Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 14, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-31826 | |
Entity Registrant Name | CENTENE CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 42-1406317 | |
Entity Address, Address Line One | 7700 Forsyth Boulevard | |
Entity Address, City or Town | St. Louis, | |
Entity Address, State or Province | MO | |
Entity Address, Postal Zip Code | 63105 | |
City Area Code | 314 | |
Local Phone Number | 725-4477 | |
Title of 12(b) Security | Common Stock $0.001 Par Value | |
Trading Symbol | CNC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 566,259,693 | |
Entity Central Index Key | 0001071739 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 14,987 | $ 13,118 |
Premium and trade receivables | 13,770 | 12,238 |
Short-term investments | 2,191 | 1,539 |
Other current assets | 2,327 | 1,602 |
Total current assets | 33,275 | 28,497 |
Long-term investments | 14,053 | 14,043 |
Restricted deposits | 1,205 | 1,068 |
Property, software and equipment, net | 2,479 | 3,391 |
Goodwill | 20,040 | 19,771 |
Intangible assets, net | 7,523 | 7,824 |
Other long-term assets | 2,597 | 3,781 |
Total assets | 81,172 | 78,375 |
Current liabilities: | ||
Medical claims liability | 16,465 | 14,243 |
Accounts payable and accrued expenses | 9,995 | 8,493 |
Return of premium payable | 2,205 | 2,328 |
Unearned revenue | 2,416 | 434 |
Current portion of long-term debt | 249 | 267 |
Total current liabilities | 31,330 | 25,765 |
Long-term debt | 18,084 | 18,571 |
Deferred tax liability | 480 | 1,407 |
Other long-term liabilities | 5,678 | 5,610 |
Total liabilities | 55,572 | 51,353 |
Commitments and contingencies | ||
Redeemable noncontrolling interests | 66 | 82 |
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; authorized 10,000 shares; no shares issued or outstanding at September 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.001 par value; authorized 800,000 shares; 606,931 issued and 570,091 outstanding at September 30, 2022, and 602,704 issued and 582,479 outstanding at December 31, 2021 | 1 | 1 |
Additional paid-in capital | 19,774 | 19,672 |
Accumulated other comprehensive earnings | (1,394) | 77 |
Retained earnings | 9,554 | 8,139 |
Treasury stock, at cost (36,840 and 20,225 shares, respectively) | (2,557) | (1,094) |
Total Centene stockholders’ equity | 25,378 | 26,795 |
Nonredeemable noncontrolling interest | 156 | 145 |
Total stockholders’ equity | 25,534 | 26,940 |
Total liabilities, redeemable noncontrolling interests and stockholders’ equity | $ 81,172 | $ 78,375 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Stockholders' equity | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 800,000,000 | 800,000,000 |
Common stock, shares issued (in shares) | 606,931,000 | 602,704,000 |
Common stock, shares outstanding (in shares) | 570,091,000 | 582,479,000 |
Treasury stock (in shares) | 36,840,000 | 20,225,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Premium and service revenues | $ 33,726 | $ 30,514 | $ 101,926 | $ 87,490 |
Premium tax | 2,139 | 1,892 | 7,060 | 5,924 |
Total revenues | 35,865 | 32,406 | 108,986 | 93,414 |
Expenses: | ||||
Medical costs | 28,111 | 25,430 | 83,261 | 73,210 |
Cost of services | 1,571 | 1,355 | 5,658 | 3,510 |
Selling, general and administrative expenses | 2,846 | 2,537 | 8,391 | 6,910 |
Depreciation expense | 150 | 147 | 470 | 414 |
Amortization of acquired intangible assets | 211 | 198 | 609 | 581 |
Premium tax expense | 2,211 | 1,965 | 7,258 | 6,129 |
Impairment | 289 | 229 | 1,739 | 229 |
Legal settlement | 0 | 0 | 0 | 1,250 |
Total operating expenses | 35,389 | 31,861 | 107,386 | 92,233 |
Earnings from operations | 476 | 545 | 1,600 | 1,181 |
Other income (expense): | ||||
Investment and other income | 692 | 424 | 786 | 566 |
Debt extinguishment | 10 | (79) | 26 | (125) |
Interest expense | (169) | (170) | (491) | (503) |
Earnings before income tax | 1,009 | 720 | 1,921 | 1,119 |
Income tax expense | 269 | 139 | 500 | 376 |
Net earnings | 740 | 581 | 1,421 | 743 |
(Earnings) loss attributable to noncontrolling interests | (2) | 3 | (6) | 5 |
Net earnings attributable to Centene Corporation | $ 738 | $ 584 | $ 1,415 | $ 748 |
Net earnings per common share attributable to Centene Corporation: | ||||
Basic earnings per common share (in dollars per share) | $ 1.29 | $ 1 | $ 2.44 | $ 1.28 |
Diluted earnings per common share (in dollars per share) | $ 1.27 | $ 0.99 | $ 2.41 | $ 1.27 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 573,961 | 583,244 | 580,277 | 582,636 |
Diluted (in shares) | 580,607 | 590,702 | 587,084 | 590,154 |
Premium | ||||
Revenues: | ||||
Premium and service revenues | $ 31,848 | $ 28,876 | $ 95,247 | $ 83,436 |
Service | ||||
Revenues: | ||||
Premium and service revenues | $ 1,878 | $ 1,638 | $ 6,679 | $ 4,054 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 740 | $ 581 | $ 1,421 | $ 743 |
Reclassification adjustment, net of tax | 3 | 1 | 12 | (16) |
Change in unrealized gain (loss) on investments, net of tax | (383) | (47) | (1,267) | (125) |
Foreign currency translation adjustments | (101) | (17) | (216) | (20) |
Other comprehensive earnings (loss) | (481) | (63) | (1,471) | (161) |
Comprehensive earnings (loss) | 259 | 518 | (50) | 582 |
Comprehensive (earnings) loss attributable to noncontrolling interests | (2) | 3 | (6) | 5 |
Comprehensive earnings (loss) attributable to Centene Corporation | $ 257 | $ 521 | $ (56) | $ 587 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Earnings (Loss) | Retained Earnings | Treasury Stock | Non-redeemable Non- controlling Interest |
Balance (in shares) at Dec. 31, 2020 | 598,249 | ||||||
Treasury stock (in shares) at Dec. 31, 2020 | 16,770 | ||||||
Balance at Dec. 31, 2020 | $ 25,885 | $ 1 | $ 19,459 | $ 337 | $ 6,792 | $ (816) | $ 112 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | 694 | 699 | (5) | ||||
Other comprehensive earnings (loss) , net of tax | (161) | (161) | |||||
Common stock issued for employee benefit plans (in shares) | 1,675 | ||||||
Common stock issued for employee benefit plans | 9 | 9 | |||||
Common stock repurchases (in shares) | (316) | (156) | |||||
Common stock repurchases | (29) | (19) | $ (10) | ||||
Stock compensation expense | 51 | 51 | |||||
Contribution from noncontrolling interest | 9 | 9 | |||||
Balance (in shares) at Mar. 31, 2021 | 599,608 | ||||||
Treasury stock (in shares) at Mar. 31, 2021 | 16,926 | ||||||
Balance at Mar. 31, 2021 | 26,458 | $ 1 | 19,500 | 176 | 7,491 | $ (826) | 116 |
Balance (in shares) at Dec. 31, 2020 | 598,249 | ||||||
Treasury stock (in shares) at Dec. 31, 2020 | 16,770 | ||||||
Balance at Dec. 31, 2020 | 25,885 | $ 1 | 19,459 | 337 | 6,792 | $ (816) | 112 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Other comprehensive earnings (loss) , net of tax | (161) | ||||||
Balance (in shares) at Sep. 30, 2021 | 600,708 | ||||||
Treasury stock (in shares) at Sep. 30, 2021 | 17,208 | ||||||
Balance at Sep. 30, 2021 | 26,590 | $ 1 | 19,594 | 176 | 7,540 | $ (845) | 124 |
Balance (in shares) at Mar. 31, 2021 | 599,608 | ||||||
Treasury stock (in shares) at Mar. 31, 2021 | 16,926 | ||||||
Balance at Mar. 31, 2021 | 26,458 | $ 1 | 19,500 | 176 | 7,491 | $ (826) | 116 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | (538) | (535) | (3) | ||||
Other comprehensive earnings (loss) , net of tax | 63 | 63 | |||||
Common stock issued for employee benefit plans (in shares) | 390 | ||||||
Common stock issued for employee benefit plans | 9 | 9 | |||||
Common stock repurchases (in shares) | (10) | (60) | |||||
Common stock repurchases | (4) | $ (4) | |||||
Stock compensation expense | 36 | 36 | |||||
Contribution from noncontrolling interest | 21 | 21 | |||||
Balance (in shares) at Jun. 30, 2021 | 599,988 | ||||||
Treasury stock (in shares) at Jun. 30, 2021 | 16,986 | ||||||
Balance at Jun. 30, 2021 | 26,045 | $ 1 | 19,545 | 239 | 6,956 | $ (830) | 134 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | 576 | 584 | (8) | ||||
Other comprehensive earnings (loss) , net of tax | (63) | (63) | |||||
Common stock issued for employee benefit plans (in shares) | 720 | ||||||
Common stock issued for employee benefit plans | 9 | 9 | |||||
Common stock repurchases (in shares) | (222) | ||||||
Common stock repurchases | (15) | $ (15) | |||||
Stock compensation expense | 40 | 40 | |||||
Contribution from noncontrolling interest | 5 | 5 | |||||
Divestiture of noncontrolling interest | (10) | (10) | |||||
Acquisition resulting in noncontrolling interest | 3 | 3 | |||||
Balance (in shares) at Sep. 30, 2021 | 600,708 | ||||||
Treasury stock (in shares) at Sep. 30, 2021 | 17,208 | ||||||
Balance at Sep. 30, 2021 | $ 26,590 | $ 1 | 19,594 | 176 | 7,540 | $ (845) | 124 |
Balance (in shares) at Dec. 31, 2021 | 582,479 | 602,704 | |||||
Treasury stock (in shares) at Dec. 31, 2021 | 20,225 | ||||||
Balance at Dec. 31, 2021 | $ 26,940 | $ 1 | 19,672 | 77 | 8,139 | $ (1,094) | 145 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | 848 | 849 | (1) | ||||
Other comprehensive earnings (loss) , net of tax | (562) | (562) | |||||
Common stock issued for employee benefit plans (in shares) | 3,221 | ||||||
Common stock issued for employee benefit plans | 28 | 28 | |||||
Fair value of unvested equity awards in connection with acquisition | 60 | 60 | |||||
Common stock repurchases (in shares) | (846) | ||||||
Common stock repurchases | (71) | $ (71) | |||||
Stock compensation expense | 70 | 70 | |||||
Balance (in shares) at Mar. 31, 2022 | 605,925 | ||||||
Treasury stock (in shares) at Mar. 31, 2022 | 21,071 | ||||||
Balance at Mar. 31, 2022 | $ 27,313 | $ 1 | 19,830 | (485) | 8,988 | $ (1,165) | 144 |
Balance (in shares) at Dec. 31, 2021 | 582,479 | 602,704 | |||||
Treasury stock (in shares) at Dec. 31, 2021 | 20,225 | ||||||
Balance at Dec. 31, 2021 | $ 26,940 | $ 1 | 19,672 | 77 | 8,139 | $ (1,094) | 145 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Other comprehensive earnings (loss) , net of tax | $ (1,471) | ||||||
Balance (in shares) at Sep. 30, 2022 | 570,091 | 606,931 | |||||
Treasury stock (in shares) at Sep. 30, 2022 | 36,840 | ||||||
Balance at Sep. 30, 2022 | $ 25,534 | $ 1 | 19,774 | (1,394) | 9,554 | $ (2,557) | 156 |
Balance (in shares) at Mar. 31, 2022 | 605,925 | ||||||
Treasury stock (in shares) at Mar. 31, 2022 | 21,071 | ||||||
Balance at Mar. 31, 2022 | 27,313 | $ 1 | 19,830 | (485) | 8,988 | $ (1,165) | 144 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | (175) | (172) | (3) | ||||
Other comprehensive earnings (loss) , net of tax | (428) | (428) | |||||
Common stock issued for employee benefit plans (in shares) | 519 | ||||||
Common stock issued for employee benefit plans | 10 | 10 | |||||
Common stock repurchases (in shares) | (4,249) | ||||||
Common stock repurchases | (349) | $ (349) | |||||
Stock compensation expense | 59 | 59 | |||||
Balance (in shares) at Jun. 30, 2022 | 606,444 | ||||||
Treasury stock (in shares) at Jun. 30, 2022 | 25,320 | ||||||
Balance at Jun. 30, 2022 | 26,430 | $ 1 | 19,899 | (913) | 8,816 | $ (1,514) | 141 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings (loss) | 736 | 738 | (2) | ||||
Other comprehensive earnings (loss) , net of tax | (481) | (481) | |||||
Common stock issued for employee benefit plans (in shares) | 487 | ||||||
Common stock issued for employee benefit plans | 24 | 24 | |||||
Common stock repurchases (in shares) | (11,520) | ||||||
Common stock repurchases | (1,243) | (200) | $ (1,043) | ||||
Stock compensation expense | 51 | 51 | |||||
Reclassification to non-redeemable noncontrolling interest | $ 17 | 17 | |||||
Balance (in shares) at Sep. 30, 2022 | 570,091 | 606,931 | |||||
Treasury stock (in shares) at Sep. 30, 2022 | 36,840 | ||||||
Balance at Sep. 30, 2022 | $ 25,534 | $ 1 | $ 19,774 | $ (1,394) | $ 9,554 | $ (2,557) | $ 156 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||
Other comprehensive earnings (loss), tax (benefit) expense | $ (120) | $ (106) | $ (171) | $ (15) | $ 19 | $ (49) | ||
Common Stock | ||||||||
Par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | 0.001 | $ 0.001 |
Treasury Stock | ||||||||
Par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net earnings | $ 1,421 | $ 743 |
Adjustments to reconcile net earnings to net cash provided by operating activities | ||
Depreciation and amortization | 1,178 | 1,098 |
Stock compensation expense | 180 | 127 |
Impairment | 1,739 | 229 |
(Gain) loss on debt extinguishment | (26) | 125 |
(Gain) on acquisition | (2) | (309) |
Deferred income taxes | (682) | (143) |
(Gain) loss on divestitures | (503) | 62 |
Other adjustments, net | 164 | (6) |
Changes in assets and liabilities | ||
Premium and trade receivables | (1,274) | (1,723) |
Other assets | 152 | (124) |
Medical claims liabilities | 1,976 | 1,661 |
Unearned revenue | 1,964 | (169) |
Accounts payable and accrued expenses | 686 | 993 |
Other long-term liabilities | 863 | 964 |
Other operating activities, net | 1 | 2 |
Net cash provided by operating activities | 7,837 | 3,530 |
Cash flows from investing activities: | ||
Capital expenditures | (771) | (662) |
Purchases of investments | (5,118) | (5,253) |
Sales and maturities of investments | 2,842 | 4,069 |
Acquisitions, net of cash acquired | (1,457) | (534) |
Divestiture proceeds, net of divested cash | 1,362 | (62) |
Net cash used in investing activities | (3,142) | (2,442) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 357 | 9,247 |
Payments and repurchases of long-term debt | (1,202) | (7,411) |
Common stock repurchases | (1,663) | (49) |
Payments for debt extinguishment | (14) | (157) |
Debt issuance costs | 0 | (72) |
Other financing activities, net | 57 | 39 |
Net cash (used in) provided by financing activities | (2,465) | 1,597 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (37) | (8) |
Net increase in cash, cash equivalents, and restricted cash and cash equivalents | 2,193 | 2,677 |
Cash and cash equivalents reclassified from (to) held for sale | (192) | 0 |
Cash, cash equivalents, and restricted cash and cash equivalents, beginning of period | 13,214 | 10,957 |
Cash, cash equivalents, and restricted cash and cash equivalents, end of period | 15,215 | 13,634 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 462 | 479 |
Income taxes paid | 448 | 477 |
The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported within the Consolidated Balance Sheets to the totals above: | ||
Cash and cash equivalents | 14,987 | 13,423 |
Restricted cash and cash equivalents, included in restricted deposits | 228 | 211 |
Total cash, cash equivalents, and restricted cash and cash equivalents | $ 15,215 | $ 13,634 |
Organization and Operations
Organization and Operations | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021. The unaudited interim financial statements herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, footnote disclosures that would substantially duplicate the disclosures contained in the December 31, 2021 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 2021 amounts in the consolidated financial statements and notes to the consolidated financial statements have been reclassified to conform to the 2022 presentation. Beginning in 2022, the Company has included a separate line item for depreciation expense on the Consolidated Statement of Operations, which was previously included in selling, general and administrative (SG&A) expenses. Prior period SG&A expense ratios have also been conformed to the current presentation. These reclassifications have no effect on net earnings or stockholders’ equity as previously reported. On January 4, 2022, the Company acquired all of the issued and outstanding shares of Magellan Health, Inc. (Magellan) (the Magellan Acquisition). The acquisition was accounted for as a business combination. See Note 2. Acquisitions and Divestitures for further details. Accounting Guidance Not Yet Adopted The Company has determined that there are no recently issued accounting pronouncements that will have a material impact on its consolidated financial position, results of operations, or cash flows. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Magellan Acquisition On January 4, 2022, the Company acquired all of the issued and outstanding shares of Magellan. Total consideration for the acquisition was $2,491 million, consisting of $2,431 million in cash and $60 million related to the fair value of replacement equity awards associated with pre-combination service. The purchase price has been adjusted to reflect the net effective settlement of preexisting relationships between the Company and Magellan of $70 million. The Company recognized $8 million and $100 million of acquisition related expenses related to Magellan for the three and nine months ended September 30, 2022, respectively. The Magellan Acquisition was accounted for as a business combination using the acquisition method of accounting that requires assets acquired and liabilities assumed to be recognized at fair value as of the acquisition date. The significant areas of the assessment of fair value that remain preliminary include identifiable intangible assets and goodwill, premium and related receivables, medical claims liability, and income taxes, and accordingly, the Company has recorded provisional amounts which are subject to adjustment. Measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date. The Company's preliminary allocation of the fair value of assets acquired and liabilities assumed as of the acquisition date of January 4, 2022 is as follows ($ in millions): Assets acquired and liabilities assumed Cash and cash equivalents $ 998 Premium and related receivables 791 Short-term investments 144 Other current assets 194 Long-term investments 43 Restricted deposits 7 Property, software and equipment 90 Intangible assets (a) 751 Other long-term assets 50 Total assets acquired 3,068 Medical claims liability 247 Accounts payable and accrued expenses 495 Return of premium payable 53 Unearned revenue 8 Current portion of long-term debt 5 Long-term debt (b) 542 Deferred tax liabilities (c) 123 Other long-term liabilities 69 Total liabilities assumed 1,542 Mezzanine equity 32 Total identifiable net assets 1,494 Goodwill (d) 997 Total assets acquired and liabilities assumed $ 2,491 The Company has made the following preliminary fair value adjustments based on information reviewed through September 30, 2022. Significant fair value adjustments are noted as follows: (a) The identifiable intangible assets acquired are to be measured at fair value as of the completion of the acquisition. The fair value of intangible assets will be determined primarily using variations of the income approach, which is based on the present value of the future after-tax cash flows attributable to each identified intangible asset. Other valuation methods, including the market approach and cost approach, will be considered in estimating the fair value. The identifiable intangible assets include purchased contract rights, trade names, provider contracts, and developed technologies. The Company has estimated the fair value of intangible assets to be $751 million with a weighted average life of 13 years. The Company adjusted its estimate of the identifiable intangible assets during the third quarter, resulting in additional amortization of $15 million. The fair values and weighted average useful lives for identifiable intangible assets acquired are as follows: Fair Value Weighted Average Useful Life (in years) Purchased contract rights $ 470 13 Provider contracts 100 15 Trade names 80 17 Developed technologies 101 5 Total intangible assets acquired $ 751 13 (b) Debt is required to be measured at fair value under the acquisition method of accounting. The fair value of Magellan's Senior Notes and Credit Agreement assumed in the acquisition was $535 million. In January 2022, the Company paid off Magellan's debt acquired in the transaction using Magellan's cash on hand. (c) The preliminary deferred tax liabilities are presented net of $116 million of deferred tax assets. (d) Goodwill is estimated at $997 million and primarily relates to synergies expected from the acquisition and the assembled workforce of Magellan. The assignment of goodwill to the Company’s respective segments has not been completed at this time, but the majority of goodwill is expected to be allocated to the Specialty segment. The majority of the goodwill is not deductible for income tax purposes. PANTHERx Rare Divestiture On July 14, 2022, the Company completed the previously announced sale of PANTHERx Rare (PANTHERx) for $1,373 million. The Company recognized a gain of $490 million, or $382 million after-tax, which is included in investment and other income on the Consolidated Statements of Operations. Spanish and Central European Divestiture On July 25, 2022, as part of the Company’s previously announced review of strategic alternatives for its international portfolio, the Company announced it has signed a definitive agreement to sell its ownership stakes in its Spanish and Central European businesses, including Ribera Salud, Torrejón Salud, and Pro Diagnostics Group. As of September 30, 2022, the assets and liabilities of the Spanish and Central European businesses were considered held for sale resulting in $666 million of assets held for sale in Other Current Assets and $582 million of liabilities held for sale in Accounts Payable and Accrued Expenses on the Consolidated Balance Sheet. The majority of the held for sale assets were previously reported as cash and cash equivalents, premium and trade receivables, and property, software and equipment. During the third quarter, the Company recorded an impairment charge primarily related to intangible assets and goodwill associated with the pending divestiture of $165 million, or $138 million after-tax. |
Short-term and Long-term Invest
Short-term and Long-term Investments, Restricted Deposits | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term and Long-term Investments, Restricted Deposits | Short-term and Long-term Investments, Restricted Deposits Short-term and long-term investments and restricted deposits by investment type consist of the following ($ in millions): September 30, 2022 December 31, 2021 Amortized Gross Gross Fair Amortized Gross Gross Fair Debt securities: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 666 $ — $ (18) $ 648 $ 642 $ — $ (2) $ 640 Corporate securities 9,648 1 (897) 8,752 8,145 130 (75) 8,200 Restricted certificates of deposit 4 — — 4 4 — — 4 Restricted cash equivalents 228 — — 228 96 — — 96 Short-term time deposits 275 — — 275 109 — — 109 Municipal securities 3,980 — (320) 3,660 3,398 85 (15) 3,468 Asset-backed securities 1,335 — (68) 1,267 1,308 5 (5) 1,308 Residential mortgage-backed securities 1,154 — (135) 1,019 850 10 (7) 853 Commercial mortgage-backed securities 970 — (96) 874 870 13 (10) 873 Equity securities (1) 6 — — 6 326 — — 326 Private equity investments 551 — — 551 587 — — 587 Life insurance contracts 165 — — 165 186 — — 186 Total $ 18,982 $ 1 $ (1,534) $ 17,449 $ 16,521 $ 243 $ (114) $ 16,650 (1) Investments in equity securities as of December 31, 2021 primarily consisted of exchange traded funds in fixed income securities. The Company's investments are debt securities classified as available-for-sale with the exception of equity securities, certain private equity investments and life insurance contracts. 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, 2022, 98% of the Company's investments in rated securities carry an investment grade rating by nationally recognized statistical rating organizations. At September 30, 2022, the Company held certificates of deposit, equity securities, private equity investments, and life insurance contracts, which did not carry a credit rating. Accrued interest income on available-for-sale debt securities was $119 million and $96 million at September 30, 2022 and December 31, 2021, respectively, and is included in other current assets on the Consolidated Balance Sheets. The Company's residential mortgage-backed securities are primarily issued by the Federal National Mortgage Association, Government National Mortgage Association, or Federal Home Loan Mortgage Corporation, which carry implicit or explicit guarantees of the U.S. government. The Company's commercial mortgage-backed securities are primarily senior tranches with a weighted average rating of AAA and a weighted average duration of 4 years at September 30, 2022. The fair value of available-for-sale debt securities with gross unrealized losses by investment type and length of time that individual securities have been in a continuous unrealized loss position were as follows ($ in millions): September 30, 2022 December 31, 2021 Less Than 12 Months 12 Months or More Less Than 12 Months 12 Months or More Unrealized Losses Fair Unrealized Losses Fair Unrealized Losses Fair Unrealized Losses Fair U.S. Treasury securities and obligations of U.S. government corporations and agencies $ (14) $ 556 $ (4) $ 67 $ (2) $ 598 $ — $ 3 Corporate securities (562) 6,737 (335) 1,975 (66) 4,209 (9) 209 Municipal securities (228) 2,998 (92) 586 (14) 1,173 (1) 39 Asset-backed securities (57) 1,094 (11) 166 (5) 770 — 33 Residential mortgage-backed securities (86) 770 (49) 244 (7) 472 — 15 Commercial mortgage-backed securities (59) 650 (37) 218 (8) 380 (2) 32 Total $ (1,006) $ 12,805 $ (528) $ 3,256 $ (102) $ 7,602 $ (12) $ 331 As of September 30, 2022, the gross unrealized losses were generated from 6,688 positions out of a total of 6,847 positions. The change in fair value of available-for-sale debt 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 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, the Company did not record an impairment for these securities. In addition, the Company monitors available-for-sale debt securities for credit losses. 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 allowance when evidence demonstrates that the decline in fair value is credit related. Evidence of a credit related loss may include rating agency actions, adverse conditions specifically related to the security, or failure of the issuer of the security to make scheduled payments. The contractual maturities of short-term and long-term debt securities and restricted deposits are as follows ($ in millions): September 30, 2022 December 31, 2021 Investments Restricted Deposits Investments Restricted Deposits Amortized Fair Amortized Fair Amortized Fair Amortized Fair One year or less $ 2,053 $ 2,029 $ 521 $ 518 $ 1,390 $ 1,396 $ 368 $ 368 One year through five years 7,296 6,752 518 482 6,212 6,294 460 457 Five years through ten years 4,077 3,496 241 205 3,647 3,681 244 243 Greater than ten years 95 85 — — 73 78 — — Asset-backed securities 3,459 3,160 — — 3,028 3,034 — — Total $ 16,980 $ 15,522 $ 1,280 $ 1,205 $ 14,350 $ 14,483 $ 1,072 $ 1,068 Actual maturities may differ from contractual maturities due to call or prepayment options. Equity securities, private equity investments and life insurance contracts are excluded from the table above because they do not have a contractual maturity. 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. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022, 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 $ 14,987 $ — $ — $ 14,987 Investments: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 313 $ — $ — $ 313 Corporate securities — 8,721 — 8,721 Municipal securities — 3,053 — 3,053 Short-term time deposits — 275 — 275 Asset-backed securities — 1,267 — 1,267 Residential mortgage-backed securities — 1,019 — 1,019 Commercial mortgage-backed securities — 874 — 874 Equity securities 4 2 — 6 Total investments $ 317 $ 15,211 $ — $ 15,528 Restricted deposits: Cash and cash equivalents $ 228 $ — $ — $ 228 Certificates of deposit — 4 — 4 Corporate securities — 31 — 31 Municipal securities — 607 — 607 U.S. Treasury securities and obligations of U.S. government corporations and agencies 335 — — 335 Total restricted deposits $ 563 $ 642 $ — $ 1,205 Total assets at fair value $ 15,867 $ 15,853 $ — $ 31,720 The following table summarizes fair value measurements by level at December 31, 2021, 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 $ 13,118 $ — $ — $ 13,118 Investments: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 171 $ — $ — $ 171 Corporate securities — 8,170 — 8,170 Municipal securities — 2,999 — 2,999 Short-term time deposits — 109 — 109 Asset backed securities — 1,308 — 1,308 Residential mortgage backed securities — 853 — 853 Commercial mortgage backed securities — 873 — 873 Equity securities 324 2 — 326 Total investments $ 495 $ 14,314 $ — $ 14,809 Restricted deposits: Cash and cash equivalents $ 96 $ — $ — $ 96 Certificates of deposit — 4 — 4 Corporate securities — 30 — 30 Municipal securities — 469 — 469 U.S. Treasury securities and obligations of U.S. government corporations and agencies 469 — — 469 Total restricted deposits $ 565 $ 503 $ — $ 1,068 Other long-term assets: Interest rate swap agreements $ — $ 15 $ — $ 15 Total assets at fair value $ 14,178 $ 14,832 $ — $ 29,010 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. In addition, the aggregate carrying amount of the Company's private equity investments and life insurance contracts, which approximates fair value, was $716 million and $773 million as of September 30, 2022 and December 31, 2021, respectively. |
Property, Software and Equipmen
Property, Software and Equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Software and Equipment | Property, Software and Equipment Property, software and equipment consist of the following ($ in millions): September 30, 2022 December 31, 2021 Computer software $ 2,211 $ 1,825 Building 641 1,116 Furniture and office equipment 407 753 Leasehold improvements 454 732 Computer hardware 648 617 Land 178 248 Property, software and equipment, at cost 4,539 5,291 Less: accumulated depreciation (2,060) (1,900) Property, software and equipment, net $ 2,479 $ 3,391 During the second quarter of 2022, in connection with the adoption of a more modern, flexible work environment, the Company undertook a real estate optimization initiative to evaluate future real estate needs and downsize its real estate footprint for owned and leased properties. As a result of this evaluation, during the second quarter of 2022, the Company substantially changed the use or abandoned various properties and assessed for impairment. The Company engaged a third-party real estate specialist to determine the fair value of its owned properties. The valuation primarily considered comparable properties in each market as well as future cash flows. As a result of the optimization, the Company has recognized impairment charges related to owned real estate of $57 million and $763 million for the three and nine months ended September 30, 2022, respectively. The Company also recognized impairment on fixed assets related to leased real estate of $14 million and $237 million for the three and nine months ended September 30, 2022, respectively. These impairments are primarily related to the Managed Care segment. The remainder of the $1,574 million charge relates to right-of-use (ROU) asset impairments, which is included within Other Long-term assets on the balance sheet, refer to Note 9. Leases. |
Medical Claims Liability
Medical Claims Liability | 9 Months Ended |
Sep. 30, 2022 | |
Insurance [Abstract] | |
Medical Claims Liability | Medical Claims Liability The following table summarizes the change in medical claims liability ($ in millions): Nine Months Ended September 30, 2022 2021 Balance, January 1 $ 14,243 $ 12,438 Less: Reinsurance recoverable 23 23 Balance, January 1, net 14,220 12,415 Acquisitions and divestitures 249 — Incurred related to: Current year 84,457 74,736 Prior years (1,196) (1,526) Total incurred 83,261 73,210 Paid related to: Current year 70,305 62,205 Prior years 10,968 9,344 Total paid 81,273 71,549 Balance, September 30, net 16,457 14,076 Plus: Reinsurance recoverable 8 23 Balance, September 30 $ 16,465 $ 14,099 Reinsurance recoverables related to medical claims are included in premium and trade receivables. Changes in estimates of incurred claims for prior years are primarily attributable to reserving under moderately adverse conditions. The impact from COVID-19 on healthcare utilization and medical claims submission patterns continues to provide increased estimation uncertainty on the incurred but not reported liability. Additionally, as a result of minimum health benefits ratio (HBR) and other return of premium programs, the Company recorded $121 million and $438 million as a reduction to premium revenue in the nine months ended September 30, 2022 and 2021, respectively. Incurred but not reported (IBNR) plus expected development on reported claims as of September 30, 2022 was $11,130 million. Total IBNR plus expected development on reported claims represents estimates for claims incurred but not reported, development on reported claims, and estimates for the costs necessary to process unpaid claims at the end of each period. The Company estimates its liability using actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice. These actuarial methods consider factors such as historical data for payment patterns, cost trends, product mix, seasonality, utilization of healthcare services, and other relevant factors. |
Affordable Care Act
Affordable Care Act | 9 Months Ended |
Sep. 30, 2022 | |
Affordable Care Act [Abstract] | |
Affordable Care Act | Affordable Care Act The Affordable Care Act established risk spreading premium stabilization programs as well as a minimum annual medical loss ratio (MLR) and cost sharing reductions. The Company's net receivables (payables) for each of the programs are as follows ($ in millions): September 30, 2022 December 31, 2021 Risk adjustment receivable $ 1,068 $ 522 Risk adjustment payable (652) (536) Minimum medical loss ratio (69) (196) Cost sharing reduction receivable 10 69 Cost sharing reduction payable (81) (42) |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consists of the following ($ in millions): September 30, 2022 December 31, 2021 $2,500 million 4.25% Senior Notes due December 15, 2027 $ 2,403 $ 2,484 $2,300 million 2.45% Senior Notes due July 15, 2028 2,304 2,304 $3,500 million 4.625% Senior Notes due December 15, 2029 3,324 3,500 $2,000 million 3.375% Senior Notes due February 15, 2030 2,000 2,000 $2,200 million 3.00% Senior Notes due October 15, 2030 2,200 2,200 $2,200 million 2.50% Senior Notes due March 1, 2031 2,200 2,200 $1,300 million 2.625% Senior Notes due August 1, 2031 1,300 1,300 Total senior notes 15,731 15,988 Term loan facility 2,196 2,195 Revolving credit agreement 120 149 Construction loan payable 181 184 Finance leases and other 258 493 Debt issuance costs (153) (171) Total debt 18,333 18,838 Less current portion (249) (267) Long-term debt $ 18,084 $ 18,571 Of the Company's total debt, approximately 15% is variable rate debt tied to London Interbank Offered Rate (LIBOR). The debt agreements that may be impacted by the discontinuation of LIBOR include provisions that the Company believes are sufficient to transition from the existing LIBOR rates to the prevailing successor market rates as necessary. Senior Notes In connection with the Magellan Acquisition in January 2022, the Company redeemed Magellan’s existing outstanding 4.4% Senior Notes due 2024 and paid off the existing Credit Agreement using Magellan’s cash on hand. The Company recognized an immaterial net pre-tax gain on extinguishment including related fees and expenses and the write-off of the unamortized premium. During the third quarter of 2022, the Company utilized a portion of the proceeds from the PANTHERx divestiture to repurchase $83 million of its par value Senior Notes due 2027 and $176 million of its par value Senior Notes due 2029 through the Company’s debt repurchase program. The Company recognized a $10 million gain on the redemptions of the notes. Foreign Currency Swap In order to manage the foreign exchange risk associated with an intercompany note receivable related to the Circle Health acquisition, the Company entered into a foreign currency swap agreement for a notional amount of $705 million, to purchase £509 million. The swap agreement was formally designated and qualified as a fair value hedge. All gains and losses due to changes in the fair value of the foreign currency swap completely offset changes in the remeasurement of the intercompany note receivable within investment and other income in the Consolidated Statement of Operations, resulting in no net impact to the Consolidated Statement of Operations. On March 31, 2022, the foreign currency swap settled in connection with its expiration, and the Company received cash proceeds of $35 million. The Company does not hold or issue any derivative instruments for trading or speculative purposes. Circle Health Debt Refinancing In May 2022, the Company refinanced certain debt agreements for its Circle Health subsidiary with a new £250 million credit facility maturing in May 2025. The Company recognized a $13 million pre-tax gain on the extinguishment of the existing debt. As of September 30, 2022, £180 million was drawn on the facility, which is included within Finance leases and other in the table above. The new facility is guaranteed by the Company and has similar borrowing rates and covenants to the Company's Revolving Credit Agreement. 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. Until final completion of the construction project, which occurred in July 2021, the loan bore interest based on one month LIBOR plus 2.70%, which reduced to LIBOR plus 2.00% at the time construction was completed. The agreement contains financial and non-financial covenants similar to those contained in the Company Credit Facility. The Company guaranteed completion of the construction project associated with the loan. As of September 30, 2022, the Company had $181 million in borrowings outstanding under the loan, which is included in the current portion of long-term debt. In April 2022, the Company extended the term of the loan for an additional one year. The extension reduced interest on the loan to the Secured Overnight Financing Rate (SOFR) plus 1.85% and matures in April 2023. Debt Repurchase Program In June 2022, the Company's Board of Directors authorized a new $1,000 million debt repurchase program in preparation for future debt reductions as part of the Company’s strategic value creation initiatives. During the quarter ended September 30, 2022, the Company repurchased $259 million of its par value senior notes, as described above, for $247 million. As of September 30, 2022, there was $753 million available under the program. In October 2022, the Company repurchased an additional $58 million of its par value senior notes for $53 million. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | Leases The following table sets forth the ROU assets and lease liabilities ($ in millions): September 30, 2022 December 31, 2021 Assets ROU assets (recorded within other long-term assets) $ 2,456 $ 3,566 Liabilities Short-term (recorded within accounts payable and accrued expenses) $ 193 $ 204 Long-term (recorded within other long-term liabilities) 3,038 3,619 Total lease liabilities $ 3,231 $ 3,823 As part of the real estate optimization initiative as described in Note 5. Property, Software and Equipment , the Company vacated and abandoned various domestic leased properties. As a result, the Company assessed the ROU assets for impairment. The Company engaged a third-party real estate specialist to determine the recoverability of the leased properties. The valuation primarily considered comparable leased properties in each market and the assessment of potential future rental income that could be generated by the ROU assets. As a result of the optimization, the Company recognized $53 million and $574 million of ROU asset impairments in the three and nine months ended September 30, 2022, respectively, primarily related to the Managed Care segment. The remainder of the $1,574 million charge was recorded within Property, Software and Equipment, refer to Note 5. Property, Software and Equipment . As of September 30, 2022, the weighted average remaining lease term for the Company was 20.1 years. The lease liabilities as of September 30, 2022 reflect a weighted average discount rate of 5.6%. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity In June 2022, the Company's Board of Directors authorized an additional $3,000 million to the Company’s existing stock repurchase program for its common stock, for a total $4,000 million, in preparation for closing of the Magellan Rx and PANTHERx divestitures as well as planning for the future. During the third quarter of 2022, the Company entered into an accelerated share repurchase (ASR) agreement with Bank of America to purchase $1,000 million of the Company's common stock in aggregate under the Company’s stock repurchase program. In July 2022, 8.6 million shares were delivered to the Company, representing 80% of the notional amount under the ASR. In October 2022, an additional 3.0 million shares were delivered upon settlement of the ASR based upon the volume-weighted average price (VWAP) over the term of the agreement, less a discount. In total, 11.6 million shares were purchased through the $1,000 million ASR. The Company also repurchased an additional 2.9 million shares for $240 million during the third quarter. The remaining common stock repurchases relate to the purchase of shares to satisfy tax withholding requirements in connection with employee equity awards. During the nine months ended September 30, 2022, the Company has repurchased a total of 15.7 million shares of Centene common stock for $1,384 million, exclusive of the $200 million unsettled portion under the ASR. As of September 30, 2022, the Company had a remaining amount of $2,216 million available under the Company’s stock repurchase program. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the calculation of basic and diluted net earnings per common share ($ in millions, except per share data in dollars and shares in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Earnings attributable to Centene Corporation $ 738 $ 584 $ 1,415 $ 748 Shares used in computing per share amounts: Weighted average number of common shares outstanding 573,961 583,244 580,277 582,636 Common stock equivalents (as determined by applying the treasury stock method) 6,646 7,458 6,807 7,518 Weighted average number of common shares and potential dilutive common shares outstanding 580,607 590,702 587,084 590,154 Net earnings per common share attributable to Centene Corporation: Basic earnings per common share $ 1.29 $ 1.00 $ 2.44 $ 1.28 Diluted earnings per common share $ 1.27 $ 0.99 $ 2.41 $ 1.27 The calculation of diluted earnings per common share for the three months ended September 30, 2022 and 2021 excludes 152 thousand shares and 111 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 nine months ended September 30, 2022 and 2021 excludes the impact of 193 thousand shares and 57 thousand shares, respectively, related to anti-dilutive stock options, restricted stock, and restricted stock units. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
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. Factors used in determining the reportable business segments include the nature of operating activities, the existence of separate senior management teams, and the type of information presented to the Company's chief operating decision-maker to evaluate all results of operations. Segment information for the three months ended September 30, 2022, is as follows ($ in millions): Managed Specialty Eliminations Consolidated Total revenues from external customers $ 33,722 $ 2,143 $ — $ 35,865 Total revenues from internal customers 2 3,264 (3,266) — Total revenues $ 33,724 $ 5,407 $ (3,266) $ 35,865 Earnings from operations $ 527 $ (51) $ — $ 476 Segment information for the three months ended September 30, 2021, is as follows ($ in millions): Managed Specialty Eliminations Consolidated Total revenues from external customers $ 30,888 $ 1,518 $ — $ 32,406 Total revenues from internal customers 1 3,209 (3,210) — Total revenues $ 30,889 $ 4,727 $ (3,210) $ 32,406 Earnings from operations $ 699 $ (154) $ — $ 545 Segment information for the nine months ended September 30, 2022, follows ($ in millions): Managed Care Specialty Eliminations Consolidated Total revenues from external customers $ 101,428 $ 7,558 $ — $ 108,986 Total revenues from internal customers 6 9,939 (9,945) — Total revenues $ 101,434 $ 17,497 $ (9,945) $ 108,986 Earnings from operations $ 1,634 $ (34) $ — $ 1,600 Segment information for the nine months ended September 30, 2021, follows ($ in millions): Managed Care Specialty Eliminations Consolidated Total revenues from external customers $ 89,078 $ 4,336 $ — $ 93,414 Total revenues from internal customers 4 9,217 (9,221) — Total revenues $ 89,082 $ 13,553 $ (9,221) $ 93,414 Earnings from operations $ 1,240 $ (59) $ — $ 1,181 |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Overview The Company is 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, the calculation of minimum MLR and rebates related thereto, submissions to state agencies related to payments or state false claims acts, 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 and other federal and state fraud, waste and abuse laws; • litigation arising out of general business activities, such as tax matters, disputes related to healthcare benefits coverage or reimbursement, putative securities class actions, and medical malpractice, privacy, real estate, intellectual property and employment-related claims; and • 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, claims related to network adequacy 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 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. 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, except for the reserve estimate as described below with respect to claims or potential claims involving services provided by Envolve Pharmacy Solutions, Inc. (Envolve), as the Company's pharmacy benefits manager (PBM) subsidiary. 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 On October 20, 2015, the Company's California subsidiary, Health Net of California, Inc. (Health Net California), was 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, Dave Jones, Insurance Commissioner of the State of California, Betty T. Yee, Controller of the State of California, 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 (collectively, Related Actions). In March 2018, the Court overruled the Company's demurrer seeking to dismiss the complaint and denied the Company's motion to strike allegations seeking retroactive relief. In August 2018, the trial court stayed all the Related Actions pending determination of a writ of mandate by the California Court of Appeals in two of the Related Actions. In March 2019, the California Court of Appeals denied the writ of mandate. The defendants in those Related Actions sought review by the California Supreme Court, which declined to review the matter. Upon the return of the matter to the Los Angeles County Superior Court, motions for summary judgment were scheduled. Health Net California's motion for summary judgment was heard by the Court in March 2020. In March 2020, the Court granted Health Net California's motion for summary judgment. In September 2020, the plaintiff appealed the Court's decision. The Company intends to continue its vigorous defense 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 the Company's financial position, results of operations and cash flows. Beginning in April 2021, several lawsuits have been filed against the Company and its subsidiaries, alleging that the defendants failed to prevent Health Net members' personal and health data from being exposed in connection with a data breach involving Accellion's File Transfer Appliance. The Company denies any wrongdoing and is seeking indemnification from Accellion for these claims. In December 2021, the plaintiffs in three of the pending actions filed a motion for preliminary approval of a settlement with the Company and its subsidiaries, which, if approved by the court, should resolve most or all of the pending litigation. In addition, claims related to these lawsuits are anticipated to be covered in part by the Company's insurance carrier. As a result, while these matters are subject to many uncertainties, the Company does not believe that an adverse outcome in these matters is likely to have a materially adverse impact on the Company’s financial position, results of operations and cash flows. Pharmacy Benefits Management Matters On March 11, 2021, the State of Ohio filed a civil action against the Company and the Company's subsidiaries, Buckeye Health Plan Community Solutions, Inc. and Envolve, in Franklin County Court of Common Pleas, captioned as Ohio Department of Medicaid, et al. v. Centene Corporation, et al. The complaint alleged breaches of contract with the Ohio Department of Medicaid relating to the provision of PBM services and violations of Ohio law relating to such contracts, including among other things, by (i) seeking payment for services already reimbursed, (ii) not accurately disclosing to the Ohio Department of Medicaid the true cost of the PBM services and (iii) inflating dispensing fees for prescription drugs. The plaintiffs sought an undisclosed sum of money in damages, penalties, and possible termination of the contract with Buckeye Health Plan. The Company has reached no-fault agreements with the Attorney Generals in 13 states, including Ohio, to resolve claims and/or allegations made by the states related to services provided by Envolve. As a result of the settlement, the Ohio Attorney General’s litigation against the Company was dismissed. Additionally, the Company is in discussions to bring final resolution to similar concerns in other affected states. Consistent with those discussions, the Company recorded a reserve estimate of $1,250 million in the second quarter of 2021 related to this issue, inclusive of the above settlements and rebates that the Company determined in the course of the matter are payable across products. Additional claims, reviews or investigations relating to the Company's PBM business across products may be brought by other states, the federal government or shareholder litigants, and there is no guarantee the Company will have the ability to settle such claims with other states within the reserve estimate the Company has recorded and on other acceptable terms, or at all. This matter is subject to many uncertainties, and an adverse outcome in this matter could have an adverse impact on the Company's financial position, results of operations and cash flows. |
Organization and Operations (Po
Organization and Operations (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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, 2021. The unaudited interim financial statements herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, footnote disclosures that would substantially duplicate the disclosures contained in the December 31, 2021 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 2021 amounts in the consolidated financial statements and notes to the consolidated financial statements have been reclassified to conform to the 2022 presentation. Beginning in 2022, the Company has included a separate line item for depreciation expense on the Consolidated Statement of Operations, which was previously included in selling, general and administrative (SG&A) expenses. Prior period SG&A expense ratios have also been conformed to the current presentation. These reclassifications have no effect on net earnings or stockholders’ equity as previously reported. On January 4, 2022, the Company acquired all of the issued and outstanding shares of Magellan Health, Inc. (Magellan) (the Magellan Acquisition). The acquisition was accounted for as a business combination. See Note 2. Acquisitions and Divestitures |
Accounting Guidance Not Yet Adopted | Accounting Guidance Not Yet Adopted The Company has determined that there are no recently issued accounting pronouncements that will have a material impact on its consolidated financial position, results of operations, or cash flows. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Allocation of the Fair Value of Assets Acquired and Liabilities Assumed | The Company's preliminary allocation of the fair value of assets acquired and liabilities assumed as of the acquisition date of January 4, 2022 is as follows ($ in millions): Assets acquired and liabilities assumed Cash and cash equivalents $ 998 Premium and related receivables 791 Short-term investments 144 Other current assets 194 Long-term investments 43 Restricted deposits 7 Property, software and equipment 90 Intangible assets (a) 751 Other long-term assets 50 Total assets acquired 3,068 Medical claims liability 247 Accounts payable and accrued expenses 495 Return of premium payable 53 Unearned revenue 8 Current portion of long-term debt 5 Long-term debt (b) 542 Deferred tax liabilities (c) 123 Other long-term liabilities 69 Total liabilities assumed 1,542 Mezzanine equity 32 Total identifiable net assets 1,494 Goodwill (d) 997 Total assets acquired and liabilities assumed $ 2,491 |
Schedule of Preliminary Fair Values and Weighted Average Useful Lives for Identifiable Intangible Assets Acquired | The fair values and weighted average useful lives for identifiable intangible assets acquired are as follows: Fair Value Weighted Average Useful Life (in years) Purchased contract rights $ 470 13 Provider contracts 100 15 Trade names 80 17 Developed technologies 101 5 Total intangible assets acquired $ 751 13 |
Short-term and Long-term Inve_2
Short-term and Long-term Investments, Restricted Deposits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 December 31, 2021 Amortized Gross Gross Fair Amortized Gross Gross Fair Debt securities: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 666 $ — $ (18) $ 648 $ 642 $ — $ (2) $ 640 Corporate securities 9,648 1 (897) 8,752 8,145 130 (75) 8,200 Restricted certificates of deposit 4 — — 4 4 — — 4 Restricted cash equivalents 228 — — 228 96 — — 96 Short-term time deposits 275 — — 275 109 — — 109 Municipal securities 3,980 — (320) 3,660 3,398 85 (15) 3,468 Asset-backed securities 1,335 — (68) 1,267 1,308 5 (5) 1,308 Residential mortgage-backed securities 1,154 — (135) 1,019 850 10 (7) 853 Commercial mortgage-backed securities 970 — (96) 874 870 13 (10) 873 Equity securities (1) 6 — — 6 326 — — 326 Private equity investments 551 — — 551 587 — — 587 Life insurance contracts 165 — — 165 186 — — 186 Total $ 18,982 $ 1 $ (1,534) $ 17,449 $ 16,521 $ 243 $ (114) $ 16,650 (1) Investments in equity securities as of December 31, 2021 primarily consisted of exchange traded funds in fixed income securities. |
Fair value of available-for-sale investments with gross unrealized losses by investment type and length of time | The fair value of available-for-sale debt securities 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, 2022 December 31, 2021 Less Than 12 Months 12 Months or More Less Than 12 Months 12 Months or More Unrealized Losses Fair Unrealized Losses Fair Unrealized Losses Fair Unrealized Losses Fair U.S. Treasury securities and obligations of U.S. government corporations and agencies $ (14) $ 556 $ (4) $ 67 $ (2) $ 598 $ — $ 3 Corporate securities (562) 6,737 (335) 1,975 (66) 4,209 (9) 209 Municipal securities (228) 2,998 (92) 586 (14) 1,173 (1) 39 Asset-backed securities (57) 1,094 (11) 166 (5) 770 — 33 Residential mortgage-backed securities (86) 770 (49) 244 (7) 472 — 15 Commercial mortgage-backed securities (59) 650 (37) 218 (8) 380 (2) 32 Total $ (1,006) $ 12,805 $ (528) $ 3,256 $ (102) $ 7,602 $ (12) $ 331 |
Contractual maturities of short-term and long-term investments and restricted deposits | The contractual maturities of short-term and long-term debt securities and restricted deposits are as follows ($ in millions): September 30, 2022 December 31, 2021 Investments Restricted Deposits Investments Restricted Deposits Amortized Fair Amortized Fair Amortized Fair Amortized Fair One year or less $ 2,053 $ 2,029 $ 521 $ 518 $ 1,390 $ 1,396 $ 368 $ 368 One year through five years 7,296 6,752 518 482 6,212 6,294 460 457 Five years through ten years 4,077 3,496 241 205 3,647 3,681 244 243 Greater than ten years 95 85 — — 73 78 — — Asset-backed securities 3,459 3,160 — — 3,028 3,034 — — Total $ 16,980 $ 15,522 $ 1,280 $ 1,205 $ 14,350 $ 14,483 $ 1,072 $ 1,068 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities, Based Upon Observable or Unobservable Inputs, Level Input Definitions | 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. |
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, 2022, 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 $ 14,987 $ — $ — $ 14,987 Investments: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 313 $ — $ — $ 313 Corporate securities — 8,721 — 8,721 Municipal securities — 3,053 — 3,053 Short-term time deposits — 275 — 275 Asset-backed securities — 1,267 — 1,267 Residential mortgage-backed securities — 1,019 — 1,019 Commercial mortgage-backed securities — 874 — 874 Equity securities 4 2 — 6 Total investments $ 317 $ 15,211 $ — $ 15,528 Restricted deposits: Cash and cash equivalents $ 228 $ — $ — $ 228 Certificates of deposit — 4 — 4 Corporate securities — 31 — 31 Municipal securities — 607 — 607 U.S. Treasury securities and obligations of U.S. government corporations and agencies 335 — — 335 Total restricted deposits $ 563 $ 642 $ — $ 1,205 Total assets at fair value $ 15,867 $ 15,853 $ — $ 31,720 The following table summarizes fair value measurements by level at December 31, 2021, 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 $ 13,118 $ — $ — $ 13,118 Investments: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 171 $ — $ — $ 171 Corporate securities — 8,170 — 8,170 Municipal securities — 2,999 — 2,999 Short-term time deposits — 109 — 109 Asset backed securities — 1,308 — 1,308 Residential mortgage backed securities — 853 — 853 Commercial mortgage backed securities — 873 — 873 Equity securities 324 2 — 326 Total investments $ 495 $ 14,314 $ — $ 14,809 Restricted deposits: Cash and cash equivalents $ 96 $ — $ — $ 96 Certificates of deposit — 4 — 4 Corporate securities — 30 — 30 Municipal securities — 469 — 469 U.S. Treasury securities and obligations of U.S. government corporations and agencies 469 — — 469 Total restricted deposits $ 565 $ 503 $ — $ 1,068 Other long-term assets: Interest rate swap agreements $ — $ 15 $ — $ 15 Total assets at fair value $ 14,178 $ 14,832 $ — $ 29,010 |
Property, Software and Equipm_2
Property, Software and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Components of Property, Software and Equipment | Property, software and equipment consist of the following ($ in millions): September 30, 2022 December 31, 2021 Computer software $ 2,211 $ 1,825 Building 641 1,116 Furniture and office equipment 407 753 Leasehold improvements 454 732 Computer hardware 648 617 Land 178 248 Property, software and equipment, at cost 4,539 5,291 Less: accumulated depreciation (2,060) (1,900) Property, software and equipment, net $ 2,479 $ 3,391 |
Medical Claims Liability (Table
Medical Claims Liability (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 Balance, January 1 $ 14,243 $ 12,438 Less: Reinsurance recoverable 23 23 Balance, January 1, net 14,220 12,415 Acquisitions and divestitures 249 — Incurred related to: Current year 84,457 74,736 Prior years (1,196) (1,526) Total incurred 83,261 73,210 Paid related to: Current year 70,305 62,205 Prior years 10,968 9,344 Total paid 81,273 71,549 Balance, September 30, net 16,457 14,076 Plus: Reinsurance recoverable 8 23 Balance, September 30 $ 16,465 $ 14,099 |
Affordable Care Act (Tables)
Affordable Care Act (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Affordable Care Act [Abstract] | |
Schedule of net receivables (payables) related to the Affordable Care Act Programs | The Company's net receivables (payables) for each of the programs are as follows ($ in millions): September 30, 2022 December 31, 2021 Risk adjustment receivable $ 1,068 $ 522 Risk adjustment payable (652) (536) Minimum medical loss ratio (69) (196) Cost sharing reduction receivable 10 69 Cost sharing reduction payable (81) (42) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of the following ($ in millions): September 30, 2022 December 31, 2021 $2,500 million 4.25% Senior Notes due December 15, 2027 $ 2,403 $ 2,484 $2,300 million 2.45% Senior Notes due July 15, 2028 2,304 2,304 $3,500 million 4.625% Senior Notes due December 15, 2029 3,324 3,500 $2,000 million 3.375% Senior Notes due February 15, 2030 2,000 2,000 $2,200 million 3.00% Senior Notes due October 15, 2030 2,200 2,200 $2,200 million 2.50% Senior Notes due March 1, 2031 2,200 2,200 $1,300 million 2.625% Senior Notes due August 1, 2031 1,300 1,300 Total senior notes 15,731 15,988 Term loan facility 2,196 2,195 Revolving credit agreement 120 149 Construction loan payable 181 184 Finance leases and other 258 493 Debt issuance costs (153) (171) Total debt 18,333 18,838 Less current portion (249) (267) Long-term debt $ 18,084 $ 18,571 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
ROU Assets and Liabilities | The following table sets forth the ROU assets and lease liabilities ($ in millions): September 30, 2022 December 31, 2021 Assets ROU assets (recorded within other long-term assets) $ 2,456 $ 3,566 Liabilities Short-term (recorded within accounts payable and accrued expenses) $ 193 $ 204 Long-term (recorded within other long-term liabilities) 3,038 3,619 Total lease liabilities $ 3,231 $ 3,823 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Net Earnings Per Common Share | The following table sets forth the calculation of basic and diluted net earnings per common share ($ in millions, except per share data in dollars and shares in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Earnings attributable to Centene Corporation $ 738 $ 584 $ 1,415 $ 748 Shares used in computing per share amounts: Weighted average number of common shares outstanding 573,961 583,244 580,277 582,636 Common stock equivalents (as determined by applying the treasury stock method) 6,646 7,458 6,807 7,518 Weighted average number of common shares and potential dilutive common shares outstanding 580,607 590,702 587,084 590,154 Net earnings per common share attributable to Centene Corporation: Basic earnings per common share $ 1.29 $ 1.00 $ 2.44 $ 1.28 Diluted earnings per common share $ 1.27 $ 0.99 $ 2.41 $ 1.27 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment information for the three months ended September 30, 2022, is as follows ($ in millions): Managed Specialty Eliminations Consolidated Total revenues from external customers $ 33,722 $ 2,143 $ — $ 35,865 Total revenues from internal customers 2 3,264 (3,266) — Total revenues $ 33,724 $ 5,407 $ (3,266) $ 35,865 Earnings from operations $ 527 $ (51) $ — $ 476 Segment information for the three months ended September 30, 2021, is as follows ($ in millions): Managed Specialty Eliminations Consolidated Total revenues from external customers $ 30,888 $ 1,518 $ — $ 32,406 Total revenues from internal customers 1 3,209 (3,210) — Total revenues $ 30,889 $ 4,727 $ (3,210) $ 32,406 Earnings from operations $ 699 $ (154) $ — $ 545 Segment information for the nine months ended September 30, 2022, follows ($ in millions): Managed Care Specialty Eliminations Consolidated Total revenues from external customers $ 101,428 $ 7,558 $ — $ 108,986 Total revenues from internal customers 6 9,939 (9,945) — Total revenues $ 101,434 $ 17,497 $ (9,945) $ 108,986 Earnings from operations $ 1,634 $ (34) $ — $ 1,600 Segment information for the nine months ended September 30, 2021, follows ($ in millions): Managed Care Specialty Eliminations Consolidated Total revenues from external customers $ 89,078 $ 4,336 $ — $ 93,414 Total revenues from internal customers 4 9,217 (9,221) — Total revenues $ 89,082 $ 13,553 $ (9,221) $ 93,414 Earnings from operations $ 1,240 $ (59) $ — $ 1,181 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Narrative (Details) - Magellan Acquisition - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jan. 04, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | |||
Consideration transferred | $ 2,491 | ||
Cash paid | 2,431 | ||
Consideration transferred related to fair value of replacement equity awards associated with pre-combination service | 60 | ||
Settlement of pre-existing payables and receivables prior to acquisition | $ (70) | ||
Acquisition related expenses | $ 8 | $ 100 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Schedule of Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jan. 04, 2022 | Dec. 31, 2021 |
Assets acquired and liabilities assumed | |||
Goodwill | $ 20,040 | $ 19,771 | |
Goodwill | $ 20,040 | $ 19,771 | |
Magellan Acquisition | |||
Assets acquired and liabilities assumed | |||
Cash and cash equivalents | $ 998 | ||
Premium and related receivables | 791 | ||
Short-term investments | 144 | ||
Other current assets | 194 | ||
Long-term investments | 43 | ||
Restricted deposits | 7 | ||
Property, software and equipment | 90 | ||
Intangible assets | 751 | ||
Other long-term assets | 50 | ||
Total assets acquired | 3,068 | ||
Medical claims liability | 247 | ||
Accounts payable and accrued expenses | 495 | ||
Return of premium payable | 53 | ||
Unearned revenue | 8 | ||
Current portion of long-term debt | 5 | ||
Long-term debt | 542 | ||
Deferred tax liabilities | 123 | ||
Other long-term liabilities | 69 | ||
Total liabilities assumed | 1,542 | ||
Mezzanine equity | 32 | ||
Total identifiable net assets | 1,494 | ||
Goodwill | 997 | ||
Total assets acquired and liabilities assumed | 2,491 | ||
Debt assumed, aggregate principal | 535 | ||
Deferred tax assets | 116 | ||
Goodwill | $ 997 |
Acquisitions and Divestitures_3
Acquisitions and Divestitures - Identifiable Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jan. 04, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of acquired intangible assets | $ 211 | $ 198 | $ 609 | $ 581 | |
Magellan Acquisition | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 751 | ||||
Weighted Average Useful Life (in years) | 13 years | ||||
Magellan Acquisition | Purchased contract rights | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 470 | ||||
Weighted Average Useful Life (in years) | 13 years | ||||
Magellan Acquisition | Provider contracts | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 100 | ||||
Weighted Average Useful Life (in years) | 15 years | ||||
Magellan Acquisition | Trade names | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 80 | ||||
Weighted Average Useful Life (in years) | 17 years | ||||
Magellan Acquisition | Developed technologies | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 101 | ||||
Weighted Average Useful Life (in years) | 5 years | ||||
Magellan Acquisition | Adjustment to intangible assets | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of acquired intangible assets | $ 15 |
Acquisitions and Divestitures_4
Acquisitions and Divestitures - Divestitures (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 14, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on disposition of business | $ (503) | $ 62 | ||
PANTHERx Rare | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of business | $ 1,373 | |||
Gain on disposition of business | (490) | |||
Gain on disposition of business, net of tax | $ 382 | |||
Spanish and Central European Businesses | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Assets held for sale | $ 666 | 666 | ||
Liabilities held for sale | 582 | $ 582 | ||
Impairment associated with pending divestiture | 165 | |||
Impairment associated with pending divestiture, after tax | $ 138 |
Short-term and Long-term Inve_3
Short-term and Long-term Investments, Restricted Deposits - By Investment Type (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities | ||
Gross Unrealized Gains | $ 1 | $ 243 |
Gross Unrealized Losses | (1,534) | (114) |
Equity securities | 6 | 326 |
Private equity investments | 551 | 587 |
Life insurance contracts | 165 | 186 |
Total, Amortized Cost | 18,982 | 16,521 |
Total, Fair Value | 17,449 | 16,650 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Debt Securities | ||
Amortized Cost | 666 | 642 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (18) | (2) |
Fair Value | 648 | 640 |
Corporate securities | ||
Debt Securities | ||
Amortized Cost | 9,648 | 8,145 |
Gross Unrealized Gains | 1 | 130 |
Gross Unrealized Losses | (897) | (75) |
Fair Value | 8,752 | 8,200 |
Restricted certificates of deposit | ||
Debt Securities | ||
Amortized Cost | 4 | 4 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 4 | 4 |
Restricted cash equivalents | ||
Debt Securities | ||
Amortized Cost | 228 | 96 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 228 | 96 |
Short-term time deposits | ||
Debt Securities | ||
Amortized Cost | 275 | 109 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 275 | 109 |
Municipal securities | ||
Debt Securities | ||
Amortized Cost | 3,980 | 3,398 |
Gross Unrealized Gains | 0 | 85 |
Gross Unrealized Losses | (320) | (15) |
Fair Value | 3,660 | 3,468 |
Asset-backed securities | ||
Debt Securities | ||
Amortized Cost | 1,335 | 1,308 |
Gross Unrealized Gains | 0 | 5 |
Gross Unrealized Losses | (68) | (5) |
Fair Value | 1,267 | 1,308 |
Residential mortgage-backed securities | ||
Debt Securities | ||
Amortized Cost | 1,154 | 850 |
Gross Unrealized Gains | 0 | 10 |
Gross Unrealized Losses | (135) | (7) |
Fair Value | 1,019 | 853 |
Commercial mortgage-backed securities | ||
Debt Securities | ||
Amortized Cost | 970 | 870 |
Gross Unrealized Gains | 0 | 13 |
Gross Unrealized Losses | (96) | (10) |
Fair Value | $ 874 | $ 873 |
Short-term and Long-term Inve_4
Short-term and Long-term Investments, Restricted Deposits - Narrative (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 USD ($) position | Dec. 31, 2021 USD ($) | |
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Accrued interest income | $ | $ 119 | $ 96 |
Positions from which gross unrealized losses were generated | 6,688 | |
Total investment positions | 6,847 | |
Commercial mortgage-backed securities | ||
Schedule Of Investments And Restricted Deposits By Type [Line Items] | ||
Investments recorded at fair value that carry rating of AAA Plus, weighted average (in years) | 4 years | |
Rated Securities | External Credit Rating, Investment Grade | Investment Securities | ||
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 | 98% |
Short-term and Long-term Inve_5
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, 2022 | Dec. 31, 2021 |
Unrealized Losses | ||
Less Than 12 Months | $ (1,006) | $ (102) |
12 Months or More | (528) | (12) |
Fair Value | ||
Fair Value, Less Than 12 Months | 12,805 | 7,602 |
Fair Value, 12 Months or More | 3,256 | 331 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Unrealized Losses | ||
Less Than 12 Months | (14) | (2) |
12 Months or More | (4) | 0 |
Fair Value | ||
Fair Value, Less Than 12 Months | 556 | 598 |
Fair Value, 12 Months or More | 67 | 3 |
Corporate securities | ||
Unrealized Losses | ||
Less Than 12 Months | (562) | (66) |
12 Months or More | (335) | (9) |
Fair Value | ||
Fair Value, Less Than 12 Months | 6,737 | 4,209 |
Fair Value, 12 Months or More | 1,975 | 209 |
Municipal securities | ||
Unrealized Losses | ||
Less Than 12 Months | (228) | (14) |
12 Months or More | (92) | (1) |
Fair Value | ||
Fair Value, Less Than 12 Months | 2,998 | 1,173 |
Fair Value, 12 Months or More | 586 | 39 |
Asset-backed securities | ||
Unrealized Losses | ||
Less Than 12 Months | (57) | (5) |
12 Months or More | (11) | 0 |
Fair Value | ||
Fair Value, Less Than 12 Months | 1,094 | 770 |
Fair Value, 12 Months or More | 166 | 33 |
Residential mortgage-backed securities | ||
Unrealized Losses | ||
Less Than 12 Months | (86) | (7) |
12 Months or More | (49) | 0 |
Fair Value | ||
Fair Value, Less Than 12 Months | 770 | 472 |
Fair Value, 12 Months or More | 244 | 15 |
Commercial mortgage-backed securities | ||
Unrealized Losses | ||
Less Than 12 Months | (59) | (8) |
12 Months or More | (37) | (2) |
Fair Value | ||
Fair Value, Less Than 12 Months | 650 | 380 |
Fair Value, 12 Months or More | $ 218 | $ 32 |
Short-term and Long-term Inve_6
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, 2022 | Dec. 31, 2021 |
Investments | ||
Amortized Cost | ||
One year or less | $ 2,053 | $ 1,390 |
One year through five years | 7,296 | 6,212 |
Five years through ten years | 4,077 | 3,647 |
Greater than ten years | 95 | 73 |
Asset-backed securities | 3,459 | 3,028 |
Amortized Cost | 16,980 | 14,350 |
Fair Value | ||
One year or less | 2,029 | 1,396 |
One year through five years | 6,752 | 6,294 |
Five years through ten years | 3,496 | 3,681 |
Greater than ten years | 85 | 78 |
Asset-backed securities | 3,160 | 3,034 |
Fair Value | 15,522 | 14,483 |
Restricted Deposits | ||
Amortized Cost | ||
One year or less | 521 | 368 |
One year through five years | 518 | 460 |
Five years through ten years | 241 | 244 |
Greater than ten years | 0 | 0 |
Asset-backed securities | 0 | 0 |
Amortized Cost | 1,280 | 1,072 |
Fair Value | ||
One year or less | 518 | 368 |
One year through five years | 482 | 457 |
Five years through ten years | 205 | 243 |
Greater than ten years | 0 | 0 |
Asset-backed securities | 0 | 0 |
Fair Value | $ 1,205 | $ 1,068 |
Fair Value Measurements - Fair
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, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 14,987 | $ 13,118 |
Investments: | ||
Equity securities | 6 | 326 |
Total assets at fair value | 31,720 | 29,010 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Investments: | ||
Fair Value | 648 | 640 |
Corporate securities | ||
Investments: | ||
Fair Value | 8,752 | 8,200 |
Municipal securities | ||
Investments: | ||
Fair Value | 3,660 | 3,468 |
Short-term time deposits | ||
Investments: | ||
Fair Value | 275 | 109 |
Asset-backed securities | ||
Investments: | ||
Fair Value | 1,267 | 1,308 |
Residential mortgage-backed securities | ||
Investments: | ||
Fair Value | 1,019 | 853 |
Commercial mortgage-backed securities | ||
Investments: | ||
Fair Value | 874 | 873 |
Investments available-for-sale | ||
Investments: | ||
Fair Value | 15,528 | 14,809 |
Investments available-for-sale | U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Investments: | ||
Fair Value | 313 | 171 |
Investments available-for-sale | Corporate securities | ||
Investments: | ||
Fair Value | 8,721 | 8,170 |
Investments available-for-sale | Municipal securities | ||
Investments: | ||
Fair Value | 3,053 | 2,999 |
Investments available-for-sale | Short-term time deposits | ||
Investments: | ||
Fair Value | 275 | 109 |
Investments available-for-sale | Asset-backed securities | ||
Investments: | ||
Fair Value | 1,267 | 1,308 |
Investments available-for-sale | Residential mortgage-backed securities | ||
Investments: | ||
Fair Value | 1,019 | 853 |
Investments available-for-sale | Commercial mortgage-backed securities | ||
Investments: | ||
Fair Value | 874 | 873 |
Restricted deposits | ||
Investments: | ||
Fair Value | 1,205 | 1,068 |
Restricted deposits | U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Investments: | ||
Fair Value | 335 | 469 |
Restricted deposits | Corporate securities | ||
Investments: | ||
Fair Value | 31 | 30 |
Restricted deposits | Municipal securities | ||
Investments: | ||
Fair Value | 607 | 469 |
Restricted deposits | Cash and cash equivalents | ||
Investments: | ||
Fair Value | 228 | 96 |
Restricted deposits | Certificates of deposit | ||
Investments: | ||
Fair Value | 4 | 4 |
Other long-term assets: | Interest rate swap agreements | ||
Investments: | ||
Derivative asset | 15 | |
Level I | ||
Assets | ||
Cash and cash equivalents | 14,987 | 13,118 |
Investments: | ||
Equity securities | 4 | 324 |
Total assets at fair value | 15,867 | 14,178 |
Level I | Investments available-for-sale | ||
Investments: | ||
Fair Value | 317 | 495 |
Level I | Investments available-for-sale | U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Investments: | ||
Fair Value | 313 | 171 |
Level I | Investments available-for-sale | Corporate securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level I | Investments available-for-sale | Municipal securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level I | Investments available-for-sale | Short-term time deposits | ||
Investments: | ||
Fair Value | 0 | 0 |
Level I | Investments available-for-sale | Asset-backed securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level I | Investments available-for-sale | Residential mortgage-backed securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level I | Investments available-for-sale | Commercial mortgage-backed securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level I | Restricted deposits | ||
Investments: | ||
Fair Value | 563 | 565 |
Level I | Restricted deposits | U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Investments: | ||
Fair Value | 335 | 469 |
Level I | Restricted deposits | Corporate securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level I | Restricted deposits | Municipal securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level I | Restricted deposits | Cash and cash equivalents | ||
Investments: | ||
Fair Value | 228 | 96 |
Level I | Restricted deposits | Certificates of deposit | ||
Investments: | ||
Fair Value | 0 | 0 |
Level I | Other long-term assets: | Interest rate swap agreements | ||
Investments: | ||
Derivative asset | 0 | |
Level II | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Investments: | ||
Equity securities | 2 | 2 |
Total assets at fair value | 15,853 | 14,832 |
Level II | Investments available-for-sale | ||
Investments: | ||
Fair Value | 15,211 | 14,314 |
Level II | Investments available-for-sale | U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Investments: | ||
Fair Value | 0 | 0 |
Level II | Investments available-for-sale | Corporate securities | ||
Investments: | ||
Fair Value | 8,721 | 8,170 |
Level II | Investments available-for-sale | Municipal securities | ||
Investments: | ||
Fair Value | 3,053 | 2,999 |
Level II | Investments available-for-sale | Short-term time deposits | ||
Investments: | ||
Fair Value | 275 | 109 |
Level II | Investments available-for-sale | Asset-backed securities | ||
Investments: | ||
Fair Value | 1,267 | 1,308 |
Level II | Investments available-for-sale | Residential mortgage-backed securities | ||
Investments: | ||
Fair Value | 1,019 | 853 |
Level II | Investments available-for-sale | Commercial mortgage-backed securities | ||
Investments: | ||
Fair Value | 874 | 873 |
Level II | Restricted deposits | ||
Investments: | ||
Fair Value | 642 | 503 |
Level II | Restricted deposits | U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Investments: | ||
Fair Value | 0 | 0 |
Level II | Restricted deposits | Corporate securities | ||
Investments: | ||
Fair Value | 31 | 30 |
Level II | Restricted deposits | Municipal securities | ||
Investments: | ||
Fair Value | 607 | 469 |
Level II | Restricted deposits | Cash and cash equivalents | ||
Investments: | ||
Fair Value | 0 | 0 |
Level II | Restricted deposits | Certificates of deposit | ||
Investments: | ||
Fair Value | 4 | 4 |
Level II | Other long-term assets: | Interest rate swap agreements | ||
Investments: | ||
Derivative asset | 15 | |
Level III | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Investments: | ||
Equity securities | 0 | 0 |
Total assets at fair value | 0 | 0 |
Level III | Investments available-for-sale | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Investments available-for-sale | U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Investments available-for-sale | Corporate securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Investments available-for-sale | Municipal securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Investments available-for-sale | Short-term time deposits | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Investments available-for-sale | Asset-backed securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Investments available-for-sale | Residential mortgage-backed securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Investments available-for-sale | Commercial mortgage-backed securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Restricted deposits | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Restricted deposits | U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Restricted deposits | Corporate securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Restricted deposits | Municipal securities | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Restricted deposits | Cash and cash equivalents | ||
Investments: | ||
Fair Value | 0 | 0 |
Level III | Restricted deposits | Certificates of deposit | ||
Investments: | ||
Fair Value | $ 0 | 0 |
Level III | Other long-term assets: | Interest rate swap agreements | ||
Investments: | ||
Derivative asset | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Aggregate carrying amount of life insurance contracts and equity investments, fair value | $ 716 | $ 773 |
Property, Software and Equipm_3
Property, Software and Equipment - Components (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, at cost | $ 4,539 | $ 5,291 |
Less: accumulated depreciation | (2,060) | (1,900) |
Property, software and equipment, net | 2,479 | 3,391 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, at cost | 2,211 | 1,825 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, at cost | 641 | 1,116 |
Furniture and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, at cost | 407 | 753 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, at cost | 454 | 732 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, at cost | 648 | 617 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, at cost | $ 178 | $ 248 |
Property, Software and Equipm_4
Property, Software and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Remaining asset impairment charges | $ 1,574 | |
Real Estate Owned and Related Fixed Assets | ||
Property, Plant and Equipment [Line Items] | ||
Tangible asset impairment charges | $ 57 | 763 |
Leased Real Estate and Fixed Assets | ||
Property, Plant and Equipment [Line Items] | ||
Tangible asset impairment charges | $ 14 | $ 237 |
Medical Claims Liability - Sche
Medical Claims Liability - Schedule of Change in Medical Claims Liability (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balance, January 1 | $ 14,243 | $ 12,438 |
Less: Reinsurance recoverable | 23 | 23 |
Balance, January 1, net | 14,220 | 12,415 |
Acquisitions and divestitures | 249 | 0 |
Incurred related to: | ||
Current year | 84,457 | 74,736 |
Prior years | (1,196) | (1,526) |
Total incurred | 83,261 | 73,210 |
Paid related to: | ||
Current year | 70,305 | 62,205 |
Prior years | 10,968 | 9,344 |
Total paid | 81,273 | 71,549 |
Balance, September 30, net | 16,457 | 14,076 |
Plus: Reinsurance recoverable | 8 | 23 |
Balance, September 30 | $ 16,465 | $ 14,099 |
Medical Claims Liability - Narr
Medical Claims Liability - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Insurance [Abstract] | ||
Amounts recorded as an adjustment to premium revenues related to minimum HBR and return of premium programs | $ 121 | $ 438 |
Short-duration insurance contracts, Incurred but not reported and expected development on reported claims | $ 11,130 |
Affordable Care Act - Net Recei
Affordable Care Act - Net Receivables (Payables) for Each of the Ongoing Programs (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Affordable Care Act [Abstract] | ||
Risk adjustment receivable | $ 1,068 | $ 522 |
Risk adjustment payable | (652) | (536) |
Minimum medical loss ratio | (69) | (196) |
Cost sharing reduction receivable | 10 | 69 |
Cost sharing reduction payable | $ (81) | $ (42) |
Affordable Care Act - Additiona
Affordable Care Act - Additional information (Details) - USD ($) $ in Millions | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
Affordable Care Act [Abstract] | ||
Risk adjustment, increase to net receivables | $ 403 | |
Risk adjustment and reinsurance pre-tax benefit | $ 368 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total senior notes | $ 15,731,000,000 | $ 15,988,000,000 |
Construction loan payable | 181,000,000 | 184,000,000 |
Finance leases and other | 258,000,000 | 493,000,000 |
Debt issuance costs | (153,000,000) | (171,000,000) |
Total debt | 18,333,000,000 | 18,838,000,000 |
Less current portion | (249,000,000) | (267,000,000) |
Long-term debt | 18,084,000,000 | 18,571,000,000 |
Revolving credit agreement | ||
Debt Instrument [Line Items] | ||
Credit facility | 120,000,000 | 149,000,000 |
Term loan facility | ||
Debt Instrument [Line Items] | ||
Credit facility | 2,196,000,000 | 2,195,000,000 |
$2,500 million 4.25% Senior Notes due December 15, 2027 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 2,500,000,000 | |
Interest rate | 4.25% | |
Senior notes | $ 2,403,000,000 | 2,484,000,000 |
$2,300 million 2.45% Senior Notes due July 15, 2028 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 2,300,000,000 | |
Interest rate | 2.45% | |
Senior notes | $ 2,304,000,000 | 2,304,000,000 |
$3,500 million 4.625% Senior Notes due December 15, 2029 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 3,500,000,000 | |
Interest rate | 4.625% | |
Senior notes | $ 3,324,000,000 | 3,500,000,000 |
$2,000 million 3.375% Senior Notes due February 15, 2030 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 2,000,000,000 | |
Interest rate | 3.375% | |
Senior notes | $ 2,000,000,000 | 2,000,000,000 |
$2,200 million 3.00% Senior Notes due October 15, 2030 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 2,200,000,000 | |
Interest rate | 3% | |
Senior notes | $ 2,200,000,000 | 2,200,000,000 |
$2,200 million 2.50% Senior Notes due March 1, 2031 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 2,200,000,000 | |
Interest rate | 2.50% | |
Senior notes | $ 2,200,000,000 | 2,200,000,000 |
$1,300 million 2.625% Senior Notes due August 1, 2031 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 1,300,000,000 | |
Interest rate | 2.625% | |
Senior notes | $ 1,300,000,000 | $ 1,300,000,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) £ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||
Mar. 31, 2022 USD ($) | Oct. 25, 2022 USD ($) | May 31, 2022 USD ($) | Apr. 30, 2022 | Jul. 31, 2021 GBP (£) | Oct. 31, 2017 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 GBP (£) | Sep. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | May 31, 2022 GBP (£) | Jan. 31, 2022 | Dec. 31, 2021 USD ($) | Jul. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||||||||||||
Payments for foreign currency hedge | £ | £ 509 | |||||||||||||||
Debt extinguishment | $ 13,000,000 | $ 10,000,000 | $ (79,000,000) | $ 26,000,000 | $ (125,000,000) | |||||||||||
Construction loan payable | 181,000,000 | 181,000,000 | $ 184,000,000 | |||||||||||||
Debt repurchase program, authorized amount | $ 1,000,000,000 | |||||||||||||||
Debt repurchase program, amount available under the program | 753,000,000 | 753,000,000 | ||||||||||||||
Senior Notes | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt redemption amount | 259,000,000 | $ 259,000,000 | ||||||||||||||
Gain on redemption of debt | 10,000,000 | |||||||||||||||
Repurchase of senior debt | $ 247,000,000 | |||||||||||||||
Senior Notes | Subsequent Event | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt redemption amount | $ 58,000,000 | |||||||||||||||
Repurchase of senior debt | $ 53,000,000 | |||||||||||||||
Senior Notes | $2,500 million 4.25% Senior Notes due December 15, 2027 | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate | 4.25% | 4.25% | ||||||||||||||
Debt redemption amount | $ 83,000,000 | $ 83,000,000 | ||||||||||||||
Debt, face amount | $ 2,500,000,000 | $ 2,500,000,000 | ||||||||||||||
Senior Notes | $3,500 million 4.625% Senior Notes due December 15, 2029 | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate | 4.625% | 4.625% | ||||||||||||||
Debt redemption amount | $ 176,000,000 | $ 176,000,000 | ||||||||||||||
Debt, face amount | $ 3,500,000,000 | $ 3,500,000,000 | ||||||||||||||
Construction Loan Payable | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt, face amount | $ 200,000,000 | |||||||||||||||
Extension term | 1 year | |||||||||||||||
Foreign Line of Credit | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, maximum borrowing capacity | £ | £ 250 | |||||||||||||||
Proceeds from credit facility | £ | £ 180 | |||||||||||||||
Magellan Acquisition | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate | 4.40% | |||||||||||||||
LIBOR | Construction Loan Payable | Maximum | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Basis spread on variable rate | 2.70% | |||||||||||||||
LIBOR | Construction Loan Payable | Minimum | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Basis spread on variable rate | 2% | |||||||||||||||
SOFR | Construction Loan Payable | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Basis spread on variable rate | 1.85% | |||||||||||||||
Currency Swap | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Derivative agreement | $ 705,000,000 | |||||||||||||||
Proceeds from termination of interest rate swaps | $ 35,000,000 | |||||||||||||||
Debt Total | Credit Availability Concentration Risk | LIBOR | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of investments in rated securities carry an investment grade rating by nationally recognized statistical rating organizations | 15% | 15% |
Leases - ROU Assets and Liabili
Leases - ROU Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
ROU assets (recorded within other long-term assets) | $ 2,456 | $ 3,566 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other long-term assets | Other long-term assets |
Liabilities | ||
Short-term (recorded within accounts payable and accrued expenses) | $ 193 | $ 204 |
Long-term (recorded within other long-term liabilities) | 3,038 | 3,619 |
Total lease liabilities | $ 3,231 | $ 3,823 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Leases [Abstract] | ||
ROU impairment | $ 53 | $ 574 |
Remaining asset impairment charges | $ 1,574 | |
Weighted average remaining lease term | 20 years 1 month 6 days | 20 years 1 month 6 days |
Weighted-average discount rate for operating leases | 5.60% | 5.60% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) shares in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | 4 Months Ended | 9 Months Ended | |||||||
Oct. 25, 2022 | Jul. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Oct. 25, 2022 | Sep. 30, 2022 | |
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchase program, increase to authorized amount | $ 3,000 | ||||||||||
Stock repurchase program, authorized amount | $ 4,000 | $ 4,000 | |||||||||
Common stock repurchases | $ 1,243 | $ 349 | $ 71 | $ 15 | $ 4 | $ 29 | |||||
Unsettled portion under ASR | $ 200 | ||||||||||
Stock repurchase program, remaining available | 2,216 | 2,216 | |||||||||
Subsequent Event | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Common stock repurchases (in shares) | 828 | ||||||||||
Common stock repurchases | $ 66 | ||||||||||
Share Repurchase Agreement | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Common stock repurchases | $ 1,384 | ||||||||||
Common Stock | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Common stock repurchases (in shares) | 15,700 | ||||||||||
Common Stock | Accelerated Share Repurchase Agreement | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Accelerated share repurchases agreement, amount | $ 1,000 | ||||||||||
Common stock repurchases (in shares) | 8,600 | ||||||||||
Shares repurchased, percentage of notional amount | 80% | ||||||||||
Common Stock | Accelerated Share Repurchase Agreement | Subsequent Event | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Common stock repurchases (in shares) | 3,000 | 11,600 | |||||||||
Common Stock | Share Repurchase Agreement | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Common stock repurchases (in shares) | 2,900 | ||||||||||
Common stock repurchases | $ 240 |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings attributable to Centene Corporation | ||||
Earnings attributable to Centene Corporation | $ 738 | $ 584 | $ 1,415 | $ 748 |
Shares used in computing per share amounts: | ||||
Weighted average number of common shares outstanding (in shares) | 573,961 | 583,244 | 580,277 | 582,636 |
Common stock equivalents (as determined by applying the treasury stock method) (in shares) | 6,646 | 7,458 | 6,807 | 7,518 |
Weighted average number of common shares and potential dilutive common shares outstanding (in shares) | 580,607 | 590,702 | 587,084 | 590,154 |
Net earnings per common share attributable to Centene Corporation: | ||||
Basic earnings per common share (in dollars per share) | $ 1.29 | $ 1 | $ 2.44 | $ 1.28 |
Diluted earnings per common share (in dollars per share) | $ 1.27 | $ 0.99 | $ 2.41 | $ 1.27 |
Anti-dilutive restricted stock and restricted stock units excluded from the calculation of diluted earnings (loss) per common share (in shares) | 152 | 111 | 193 | 57 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 35,865 | $ 32,406 | $ 108,986 | $ 93,414 |
Earnings from operations | 476 | 545 | 1,600 | 1,181 |
Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | (3,266) | (3,210) | (9,945) | (9,221) |
Managed Care | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 33,724 | 30,889 | 101,434 | 89,082 |
Earnings from operations | 527 | 699 | 1,634 | 1,240 |
Managed Care | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 33,722 | 30,888 | 101,428 | 89,078 |
Managed Care | Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 2 | 1 | 6 | 4 |
Specialty Services | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 5,407 | 4,727 | 17,497 | 13,553 |
Earnings from operations | (51) | (154) | (34) | (59) |
Specialty Services | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 2,143 | 1,518 | 7,558 | 4,336 |
Specialty Services | Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 3,264 | $ 3,209 | $ 9,939 | $ 9,217 |
Contingencies (Details)
Contingencies (Details) $ in Millions | Sep. 30, 2022 state | Dec. 31, 2021 claim | Jun. 30, 2021 USD ($) |
Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Pending claims | claim | 3 | ||
Reserve estimate | $ | $ 1,250 | ||
Settled Litigation | |||
Loss Contingencies [Line Items] | |||
Number of states where no fault agreements were reached with attorney generals | state | 13 |