Level II fair value measurements dependent upon the level of trading activity for the specific securities at the measurement date. The Company’s policy regarding the timing of transfers between Level I and Level II is to measure and record the transfers at the end of the reporting period. At September 30, 2017 , there were no transfers from Level I to Level II and $14 million of transfers from Level II to Level I. The Company utilizes matrix pricing services to estimate fair value for securities which are not actively traded on the measurement date. The Company designates these securities as Level II fair value measurements. The aggregate carrying amount of the Company’s life insurance contracts and other non-majority owned investments, which approximates fair value, was $302 million and $279 million as of September 30, 2017 and December 31, 2016 , respectively. |
Medical Claims Liability
Medical Claims Liability | 9 Months Ended |
Sep. 30, 2017 | |
Insurance [Abstract] | |
Medical Claims Liability | Medical Claims Liability In January 2017, the Company reclassified Cenpatico Behavioral Health of Arizona, LLC and the related Cenpatico Integrated Care health plan from the Specialty Services segment to the Managed Care segment due to a reorganization of the Arizona management structure following the Health Net integration. As a result, the financial results of Cenpatico Behavioral Health of Arizona, LLC and the related Cenpatico Integrated Care health plan have been reclassified from the Specialty Services segment to the Managed Care segment for all periods presented. Due to this change in segment reporting, the Specialty Services segment now has an insignificant amount of medical claims liability, and therefore disclosures related to medical claims liabilities have been aggregated and are presented on a consolidated basis. The following table summarizes the change in medical claims liability ($ in millions): Nine Months Ended September 30, 2017 2016 Balance, January 1 $ 3,929 $ 2,298 Less: Reinsurance Recoverable 5 — Balance, January 1, net 3,924 2,298 Acquisitions — 1,453 Incurred related to: Current year 28,666 22,372 Prior years (388 ) (300 ) Total incurred 28,278 22,072 Paid related to: Current year 24,787 20,121 Prior years 3,099 1,935 Total paid 27,886 22,056 Balance at September 30, net 4,316 3,767 Plus: Reinsurance Recoverable 17 — Balance, September 30 $ 4,333 $ 3,767 Reinsurance recoverables related to medical claims are included in premium and related receivables. Changes in estimates of incurred claims for prior years are primarily attributable to reserving under moderately adverse conditions. Additionally, as a result of development within "Incurred related to: Prior years" due to minimum HBR and other return of premium programs, we recorded approximately $4 million as an increase to premium revenues in the nine months ended September 30, 2017 and approximately $27 million as a reduction to premium revenues in the nine months ended September 30, 2016 . Incurred but not reported (IBNR) plus expected development on reported claims as of September 30, 2017 was $3,292 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. We estimate our 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. |
Affordable Care Act
Affordable Care Act | 9 Months Ended |
Sep. 30, 2017 | |
Affordable Care Act [Abstract] | |
Affordable Care Act | Affordable Care Act The Affordable Care Act (ACA) established risk spreading premium stabilization programs effective January 1, 2014. These programs, commonly referred to as the “three Rs,” include a permanent risk adjustment program, a transitional reinsurance program, and a temporary risk corridor program. Additionally, the ACA established a minimum annual medical loss ratio (MLR) and cost sharing reductions. Each of the three R programs are taken into consideration to determine if the Company’s estimated annual medical costs are less than the minimum loss ratio and require an adjustment to Premium revenue to meet the minimum MLR. The 2016 benefit year was the final year for transitional reinsurance and risk corridor. No additional balances were recorded for the 2017 benefit year for these programs. During the second quarter of 2017, the Company recognized a $48 million net pre-tax benefit related to the reconciliation of the 2016 risk adjustment program compared to a $70 million net pre-tax benefit related to the reconciliation of the 2015 risk adjustment and reinsurance programs during the second quarter of 2016. The Company's net receivables (payables) for each of these programs are as follows ($ in millions): September 30, 2017 December 31, 2016 Risk adjustment $ (609 ) $ (425 ) Reinsurance 15 122 Risk corridor (8 ) (3 ) Minimum MLR (1 ) (18 ) Cost sharing reductions (180 ) (147 ) |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consists of the following ($ in millions): September 30, 2017 December 31, 2016 $1,400 million 5.625% Senior notes, due February 15, 2021 $ 1,400 $ 1,400 $1,000 million 4.75% Senior notes, due May 15, 2022 1,007 1,008 $1,000 million 6.125% Senior notes, due February 15, 2024 1,000 1,000 $1,200 million 4.75% Senior notes, due January 15, 2025 1,200 1,200 Fair value of interest rate swap agreements (49 ) (58 ) Total senior notes 4,558 4,550 Revolving credit agreement 150 100 Mortgage notes payable 62 64 Capital leases and other 17 18 Debt issuance costs (66 ) (77 ) Total debt 4,721 4,655 Less current portion (4 ) (4 ) Long-term debt $ 4,717 $ 4,651 Senior Notes The indentures governing the senior notes listed in the table above, contain non-financial and financial covenants of Centene Corporation, including requirements of a minimum fixed charge coverage ratio. At September 30, 2017 , the Company was in compliance with all covenants. Interest Rate Swaps In February 2017 and in connection with the November 2016 issuance of $1,200 million of 4.75% Senior Notes, due January 15, 2025 ( $1,200 Million Notes), the Company entered into interest rate swap agreements for a notional amount of $600 million , at floating rates of interest based on the one month LIBOR plus 2.53% . Gains and losses due to the changes in the fair value of the interest rate swaps completely offset changes in the fair value of the hedged portion of the underlying debt and are recorded as an adjustment to the $1,200 Million Notes. The Company uses interest rate swap agreements to convert a portion of its interest rate exposure from fixed rates to floating rates to more closely align interest expense with interest income received on its cash equivalent and variable rate investment balances. The Company has $2,700 million of notional amount of interest rate swap agreements consisting of: • $600 million expiring on February 15, 2021; • $500 million expiring on May 15, 2022 ; • $1,000 million expiring on February 15, 2024; and • $600 million expiring on January 15, 2025. Under the swap agreements, the Company receives a fixed rate of interest and pays an average variable rate of either the three or one month LIBOR plus 3.61% adjusted monthly or quarterly, based on the terms of the individual swap agreements. At September 30, 2017 , the weighted average rate was 4.91% . The swap agreements are formally designated and qualify as fair value hedges and are recorded at fair value in the Consolidated Balance Sheets in other assets or other liabilities. Gains and losses due to changes in fair value of the interest rate swap agreements completely offset changes in the fair value of the hedged portion of the underlying debt. Therefore, no gain or loss has been recognized due to hedge ineffectiveness. Offsetting changes in fair value of both the interest rate swaps and the hedged portion of the underlying debt both were recognized in interest expense in the Consolidated Statements of Operations. The Company does not hold or issue any derivative instrument for trading or speculative purposes. Revolving Credit Agreement The Company has an unsecured $1,000 million revolving credit facility. Borrowings under the agreement bear interest based upon LIBOR rates, the Federal Funds Rate or the Prime Rate. The agreement has a maturity date of March 24, 2021 . As of September 30, 2017 , the Company had $150 million of borrowings outstanding under the agreement with a weighted average interest rate of 4.75% . The revolving credit facility contains non-financial and financial covenants, including requirements of minimum fixed charge coverage ratios and maximum debt-to-EBITDA ratios. The Company is required to not exceed a maximum debt-to-EBITDA ratio of 3.0 to 1.0 on and subsequent to December 31, 2016. As of September 30, 2017 , there were no limitations on the availability under the revolving credit agreement as a result of the debt-to-EBITDA ratio, and the Company was in compliance with all covenants. Letters of Credit & Surety Bonds The Company had outstanding letters of credit of $51 million as of September 30, 2017 , which were not part of the revolving credit facility. The Company also had letters of credit for $45 million (valued at September 30, 2017 conversion rate), or €38 million , representing its proportional share of the letters of credit issued to support Ribera Salud’s outstanding debt, which are a part of the revolving credit facility. Collectively, the letters of credit bore interest at 1.33% as of September 30, 2017 . The Company had outstanding surety bonds of $404 million as of September 30, 2017 . Construction Loan In October 2017, the Company executed a $200 million non-recourse construction loan to fund the expansion of the Company's corporate headquarters. The loan bears interest based on the one month LIBOR plus 2.70% and matures in April 2021 with an optional one-year extension. The agreement contains financial and non-financial covenants aligning with the Company's revolving credit agreement . The Company has guaranteed completion of the construction project associated with the loan. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the calculation of basic and diluted net earnings (loss) per common share ($ in millions, except shares in thousands and per share data in dollars): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Earnings attributable to Centene Corporation: Earnings from continuing operations, net of tax $ 205 $ 148 $ 598 $ 304 Discontinued operations, net of tax — (1 ) — (3 ) Net earnings $ 205 $ 147 $ 598 $ 301 Shares used in computing per share amounts: Weighted average number of common shares outstanding 172,508 170,775 172,314 155,681 Common stock equivalents (as determined by applying the treasury stock method) 4,407 4,720 4,100 4,376 Weighted average number of common shares and potential dilutive common shares outstanding 176,915 175,495 176,414 160,057 Net earnings (loss) per common share attributable to Centene Corporation: Basic: Continuing operations $ 1.19 $ 0.87 $ 3.47 $ 1.95 Discontinued operations — (0.01 ) — (0.02 ) Basic earnings per common share $ 1.19 $ 0.86 $ 3.47 $ 1.93 Diluted: Continuing operations $ 1.16 $ 0.84 $ 3.39 $ 1.90 Discontinued operations — — — (0.02 ) Diluted earnings per common share $ 1.16 $ 0.84 $ 3.39 $ 1.88 The calculation of diluted earnings per common share for the three and nine months ended September 30, 2017 excludes the impact of 4 thousand and 27 thousand shares, respectively, related to anti-dilutive stock options, restricted stock and restricted stock units. The calculation of diluted earnings per common share for the three and nine months ended September 30, 2016 excludes the impact of 57 thousand and 66 thousand shares, respectively, related to anti-dilutive stock options, restricted stock and restricted stock units. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Centene operates in two segments: Managed Care and Specialty Services. The Managed Care segment consists of Centene’s health plans including all of the functions needed to operate them. The Specialty Services segment consists of Centene’s specialty companies offering auxiliary healthcare services and products. In January 2017, the Company reclassified Cenpatico Behavioral Health of Arizona, LLC and the related Cenpatico Integrated Care health plan from the Specialty Services segment to the Managed Care segment due to a reorganization of the Arizona management structure following the Health Net integration. As a result, the financial results of Cenpatico Behavioral Health of Arizona, LLC and the related Cenpatico Integrated Care health plan have been reclassified from the Specialty Services segment to the Managed Care segment for all periods presented. Segment information for the three months ended September 30, 2017 , follows ($ in millions): Managed Care Specialty Services Eliminations Consolidated Total Total revenues from external customers $ 11,248 $ 650 $ — $ 11,898 Total revenues from internal customers 11 2,367 (2,378 ) — Total revenues $ 11,259 $ 3,017 $ (2,378 ) $ 11,898 Earnings from operations $ 238 $ 102 $ — $ 340 Segment information for the three months ended September 30, 2016 , follows ($ in millions): Managed Care Specialty Services Eliminations Consolidated Total Total revenues from external customers $ 10,175 $ 671 $ — $ 10,846 Total revenues from internal customers 56 1,524 (1,580 ) — Total revenues $ 10,231 $ 2,195 $ (1,580 ) $ 10,846 Earnings from operations $ 309 $ 33 $ — $ 342 Segment information for the nine months ended September 30, 2017 , follows ($ in millions): Managed Care Specialty Services Eliminations Consolidated Total Total revenues from external customers $ 33,704 $ 1,872 $ — $ 35,576 Total revenues from internal customers 33 7,112 (7,145 ) — Total revenues $ 33,737 $ 8,984 $ (7,145 ) $ 35,576 Earnings from operations $ 799 $ 219 $ — $ 1,018 Segment information for the nine months ended September 30, 2016 , follows ($ in millions): Managed Care Specialty Services Eliminations Consolidated Total Total revenues from external customers $ 26,926 $ 1,770 $ — $ 28,696 Total revenues from internal customers 144 4,383 (4,527 ) — Total revenues $ 27,070 $ 6,153 $ (4,527 ) $ 28,696 Earnings from operations $ 627 $ 112 $ — $ 739 |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Overview The Company records reserves and accrues costs for certain legal proceedings and regulatory matters to the extent that it determines an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. While such reserves and accrued costs reflect the Company's best estimate of the probable loss for such matters, the recorded amounts may differ materially from the actual amount of any such losses. In some cases, no estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made because of the inherently unpredictable nature of legal and regulatory proceedings, which may be exacerbated by various factors, including but not limited to, they may involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or legal uncertainties; involve disputed facts; represent a shift in regulatory policy; involve a large number of parties, claimants or regulatory bodies; are in the early stages of the proceedings; involve a number of separate proceedings and/or a wide range of potential outcomes; or result in a change of business practices. As of the date of this report, amounts accrued for legal proceedings and regulatory matters were not material. However, it is possible that in a particular quarter or annual period the Company’s financial condition, results of operations, cash flow and/or liquidity could be materially adversely affected by an ultimate unfavorable resolution of or development in legal and/or regulatory proceedings, including as described below. Except for the proceedings discussed below, the Company believes that the ultimate outcome of any of the regulatory and legal proceedings that are currently pending against it should not have a material adverse effect on financial condition, results of operations, cash flow or liquidity. California The Company's California subsidiary, Health Net of California, Inc. (Health Net California), has been named as a defendant in a California taxpayer action filed in Los Angeles County Superior Court, captioned as Michael D. Myers v. State Board of Equalization, et al., Los Angeles Superior Court Case No. BS158655. This action is brought under a California statute that permits an individual taxpayer to sue a governmental agency when the taxpayer believes the agency has failed to enforce governing law. Plaintiff contends that Health Net California, a California licensed Health Care Service Plan (HCSP), is an “insurer” for purposes of taxation despite acknowledging it is not an “insurer” under regulatory law. Under California law, “insurers” must pay a gross premiums tax (GPT), calculated as 2.35% on gross premiums. As a licensed HCSP, Health Net California has paid the California Corporate Franchise Tax (CFT), the tax generally paid by California businesses. Plaintiff contends that Health Net California must pay the GPT rather than the CFT. Plaintiff seeks a writ of mandate directing the California taxing agencies to collect the GPT, and seeks an order requiring Health Net California to pay GPT, interest and penalties for a period dating to eight years prior to the October 2015 filing of the complaint. This lawsuit is being coordinated with similar lawsuits filed against other entities. An initial status conference was held in June 2017 wherein the Court set a schedule for challenges to the pleadings. In September 2017, the Company filed a demurrer seeking to dismiss the complaint, and a motion to strike the allegations seeking retroactive relief. The Company intends to vigorously defend itself against these claims; however, this matter is subject to many uncertainties, and an adverse outcome in this matter could potentially have a materially adverse impact on our financial position, results of operations and cash flows. Federal Securities Class Action In November 2016, a putative federal securities class action was filed against the Company and certain of its executives in the U.S. District Court for the Central District of California. In March 2017, the court entered an order transferring the matter to the U.S. District Court for the Eastern District of Missouri. The plaintiffs in the lawsuit allege that the Company's accounting and related disclosures for certain liabilities acquired in the acquisition of Health Net violated federal securities laws. In July 2017, the lead plaintiff filed a Consolidated Class Action Complaint. The Company filed a motion to dismiss this complaint in September 2017. The Company denies any wrongdoing and is vigorously defending itself against these claims. Nevertheless, this matter is subject to many uncertainties and the Company cannot predict how long this litigation will last or what the ultimate outcome will be, and an adverse outcome in this matter could potentially have a materially adverse impact on our financial position and results of operations. Medicare Parts C and D Matter In December 2016, a Civil Investigative Demand (CID) was issued to Health Net by the United States Department of Justice regarding Health Net’s submission of risk adjustment claims to CMS under Parts C and D of Medicare. The CID may be related to a federal qui tam lawsuit filed under seal in 2011 naming more than a dozen health insurers including Health Net. The lawsuit was unsealed in February 2017 when the Department of Justice intervened in the case with respect to one of the insurers (not Health Net). The Company is complying with the CID and will vigorously defend any lawsuits. At this point, it is not possible to determine what level of liability, if any, the Company may face as a result of this matter. Veterans Administrative Matter In October 2017, a CID was issued to Health Net Federal Services, LLC (HNFS) by the United States Department of Justice. The CID seeks documents and interrogatory responses concerning whether HNFS submitted, or caused to be submitted, excessive, duplicative or otherwise improper claims to the U.S. Department of Veterans Affairs under a contract to arrange health care services for veterans. The contract began in late 2014. In 2016, modifications to the contract were made to allow for possible duplicate billings with a reconciliation period at the end of the contract term. The Company is complying with the CID and believes it has been meeting its contractual obligations. At this point, it is not possible to determine what level of liability, if any, the Company may face as a result of this matter. Guaranty Fund Assessment Under state guaranty association laws, certain insurance companies can be assessed for certain obligations to the policyholders and claimants of impaired or insolvent insurance companies that write the same line or similar lines of business. In 2009, the Pennsylvania Insurance Commissioner placed long-term care insurer Penn Treaty Network America Insurance Company and its subsidiary (Penn Treaty), neither of which is affiliated with the Company, in rehabilitation and petitioned a state court for approval to liquidate Penn Treaty. In March 2017, the court issued the final liquidation order, and as a result, during the nine months ended September 30, 2017 , the Company recognized $56 million representing its undiscounted estimated share of the guaranty association assessment as selling, general and administrative expenses. Miscellaneous Proceedings Excluding the matters discussed above, the Company is also routinely subjected to legal and regulatory proceedings in the normal course of business. These matters can include, without limitation: • periodic compliance and other reviews and investigations by various federal and state regulatory agencies with respect to requirements applicable to the Company's business, including, without limitation, those related to payment of out-of-network claims, submissions to CMS for risk adjustment payments or the False Claims Act, pre-authorization penalties, timely review of grievances and appeals, timely and accurate payment of claims, and the Health Insurance Portability and Accountability Act of 1996; • litigation arising out of general business activities, such as tax matters, disputes related to health care benefits coverage or reimbursement, putative securities class actions and medical malpractice, privacy, real estate, intellectual property and employment-related claims; • disputes regarding reinsurance arrangements, claims arising out of the acquisition or divestiture of various assets, class actions and claims relating to the performance of contractual and non-contractual obligations to providers, members, employer groups and others, including, but not limited to, the alleged failure to properly pay claims and challenges to the manner in which the Company processes claims, and claims alleging that the Company has engaged in unfair business practices. Among other things, these matters may result in awards of damages, fines or penalties, which could be substantial, and/or could require changes to the Company’s business. The Company intends to vigorously defend itself against the miscellaneous legal and regulatory proceedings to which it is currently a party; however, these proceedings are subject to many uncertainties. In some of the cases pending against the Company, substantial non-economic or punitive damages are being sought. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On October 1, 2017, the Company acquired 80% of a national, full-service specialty pharmacy, providing service to patients with certain chronic respiratory and digestive conditions. The purchase price consists of $53 million in cash paid at closing, $7 million in deferred consideration, and up to an additional $32 million of contingent consideration to be paid upon meeting certain performance metrics. |
Acquisitions and Noncontrolli21
Acquisitions and Noncontrolling Interest (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Reconciliation of Changes in Redeemable Noncontrolling Interest | A reconciliation of the changes in the Redeemable Noncontrolling Interest is as follows ($ in millions): Balance, December 31, 2016 $ 145 Noncontrolling interest purchased related to USMM (115 ) Contribution from redeemable noncontrolling interest 2 Net losses attributable to noncontrolling interests (12 ) Balance, September 30, 2017 $ 20 |
Short-term and Long-term Inve22
Short-term and Long-term Investments, Restricted Deposits (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term and long-term investments and restricted deposits by investment type | Short-term and long-term investments and restricted deposits by investment type consist of the following ($ in millions): September 30, 2017 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 330 $ — $ (1 ) $ 329 $ 364 $ — $ (1 ) $ 363 Corporate securities 2,098 18 (6 ) 2,110 1,933 12 (13 ) 1,932 Restricted certificates of deposit 4 — — 4 5 — — 5 Restricted cash equivalents 6 — — 6 6 — — 6 Municipal securities 1,979 16 (6 ) 1,989 1,767 1 (35 ) 1,733 Asset-backed securities 376 2 — 378 317 1 (1 ) 317 Residential mortgage-backed securities 309 1 (4 ) 306 219 1 (5 ) 215 Commercial mortgage-backed securities 238 1 (3 ) 236 343 — (5 ) 338 Cost and equity method investments 171 — — 171 163 — — 163 Life insurance contracts 131 — — 131 116 — — 116 Total $ 5,642 $ 38 $ (20 ) $ 5,660 $ 5,233 $ 15 $ (60 ) $ 5,188 |
Fair value of available-for-sale investments with gross unrealized losses byinvestment type and length of time | The fair value of available-for-sale investments with gross unrealized losses by investment type and length of time that individual securities have been in a continuous unrealized loss position were as follows ($ in millions): September 30, 2017 December 31, 2016 Less Than 12 Months 12 Months or More Less Than 12 Months 12 Months or More Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value U.S. Treasury securities and obligations of U.S. government corporations and agencies $ (1 ) $ 277 $ — $ 3 $ (1 ) $ 215 $ — $ 2 Corporate securities (4 ) 587 (2 ) 83 (12 ) 1,020 (1 ) 39 Municipal securities (4 ) 457 (2 ) 96 (35 ) 1,423 — 30 Asset-backed securities — 126 — 13 (1 ) 101 — 18 Residential mortgage-backed securities (3 ) 190 (1 ) 49 (5 ) 188 — — Commercial mortgage-backed securities (1 ) 99 (2 ) 31 (5 ) 271 — — Total $ (13 ) $ 1,736 $ (7 ) $ 275 $ (59 ) $ 3,218 $ (1 ) $ 89 |
Contractual maturities of short-term and long-term investments and restricted deposits | The contractual maturities of short-term and long-term investments and restricted deposits are as follows ($ in millions): September 30, 2017 December 31, 2016 Investments Restricted Deposits Investments Restricted Deposits Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value One year or less $ 533 $ 533 $ 65 $ 65 $ 500 $ 500 $ 91 $ 91 One year through five years 2,149 2,162 73 73 1,982 1,974 47 47 Five years through ten years 1,680 1,687 — — 1,101 1,089 — — Greater than ten years 219 220 — — 633 617 — — Asset-backed securities 923 920 — — 879 870 — — Total $ 5,504 $ 5,522 $ 138 $ 138 $ 5,095 $ 5,050 $ 138 $ 138 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements by Level for Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table summarizes fair value measurements by level at September 30, 2017 , for assets and liabilities measured at fair value on a recurring basis ($ in millions): Level I Level II Level III Total Assets Cash and cash equivalents $ 4,281 $ — $ — $ 4,281 Investments available for sale: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 201 $ — $ — $ 201 Corporate securities — 2,110 — 2,110 Municipal securities — 1,989 — 1,989 Asset-backed securities — 378 — 378 Residential mortgage-backed securities — 306 — 306 Commercial mortgage-backed securities — 236 — 236 Total investments $ 201 $ 5,019 $ — $ 5,220 Restricted deposits available for sale: Cash and cash equivalents $ 6 $ — $ — $ 6 Certificates of deposit 4 — — 4 U.S. Treasury securities and obligations of U.S. government corporations and agencies 128 — — 128 Total restricted deposits $ 138 $ — $ — $ 138 Other long-term assets: Interest rate swap agreements $ — $ 4 $ — $ 4 Total assets at fair value $ 4,620 $ 5,023 $ — $ 9,643 Liabilities Other long-term liabilities: Interest rate swap agreements $ — $ 53 $ — $ 53 Total liabilities at fair value $ — $ 53 $ — $ 53 The following table summarizes fair value measurements by level at December 31, 2016 , for assets and liabilities measured at fair value on a recurring basis ($ in millions): Level I Level II Level III Total Assets Cash and cash equivalents $ 3,930 $ — $ — $ 3,930 Investments available for sale: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 221 $ 15 $ — $ 236 Corporate securities — 1,932 — 1,932 Municipal securities — 1,733 — 1,733 Asset-backed securities — 317 — 317 Residential mortgage-backed securities — 215 — 215 Commercial mortgage-backed securities — 338 — 338 Total investments $ 221 $ 4,550 $ — $ 4,771 Restricted deposits available for sale: Cash and cash equivalents $ 6 $ — $ — $ 6 Certificates of deposit 5 — — 5 U.S. Treasury securities and obligations of U.S. government corporations and agencies 127 — — 127 Total restricted deposits $ 138 $ — $ — $ 138 Other long-term assets: Interest rate swap agreements $ — $ 4 $ — $ 4 Total assets at fair value $ 4,289 $ 4,554 $ — $ 8,843 Liabilities Other long-term liabilities: Interest rate swap agreements $ — $ 62 $ — $ 62 Total liabilities at fair value $ — $ 62 $ — $ 62 |
Medical Claims Liability (Table
Medical Claims Liability (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Insurance [Abstract] | |
Schedule of change in medical claims liability | The following table summarizes the change in medical claims liability ($ in millions): Nine Months Ended September 30, 2017 2016 Balance, January 1 $ 3,929 $ 2,298 Less: Reinsurance Recoverable 5 — Balance, January 1, net 3,924 2,298 Acquisitions — 1,453 Incurred related to: Current year 28,666 22,372 Prior years (388 ) (300 ) Total incurred 28,278 22,072 Paid related to: Current year 24,787 20,121 Prior years 3,099 1,935 Total paid 27,886 22,056 Balance at September 30, net 4,316 3,767 Plus: Reinsurance Recoverable 17 — Balance, September 30 $ 4,333 $ 3,767 |
Affordable Care Act (Tables)
Affordable Care Act (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Affordable Care Act [Abstract] | |
Schedule of Receivables (Payables) Related to the Affordable Care Act Programs | The Company's net receivables (payables) for each of these programs are as follows ($ in millions): September 30, 2017 December 31, 2016 Risk adjustment $ (609 ) $ (425 ) Reinsurance 15 122 Risk corridor (8 ) (3 ) Minimum MLR (1 ) (18 ) Cost sharing reductions (180 ) (147 ) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of the following ($ in millions): September 30, 2017 December 31, 2016 $1,400 million 5.625% Senior notes, due February 15, 2021 $ 1,400 $ 1,400 $1,000 million 4.75% Senior notes, due May 15, 2022 1,007 1,008 $1,000 million 6.125% Senior notes, due February 15, 2024 1,000 1,000 $1,200 million 4.75% Senior notes, due January 15, 2025 1,200 1,200 Fair value of interest rate swap agreements (49 ) (58 ) Total senior notes 4,558 4,550 Revolving credit agreement 150 100 Mortgage notes payable 62 64 Capital leases and other 17 18 Debt issuance costs (66 ) (77 ) Total debt 4,721 4,655 Less current portion (4 ) (4 ) Long-term debt $ 4,717 $ 4,651 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Net Earnings (Loss) Per Common Share | The following table sets forth the calculation of basic and diluted net earnings (loss) per common share ($ in millions, except shares in thousands and per share data in dollars): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Earnings attributable to Centene Corporation: Earnings from continuing operations, net of tax $ 205 $ 148 $ 598 $ 304 Discontinued operations, net of tax — (1 ) — (3 ) Net earnings $ 205 $ 147 $ 598 $ 301 Shares used in computing per share amounts: Weighted average number of common shares outstanding 172,508 170,775 172,314 155,681 Common stock equivalents (as determined by applying the treasury stock method) 4,407 4,720 4,100 4,376 Weighted average number of common shares and potential dilutive common shares outstanding 176,915 175,495 176,414 160,057 Net earnings (loss) per common share attributable to Centene Corporation: Basic: Continuing operations $ 1.19 $ 0.87 $ 3.47 $ 1.95 Discontinued operations — (0.01 ) — (0.02 ) Basic earnings per common share $ 1.19 $ 0.86 $ 3.47 $ 1.93 Diluted: Continuing operations $ 1.16 $ 0.84 $ 3.39 $ 1.90 Discontinued operations — — — (0.02 ) Diluted earnings per common share $ 1.16 $ 0.84 $ 3.39 $ 1.88 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment information for the three months ended September 30, 2017 , follows ($ in millions): Managed Care Specialty Services Eliminations Consolidated Total Total revenues from external customers $ 11,248 $ 650 $ — $ 11,898 Total revenues from internal customers 11 2,367 (2,378 ) — Total revenues $ 11,259 $ 3,017 $ (2,378 ) $ 11,898 Earnings from operations $ 238 $ 102 $ — $ 340 Segment information for the three months ended September 30, 2016 , follows ($ in millions): Managed Care Specialty Services Eliminations Consolidated Total Total revenues from external customers $ 10,175 $ 671 $ — $ 10,846 Total revenues from internal customers 56 1,524 (1,580 ) — Total revenues $ 10,231 $ 2,195 $ (1,580 ) $ 10,846 Earnings from operations $ 309 $ 33 $ — $ 342 Segment information for the nine months ended September 30, 2017 , follows ($ in millions): Managed Care Specialty Services Eliminations Consolidated Total Total revenues from external customers $ 33,704 $ 1,872 $ — $ 35,576 Total revenues from internal customers 33 7,112 (7,145 ) — Total revenues $ 33,737 $ 8,984 $ (7,145 ) $ 35,576 Earnings from operations $ 799 $ 219 $ — $ 1,018 Segment information for the nine months ended September 30, 2016 , follows ($ in millions): Managed Care Specialty Services Eliminations Consolidated Total Total revenues from external customers $ 26,926 $ 1,770 $ — $ 28,696 Total revenues from internal customers 144 4,383 (4,527 ) — Total revenues $ 27,070 $ 6,153 $ (4,527 ) $ 28,696 Earnings from operations $ 627 $ 112 $ — $ 739 |
Organization and Operations (De
Organization and Operations (Details) - USD ($) $ in Millions | Mar. 24, 2016 | Sep. 30, 2016 | Sep. 30, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Decrease to income tax expense due to adoption of ASU 2016-09 | $ 2 | $ 4 | |
Health Net, Inc. | |||
Business Acquisition [Line Items] | |||
Business combination, consideration transferred, including assumed debt | $ 6,000 |
Fidelis Care Transaction (Detai
Fidelis Care Transaction (Details) $ in Millions | Sep. 30, 2017USD ($) |
Fidelis Care | |
Business Acquisition [Line Items] | |
Definitive agreement to acquire amount | $ 3,750 |
Acquisitions and Noncontrolli31
Acquisitions and Noncontrolling Interest - Narrative (Details) - U.S. Medical Management $ in Millions | 1 Months Ended |
Aug. 31, 2017USD ($) | |
Business Acquisition [Line Items] | |
Percentage of ownership interests acquired | 32.00% |
Consideration transferred | $ 86 |
Cash paid to acquire business | 33 |
Deferred consideration | 33 |
Settlement of receivable from former noncontrolling interest holder | $ 20 |
Acquisitions and Noncontrolli32
Acquisitions and Noncontrolling Interest - Reconciliation of Changes in Redeemable Noncontrolling Interest (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Balance, December 31, 2016 | $ 145 |
Noncontrolling interest purchased related to USMM | (115) |
Contribution from redeemable noncontrolling interest | 2 |
Net losses attributable to noncontrolling interests | (12) |
Balance, September 30, 2017 | $ 20 |
Short-term and Long-term Inve33
Short-term and Long-term Investments, Restricted Deposits (By Investment Type) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Amortized Cost | $ 5,642 | $ 5,233 |
Gross Unrealized Gains | 38 | 15 |
Gross Unrealized Losses | (20) | (60) |
Fair Value | 5,660 | 5,188 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Amortized Cost | 330 | 364 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | (1) |
Fair Value | 329 | 363 |
Corporate securities | ||
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Amortized Cost | 2,098 | 1,933 |
Gross Unrealized Gains | 18 | 12 |
Gross Unrealized Losses | (6) | (13) |
Fair Value | 2,110 | 1,932 |
Restricted certificates of deposit | ||
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Amortized Cost | 4 | 5 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 4 | 5 |
Restricted cash equivalents | ||
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Amortized Cost | 6 | 6 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 6 | 6 |
Municipal securities | ||
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Amortized Cost | 1,979 | 1,767 |
Gross Unrealized Gains | 16 | 1 |
Gross Unrealized Losses | (6) | (35) |
Fair Value | 1,989 | 1,733 |
Asset-backed securities | ||
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Amortized Cost | 376 | 317 |
Gross Unrealized Gains | 2 | 1 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | 378 | 317 |
Residential mortgage-backed securities | ||
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Amortized Cost | 309 | 219 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | (4) | (5) |
Fair Value | 306 | 215 |
Commercial mortgage-backed securities | ||
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Amortized Cost | 238 | 343 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (3) | (5) |
Fair Value | 236 | 338 |
Cost and equity method investments | ||
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Amortized Cost | 171 | 163 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 171 | 163 |
Life insurance contracts | ||
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Amortized Cost | 131 | 116 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 131 | $ 116 |
Short-term and Long-term Inve34
Short-term and Long-term Investments, Restricted Deposits (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2017position | |
Schedule Of Investments And Restricted Deposits By Type [Line Items] | |
Positions from which gross unrealized losses were generated | 1,201 |
Total unrealized investment positions | 3,192 |
Commercial mortgage-backed securities | |
Schedule Of Investments And Restricted Deposits By Type [Line Items] | |
Investments recorded at fair value that carry rating of AA Plus, weighted average (in years) | 4 years 1 month 6 days |
Rated Securities | External Credit Rating, Investment Grade | |
Schedule Of Investments And Restricted Deposits By Type [Line Items] | |
Percentage of investments in rated securities carry an investment grade rating by nationally recognized statistical rating organizations | 95.00% |
Short-term and Long-term Inve35
Short-term and Long-term Investments, Restricted Deposits (Fair Value of Available-For-Sale Investments with Gross Unrealized Losses by Investment Type and Length of Time) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Unrealized Losses | ||
Less Than 12 Months | $ (13) | $ (59) |
12 Months or More | (7) | (1) |
Fair Value | ||
Less Than 12 Months | 1,736 | 3,218 |
12 Months or More | 275 | 89 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Unrealized Losses | ||
Less Than 12 Months | (1) | (1) |
12 Months or More | 0 | 0 |
Fair Value | ||
Less Than 12 Months | 277 | 215 |
12 Months or More | 3 | 2 |
Corporate securities | ||
Unrealized Losses | ||
Less Than 12 Months | (4) | (12) |
12 Months or More | (2) | (1) |
Fair Value | ||
Less Than 12 Months | 587 | 1,020 |
12 Months or More | 83 | 39 |
Municipal securities | ||
Unrealized Losses | ||
Less Than 12 Months | (4) | (35) |
12 Months or More | (2) | 0 |
Fair Value | ||
Less Than 12 Months | 457 | 1,423 |
12 Months or More | 96 | 30 |
Asset-backed securities | ||
Unrealized Losses | ||
Less Than 12 Months | 0 | (1) |
12 Months or More | 0 | 0 |
Fair Value | ||
Less Than 12 Months | 126 | 101 |
12 Months or More | 13 | 18 |
Residential mortgage-backed securities | ||
Unrealized Losses | ||
Less Than 12 Months | (3) | (5) |
12 Months or More | (1) | 0 |
Fair Value | ||
Less Than 12 Months | 190 | 188 |
12 Months or More | 49 | 0 |
Commercial mortgage-backed securities | ||
Unrealized Losses | ||
Less Than 12 Months | (1) | (5) |
12 Months or More | (2) | 0 |
Fair Value | ||
Less Than 12 Months | 99 | 271 |
12 Months or More | $ 31 | $ 0 |
Short-term and Long-term Inve36
Short-term and Long-term Investments, Restricted Deposits (Contractual Maturities of Short-Term and Long-Term Investments and Restricted Deposits) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Investments | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost, one year or less | $ 533 | $ 500 |
Amortized cost, one year through five years | 2,149 | 1,982 |
Amortized cost, five years through ten years | 1,680 | 1,101 |
Amortized cost, greater than ten years | 219 | 633 |
Amortized cost, asset-backed securities | 923 | 879 |
Amortized cost, total | 5,504 | 5,095 |
Fair value, one year or less | 533 | 500 |
Fair value, one year through five years | 2,162 | 1,974 |
Fair value, five years through ten years | 1,687 | 1,089 |
Fair value, greater than ten years | 220 | 617 |
Fair value, asset-backed securities | 920 | 870 |
Fair value, total | 5,522 | 5,050 |
Restricted Deposits | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost, one year or less | 65 | 91 |
Amortized cost, one year through five years | 73 | 47 |
Amortized cost, five years through ten years | 0 | 0 |
Amortized cost, greater than ten years | 0 | 0 |
Amortized cost, asset-backed securities | 0 | 0 |
Amortized cost, total | 138 | 138 |
Fair value, one year or less | 65 | 91 |
Fair value, one year through five years | 73 | 47 |
Fair value, five years through ten years | 0 | 0 |
Fair value, greater than ten years | 0 | 0 |
Fair value, asset-backed securities | 0 | 0 |
Fair value, total | $ 138 | $ 138 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Measurements by Level for Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 4,281 | $ 3,930 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | 201 | 236 |
Corporate securities | 2,110 | 1,932 |
Municipal securities | 1,989 | 1,733 |
Asset-backed securities | 378 | 317 |
Total investments | 5,220 | 4,771 |
Cash and cash equivalents | 6 | 6 |
Certificates of deposit | 4 | 5 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | 128 | 127 |
Total restricted deposits | 138 | 138 |
Interest rate swap agreements | 4 | 4 |
Total assets at fair value | 9,643 | 8,843 |
Liabilities | ||
Interest rate swap agreements | 53 | 62 |
Total liabilities at fair value | 53 | 62 |
Residential mortgage-backed securities | ||
Assets | ||
Mortgage-backed securities | 306 | 215 |
Commercial mortgage-backed securities | ||
Assets | ||
Mortgage-backed securities | 236 | 338 |
Level I | ||
Assets | ||
Cash and cash equivalents | 4,281 | 3,930 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | 201 | 221 |
Corporate securities | 0 | 0 |
Municipal securities | 0 | 0 |
Asset-backed securities | 0 | 0 |
Total investments | 201 | 221 |
Cash and cash equivalents | 6 | 6 |
Certificates of deposit | 4 | 5 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | 128 | 127 |
Total restricted deposits | 138 | 138 |
Interest rate swap agreements | 0 | 0 |
Total assets at fair value | 4,620 | 4,289 |
Liabilities | ||
Interest rate swap agreements | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Level I | Residential mortgage-backed securities | ||
Assets | ||
Mortgage-backed securities | 0 | 0 |
Level I | Commercial mortgage-backed securities | ||
Assets | ||
Mortgage-backed securities | 0 | 0 |
Level II | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | 0 | 15 |
Corporate securities | 2,110 | 1,932 |
Municipal securities | 1,989 | 1,733 |
Asset-backed securities | 378 | 317 |
Total investments | 5,019 | 4,550 |
Cash and cash equivalents | 0 | 0 |
Certificates of deposit | 0 | 0 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | 0 | 0 |
Total restricted deposits | 0 | 0 |
Interest rate swap agreements | 4 | 4 |
Total assets at fair value | 5,023 | 4,554 |
Liabilities | ||
Interest rate swap agreements | 53 | 62 |
Total liabilities at fair value | 53 | 62 |
Level II | Residential mortgage-backed securities | ||
Assets | ||
Mortgage-backed securities | 306 | 215 |
Level II | Commercial mortgage-backed securities | ||
Assets | ||
Mortgage-backed securities | 236 | 338 |
Level III | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | 0 | 0 |
Corporate securities | 0 | 0 |
Municipal securities | 0 | 0 |
Asset-backed securities | 0 | 0 |
Total investments | 0 | 0 |
Cash and cash equivalents | 0 | 0 |
Certificates of deposit | 0 | 0 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | 0 | 0 |
Total restricted deposits | 0 | 0 |
Interest rate swap agreements | 0 | 0 |
Total assets at fair value | 0 | 0 |
Liabilities | ||
Interest rate swap agreements | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Level III | Residential mortgage-backed securities | ||
Assets | ||
Mortgage-backed securities | 0 | 0 |
Level III | Commercial mortgage-backed securities | ||
Assets | ||
Mortgage-backed securities | $ 0 | $ 0 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Transfers from Level I to Level II | $ 0 | |
Transfers from Level II to Level I | 14,000,000 | |
Life insurance contracts and other non-majority owned investments, fair value | $ 302,000,000 | $ 279,000,000 |
Medical Claims Liability (Sched
Medical Claims Liability (Schedule of Change in Medical Claims Liability) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balance, January 1 | $ 3,929 | $ 2,298 |
Less: Reinsurance Recoverable | 5 | 0 |
Balance, January 1, net | 3,924 | 2,298 |
Acquisitions | 0 | 1,453 |
Incurred related to: | ||
Current year | 28,666 | 22,372 |
Prior years | (388) | (300) |
Total incurred | 28,278 | 22,072 |
Paid related to: | ||
Current year | 24,787 | 20,121 |
Prior years | 3,099 | 1,935 |
Total paid | 27,886 | 22,056 |
Balance at September 30, net | 4,316 | 3,767 |
Plus: Reinsurance Recoverable | 17 | 0 |
Balance, September 30 | $ 4,333 | $ 3,767 |
Medical Claims Liability (Narra
Medical Claims Liability (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Insurance [Abstract] | ||
Amounts recorded as an adjustment to premium revenues related to minimum HBR and return of premium programs | $ (4) | $ 27 |
Short-duration insurance contracts, Incurred but not reported and expected development on reported claims | $ 3,292 |
Affordable Care Act (Details)
Affordable Care Act (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | |
Affordable Care Act [Abstract] | ||||
Risk adjustment and reinsurance, pre-tax benefit, period increase (decrease) | $ 48 | $ 70 | ||
Risk adjustment | $ (609) | $ (425) | ||
Reinsurance | 15 | 122 | ||
Risk corridor | (8) | (3) | ||
Minimum MLR | (1) | (18) | ||
Cost sharing reductions | $ (180) | $ (147) |
Debt - (Schedule of Debt) (Deta
Debt - (Schedule of Debt) (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Nov. 30, 2016 |
Debt Instrument [Line Items] | |||
Fair value of interest rate swap agreements | $ (49,000,000) | $ (58,000,000) | |
Total senior notes | 4,558,000,000 | 4,550,000,000 | |
Mortgage notes payable | 62,000,000 | 64,000,000 | |
Capital leases and other | 17,000,000 | 18,000,000 | |
Debt issuance costs | (66,000,000) | (77,000,000) | |
Total debt | 4,721,000,000 | 4,655,000,000 | |
Less current portion | (4,000,000) | (4,000,000) | |
Long-term debt | 4,717,000,000 | 4,651,000,000 | |
Revolving credit agreement | |||
Debt Instrument [Line Items] | |||
Revolving credit agreement | 150,000,000 | 100,000,000 | |
Senior Notes | $1,400 million 5.625% Senior notes, due February 15, 2021 | |||
Debt Instrument [Line Items] | |||
Debt, face amount | $ 1,400,000,000 | ||
Interest rate, stated | 5.625% | ||
Senior notes | $ 1,400,000,000 | 1,400,000,000 | |
Senior Notes | $1,000 million 4.75% Senior notes, due May 15, 2022 | |||
Debt Instrument [Line Items] | |||
Debt, face amount | $ 1,000,000,000 | ||
Interest rate, stated | 4.75% | ||
Senior notes | $ 1,007,000,000 | 1,008,000,000 | |
Senior Notes | $1,000 million 6.125% Senior notes, due February 15, 2024 | |||
Debt Instrument [Line Items] | |||
Debt, face amount | $ 1,000,000,000 | ||
Interest rate, stated | 6.125% | ||
Senior notes | $ 1,000,000,000 | 1,000,000,000 | |
Senior Notes | $1,200 million 4.75% Senior notes, due January 15, 2025 | |||
Debt Instrument [Line Items] | |||
Debt, face amount | $ 1,200,000,000 | $ 1,200,000,000 | |
Interest rate, stated | 4.75% | 4.75% | |
Senior notes | $ 1,200,000,000 | $ 1,200,000,000 |
Debt - (Interest Rate Swaps) (D
Debt - (Interest Rate Swaps) (Details) - USD ($) | Sep. 30, 2017 | Feb. 28, 2017 | Nov. 30, 2016 |
Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Notional amount of interest rate swap agreements | $ 2,700,000,000 | ||
Average variable rate, interest rate swap agreements (percent) | 3.61% | ||
Weighted average rate, interest rate swap agreements (percent) | 4.91% | ||
February 15, 2021 Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Notional amount of interest rate swap agreements | $ 600,000,000 | ||
May 15, 2022 Expiration, Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Notional amount of interest rate swap agreements | 500,000,000 | ||
February 15, 2024 Expiration Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Notional amount of interest rate swap agreements | 1,000,000,000 | ||
January 15, 2025 Expiration Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Notional amount of interest rate swap agreements | 600,000,000 | $ 600,000,000 | |
Average variable rate, interest rate swap agreements (percent) | 2.53% | ||
Senior Notes | $1,200 million 4.75% Senior notes, due January 15, 2025 | |||
Debt Instrument [Line Items] | |||
Debt, face amount | $ 1,200,000,000 | $ 1,200,000,000 | |
Interest rate, stated | 4.75% | 4.75% |
Debt - (Revolving Credit Agreem
Debt - (Revolving Credit Agreement) (Details) - Revolving credit agreement | 9 Months Ended | |
Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 1,000,000,000 | |
Borrowings outstanding | $ 150,000,000 | $ 100,000,000 |
Weighted average interest rate (percent) | 4.75% | |
Ratio of debt to EBITDA, after current year | 3 |
Debt - (Letters of Credit & Sur
Debt - (Letters of Credit & Surety Bonds) (Details) € in Millions, $ in Millions | Sep. 30, 2017USD ($) | Sep. 30, 2017EUR (€) |
Surety Bond | ||
Debt Instrument [Line Items] | ||
Surety bonds | $ 404 | |
Letter of Credit | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding | $ 51 | |
Letters of credit, effective yield (percent) | 1.33% | 1.33% |
Letter of Credit | Ribera Salud | ||
Debt Instrument [Line Items] | ||
Borrowings outstanding | $ 45 | € 38 |
Debt - (Construction Loan) (Det
Debt - (Construction Loan) (Details) | 1 Months Ended |
Oct. 23, 2017USD ($) | |
Subsequent Event [Line Items] | |
Debt Instrument, Maturity Date | Apr. 23, 2021 |
Construction Loan Payable | Subsequent Event | |
Subsequent Event [Line Items] | |
Debt, face amount | $ 200,000,000 |
Optional extension term | 1 year |
Construction Loan Payable | London Interbank Offered Rate (LIBOR) | Subsequent Event | |
Subsequent Event [Line Items] | |
Interest rate | 2.70% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings attributable to Centene Corporation: | ||||
Earnings from continuing operations, net of tax | $ 205 | $ 148 | $ 598 | $ 304 |
Discontinued operations, net of tax | 0 | (1) | 0 | (3) |
Net earnings | $ 205 | $ 147 | $ 598 | $ 301 |
Shares used in computing per share amounts: | ||||
Weighted average number of common shares outstanding (in shares) | 172,508 | 170,775 | 172,314 | 155,681 |
Common stock equivalents (as determined by applying the treasury stock method) (in shares) | 4,407 | 4,720 | 4,100 | 4,376 |
Weighted average number of common shares and potential dilutive common shares outstanding (in shares) | 176,915 | 175,495 | 176,414 | 160,057 |
Basic: | ||||
Continuing operations (in dollars per share) | $ 1.19 | $ 0.87 | $ 3.47 | $ 1.95 |
Discontinued operations (in dollars per share) | 0 | (0.01) | 0 | (0.02) |
Basic earnings per common share (in dollars per share) | 1.19 | 0.86 | 3.47 | 1.93 |
Diluted: | ||||
Continuing operations (in dollars per share) | 1.16 | 0.84 | 3.39 | 1.90 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.02) |
Diluted earnings per common share (in dollars per share) | $ 1.16 | $ 0.84 | $ 3.39 | $ 1.88 |
Anti-dilutive restricted stock and restricted stock units excluded from the calculation of diluted earnings per common share (in shares) | 4 | 57 | 27 | 66 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 11,898 | $ 10,846 | $ 35,576 | $ 28,696 |
Earnings from operations | 340 | 342 | 1,018 | 739 |
Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | (2,378) | (1,580) | (7,145) | (4,527) |
Managed Care | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 11,248 | 10,175 | 33,704 | 26,926 |
Earnings from operations | 238 | 309 | 799 | 627 |
Managed Care | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 11,259 | 10,231 | 33,737 | 27,070 |
Managed Care | Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 11 | 56 | 33 | 144 |
Specialty Services | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 650 | 671 | 1,872 | 1,770 |
Earnings from operations | 102 | 33 | 219 | 112 |
Specialty Services | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 3,017 | 2,195 | 8,984 | 6,153 |
Specialty Services | Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 2,367 | $ 1,524 | $ 7,112 | $ 4,383 |
Contingencies (Details)
Contingencies (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Undiscounted estimated share of the guaranty | $ 56 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event - National Full-service Specialty Pharmacy $ in Millions | Oct. 01, 2017USD ($) |
Subsequent Event [Line Items] | |
Percentage of ownership interests acquired | 80.00% |
Cash paid to acquire business | $ 53 |
Deferred consideration | 7 |
Contingent consideration | $ 32 |