Cover
Cover | 9 Months Ended |
Sep. 30, 2020shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Sep. 30, 2020 |
Document Transition Report | false |
Entity File Number | 1-5975 |
Entity Registrant Name | HUMANA INC |
Entity Central Index Key | 0000049071 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 61-0647538 |
Entity Address, Address Line One | 500 West Main Street |
Entity Address, City or Town | Louisville |
Entity Address, State or Province | KY |
Entity Address, Postal Zip Code | 40202 |
City Area Code | 502 |
Local Phone Number | 580-1000 |
Title of 12(b) Security | Common stock, $0.16 2/3 par value |
Trading Symbol | HUM |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 132,341,451 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 7,985 | $ 4,054 |
Investment securities | 12,741 | 10,972 |
Receivables, less allowance for doubtful accounts of $78 in 2020 and $69 in 2019 | 1,135 | 1,056 |
Other current assets | 5,170 | 3,806 |
Total current assets | 27,031 | 19,888 |
Property and equipment, net | 2,228 | 1,955 |
Long-term investment securities | 1,105 | 406 |
Equity method investments | 1,160 | 1,063 |
Goodwill | 4,443 | 3,928 |
Other long-term assets | 2,510 | 1,834 |
Total assets | 38,477 | 29,074 |
Current liabilities: | ||
Benefits payable | 8,208 | 6,004 |
Trade accounts payable and accrued expenses | 4,472 | 3,754 |
Book overdraft | 214 | 225 |
Unearned revenues | 287 | 247 |
Short-term debt | 1,724 | 699 |
Total current liabilities | 14,905 | 10,929 |
Long-term debt | 6,059 | 4,967 |
Future policy benefits payable | 202 | 206 |
Other long-term liabilities | 1,543 | 935 |
Total liabilities | 22,709 | 17,037 |
Stockholders’ equity: | ||
Preferred stock, $1 par; 10,000,000 shares authorized; none issued | 0 | 0 |
Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 198,648,742 shares issued at September 30, 2020 and 198,629,992 shares issued at December 31, 2019 | 33 | 33 |
Capital in excess of par value | 2,940 | 2,820 |
Retained earnings | 20,872 | 17,483 |
Accumulated other comprehensive income | 370 | 156 |
Treasury stock, at cost, 66,307,291 shares at September 30, 2020 and 66,524,771 shares at December 31, 2019 | (8,447) | (8,455) |
Total stockholders’ equity | 15,768 | 12,037 |
Total liabilities and stockholders’ equity | $ 38,477 | $ 29,074 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 78 | $ 69 |
Preferred stock, par (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par (in dollars per share) | $ 0.1667 | $ 0.1667 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 198,648,742 | 198,629,992 |
Treasury stock, shares (in shares) | 66,307,291 | 66,524,771 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues: | ||||
Premiums | $ 18,904 | $ 15,712 | $ 55,822 | $ 47,139 |
Services | 457 | 393 | 1,331 | 1,103 |
Investment income | 714 | 136 | 940 | 351 |
Total revenues | 20,075 | 16,241 | 58,093 | 48,593 |
Operating expenses: | ||||
Benefits | 15,611 | 13,357 | 45,415 | 40,168 |
Operating costs | 2,513 | 1,889 | 6,984 | 5,252 |
Depreciation and amortization | 128 | 127 | 362 | 343 |
Total operating expenses | 18,252 | 15,373 | 52,761 | 45,763 |
Income from operations | 1,823 | 868 | 5,332 | 2,830 |
Interest expense | 75 | 62 | 211 | 184 |
Other (income) expense, net | (7) | (82) | 63 | (217) |
Income before income taxes and equity in net earnings | 1,755 | 888 | 5,058 | 2,863 |
Provision for income taxes | 450 | 200 | 1,485 | 684 |
Equity in net earnings | 35 | 1 | 68 | 16 |
Net income | $ 1,340 | $ 689 | $ 3,641 | $ 2,195 |
Basic earnings per common share (in dollars per share) | $ 10.12 | $ 5.16 | $ 27.53 | $ 16.31 |
Diluted earnings per common share (in dollars per share) | $ 10.05 | $ 5.14 | $ 27.37 | $ 16.24 |
Services revenue, type | us-gaap:HealthCareService | us-gaap:HealthCareService | us-gaap:HealthCareService | us-gaap:HealthCareService |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,340 | $ 689 | $ 3,641 | $ 2,195 |
Other comprehensive income: | ||||
Change in gross unrealized investment gains/losses | 66 | 87 | 332 | 452 |
Effect of income taxes | (15) | (20) | (78) | (105) |
Total change in unrealized investment gains/losses, net of tax | 51 | 67 | 254 | 347 |
Reclassification adjustment for net realized gains | (1) | (1) | (48) | (7) |
Effect of income taxes | 0 | 0 | 10 | 2 |
Total reclassification adjustment, net of tax | (1) | (1) | (38) | (5) |
Other comprehensive income, net of tax | 50 | 66 | 216 | 342 |
Comprehensive income (loss) attributable to equity method investments | 3 | (1) | (2) | (6) |
Comprehensive income | $ 1,393 | $ 754 | $ 3,855 | $ 2,531 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Impact of adoption of ASC 326 | Common Stock | Capital In Excess of Par Value | Retained Earnings | Retained EarningsImpact of adoption of ASC 326 | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Balances at Dec. 31, 2018 | $ 10,161 | $ 33 | $ 2,535 | $ 15,072 | $ (159) | $ (7,320) | ||
Balances (in shares) at Dec. 31, 2018 | 198,595 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 2,195 | 2,195 | ||||||
Other comprehensive income (loss) | 336 | 336 | ||||||
Common stock repurchases | (1,010) | (50) | (960) | |||||
Dividends and dividend equivalents | (222) | (222) | ||||||
Stock-based compensation | 119 | 119 | ||||||
Restricted stock unit vesting | 0 | (3) | 3 | |||||
Restricted stock unit vesting (in shares) | 32 | |||||||
Stock option exercises | 22 | 7 | 15 | |||||
Stock option exercises (in shares) | 2 | |||||||
Balances at Sep. 30, 2019 | 11,601 | $ 33 | 2,608 | 17,045 | 177 | (8,262) | ||
Balances (in shares) at Sep. 30, 2019 | 198,629 | |||||||
Balances at Dec. 31, 2018 | 10,161 | $ 33 | 2,535 | 15,072 | (159) | (7,320) | ||
Balances (in shares) at Dec. 31, 2018 | 198,595 | |||||||
Balances at Dec. 31, 2019 | $ 12,037 | $ (2) | $ 33 | 2,820 | 17,483 | $ (2) | 156 | (8,455) |
Balances (in shares) at Dec. 31, 2019 | 198,630 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||
Balances at Jun. 30, 2019 | $ 11,872 | $ 33 | 2,763 | 16,429 | 112 | (7,465) | ||
Balances (in shares) at Jun. 30, 2019 | 198,628 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 689 | 689 | ||||||
Other comprehensive income (loss) | 65 | 65 | ||||||
Common stock repurchases | (1,000) | (200) | (800) | |||||
Dividends and dividend equivalents | (73) | (73) | ||||||
Stock-based compensation | 43 | 43 | ||||||
Restricted stock unit vesting | 0 | 0 | 0 | |||||
Restricted stock unit vesting (in shares) | 0 | |||||||
Stock option exercises | 5 | 2 | 3 | |||||
Stock option exercises (in shares) | 1 | |||||||
Balances at Sep. 30, 2019 | 11,601 | $ 33 | 2,608 | 17,045 | 177 | (8,262) | ||
Balances (in shares) at Sep. 30, 2019 | 198,629 | |||||||
Balances at Dec. 31, 2019 | 12,037 | $ (2) | $ 33 | 2,820 | 17,483 | $ (2) | 156 | (8,455) |
Balances (in shares) at Dec. 31, 2019 | 198,630 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 3,641 | 3,641 | ||||||
Other comprehensive income (loss) | 214 | 214 | ||||||
Common stock repurchases | (30) | 0 | (30) | |||||
Common stock repurchases (in shares) | 19 | |||||||
Dividends and dividend equivalents | (250) | (250) | ||||||
Stock-based compensation | 129 | 129 | ||||||
Restricted stock unit vesting | 0 | (21) | 21 | |||||
Restricted stock unit vesting (in shares) | 0 | |||||||
Stock option exercises | 29 | 12 | 17 | |||||
Stock option exercises (in shares) | 0 | |||||||
Balances at Sep. 30, 2020 | 15,768 | $ 33 | 2,940 | 20,872 | 370 | (8,447) | ||
Balances (in shares) at Sep. 30, 2020 | 198,649 | |||||||
Balances at Jun. 30, 2020 | 14,416 | $ 33 | 2,898 | 19,616 | 317 | (8,448) | ||
Balances (in shares) at Jun. 30, 2020 | 198,630 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 1,340 | 1,340 | ||||||
Other comprehensive income (loss) | 53 | 53 | ||||||
Common stock repurchases | (5) | 0 | (5) | |||||
Common stock repurchases (in shares) | 19 | |||||||
Dividends and dividend equivalents | (84) | (84) | ||||||
Stock-based compensation | 47 | 47 | ||||||
Restricted stock unit vesting | 0 | (6) | 6 | |||||
Restricted stock unit vesting (in shares) | 0 | |||||||
Stock option exercises | 1 | 1 | 0 | |||||
Stock option exercises (in shares) | 0 | |||||||
Balances at Sep. 30, 2020 | $ 15,768 | $ 33 | $ 2,940 | $ 20,872 | $ 370 | $ (8,447) | ||
Balances (in shares) at Sep. 30, 2020 | 198,649 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net income | $ 3,641 | $ 2,195 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Gains on investment securities, net | (696) | (23) |
Equity in net earnings | (68) | (16) |
Stock-based compensation | 129 | 119 |
Depreciation | 390 | 382 |
Amortization | 66 | 53 |
Benefit for deferred income taxes | (3) | (21) |
Changes in operating assets and liabilities, net of effect of businesses acquired and dispositions: | ||
Receivables | (82) | 179 |
Other assets | (1,547) | 334 |
Benefits payable | 2,204 | 1,358 |
Other liabilities | 1,257 | 168 |
Unearned revenues | 40 | (9) |
Other | 25 | 53 |
Net cash provided by operating activities | 5,356 | 4,772 |
Cash flows from investing activities | ||
Acquisitions, net of cash acquired | (709) | 0 |
Purchases of property and equipment | (668) | (506) |
Purchases of investment securities | (7,230) | (4,130) |
Maturities of investment securities | 3,500 | 1,281 |
Proceeds from sales of investment securities | 2,097 | 2,878 |
Net cash used in investing activities | (3,010) | (477) |
Cash flows from financing activities | ||
(Withdrawals) receipts from contract deposits, net | (274) | 11 |
Proceeds from issuance of senior notes, net | 1,088 | 987 |
Proceeds (repayments) from issuance of commercial paper, net | 21 | |
Proceeds (repayments) from issuance of commercial paper, net | (358) | |
Proceeds from term loan | 1,000 | 0 |
Repayments of Notes Payable | 0 | (650) |
Change in book overdraft | (11) | 102 |
Common stock repurchases | (30) | (1,010) |
Dividends paid | (239) | (216) |
Proceeds from stock option exercises and other, net | 30 | 23 |
Net cash provided by (used in) financing activities | 1,585 | (1,111) |
Increase in cash and cash equivalents | 3,931 | 3,184 |
Cash and cash equivalents at beginning of period | 4,054 | 2,343 |
Cash and cash equivalents at end of period | 7,985 | 5,527 |
Supplemental cash flow disclosures: | ||
Interest payments | 159 | 136 |
Income tax payments, net | $ 778 | $ 578 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS | BASIS OF PRESENTATION AND SIGNIFICANT EVENTS The accompanying condensed consolidated financial statements are presented in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America, or GAAP, or those normally made in an Annual Report on Form 10-K. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. For further information, the reader of this Form 10-Q should refer to our Form 10-K for the year ended December 31, 2019, that was filed with the Securities and Exchange Commission, or the SEC, on February 20, 2020. We refer to the Form 10-K as the “2019 Form 10-K” in this document. References throughout this document to “we,” “us,” “our,” “Company,” and “Humana” mean Humana Inc. and its subsidiaries. The preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. Refer to Note 2 to the consolidated financial statements included in our 2019 Form 10-K for information on accounting policies that we consider in preparing our consolidated financial statements. Since the filing of our 2019 Form 10-K we have received common stock, primarily in Oak Street Health, Inc., or OSH, as part of their initial public offering during the third quarter of 2020. We have updated our accounting policy for investment securities below. The financial information has been prepared in accordance with our customary accounting practices and has not been audited. In our opinion, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature. Investment Securities Investment securities, which consist of debt and equity securities, are stated at fair value. Our debt securities have been categorized as available for sale. Debt securities available for current operations are classified as current assets and debt securities available for our long-term insurance products and professional liability funding requirements, as well as restricted statutory deposits and equity securities, are classified as long-term assets. For the purpose of determining realized gross gains and losses for debt securities sold, which are included as a component of investment income in the consolidated statements of income, the cost of investment securities sold is based upon specific identification. Unrealized holding gains and losses for debt securities, net of applicable deferred taxes, are included as a component of stockholders’ equity and comprehensive income until realized from a sale or other-than-temporary impairment. For the purpose of determining gross gains and losses for equity securities, changes in fair value at the reporting date are included as a component of investment income in the consolidated statements of income. COVID-19 The temporary deferral of non-essential care resulting from stay-at-home and physical distancing orders and other restrictions on movement and economic activity implemented throughout the country beginning in the second half of March 2020 to reduce the spread of the novel coronavirus, or COVID-19, has impacted our business. Hospital admissions and utilization were significantly depressed in April and increased throughout May and June. Utilization continued to rebound throughout the third quarter of 2020, reaching approximately 95% of historic baseline levels at the close of the third quarter. The impact of the deferral of non-essential care was partially offset by COVID-19 testing and treatment costs, as well as our ongoing pandemic relief efforts. Revenue Recognition Our revenues include premium and service revenues. Service revenues include administrative service fees that are recorded based upon established per member per month rates and the number of members for the month and are recognized as services are provided for the month. Additionally, service revenues include net patient service revenues that are recorded based upon established billing rates, less allowances for contractual adjustments, and are recognized as services are provided. For more information about our revenues, refer to Note 2 to the consolidated financial statements included in our 2019 Form 10-K for information on accounting policies that we consider in preparing our consolidated financial statements. See Note 14 for disaggregation of revenue by segment and type. At September 30, 2020, accounts receivable related to services were $155 million. For the three and nine months ended September 30, 2020, we had no material bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the condensed consolidated balance sheet at September 30, 2020. For the three and nine months ended September 30, 2020, services revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price), was not material. Further, services revenue expected to be recognized in any future year related to remaining performance obligations was not material. Health Care Reform The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010 (which we collectively refer to as the Health Care Reform Law) enacted significant reforms to various aspects of the U.S. health insurance industry. Certain of these reforms became effective January 1, 2014, including an annual insurance industry premium-based fee. The Continuing Resolution bill, H.R. 195, enacted on January 22, 2018, included a one year suspension in 2019 of the health insurance industry fee, but the fee resumed in calendar year 2020. The Further Consolidated Appropriations Act, 2020, enacted on December 20, 2019, permanently repealed the health insurance industry fee beginning in calendar year 2021. In September 2020, we paid the federal government $1.2 billion for the annual health insurance industry fee attributed to calendar year 2020. This fee, fixed in amount by law and apportioned to insurance carriers based on market share, is not deductible for tax purposes. On January 1 we recorded a liability for this fee in trade accounts payable and accrued expenses which we carried until the fee was paid. We also recorded a corresponding deferred cost in other current assets in our condensed consolidated financial statements which is amortized ratably to expense over the calendar year. Amortization of the deferred cost was recorded in operating cost expense of approximately $292 million and $884 million for the three and nine months ended September 30, 2020, respectively, resulting from the amortization of the 2020 annual health insurance industry fee. |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTSIn June 2016, the FASB issued guidance introducing a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The guidance was effective for us beginning January 1, 2020. The new current expected credit losses (CECL) model generally calls for the immediate recognition of all expected credit losses and applies to loans, accounts and trade receivables as well as other financial assets measured at amortized cost, loan commitments and off-balance sheet credit exposures, debt securities and other financial assets measured at fair value through other comprehensive income, and beneficial interests in securitized financial assets. The new guidance replaces the current incurred loss model for measuring expected credit losses, requires expected losses on available for sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities, and provides for additional disclosure requirements. Our investment portfolio consists primarily of available for sale debt securities. We adopted the new standard effective January 1, 2020. Due to the high concentration of our financial assets measured at amortized cost being with the federal government resulting in zero nonpayment risk as well as our available for sale debt securities primarily being in an unrealized gain position, the adoption of the new standard did not have a material impact on our results of operations, financial condition, or cash flows. In September 2018, the FASB issued new guidance related to accounting for long-duration contracts of insurers which revises key elements of the measurement models and disclosure requirements for long-duration contracts issued by insurers and reinsurers. The new guidance is effective for us beginning with annual and interim periods in 2023, with earlier adoption permitted, and requires retrospective application to previously issued annual and interim financial statements. We are currently evaluating the impact on our results of operations, financial position and cash flows. There are no other recently issued accounting standards that apply to us or that are expected to have a material impact on our results of operations, financial condition, or cash flows. |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES On January 31, 2020, we purchased privately held Enclara Healthcare, or Enclara, one of the nation’s largest hospice pharmacy and benefit management providers for cash consideration of approximately $709 million, net of cash received. This resulted in a preliminary purchase price allocation to goodwill of $515 million, other intangible assets of $240 million, and net tangible liabilities assumed of $11 million. The goodwill was assigned to the Healthcare Services segment. The other intangible assets, which primarily consist of customer contracts, have an estimated weighted average useful life of 11.4 years. The purchase price allocation is preliminary, subject to completion of valuation analysis, including for example, refining assumptions used to calculate the fair value of intangible assets. On February 1, 2020, our Partners in Primary Care wholly-owned subsidiary entered into a strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, to accelerate the expansion of our primary care model. The WCAS partnership is expected to open approximately 50 payor-agnostic, senior-focused primary care centers over 3 years beginning in 2020. Partners in Primary Care committed to the acquisition of a non-controlling interest in the approximately $600 million entity accounted for under the equity method of accounting. In addition, the agreement includes a series of put and call options through which WCAS may require us to purchase their interest in the entity, and through which we may acquire WCAS’s interest, over the next 5 to 10 years. During 2020 and 2019, we acquired other health and wellness related businesses which, individually or in the aggregate, have not had a material impact on our results of operations, financial condition, or cash flows. The results of operations and financial condition of these businesses acquired in 2020 and 2019 have been included in our condensed consolidated statements of income and condensed consolidated balance sheets from the respective acquisition dates. Acquisition-related costs recognized in 2020 and 2019 were not material to our results of operations. The pro forma financial information assuming the acquisitions had occurred as of the beginning of the calendar year prior to the year of acquisition, as well as the revenues and earnings generated during the year of acquisition, were not material for disclosure purposes. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | INVESTMENT SECURITIES Investment securities classified as current and long-term were as follows at September 30, 2020 and December 31, 2019, respectively: Amortized Gross Gross Fair (in millions) September 30, 2020 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 1,195 $ 2 $ (1) $ 1,196 Mortgage-backed securities 3,511 183 (2) 3,692 Tax-exempt municipal securities 1,439 40 (3) 1,476 Commercial mortgage-backed securities 1,020 54 (1) 1,073 Asset-backed securities 1,278 8 (5) 1,281 Corporate debt securities 4,199 218 (2) 4,415 Total debt securities $ 12,642 $ 505 $ (14) 13,133 Common stock 713 Total investment securities $ 13,846 December 31, 2019 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 353 $ 1 $ — $ 354 Mortgage-backed securities 3,628 85 (3) 3,710 Tax-exempt municipal securities 1,433 30 — 1,463 Commercial mortgage-backed securities 786 18 — 804 Asset-backed securities 1,093 3 (3) 1,093 Corporate debt securities 3,867 82 (2) 3,947 Total debt securities $ 11,160 $ 219 $ (8) 11,371 Common stock 7 Total investment securities $ 11,378 Gross unrealized losses and fair values aggregated by investment category and length of time of individual debt securities that have been in a continuous unrealized loss position were as follows at September 30, 2020 and December 31, 2019, respectively: Less than 12 months 12 months or more Total Fair Gross Fair Gross Fair Gross (in millions) September 30, 2020 U.S. Treasury and other U.S. U.S. Treasury and agency $ 662 $ (1) $ — $ — $ 662 $ (1) Mortgage-backed 450 (2) — — 450 (2) Tax-exempt municipal 127 (3) 12 — 139 (3) Commercial mortgage-backed securities 181 — 36 (1) 217 (1) Asset-backed securities 121 (1) 537 (4) 658 (5) Corporate debt securities 275 (1) 98 (1) 373 (2) Total debt securities $ 1,816 $ (8) $ 683 $ (6) $ 2,499 $ (14) December 31, 2019 U.S. Treasury and other U.S. U.S. Treasury and agency $ 48 $ — $ 23 $ — $ 71 $ — Mortgage-backed 315 (1) 204 (2) 519 (3) Tax-exempt municipal 58 — 75 — 133 — Commercial mortgage-backed securities 118 — 36 — 154 — Asset-backed securities 20 — 607 (3) 627 (3) Corporate debt securities 589 (2) 155 — 744 (2) Total debt securities $ 1,148 $ (3) $ 1,100 $ (5) $ 2,248 $ (8) Approximately 96% of our debt securities were investment-grade quality, with a weighted average credit rating of AA by Standard & Poor's Rating Service, or S&P, at September 30, 2020. Most of the debt securities that were below investment-grade were rated BB, the higher end of the below investment-grade rating scale. Tax-exempt municipal securities were diversified among general obligation bonds of states and local municipalities in the United States as well as special revenue bonds issued by municipalities to finance specific public works projects such as utilities, water and sewer, transportation, or education. Our general obligation bonds are diversified across the United States with no individual state exceeding 1% of our total debt securities. Our investment policy limits investments in a single issuer and requires diversification among various asset types. Our unrealized losses from all debt securities were generated from approximately 155 positions out of a total of approximately 1,530 positions at September 30, 2020. All issuers of debt securities we own that were trading at an unrealized loss at September 30, 2020 remain current on all contractual payments. After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets since the time these debt securities were purchased. At September 30, 2020, we did not intend to sell any debt securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these debt securities before recovery of their amortized cost basis. Additionally, we did not record any material credit allowances for debt securities that were in an unrealized loss position for the three and nine months ended September 30, 2020. The detail of gains (losses) related to investment securities and included within investment income was as follows for the three and nine months ended September 30, 2020 and 2019: Three months ended Nine months ended 2020 2019 2020 2019 (in millions) Gross gains on investment securities $ 645 $ 41 $ 714 $ 59 Gross losses on investment securities — (23) (18) (36) Net gains on investment securities $ 645 $ 18 $ 696 $ 23 Gross gain on investment securities includes both the gain resulting from the initial conversion of our prior ownership interest in certain privately held companies into common stock upon such companies' initial public offering, or IPO, during the three months ended September 30, 2020, and subsequent changes in the market value of such securities from the IPO through the end of the period, which combined to total $643 million for the three and nine months ended September 30, 2020. All purchases of and proceeds from investment securities for the three and nine months ended September 30, 2020 and 2019 relate to debt securities. There were no material other-than-temporary impairments for the three and nine months ended September 30, 2019. The contractual maturities of debt securities available for sale at September 30, 2020, regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Fair (in millions) Due within one year $ 1,487 $ 1,490 Due after one year through five years 2,176 2,259 Due after five years through ten years 1,999 2,128 Due after ten years 1,171 1,210 Mortgage and asset-backed securities 5,809 6,046 Total debt securities $ 12,642 $ 13,133 |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Financial Assets The following table summarizes our fair value measurements at September 30, 2020 and December 31, 2019, respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Quoted Prices Other Unobservable (in millions) September 30, 2020 Cash equivalents $ 7,722 $ 7,722 $ — $ — Debt securities: U.S. Treasury and other U.S. government U.S. Treasury and agency obligations 1,196 — 1,196 — Mortgage-backed securities 3,692 — 3,692 — Tax-exempt municipal securities 1,476 — 1,476 — Commercial mortgage-backed securities 1,073 — 1,073 — Asset-backed securities 1,281 — 1,281 — Corporate debt securities 4,415 — 4,415 — Total debt securities 13,133 — 13,133 — Common stock 713 713 — — Total investment securities $ 21,568 $ 8,435 $ 13,133 $ — December 31, 2019 Cash equivalents $ 3,660 $ 3,660 $ — $ — Debt securities: U.S. Treasury and other U.S. government U.S. Treasury and agency obligations 354 — 354 — Mortgage-backed securities 3,710 — 3,710 — Tax-exempt municipal securities 1,463 — 1,463 — Commercial mortgage-backed securities 804 — 804 — Asset-backed securities 1,093 — 1,093 — Corporate debt securities 3,947 — 3,947 — Total debt securities 11,371 — 11,371 — Common stock 7 7 — — Total investment securities $ 15,038 $ 3,667 $ 11,371 $ — Financial Liabilities Our debt is recorded at carrying value in our consolidated balance sheets. The carrying value of our senior notes debt outstanding, net of unamortized debt issuance costs, was $6,458 million at September 30, 2020 and $5,366 million at December 31, 2019. The fair value of our senior notes debt was $7,674 million at September 30, 2020 and $5,916 million at December 31, 2019. The fair value of our senior note debt is determined based on Level 2 inputs, including quoted market prices for the same or similar debt, or if no quoted market prices are available, on the current prices estimated to be available to us for debt with similar terms and remaining maturities. Due to the short-term nature, carrying value approximates fair value for our term note and commercial paper borrowings. The term loan outstanding and commercial paper borrowings were $1,325 million as of September 30, 2020. The commercial paper borrowings were $300 million as of December 31, 2019. Put and Call Options Measured at Fair Value As part of our investment in Kindred at Home, we entered into a shareholders agreement with TPG Capital, or TPG, and Welsh, Carson, Anderson & Stowe, or WCAS, the Sponsors, that provides for certain rights and obligations of each party. The shareholders agreement with the Sponsors includes a put option under which they have the right to require us to purchase their interest in the joint venture beginning on July 2, 2021 and ending on July 1, 2022. Likewise, we have a call option under which we have the right to require the Sponsors to sell their interest in the joint venture to Humana beginning on July 2, 2022 and ending on July 1, 2023. The put and call options, which are exercisable at a fixed EBITDA multiple and provide a minimum return on the Sponsor's investment if exercised, are measured at fair value each period using a Monte Carlo simulation. The put and call options fair values were $151 million and $634 million, respectively, at September 30, 2020, and $28 million and $557 million, respectively, at December 31, 2019. The put option is included within other long-term liabilities and the call option is included within other long-term assets. The change in fair value of the put and call options is reflected as "Other (income) expense, net" in our condensed consolidated statements of income. The significant unobservable inputs utilized in these Level 3 fair value measurements (and selected values) include the enterprise value of Kindred at Home, annualized volatility and secured credit rate. Enterprise value was derived from a discounted cash flow model, which utilized significant unobservable inputs for long-term net operating profit after tax margin, or NOPAT, to measure underlying cash flows, weighted average cost of capital and long term growth rate. The table below presents the assumptions used for each reporting period. September 30, 2020 December 31, 2019 Annualized volatility 44.9 % 19.8 % Secured credit rate 0.4 % 2.2 % NOPAT 12.0 % 12.0 % Weighted average cost of capital 10.0 % 10.0 % Long term growth rate 3.0 % 3.0 % The calculation of NOPAT utilized net income plus after tax interest expense. We regularly evaluate each of the assumptions used in establishing these assets and liabilities. Significant changes in assumptions for weighted average cost of capital, long term growth rates, NOPAT, volatility, credit spreads, risk free rate, and underlying cash flow estimates, could result in significantly lower or higher fair value measurements. A change in one of these assumptions is not necessarily accompanied by a change in another assumption. Other Assets and Liabilities Measured at Fair Value As disclosed in Note 3, we acquired Enclara during 2020. The values of net tangible assets acquired and the resulting goodwill and other intangible assets were recorded at fair value using Level 3 inputs. The majority of the net tangible liabilities assumed were recorded at their carrying values as of the date of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible |
MEDICARE PART D
MEDICARE PART D | 9 Months Ended |
Sep. 30, 2020 | |
Insurance [Abstract] | |
MEDICARE PART D | MEDICARE PART D We cover prescription drug benefits in accordance with Medicare Part D under multiple contracts with the Centers for Medicare and Medicaid Services, or CMS, as described further in Note 2 to the consolidated financial statements included in our 2019 Form 10-K. The accompanying condensed consolidated balance sheets include the following amounts associated with Medicare Part D at September 30, 2020 and December 31, 2019. CMS subsidies/discounts in the table below include the reinsurance and low-income cost subsidies funded by CMS for which we assume no risk as well as brand name prescription drug discounts for Part D plan participants in the coverage gap funded by CMS and pharmaceutical manufacturers. September 30, 2020 December 31, 2019 Risk CMS Risk CMS (in millions) Other current assets $ 25 $ 1,226 $ 5 $ 585 Trade accounts payable and accrued expenses (101) (714) (120) (356) Net current (liability) asset (76) 512 (115) 229 Other long-term assets 273 — 6 — Other long-term liabilities (176) — (61) — Net long-term asset (liability) 97 — (55) — Total net asset (liability) $ 21 $ 512 $ (170) $ 229 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill for our reportable segments for the nine months ended September 30, 2020 were as follows: Retail Group and Specialty Healthcare Total (in millions) Balance at January 1, 2020 $ 1,535 $ 261 $ 2,132 $ 3,928 Acquisitions — — 515 515 Balance at September 30, 2020 $ 1,535 $ 261 $ 2,647 $ 4,443 The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at September 30, 2020 and December 31, 2019. September 30, 2020 December 31, 2019 Weighted Cost Accumulated Net Cost Accumulated Net ($ in millions) Other intangible assets: Customer contracts/ 9.5 years $ 849 $ 553 $ 296 $ 646 $ 496 $ 150 Trade names and 7.0 years 122 87 35 84 84 — Provider contracts 11.8 years 70 49 21 70 44 26 Noncompetes and 7.3 years 29 29 — 29 28 1 Total other intangible 9.3 years $ 1,070 $ 718 $ 352 $ 829 $ 652 $ 177 For the three months ended September 30, 2020 and 2019, amortization expense for other intangible assets was approximately $23 million and $17 million, respectively. For the nine months ended September 30, 2020 and 2019, amortization expense for other intangible assets was approximately $66 million and $53 million, respectively. The following table presents our estimate of amortization expense remaining for 2020 and each of the five next succeeding years: (in millions) For the years ending December 31, 2020 $ 22 2021 56 2022 53 2023 40 2024 33 2025 33 |
BENEFITS PAYABLE
BENEFITS PAYABLE | 9 Months Ended |
Sep. 30, 2020 | |
Insurance [Abstract] | |
BENEFITS PAYABLE | BENEFITS PAYABLE On a consolidated basis, activity in benefits payable, was as follows for the nine months ended September 30, 2020 and 2019: For the nine months ended September 30, 2020 2019 (in millions) Balances, beginning of period $ 6,004 $ 4,862 Less: Reinsurance recoverables (68) (95) Balances, beginning of period, net 5,936 4,767 Incurred related to: Current year 45,693 40,499 Prior years (278) (331) Total incurred 45,415 40,168 Paid related to: Current year (37,810) (34,625) Prior years (5,334) (4,158) Total paid (43,144) (38,783) Reinsurance recoverable 1 68 Balances, end of period $ 8,208 $ 6,220 Amounts incurred related to prior periods vary from previously estimated liabilities as the claims ultimately are settled. Negative amounts reported for incurred related to prior years result from claims being ultimately settled for amounts less than originally estimated (favorable development). Our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for claims. Actuarial standards require the use of assumptions based on moderately adverse experience, which generally results in favorable reserve development, or reserves that are considered redundant. Incurred and Paid Claims Development The following discussion provides information about incurred and paid claims development for our Retail and Group and Specialty segments as of September 30, 2020 and 2019, net of reinsurance, and the total estimate of benefits payable for claims incurred but not reported, or IBNR, included within the net incurred claims amounts. Retail Segment Activity in benefits payable for our Retail segment was as follows for the nine months ended September 30, 2020 and 2019: For the nine months ended September 30, 2020 2019 (in millions) Balances, beginning of period $ 5,363 $ 4,338 Less: Reinsurance recoverables (68) (95) Balances, beginning of period, net 5,295 4,243 Incurred related to: Current year 42,186 36,762 Prior years (235) (366) Total incurred 41,951 36,396 Paid related to: Current year (34,946) (31,476) Prior years (4,759) (3,634) Total paid (39,705) (35,110) Reinsurance recoverable 1 68 Balances, end of period $ 7,542 $ 5,597 At September 30, 2020, benefits payable for our Retail segment included IBNR of approximately $4.6 billion, primarily associated with claims incurred in 2020. Group and Specialty Segment Activity in benefits payable for our Group and Specialty segment, was as follows for the nine months ended September 30, 2020 and 2019: For the nine months ended September 30, 2020 2019 (in millions) Balances, beginning of period $ 641 $ 517 Incurred related to: Current year 3,929 4,142 Prior years (43) 35 Total incurred 3,886 4,177 Paid related to: Current year (3,286) (3,547) Prior years (575) (524) Total paid (3,861) (4,071) Balances, end of period $ 666 $ 623 At September 30, 2020, benefits payable for our Group and Specialty segment included IBNR of approximately $576 million, primarily associated with claims incurred in 2020. Reconciliation to Consolidated The reconciliation of the net incurred and paid claims development tables to benefits payable in the consolidated statement of financial position is as follows: Reconciliation of the Disclosure of Incurred and Paid Claims Development to Benefits Payable, net of reinsurance September 30, 2020 Net outstanding liabilities (in millions) Retail $ 7,541 Group and Specialty 666 Benefits payable, net of reinsurance 8,207 Reinsurance recoverable on unpaid claims Retail 1 Total benefits payable, gross $ 8,208 |
EARNINGS PER COMMON SHARE COMPU
EARNINGS PER COMMON SHARE COMPUTATION | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE COMPUTATION | EARNINGS PER COMMON SHARE COMPUTATION Detail supporting the computation of basic and diluted earnings per common share was as follows for the three and nine months ended September 30, 2020 and 2019: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 (dollars in millions, except per common share results; number of shares in thousands) Net income available for common stockholders $ 1,340 $ 689 $ 3,641 $ 2,195 Weighted average outstanding shares of common stock 132,318 133,321 132,234 134,589 Dilutive effect of: Employee stock options 105 101 95 99 Restricted stock 773 603 681 501 Shares used to compute diluted earnings per common share 133,196 134,025 133,010 135,189 Basic earnings per common share $ 10.12 $ 5.16 $ 27.53 $ 16.31 Diluted earnings per common share $ 10.05 $ 5.14 $ 27.37 $ 16.24 Number of antidilutive stock options and restricted stock 143 302 311 589 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Dividends The following table provides details of dividend payments, excluding dividend equivalent rights for unvested stock awards, in 2019 and 2020 under our Board approved quarterly cash dividend policy: Record Payment Amount Total (in millions) 2019 payments 12/31/2018 1/25/2019 $ 0.50 $ 68 3/29/2019 4/26/2019 $ 0.55 $ 74 6/28/2019 7/26/2019 $ 0.55 $ 74 9/30/2019 10/25/2019 $ 0.55 $ 73 2020 payments 12/31/2019 1/31/2020 $ 0.55 $ 73 3/31/2020 4/24/2020 $ 0.625 $ 83 6/30/2020 7/31/2020 $ 0.625 $ 83 9/30/2020 10/30/2020 $ 0.625 $ 83 In November 2020, the Board declared a cash dividend of $0.625 per share payable on January 29, 2021 to stockholders of record on December 31, 2020. Stock Repurchases Our Board of Directors may authorize the purchase of our common stock shares. Under the share repurchase authorization, shares may be purchased from time to time at prevailing prices in the open market, by block purchases, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or in privately-negotiated transactions, including pursuant to accelerated share repurchase agreements with investment banks, subject to certain regulatory restrictions on volume, pricing, and timing. On July 30, 2019, the Board of Directors replaced a previous share repurchase authorization of up to $3 billion (of which approximately $1.03 billion remained unused) with a new authorization for repurchases of up to $3 billion of our common shares exclusive of shares repurchased in connection with employee stock plans, expiring on June 30, 2022. On July 31, 2019, we entered into an accelerated stock repurchase agreement, the July 2019 ASR, with Citibank, N.A., or Citi, to repurchase $1 billion of our common stock. On August 2, 2019, we made a payment of $1 billion to Citi and received an initial delivery of 2.7 million shares of our common stock. We recorded the payment to Citi as a reduction to stockholders’ equity, consisting of an $800 million increase in treasury stock, which reflects the value of the initial 2.7 million shares received upon initial settlement, and a $200 million decrease in capital in excess of par value, which reflects the value of stock held back by Citi pending final settlement of the July 2019 ASR. Upon final settlement of the July 2019 ASR on December 26, 2019, we received an additional 0.7 million shares as determined by the average daily volume weighted-averages share price of our common stock during the term of the agreement, less a discount, of $296.19, bringing the total shares received under the July 2019 ASR to 3.4 million. In addition, upon settlement we reclassified the $200 million value of stock initially held back by Citi from capital in excess of par value to treasury stock. Our remaining repurchase authorization was approximately $2 billion of the $3 billion share repurchase program as of November 2, 2020. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESThe effective income tax rate was 25.2% and 29.0% for the three and nine months ended September 30, 2020, respectively, compared to 22.5% and 23.8% for the three and nine months ended September 30, 2019, respectively, primarily due to the reinstatement of the non-deductible health insurance industry fee in 2020. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The carrying value of debt outstanding, net of unamortized debt issuance costs, was as follows at September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 (in millions) Short-term debt: Commercial paper $ 325 $ 300 Term note 1,000 — Senior notes: $400 million, 2.50% due December 15, 2020 399 399 Total short-term debt $ 1,724 $ 699 Long-term debt: Senior notes: $600 million, 3.15% due December 1, 2022 $ 598 $ 598 $400 million, 2.90% due December 15, 2022 398 397 $600 million, 3.85% due October 1, 2024 597 597 $600 million, 4.50% due April 1, 2025 595 — $600 million, 3.95% due March 15, 2027 596 595 $500 million, 3.125% due August 15, 2029 495 495 $500 million, 4.875% due April 1, 2030 494 — $250 million, 8.15% due June 15, 2038 262 262 $400 million, 4.625% due December 1, 2042 396 396 $750 million, 4.95% due October 1, 2044 739 739 $400 million, 4.80% due March 15, 2047 396 396 $500 million, 3.95% due August 15, 2049 493 492 Total long-term debt $ 6,059 $ 4,967 Senior Notes In March 2020, we issued $600 million of 4.500% senior notes due April 1, 2025 and $500 million of 4.875% senior notes due April 1, 2030. Our net proceeds, reduced for the underwriters' discount and commission and offering expenses paid, were approximately $1,088 million as of September 30, 2020. We intend to use the net proceeds for general corporate purposes, which may include the repayment of existing indebtedness. Our senior notes, which are unsecured, may be redeemed at our option at any time at 100% of the principal amount plus accrued interest and a specified make-whole amount. The 8.15% senior notes are subject to an interest rate adjustment if the debt ratings assigned to the notes are downgraded (or subsequently upgraded). In addition, our senior notes contain a change of control provision that may require us to purchase the notes under certain circumstances. Credit Agreement Our 5-year, $2.0 billion unsecured revolving credit agreement expires May 2022. Under the credit agreement, at our option, we can borrow on either a competitive advance basis or a revolving credit basis. The revolving credit portion bears interest at either LIBOR plus a spread or the base rate plus a spread. If drawn upon, the revolving credit would revert to using the alternative base rate once LIBOR is discontinued. The LIBOR spread, currently 110.0 basis points, varies depending on our credit ratings ranging from 91.0 to 150.0 basis points. We also pay an annual facility fee regardless of utilization. This facility fee, currently 15.0 basis points, may fluctuate between 9.0 and 25.0 basis points, depending upon our credit ratings. The competitive advance portion of any borrowings will bear interest at market rates prevailing at the time of borrowing on either a fixed rate or a floating rate based on LIBOR, at our option. The terms of the credit agreement include standard provisions related to conditions of borrowing which could limit our ability to borrow additional funds. In addition, the credit agreement contains customary restrictive covenants and a financial covenant regarding maximum debt to capitalization of 50%, as well as customary events of default. We are in compliance with this financial covenant, with actual debt to capitalization of 33% as measured in accordance with the credit agreement as of September 30, 2020. Upon our agreement with one or more financial institutions, we may expand the aggregate commitments under the credit agreement to a maximum of $2.5 billion, through a $500 million incremental loan facility. At September 30, 2020, we had no borrowings and no letters of credit outstanding under the credit agreement. Accordingly, as of September 30, 2020, we had $2.0 billion of remaining borrowing capacity (which excludes the uncommitted $500 million incremental loan facility under the credit agreement), none of which would be restricted by our financial covenant compliance requirement. We have other customary, arms-length relationships, including financial advisory and banking, with some parties to the credit agreement. Commercial Paper Under our commercial paper program we may issue short-term, unsecured commercial paper notes privately placed on a discount basis through certain broker dealers at any time not to exceed $2 billion. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The net proceeds of issuances have been and are expected to be used for general corporate purposes. The maximum principal amount outstanding at any one time during the nine months ended September 30, 2020 was $600 million, with $325 million outstanding at September 30, 2020 compared to $300 million outstanding at December 31, 2019. The outstanding commercial paper at September 30, 2020 had a weighted average annual interest rate of 0.35%. Term Note |
COMMITMENTS, GUARANTEES AND CON
COMMITMENTS, GUARANTEES AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, GUARANTEES AND CONTINGENCIES | COMMITMENTS, GUARANTEES AND CONTINGENCIES Government Contracts Our Medicare products, which accounted for approximately 82% of our total premiums and services revenue for the nine months ended September 30, 2020, primarily con sisted of products covered under the Medicare Advantage and Medicare Part D Prescription Drug Plan contracts with the federal government. These contracts are renewed generally for a calendar year term unless CMS notifies us of its decision not to renew by May 1 of the calendar year in which the contract would end, or we notify CMS of our decision not to renew by the first Monday in June of the calendar year in which the contract would end. All material contracts between Humana and CMS relating to our Medicare products have been renewed for 2021 and all of our product offerings have been approved. CMS uses a risk-adjustment model which adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members. The risk-adjustment model, which CMS implemented pursuant to the Balanced Budget Act of 1997 (BBA) and the Benefits Improvement and Protection Act of 2000 (BIPA), generally pays more where a plan's membership has higher expected costs. Under this model, rates paid to MA plans are based on actuarially determined bids, which include a process whereby our prospective payments are based on our estimated cost of providing standard Medicare-covered benefits to an enrollee with a "national average risk profile." That baseline payment amount is adjusted to reflect the health status of our enrolled membership. Under the risk-adjustment methodology, all MA plans must collect and submit the necessary diagnosis code information from hospital inpatient, hospital outpatient, and physician providers to CMS within prescribed deadlines. The CMS risk-adjustment model uses the diagnosis data to calculate the risk-adjusted premium payment to MA plans, which CMS adjusts for coding pattern differences between the health plans and the government fee-for-service program. We generally rely on providers, including certain providers in our network who are our employees, to code their claim submissions with appropriate diagnoses, which we send to CMS as the basis for our payment received from CMS under the actuarial risk-adjustment model. We also rely on these providers to document appropriately all medical data, including the diagnosis data submitted with claims. In addition, we conduct medical record reviews as part of our data and payment accuracy compliance efforts, to more accurately reflect diagnosis conditions under the risk adjustment model. These compliance efforts include the internal contract level audits described in more detail below, as well as ordinary course reviews of our internal business processes. CMS is phasing-in the process of calculating risk scores using diagnoses data from the Risk Adjustment Processing System, or RAPS, to diagnoses data from the Encounter Data System, or EDS. The RAPS process requires MA plans to apply a filter logic based on CMS guidelines and only submit diagnoses that satisfy those guidelines. For submissions through EDS, CMS requires MA plans to submit all the encounter data and CMS will apply the risk adjustment filtering logic to determine the risk scores. For 2019, 25% of the risk score was calculated from claims data submitted through EDS. CMS increased that percentage to 50% in 2020 and will increase that percentage to 75% in 2021. For 2022, CMS has proposed to calculate risk scores for payment to MA organizations using only risk adjustment eligible diagnoses identified from EDS data completing the phased-in transition from RAPS to EDS. The phase-in from RAPS to EDS could result in different risk scores from each dataset as a result of plan processing issues, CMS processing issues, or filtering logic differences between RAPS and EDS, and could have a material adverse effect on our results of operations, financial position, or cash flows. CMS and the Office of the Inspector General of Health and Human Services, or HHS-OIG, are continuing to perform audits of various companies’ selected MA contracts related to this risk adjustment diagnosis data. We refer to these audits as Risk-Adjustment Data Validation Audits, or RADV audits. RADV audits review medical records in an attempt to validate provider medical record documentation and coding practices which influence the calculation of premium payments to MA plans. In 2012, CMS released a “Notice of Final Payment Error Calculation Methodology for Part C Medicare Advantage Risk Adjustment Data Validation (RADV) Contract-Level Audits.” The payment error calculation methodology provided that, in calculating the economic impact of audit results for an MA contract, if any, the results of the RADV audit sample would be extrapolated to the entire MA contract after a comparison of the audit results to a similar audit of the government’s traditional fee-for-service Medicare program, or Medicare FFS. We refer to the process of accounting for errors in FFS claims as the "FFS Adjuster." This comparison of RADV audit results to the FFS error rate is necessary to determine the economic impact, if any, of RADV audit results because the government used the Medicare FFS program data set, including any attendant errors that are present in that data set, to estimate the costs of various health status conditions and to set the resulting adjustments to MA plans’ payment rates in order to establish actuarial equivalence in payment rates as required under the Medicare statute. CMS already makes other adjustments to payment rates based on a comparison of coding pattern differences between MA plans and Medicare FFS data (such as for frequency of coding for certain diagnoses in MA plan data versus the Medicare FFS program dataset). The final RADV extrapolation methodology, including the first application of extrapolated audit results to determine audit settlements, is expected to be applied to CMS RADV contract level audits conducted for contract year 2011 and subsequent years. CMS is currently conducting RADV contract level audits for certain of our Medicare Advantage plans. Estimated audit settlements are recorded as a reduction of premiums revenue in our consolidated statements of income, based upon available information. We perform internal contract level audits based on the RADV audit methodology prescribed by CMS. Included in these internal contract level audits is an audit of our Private Fee-For Service business which we used to represent a proxy of the FFS Adjuster which has not yet been finalized. We based our accrual of estimated audit settlements for each contract year on the results of these internal contract level audits and update our estimates as each audit is completed. Estimates derived from these results were not material to our results of operations, financial position, or cash flows. We report the results of these internal contract level audits to CMS, including identified overpayments, if any. On October 26, 2018, CMS issued a proposed rule and accompanying materials (which we refer to as the “Proposed Rule”) related to, among other things, the RADV audit methodology described above. If implemented, the Proposed Rule would use extrapolation in RADV audits applicable to payment year 2011 contract-level audits and all subsequent audits, without the application of a FFS Adjuster to audit findings. We believe that the Proposed Rule fails to address adequately the statutory requirement of actuarial equivalence, and have provided substantive comments to CMS on the Proposed Rule as part of the notice-and-comment rulemaking process. Whether, and to what extent, CMS finalizes the Proposed Rule, and any related regulatory, industry or company reactions, could have a material adverse effect on our results of operations, financial position, or cash flows. In addition, as part of our internal compliance efforts, we routinely perform ordinary course reviews of our internal business processes related to, among other things, our risk coding and data submissions in connection with the risk adjustment model. These reviews may also result in the identification of errors and the submission of corrections to CMS, that may, either individually or in the aggregate, be material. As such, the result of these reviews may have a material adverse effect on our results of operations, financial position, or cash flows. We believe that CMS' statements and policies regarding the requirement to report and return identified overpayments received by MA plans are inconsistent with CMS' 2012 RADV audit methodology, and the Medicare statute's requirements. These statements and policies, such as certain statements contained in the preamble to CMS’ final rule release regarding Medicare Advantage and Part D prescription drug benefit program regulations for Contract Year 2015 (which we refer to as the "Overpayment Rule"), and the Proposed Rule, appear to equate each Medicare Advantage risk adjustment data error with an “overpayment” without addressing the principles underlying the FFS Adjuster referenced above. On September 7, 2018, the Federal District Court for the District of Columbia vacated CMS's Overpayment Rule, concluding that it violated the Medicare statute, including the requirement for actuarial equivalence, and that the Overpayment Rule was also arbitrary and capricious in departing from CMS's RADV methodology without adequate explanation (among other reasons). CMS has appealed the decision to the Circuit Court of Appeals. We will continue to work with CMS to ensure that MA plans are paid accurately and that payment model principles are in accordance with the requirements of the Social Security Act, which, if not implemented correctly could have a material adverse effect on our results of operations, financial position, or cash flows. At September 30, 2020, our military services business, which accounted for approximately 1% of our total premiums and services revenue for the nine months ended September 30, 2020, primarily consisted of the TRICARE T2017 East Region contract. The T2017 East Region contract is a consolidation of the former T3 North and South Regions, comprising thirty-two states and approximately 6 million TRICARE beneficiaries, under which delivery of health care services commenced on January 1, 2018. The T2017 East Region contract is a 5-year contract set to expire on December 31, 2022 and is subject to renewals on January 1 of each year during its term at the government's option. Our state-based Medicaid business accounted for approximately 5% of our total premiums and services revenue for the nine months ended September 30, 2020. In addition to our state-based Temporary Assistance for Needy Families, or TANF, Medicaid contracts in Florida and Kentucky, we have contracts in Florida for Long Term Support Services (LTSS), and in Illinois for stand-alone dual eligible demonstration programs serving individuals dually eligible for both the federal Medicare program and the applicable state-based Medicaid program. The loss of any of the contracts above or significant changes in these programs as a result of legislative or regulatory action, including reductions in premium payments to us, regulatory restrictions on profitability, including reviews by regulatory bodies that may compare our Medicare Advantage profitability to our non-Medicare Advantage business profitability, or compare the profitability of various products within our Medicare Advantage business, and require that they remain within certain ranges of each other, or increases in member benefits or member eligibility criteria without corresponding increases in premium payments to us, may have a material adverse effect on our results of operations, financial position, and cash flows. Legal Proceedings and Certain Regulatory Matters As previously disclosed, the Civil Division of the United States Department of Justice provided us with an information request in December 2014, concerning our Medicare Part C risk adjustment practices. The request relates to our oversight and submission of risk adjustment data generated by providers in our Medicare Advantage network, as well as to our business and compliance practices related to risk adjustment data generated by our providers and by us, including medical record reviews conducted as part of our data and payment accuracy compliance efforts, the use of health and well-being assessments, and our fraud detection efforts. We believe that this request for information is in connection with a wider review of Medicare Risk Adjustment generally that includes a number of Medicare Advantage plans, providers and vendors. We continue to cooperate with the Department of Justice. These matters are expected to result in additional qui tam litigation. As previously disclosed, on January 19, 2016, an individual filed a qui tam suit captioned United States of America ex rel. Steven Scott v. Humana, Inc., in United States District Court, Central District of California, Western Division. The complaint alleges certain civil violations by us in connection with the actuarial equivalence of the plan benefits under Humana’s Basic PDP plan, a prescription drug plan offered by us under Medicare Part D. The action seeks damages and penalties on behalf of the United States under the False Claims Act. The court ordered the qui tam action unsealed on September 13, 2017, so that the relator could proceed, following notice from the U.S. Government that it was not intervening at that time. On January 29, 2018, the suit was transferred to the United States District Court, Western District of Kentucky, Louisville Division. We take seriously our obligations to comply with applicable CMS requirements and actuarial standards of practice, and continue to vigorously defend against these allegations since the transfer to the Western District of Kentucky. We have substantially completed discovery with the relator who has pursued the matter on behalf of the United States following its unsealing, and expect the Court to consider our motion for summary judgment. On November 2, 2017, we filed suit against the United States of America in the United States Court of Federal Claims, on behalf of our health plans seeking recovery from the federal government of approximately $611 million in payments under the risk corridor premium stabilization program established under Health Care Reform, for years 2014, 2015 and 2016. On April 27, 2020, the U.S. Supreme Court ruled that the government is obligated to pay the losses under this risk corridor program, and that Congress did not impliedly repeal the obligation under its appropriations riders. In September 2020, we received a $609 million payment from the U.S Government pursuant to the judgement issued by the Court of Federal Claims on July 7, 2020. The $609 million payment received from the U.S Government and approximately $31 million in related fees and expenses are reflected in "Premiums" revenue and "Operating costs", respectively, in our condensed consolidated statements of income for the three and nine months ended September 30, 2020. Other Lawsuits and Regulatory Matters Our current and past business practices are subject to review or other investigations by various state insurance and health care regulatory authorities and other state and federal regulatory authorities. These authorities regularly scrutinize the business practices of health insurance, health care delivery and benefits companies. These reviews focus on numerous facets of our business, including claims payment practices, statutory capital requirements, provider contracting, risk adjustment, competitive practices, commission payments, privacy issues, utilization management practices, pharmacy benefits, access to care, and sales practices, among others. Some of these reviews have historically resulted in fines imposed on us and some have required changes to some of our practices. We continue to be subject to these reviews, which could result in additional fines or other sanctions being imposed on us or additional changes in some of our practices. We also are involved in various other lawsuits that arise, for the most part, in the ordinary course of our business operations, certain of which may be styled as class-action lawsuits. Among other matters, this litigation may include employment matters, claims of medical malpractice, bad faith, nonacceptance or termination of providers, anticompetitive practices, improper rate setting, provider contract rate and payment disputes, including disputes over reimbursement rates required by statute, disputes arising from competitive procurement process, general contractual matters, intellectual property matters, and challenges to subrogation practices. Under state guaranty assessment laws, including those related to state cooperative failures in the industry, we may be assessed (up to prescribed limits) for certain obligations to the policyholders and claimants of insolvent insurance companies that write the same line or lines of business as we do. As a government contractor, we may also be subject to qui tam litigation brought by individuals who seek to sue on behalf of the government, alleging that the government contractor submitted false claims to the government including, among other allegations, those resulting from coding and review practices under the Medicare risk adjustment model. Qui tam litigation is filed under seal to allow the government an opportunity to investigate and to decide if it wishes to intervene and assume control of the litigation. If the government does not intervene, the individual may continue to prosecute the action on his or her own, on behalf of the government. We also are subject to other allegations of nonperformance of contractual obligations to providers, members, and others, including failure to properly pay claims, improper policy terminations, challenges to our implementation of the Medicare Part D prescription drug program and other litigation. A limited number of the claims asserted against us are subject to insurance coverage. Personal injury claims, claims for extra contractual damages, care delivery malpractice, and claims arising from medical benefit denials are covered by insurance from our wholly owned captive insurance subsidiary and excess carriers, except to the extent that claimants seek punitive damages, which may not be covered by insurance in certain states in which insurance coverage for punitive damages is not permitted. In addition, insurance coverage for all or certain forms of liability has become increasingly costly and may become unavailable or prohibitively expensive in the future. We record accruals for the contingencies discussed in the sections above to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made at this time regarding the matters specifically described above because of the inherently unpredictable nature of legal proceedings, which also may be exacerbated by various factors, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; (vi) there are a large number of parties (including where it is uncertain how liability, if any, will be shared among multiple defendants); or (vii) there is a wide range of potential outcomes. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We manage our business with three reportable segments: Retail, Group and Specialty, and Healthcare Services. The reportable segments are based on a combination of the type of health plan customer and adjacent businesses centered on well-being solutions for our health plans and other customers, as described below. These segment groupings are consistent with information used by our Chief Executive Officer, the Chief Operating Decision Maker, to assess performance and allocate resources. The Retail segment consists of Medicare benefits, marketed to individuals or directly via group Medicare accounts. In addition, the Retail segment also includes our contract with CMS to administer the Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program and contracts with various states to provide Medicaid, dual eligible, and Long-Term Support Services benefits, which we refer to collectively as our state-based contracts. The Group and Specialty segment consists of employer group commercial fully-insured medical and specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health benefits, as well as administrative services only, or ASO products. In addition, our Group and Specialty segment includes our military services business, primarily our TRICARE T2017 East Region contract. The Healthcare Services segment includes our services offered to our health plan members as well as to third parties, including pharmacy solutions, provider services, and clinical care service, such as home health and other services and capabilities to promote wellness and advance population health, including our minority investment in Kindred at Home and the strategic partnership with WCAS to develop and operate senior-focused, payor-agnostic, primary care centers. Our Healthcare Services intersegment revenues primarily relate to managing prescription drug coverage for members of our other segments through Humana Pharmacy Solutions®, or HPS, and includes the operations of Humana Pharmacy, Inc., our mail order pharmacy business. These revenues consist of the prescription price (ingredient cost plus dispensing fee), including the portion to be settled with the member (co-share) or with the government (subsidies), plus any associated administrative fees. Services revenues related to the distribution of prescriptions by third party retail pharmacies in our networks are recognized when the claim is processed and product revenues from dispensing prescriptions from our mail order pharmacies are recorded when the prescription or product is shipped. Our pharmacy operations, which are responsible for designing pharmacy benefits, including defining member co-share responsibilities, determining formulary listings, contracting with retail pharmacies, confirming member eligibility, reviewing drug utilization, and processing claims, act as a principal in the arrangement on behalf of members in our other segments. As principal, our Healthcare Services segment reports revenues on a gross basis, including co-share amounts from members collected by third party retail pharmacies at the point of service. In addition, our Healthcare Services intersegment revenues include revenues earned by certain owned providers derived from risk-based and non-risk-based managed care agreements with our health plans. Under risk-based agreements, the provider receives a monthly capitated fee that varies depending on the demographics and health status of the member, for each member assigned to these owned providers by our health plans. The owned provider assumes the economic risk of funding the assigned members’ healthcare services. Under non risk-based agreements, our health plans retain the economic risk of funding the assigned members' healthcare services. Our Healthcare Services segment reports provider services revenues associated with risk-based agreements on a gross basis, whereby capitation fee revenue is recognized in the period in which the assigned members are entitled to receive healthcare services. Provider services revenues associated with non-risk-based agreements are presented net of associated healthcare costs. We present our condensed consolidated results of operations from the perspective of the health plans. As a result, the cost of providing benefits to our members, whether provided via a third party provider or internally through a stand-alone subsidiary, is classified as benefits expense and excludes the portion of the cost for which the health plans do not bear responsibility, including member co-share amounts and government subsidies of $4.4 billion and $4.0 billion for the three months ended September 30, 2020 and 2019, respectively. For the nine months ended September 30, 2020 and 2019 these amounts were $11.9 billion and $10.7 billion, respectively. In addition, depreciation and amortization expense associated with certain businesses in our Healthcare Services segment delivering benefits to our members, primarily associated with our provider services and pharmacy operations, are included with benefits expense. The amount of this expense was $33 million and $32 million for the three months ended September 30, 2020 and 2019, respectively. For the nine months ended September 30, 2020 and 2019, the amount of this expense was $94 million and $92 million, respectively. Other than those described previously, the accounting policies of each segment are the same and are described in Note 2 to the consolidated financial statements included in our 2019 Form 10-K. Transactions between reportable segments primarily consist of sales of services rendered by our Healthcare Services segment, primarily pharmacy, provider, and clinical care services, to our Retail and Group and Specialty segment customers. Intersegment sales and expenses are recorded at fair value and eliminated in consolidation. Members served by our segments often use the same provider networks, enabling us in some instances to obtain more favorable contract terms with providers. Our segments also share indirect costs and assets. As a result, the profitability of each segment is interdependent. We allocate most operating expenses to our segments. Assets and certain corporate income and expenses are not allocated to the segments, including the portion of investment income not supporting segment operations, interest expense on corporate debt, and certain other corporate expenses. These items are managed at a corporate level. These corporate amounts are reported separately from our reportable segments and are included with intersegment eliminations in the tables presenting segment results below. Our segment results were as follows for the three and nine months ended September 30, 2020 and 2019: Retail Group and Specialty Healthcare Eliminations/ Consolidated Three months ended September 30, 2020 (in millions) External revenues Premiums: Individual Medicare Advantage $ 12,949 $ — $ — $ — $ 12,949 Group Medicare Advantage 1,880 — — — 1,880 Medicare stand-alone PDP 622 — — — 622 Total Medicare 15,451 — — — 15,451 Fully-insured 177 1,169 — 602 1,948 Specialty — 424 — — 424 Medicaid and other 1,081 — — — 1,081 Total premiums 16,709 1,593 — 602 18,904 Services revenue: Provider — — 107 — 107 ASO and other 4 189 — — 193 Pharmacy — — 157 — 157 Total services revenue 4 189 264 — 457 Total external revenues 16,713 1,782 264 602 19,361 Intersegment revenues Services — 9 4,852 (4,861) — Products — — 2,013 (2,013) — Total intersegment revenues — 9 6,865 (6,874) — Investment income 28 3 2 681 714 Total revenues 16,741 1,794 7,131 (5,591) 20,075 Operating expenses: Benefits 14,224 1,481 — (94) 15,611 Operating costs 1,877 452 6,871 (6,687) 2,513 Depreciation and amortization 87 21 46 (26) 128 Total operating expenses 16,188 1,954 6,917 (6,807) 18,252 Income (loss) from operations 553 (160) 214 1,216 1,823 Interest expense — — — 75 75 Other income, net — — — (7) (7) Income (loss) before income taxes and equity in net earnings 553 (160) 214 1,148 1,755 Equity in net earnings — — 35 — 35 Segment earnings (loss) $ 553 $ (160) $ 249 $ 1,148 $ 1,790 Retail Group and Specialty Healthcare Eliminations/ Consolidated Three months ended September 30, 2019 (in millions) External revenues Premiums: Individual Medicare Advantage $ 10,752 $ — $ — $ — $ 10,752 Group Medicare Advantage 1,609 — — — 1,609 Medicare stand-alone PDP 781 — — — 781 Total Medicare 13,142 — — — 13,142 Fully-insured 150 1,278 — — 1,428 Specialty — 400 — — 400 Medicaid and other 742 — — — 742 Total premiums 14,034 1,678 — — 15,712 Services revenue: Provider — — 136 — 136 ASO and other 4 200 — — 204 Pharmacy — — 53 — 53 Total services revenue 4 200 189 — 393 Total external revenues 14,038 1,878 189 — 16,105 Intersegment revenues Services — 4 4,654 (4,658) — Products — — 1,759 (1,759) — Total intersegment revenues — 4 6,413 (6,417) — Investment income 50 7 — 79 136 Total revenues 14,088 1,889 6,602 (6,338) 16,241 Operating expenses: Benefits 12,050 1,448 — (141) 13,357 Operating costs 1,310 413 6,348 (6,182) 1,889 Depreciation and amortization 89 24 43 (29) 127 Total operating expenses 13,449 1,885 6,391 (6,352) 15,373 Income from operations 639 4 211 14 868 Interest expense — — — 62 62 Other income, net — — — (82) (82) Income before income taxes and equity in net earnings 639 4 211 34 888 Equity in net earnings — — 1 — 1 Segment earnings $ 639 $ 4 $ 212 $ 34 $ 889 Retail Group and Specialty Healthcare Eliminations/ Consolidated Nine months ended September 30, 2020 (in millions) External revenues Premiums: Individual Medicare Advantage $ 38,748 $ — $ — $ — $ 38,748 Group Medicare Advantage 5,867 — — — 5,867 Medicare stand-alone PDP 2,108 — — — 2,108 Total Medicare 46,723 — — — 46,723 Fully-insured 509 3,606 — 602 4,717 Specialty — 1,278 — — 1,278 Medicaid and other 3,104 — — — 3,104 Total premiums 50,336 4,884 — 602 55,822 Services revenue: Provider — — 316 — 316 ASO and other 14 576 — — 590 Pharmacy — — 425 — 425 Total services revenue 14 576 741 — 1,331 Total external revenues 50,350 5,460 741 602 57,153 Intersegment revenues Services — 22 14,514 (14,536) — Products — — 5,900 (5,900) — Total intersegment revenues — 22 20,414 (20,436) — Investment income 114 12 2 812 940 Total revenues 50,464 5,494 21,157 (19,022) 58,093 Operating expenses: Benefits 41,939 3,886 — (410) 45,415 Operating costs 5,047 1,316 20,274 (19,653) 6,984 Depreciation and amortization 251 60 135 (84) 362 Total operating expenses 47,237 5,262 20,409 (20,147) 52,761 Income from operations 3,227 232 748 1,125 5,332 Interest expense — — — 211 211 Other expense, net — — — 63 63 Income before income taxes and equity in net earnings 3,227 232 748 851 5,058 Equity in net earnings — — 68 — 68 Segment earnings $ 3,227 $ 232 $ 816 $ 851 $ 5,126 Retail Group and Specialty Healthcare Eliminations/ Consolidated Nine months ended September 30, 2019 (in millions) External Revenues Premiums: Individual Medicare Advantage $ 32,254 $ — $ — $ — $ 32,254 Group Medicare Advantage 4,867 — — — 4,867 Medicare stand-alone PDP 2,408 — — — 2,408 Total Medicare 39,529 — — — 39,529 Fully-insured 434 3,873 — — 4,307 Specialty — 1,160 — — 1,160 Medicaid and other 2,143 — — — 2,143 Total premiums 42,106 5,033 — — 47,139 Services revenue: Provider — — 367 — 367 ASO and other 14 587 — — 601 Pharmacy — — 135 — 135 Total services revenue 14 587 502 — 1,103 Total external revenues 42,120 5,620 502 — 48,242 Intersegment revenues Services — 13 13,456 (13,469) — Products — — 5,128 (5,128) — Total intersegment revenues — 13 18,584 (18,597) — Investment income 139 17 1 194 351 Total revenues 42,259 5,650 19,087 (18,403) 48,593 Operating expenses: Benefits 36,396 4,177 — (405) 40,168 Operating costs 3,664 1,232 18,371 (18,015) 5,252 Depreciation and amortization 239 67 121 (84) 343 Total operating expenses 40,299 5,476 18,492 (18,504) 45,763 Income from operations 1,960 174 595 101 2,830 Interest expense — — — 184 184 Other income, net — — — (217) (217) Income before income taxes and equity in net earnings 1,960 174 595 134 2,863 Equity in net earnings — — 16 — 16 Segment earnings $ 1,960 $ 174 $ 611 $ 134 $ 2,879 |
RECENTLY ISSUED ACCOUNTING PR_2
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION AND SIGNIFICANT EVENTS The accompanying condensed consolidated financial statements are presented in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America, or GAAP, or those normally made in an Annual Report on Form 10-K. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. For further information, the reader of this Form 10-Q should refer to our Form 10-K for the year ended December 31, 2019, that was filed with the Securities and Exchange Commission, or the SEC, on February 20, 2020. We refer to the Form 10-K as the “2019 Form 10-K” in this document. References throughout this document to “we,” “us,” “our,” “Company,” and “Humana” mean Humana Inc. and its subsidiaries. The preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. Refer to Note 2 to the consolidated financial statements included in our 2019 Form 10-K for information on accounting policies that we consider in preparing our consolidated financial statements. Since the filing of our 2019 Form 10-K we have received common stock, primarily in Oak Street Health, Inc., or OSH, as part of their initial public offering during the third quarter of 2020. We have updated our accounting policy for investment securities below. The financial information has been prepared in accordance with our customary accounting practices and has not been audited. In our opinion, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature. |
Investment Securities | Investment Securities Investment securities, which consist of debt and equity securities, are stated at fair value. Our debt securities have been categorized as available for sale. Debt securities available for current operations are classified as current assets and debt securities available for our long-term insurance products and professional liability funding requirements, as well as restricted statutory deposits and equity securities, are classified as long-term assets. For the purpose of determining realized gross gains and losses for debt securities sold, which are included as a component of investment income in the consolidated statements of income, the cost of investment securities sold is based upon specific identification. Unrealized holding gains and losses for debt securities, net of applicable deferred taxes, are included as a component of stockholders’ equity and comprehensive income until realized from a sale or other-than-temporary impairment. For the purpose of determining gross gains and losses for equity securities, changes in fair value at the reporting date are included as a component of investment income in the consolidated statements of income. |
Revenue Recognition | Revenue RecognitionOur revenues include premium and service revenues. Service revenues include administrative service fees that are recorded based upon established per member per month rates and the number of members for the month and are recognized as services are provided for the month. Additionally, service revenues include net patient service revenues that are recorded based upon established billing rates, less allowances for contractual adjustments, and are recognized as services are provided. |
Recently Issued Accounting Pronouncements | In June 2016, the FASB issued guidance introducing a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The guidance was effective for us beginning January 1, 2020. The new current expected credit losses (CECL) model generally calls for the immediate recognition of all expected credit losses and applies to loans, accounts and trade receivables as well as other financial assets measured at amortized cost, loan commitments and off-balance sheet credit exposures, debt securities and other financial assets measured at fair value through other comprehensive income, and beneficial interests in securitized financial assets. The new guidance replaces the current incurred loss model for measuring expected credit losses, requires expected losses on available for sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities, and provides for additional disclosure requirements. Our investment portfolio consists primarily of available for sale debt securities. We adopted the new standard effective January 1, 2020. Due to the high concentration of our financial assets measured at amortized cost being with the federal government resulting in zero nonpayment risk as well as our available for sale debt securities primarily being in an unrealized gain position, the adoption of the new standard did not have a material impact on our results of operations, financial condition, or cash flows. In September 2018, the FASB issued new guidance related to accounting for long-duration contracts of insurers which revises key elements of the measurement models and disclosure requirements for long-duration contracts issued by insurers and reinsurers. The new guidance is effective for us beginning with annual and interim periods in 2023, with earlier adoption permitted, and requires retrospective application to previously issued annual and interim financial statements. We are currently evaluating the impact on our results of operations, financial position and cash flows. There are no other recently issued accounting standards that apply to us or that are expected to have a material impact on our results of operations, financial condition, or cash flows. |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investment Securities Classified as Current and Long-Term | Investment securities classified as current and long-term were as follows at September 30, 2020 and December 31, 2019, respectively: Amortized Gross Gross Fair (in millions) September 30, 2020 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 1,195 $ 2 $ (1) $ 1,196 Mortgage-backed securities 3,511 183 (2) 3,692 Tax-exempt municipal securities 1,439 40 (3) 1,476 Commercial mortgage-backed securities 1,020 54 (1) 1,073 Asset-backed securities 1,278 8 (5) 1,281 Corporate debt securities 4,199 218 (2) 4,415 Total debt securities $ 12,642 $ 505 $ (14) 13,133 Common stock 713 Total investment securities $ 13,846 December 31, 2019 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 353 $ 1 $ — $ 354 Mortgage-backed securities 3,628 85 (3) 3,710 Tax-exempt municipal securities 1,433 30 — 1,463 Commercial mortgage-backed securities 786 18 — 804 Asset-backed securities 1,093 3 (3) 1,093 Corporate debt securities 3,867 82 (2) 3,947 Total debt securities $ 11,160 $ 219 $ (8) 11,371 Common stock 7 Total investment securities $ 11,378 |
Schedule of Gross Unrealized Losses and Fair Value of Securities | Gross unrealized losses and fair values aggregated by investment category and length of time of individual debt securities that have been in a continuous unrealized loss position were as follows at September 30, 2020 and December 31, 2019, respectively: Less than 12 months 12 months or more Total Fair Gross Fair Gross Fair Gross (in millions) September 30, 2020 U.S. Treasury and other U.S. U.S. Treasury and agency $ 662 $ (1) $ — $ — $ 662 $ (1) Mortgage-backed 450 (2) — — 450 (2) Tax-exempt municipal 127 (3) 12 — 139 (3) Commercial mortgage-backed securities 181 — 36 (1) 217 (1) Asset-backed securities 121 (1) 537 (4) 658 (5) Corporate debt securities 275 (1) 98 (1) 373 (2) Total debt securities $ 1,816 $ (8) $ 683 $ (6) $ 2,499 $ (14) December 31, 2019 U.S. Treasury and other U.S. U.S. Treasury and agency $ 48 $ — $ 23 $ — $ 71 $ — Mortgage-backed 315 (1) 204 (2) 519 (3) Tax-exempt municipal 58 — 75 — 133 — Commercial mortgage-backed securities 118 — 36 — 154 — Asset-backed securities 20 — 607 (3) 627 (3) Corporate debt securities 589 (2) 155 — 744 (2) Total debt securities $ 1,148 $ (3) $ 1,100 $ (5) $ 2,248 $ (8) |
Schedule of Realized Gains (Losses) Related to Investment Securities Included Within Investment Income | The detail of gains (losses) related to investment securities and included within investment income was as follows for the three and nine months ended September 30, 2020 and 2019: Three months ended Nine months ended 2020 2019 2020 2019 (in millions) Gross gains on investment securities $ 645 $ 41 $ 714 $ 59 Gross losses on investment securities — (23) (18) (36) Net gains on investment securities $ 645 $ 18 $ 696 $ 23 |
Schedule of Contractual Maturity of Debt Securities Available for Sale | The contractual maturities of debt securities available for sale at September 30, 2020, regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Fair (in millions) Due within one year $ 1,487 $ 1,490 Due after one year through five years 2,176 2,259 Due after five years through ten years 1,999 2,128 Due after ten years 1,171 1,210 Mortgage and asset-backed securities 5,809 6,046 Total debt securities $ 12,642 $ 13,133 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets Measured at Fair Value on Recurring Basis | The following table summarizes our fair value measurements at September 30, 2020 and December 31, 2019, respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Quoted Prices Other Unobservable (in millions) September 30, 2020 Cash equivalents $ 7,722 $ 7,722 $ — $ — Debt securities: U.S. Treasury and other U.S. government U.S. Treasury and agency obligations 1,196 — 1,196 — Mortgage-backed securities 3,692 — 3,692 — Tax-exempt municipal securities 1,476 — 1,476 — Commercial mortgage-backed securities 1,073 — 1,073 — Asset-backed securities 1,281 — 1,281 — Corporate debt securities 4,415 — 4,415 — Total debt securities 13,133 — 13,133 — Common stock 713 713 — — Total investment securities $ 21,568 $ 8,435 $ 13,133 $ — December 31, 2019 Cash equivalents $ 3,660 $ 3,660 $ — $ — Debt securities: U.S. Treasury and other U.S. government U.S. Treasury and agency obligations 354 — 354 — Mortgage-backed securities 3,710 — 3,710 — Tax-exempt municipal securities 1,463 — 1,463 — Commercial mortgage-backed securities 804 — 804 — Asset-backed securities 1,093 — 1,093 — Corporate debt securities 3,947 — 3,947 — Total debt securities 11,371 — 11,371 — Common stock 7 7 — — Total investment securities $ 15,038 $ 3,667 $ 11,371 $ — |
Schedule of Assumptions Used For Inputs In Fair Value Measurement | The table below presents the assumptions used for each reporting period. September 30, 2020 December 31, 2019 Annualized volatility 44.9 % 19.8 % Secured credit rate 0.4 % 2.2 % NOPAT 12.0 % 12.0 % Weighted average cost of capital 10.0 % 10.0 % Long term growth rate 3.0 % 3.0 % |
MEDICARE PART D (Tables)
MEDICARE PART D (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Insurance [Abstract] | |
Schedule of Balance Sheet Amounts Associated With Medicare Part D | The accompanying condensed consolidated balance sheets include the following amounts associated with Medicare Part D at September 30, 2020 and December 31, 2019. CMS subsidies/discounts in the table below include the reinsurance and low-income cost subsidies funded by CMS for which we assume no risk as well as brand name prescription drug discounts for Part D plan participants in the coverage gap funded by CMS and pharmaceutical manufacturers. September 30, 2020 December 31, 2019 Risk CMS Risk CMS (in millions) Other current assets $ 25 $ 1,226 $ 5 $ 585 Trade accounts payable and accrued expenses (101) (714) (120) (356) Net current (liability) asset (76) 512 (115) 229 Other long-term assets 273 — 6 — Other long-term liabilities (176) — (61) — Net long-term asset (liability) 97 — (55) — Total net asset (liability) $ 21 $ 512 $ (170) $ 229 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill By Reportable Segments | Changes in the carrying amount of goodwill for our reportable segments for the nine months ended September 30, 2020 were as follows: Retail Group and Specialty Healthcare Total (in millions) Balance at January 1, 2020 $ 1,535 $ 261 $ 2,132 $ 3,928 Acquisitions — — 515 515 Balance at September 30, 2020 $ 1,535 $ 261 $ 2,647 $ 4,443 |
Schedule of Intangible Assets Included in Other Long-Term Assets | The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at September 30, 2020 and December 31, 2019. September 30, 2020 December 31, 2019 Weighted Cost Accumulated Net Cost Accumulated Net ($ in millions) Other intangible assets: Customer contracts/ 9.5 years $ 849 $ 553 $ 296 $ 646 $ 496 $ 150 Trade names and 7.0 years 122 87 35 84 84 — Provider contracts 11.8 years 70 49 21 70 44 26 Noncompetes and 7.3 years 29 29 — 29 28 1 Total other intangible 9.3 years $ 1,070 $ 718 $ 352 $ 829 $ 652 $ 177 |
Schedule of Estimated Amortization Expense | The following table presents our estimate of amortization expense remaining for 2020 and each of the five next succeeding years: (in millions) For the years ending December 31, 2020 $ 22 2021 56 2022 53 2023 40 2024 33 2025 33 |
BENEFITS PAYABLE (Tables)
BENEFITS PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Insurance [Abstract] | |
Schedule of Activity in Benefits Payable | On a consolidated basis, activity in benefits payable, was as follows for the nine months ended September 30, 2020 and 2019: For the nine months ended September 30, 2020 2019 (in millions) Balances, beginning of period $ 6,004 $ 4,862 Less: Reinsurance recoverables (68) (95) Balances, beginning of period, net 5,936 4,767 Incurred related to: Current year 45,693 40,499 Prior years (278) (331) Total incurred 45,415 40,168 Paid related to: Current year (37,810) (34,625) Prior years (5,334) (4,158) Total paid (43,144) (38,783) Reinsurance recoverable 1 68 Balances, end of period $ 8,208 $ 6,220 Activity in benefits payable for our Retail segment was as follows for the nine months ended September 30, 2020 and 2019: For the nine months ended September 30, 2020 2019 (in millions) Balances, beginning of period $ 5,363 $ 4,338 Less: Reinsurance recoverables (68) (95) Balances, beginning of period, net 5,295 4,243 Incurred related to: Current year 42,186 36,762 Prior years (235) (366) Total incurred 41,951 36,396 Paid related to: Current year (34,946) (31,476) Prior years (4,759) (3,634) Total paid (39,705) (35,110) Reinsurance recoverable 1 68 Balances, end of period $ 7,542 $ 5,597 Activity in benefits payable for our Group and Specialty segment, was as follows for the nine months ended September 30, 2020 and 2019: For the nine months ended September 30, 2020 2019 (in millions) Balances, beginning of period $ 641 $ 517 Incurred related to: Current year 3,929 4,142 Prior years (43) 35 Total incurred 3,886 4,177 Paid related to: Current year (3,286) (3,547) Prior years (575) (524) Total paid (3,861) (4,071) Balances, end of period $ 666 $ 623 |
Schedule of Benefits Payable | The reconciliation of the net incurred and paid claims development tables to benefits payable in the consolidated statement of financial position is as follows: Reconciliation of the Disclosure of Incurred and Paid Claims Development to Benefits Payable, net of reinsurance September 30, 2020 Net outstanding liabilities (in millions) Retail $ 7,541 Group and Specialty 666 Benefits payable, net of reinsurance 8,207 Reinsurance recoverable on unpaid claims Retail 1 Total benefits payable, gross $ 8,208 |
EARNINGS PER COMMON SHARE COM_2
EARNINGS PER COMMON SHARE COMPUTATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Details Supporting Computation of Earnings Per Share | Detail supporting the computation of basic and diluted earnings per common share was as follows for the three and nine months ended September 30, 2020 and 2019: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 (dollars in millions, except per common share results; number of shares in thousands) Net income available for common stockholders $ 1,340 $ 689 $ 3,641 $ 2,195 Weighted average outstanding shares of common stock 132,318 133,321 132,234 134,589 Dilutive effect of: Employee stock options 105 101 95 99 Restricted stock 773 603 681 501 Shares used to compute diluted earnings per common share 133,196 134,025 133,010 135,189 Basic earnings per common share $ 10.12 $ 5.16 $ 27.53 $ 16.31 Diluted earnings per common share $ 10.05 $ 5.14 $ 27.37 $ 16.24 Number of antidilutive stock options and restricted stock 143 302 311 589 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Details of Dividend Payments | The following table provides details of dividend payments, excluding dividend equivalent rights for unvested stock awards, in 2019 and 2020 under our Board approved quarterly cash dividend policy: Record Payment Amount Total (in millions) 2019 payments 12/31/2018 1/25/2019 $ 0.50 $ 68 3/29/2019 4/26/2019 $ 0.55 $ 74 6/28/2019 7/26/2019 $ 0.55 $ 74 9/30/2019 10/25/2019 $ 0.55 $ 73 2020 payments 12/31/2019 1/31/2020 $ 0.55 $ 73 3/31/2020 4/24/2020 $ 0.625 $ 83 6/30/2020 7/31/2020 $ 0.625 $ 83 9/30/2020 10/30/2020 $ 0.625 $ 83 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Value of Debt Outstanding | The carrying value of debt outstanding, net of unamortized debt issuance costs, was as follows at September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 (in millions) Short-term debt: Commercial paper $ 325 $ 300 Term note 1,000 — Senior notes: $400 million, 2.50% due December 15, 2020 399 399 Total short-term debt $ 1,724 $ 699 Long-term debt: Senior notes: $600 million, 3.15% due December 1, 2022 $ 598 $ 598 $400 million, 2.90% due December 15, 2022 398 397 $600 million, 3.85% due October 1, 2024 597 597 $600 million, 4.50% due April 1, 2025 595 — $600 million, 3.95% due March 15, 2027 596 595 $500 million, 3.125% due August 15, 2029 495 495 $500 million, 4.875% due April 1, 2030 494 — $250 million, 8.15% due June 15, 2038 262 262 $400 million, 4.625% due December 1, 2042 396 396 $750 million, 4.95% due October 1, 2044 739 739 $400 million, 4.80% due March 15, 2047 396 396 $500 million, 3.95% due August 15, 2049 493 492 Total long-term debt $ 6,059 $ 4,967 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Results | Our segment results were as follows for the three and nine months ended September 30, 2020 and 2019: Retail Group and Specialty Healthcare Eliminations/ Consolidated Three months ended September 30, 2020 (in millions) External revenues Premiums: Individual Medicare Advantage $ 12,949 $ — $ — $ — $ 12,949 Group Medicare Advantage 1,880 — — — 1,880 Medicare stand-alone PDP 622 — — — 622 Total Medicare 15,451 — — — 15,451 Fully-insured 177 1,169 — 602 1,948 Specialty — 424 — — 424 Medicaid and other 1,081 — — — 1,081 Total premiums 16,709 1,593 — 602 18,904 Services revenue: Provider — — 107 — 107 ASO and other 4 189 — — 193 Pharmacy — — 157 — 157 Total services revenue 4 189 264 — 457 Total external revenues 16,713 1,782 264 602 19,361 Intersegment revenues Services — 9 4,852 (4,861) — Products — — 2,013 (2,013) — Total intersegment revenues — 9 6,865 (6,874) — Investment income 28 3 2 681 714 Total revenues 16,741 1,794 7,131 (5,591) 20,075 Operating expenses: Benefits 14,224 1,481 — (94) 15,611 Operating costs 1,877 452 6,871 (6,687) 2,513 Depreciation and amortization 87 21 46 (26) 128 Total operating expenses 16,188 1,954 6,917 (6,807) 18,252 Income (loss) from operations 553 (160) 214 1,216 1,823 Interest expense — — — 75 75 Other income, net — — — (7) (7) Income (loss) before income taxes and equity in net earnings 553 (160) 214 1,148 1,755 Equity in net earnings — — 35 — 35 Segment earnings (loss) $ 553 $ (160) $ 249 $ 1,148 $ 1,790 Retail Group and Specialty Healthcare Eliminations/ Consolidated Three months ended September 30, 2019 (in millions) External revenues Premiums: Individual Medicare Advantage $ 10,752 $ — $ — $ — $ 10,752 Group Medicare Advantage 1,609 — — — 1,609 Medicare stand-alone PDP 781 — — — 781 Total Medicare 13,142 — — — 13,142 Fully-insured 150 1,278 — — 1,428 Specialty — 400 — — 400 Medicaid and other 742 — — — 742 Total premiums 14,034 1,678 — — 15,712 Services revenue: Provider — — 136 — 136 ASO and other 4 200 — — 204 Pharmacy — — 53 — 53 Total services revenue 4 200 189 — 393 Total external revenues 14,038 1,878 189 — 16,105 Intersegment revenues Services — 4 4,654 (4,658) — Products — — 1,759 (1,759) — Total intersegment revenues — 4 6,413 (6,417) — Investment income 50 7 — 79 136 Total revenues 14,088 1,889 6,602 (6,338) 16,241 Operating expenses: Benefits 12,050 1,448 — (141) 13,357 Operating costs 1,310 413 6,348 (6,182) 1,889 Depreciation and amortization 89 24 43 (29) 127 Total operating expenses 13,449 1,885 6,391 (6,352) 15,373 Income from operations 639 4 211 14 868 Interest expense — — — 62 62 Other income, net — — — (82) (82) Income before income taxes and equity in net earnings 639 4 211 34 888 Equity in net earnings — — 1 — 1 Segment earnings $ 639 $ 4 $ 212 $ 34 $ 889 Retail Group and Specialty Healthcare Eliminations/ Consolidated Nine months ended September 30, 2020 (in millions) External revenues Premiums: Individual Medicare Advantage $ 38,748 $ — $ — $ — $ 38,748 Group Medicare Advantage 5,867 — — — 5,867 Medicare stand-alone PDP 2,108 — — — 2,108 Total Medicare 46,723 — — — 46,723 Fully-insured 509 3,606 — 602 4,717 Specialty — 1,278 — — 1,278 Medicaid and other 3,104 — — — 3,104 Total premiums 50,336 4,884 — 602 55,822 Services revenue: Provider — — 316 — 316 ASO and other 14 576 — — 590 Pharmacy — — 425 — 425 Total services revenue 14 576 741 — 1,331 Total external revenues 50,350 5,460 741 602 57,153 Intersegment revenues Services — 22 14,514 (14,536) — Products — — 5,900 (5,900) — Total intersegment revenues — 22 20,414 (20,436) — Investment income 114 12 2 812 940 Total revenues 50,464 5,494 21,157 (19,022) 58,093 Operating expenses: Benefits 41,939 3,886 — (410) 45,415 Operating costs 5,047 1,316 20,274 (19,653) 6,984 Depreciation and amortization 251 60 135 (84) 362 Total operating expenses 47,237 5,262 20,409 (20,147) 52,761 Income from operations 3,227 232 748 1,125 5,332 Interest expense — — — 211 211 Other expense, net — — — 63 63 Income before income taxes and equity in net earnings 3,227 232 748 851 5,058 Equity in net earnings — — 68 — 68 Segment earnings $ 3,227 $ 232 $ 816 $ 851 $ 5,126 Retail Group and Specialty Healthcare Eliminations/ Consolidated Nine months ended September 30, 2019 (in millions) External Revenues Premiums: Individual Medicare Advantage $ 32,254 $ — $ — $ — $ 32,254 Group Medicare Advantage 4,867 — — — 4,867 Medicare stand-alone PDP 2,408 — — — 2,408 Total Medicare 39,529 — — — 39,529 Fully-insured 434 3,873 — — 4,307 Specialty — 1,160 — — 1,160 Medicaid and other 2,143 — — — 2,143 Total premiums 42,106 5,033 — — 47,139 Services revenue: Provider — — 367 — 367 ASO and other 14 587 — — 601 Pharmacy — — 135 — 135 Total services revenue 14 587 502 — 1,103 Total external revenues 42,120 5,620 502 — 48,242 Intersegment revenues Services — 13 13,456 (13,469) — Products — — 5,128 (5,128) — Total intersegment revenues — 13 18,584 (18,597) — Investment income 139 17 1 194 351 Total revenues 42,259 5,650 19,087 (18,403) 48,593 Operating expenses: Benefits 36,396 4,177 — (405) 40,168 Operating costs 3,664 1,232 18,371 (18,015) 5,252 Depreciation and amortization 239 67 121 (84) 343 Total operating expenses 40,299 5,476 18,492 (18,504) 45,763 Income from operations 1,960 174 595 101 2,830 Interest expense — — — 184 184 Other income, net — — — (217) (217) Income before income taxes and equity in net earnings 1,960 174 595 134 2,863 Equity in net earnings — — 16 — 16 Segment earnings $ 1,960 $ 174 $ 611 $ 134 $ 2,879 |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Nov. 02, 2017 | |
Receivables and Other [Line Items] | |||||
Hospital utilization as a percentage of historic baseline levels | 95.00% | 95.00% | 95.00% | ||
Accounts receivable | $ 1,135 | $ 1,135 | $ 1,135 | $ 1,056 | |
Amortization of deferred costs | 292 | 884 | |||
US Risk Corridor Premium Stabilization Program | |||||
Receivables and Other [Line Items] | |||||
Litigation recoveries sought | $ 611 | ||||
Payment received upon judgement | 609 | 609 | 609 | ||
Related legal fees and expenses | 31 | 31 | |||
Health Care Reform | |||||
Receivables and Other [Line Items] | |||||
Payment of annual health insurance industry fee | 1,200 | ||||
Services Accounts Receivable | |||||
Receivables and Other [Line Items] | |||||
Accounts receivable | $ 155 | $ 155 | $ 155 |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Details) $ in Millions | Feb. 01, 2020USD ($)primary_care_center | Jan. 31, 2020USD ($) | Sep. 30, 2020USD ($) |
Business Acquisition [Line Items] | |||
Goodwill, acquired during period | $ 515 | ||
WCAS | |||
Business Acquisition [Line Items] | |||
Expected number of payor-agnostic, senior-focused primary care centers to be opened by strategic partnership | primary_care_center | 50 | ||
Expected time frame for opening primary care centers | 3 years | ||
Value of partnership entity | $ 600 | ||
Time frame for put and call option activity per partnership agreement, minimum | 5 years | ||
Time frame for put and call option activity per partnership agreement, maximum | 10 years | ||
Enclara | |||
Business Acquisition [Line Items] | |||
Cash consideration for acquisition | $ 709 | ||
Goodwill, acquired during period | 515 | ||
Other intangible assets acquired | 240 | ||
Net tangible liabilities assumed | $ 11 | ||
Other intangible assets, weighted average useful life | 11 years 4 months 24 days |
INVESTMENT SECURITIES - Securit
INVESTMENT SECURITIES - Securities Classified as Current and Long-Term (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | $ 12,642 | $ 11,160 |
Gross Unrealized Gains | 505 | 219 |
Gross Unrealized Losses | (14) | (8) |
Fair Value | 13,133 | 11,371 |
Common stock | 713 | 7 |
Total investment securities | 13,846 | 11,378 |
U.S. Treasury and agency obligations | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 1,195 | 353 |
Gross Unrealized Gains | 2 | 1 |
Gross Unrealized Losses | (1) | 0 |
Fair Value | 1,196 | 354 |
Mortgage-backed securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 3,511 | 3,628 |
Gross Unrealized Gains | 183 | 85 |
Gross Unrealized Losses | (2) | (3) |
Fair Value | 3,692 | 3,710 |
Tax-exempt municipal securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 1,439 | 1,433 |
Gross Unrealized Gains | 40 | 30 |
Gross Unrealized Losses | (3) | 0 |
Fair Value | 1,476 | 1,463 |
Commercial mortgage-backed securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 1,020 | 786 |
Gross Unrealized Gains | 54 | 18 |
Gross Unrealized Losses | (1) | 0 |
Fair Value | 1,073 | 804 |
Asset-backed securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 1,278 | 1,093 |
Gross Unrealized Gains | 8 | 3 |
Gross Unrealized Losses | (5) | (3) |
Fair Value | 1,281 | 1,093 |
Corporate debt securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 4,199 | 3,867 |
Gross Unrealized Gains | 218 | 82 |
Gross Unrealized Losses | (2) | (2) |
Fair Value | $ 4,415 | $ 3,947 |
INVESTMENT SECURITIES - Gross U
INVESTMENT SECURITIES - Gross Unrealized Losses and Fair Values of Securities (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value | ||
Less than 12 months | $ 1,816 | $ 1,148 |
12 months or more | 683 | 1,100 |
Total | 2,499 | 2,248 |
Gross Unrealized Losses | ||
Less than 12 months | (8) | (3) |
12 months or more | (6) | (5) |
Total | (14) | (8) |
U.S. Treasury and agency obligations | ||
Fair Value | ||
Less than 12 months | 662 | 48 |
12 months or more | 0 | 23 |
Total | 662 | 71 |
Gross Unrealized Losses | ||
Less than 12 months | (1) | 0 |
12 months or more | 0 | 0 |
Total | (1) | 0 |
Mortgage-backed securities | ||
Fair Value | ||
Less than 12 months | 450 | 315 |
12 months or more | 0 | 204 |
Total | 450 | 519 |
Gross Unrealized Losses | ||
Less than 12 months | (2) | (1) |
12 months or more | 0 | (2) |
Total | (2) | (3) |
Tax-exempt municipal securities | ||
Fair Value | ||
Less than 12 months | 127 | 58 |
12 months or more | 12 | 75 |
Total | 139 | 133 |
Gross Unrealized Losses | ||
Less than 12 months | (3) | 0 |
12 months or more | 0 | 0 |
Total | (3) | 0 |
Commercial mortgage-backed securities | ||
Fair Value | ||
Less than 12 months | 181 | 118 |
12 months or more | 36 | 36 |
Total | 217 | 154 |
Gross Unrealized Losses | ||
Less than 12 months | 0 | 0 |
12 months or more | (1) | 0 |
Total | (1) | 0 |
Asset-backed securities | ||
Fair Value | ||
Less than 12 months | 121 | 20 |
12 months or more | 537 | 607 |
Total | 658 | 627 |
Gross Unrealized Losses | ||
Less than 12 months | (1) | 0 |
12 months or more | (4) | (3) |
Total | (5) | (3) |
Corporate debt securities | ||
Fair Value | ||
Less than 12 months | 275 | 589 |
12 months or more | 98 | 155 |
Total | 373 | 744 |
Gross Unrealized Losses | ||
Less than 12 months | (1) | (2) |
12 months or more | (1) | 0 |
Total | $ (2) | $ (2) |
INVESTMENT SECURITIES - Narrati
INVESTMENT SECURITIES - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020USD ($)position | Sep. 30, 2020USD ($)position | |
Investments, Debt and Equity Securities [Abstract] | ||
Percentage of debt securities considered to be of investment-grade (percent) | 96.00% | 96.00% |
Maximum individual state general bond obligation as a percentage of total debt securities (percent) | 1.00% | |
Securities in unrealized loss positions, number of positions | 155 | 155 |
Securities, number of positions | 1,530 | 1,530 |
Gain on equity securities | $ | $ 643 | $ 643 |
INVESTMENT SECURITIES - Gains (
INVESTMENT SECURITIES - Gains (Losses) Within Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gross gains on investment securities | $ 645 | $ 41 | $ 714 | $ 59 |
Gross losses on investment securities | 0 | (23) | (18) | (36) |
Net gains on investment securities | $ 645 | $ 18 | $ 696 | $ 23 |
INVESTMENT SECURITIES - Contrac
INVESTMENT SECURITIES - Contractual Maturities of Debt Securities Available for Sale (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
Due within one year | $ 1,487 | |
Due after one year through five years | 2,176 | |
Due after five years through ten years | 1,999 | |
Due after ten years | 1,171 | |
Mortgage and asset-backed securities | 5,809 | |
Amortized Cost | 12,642 | $ 11,160 |
Fair Value | ||
Due within one year | 1,490 | |
Due after one year through five years | 2,259 | |
Due after five years through ten years | 2,128 | |
Due after ten years | 1,210 | |
Mortgage and asset-backed securities | 6,046 | |
Fair Value | $ 13,133 | $ 11,371 |
FAIR VALUE - Financial Assets M
FAIR VALUE - Financial Assets Measured on Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 13,133 | $ 11,371 |
Common stock | 713 | 7 |
U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,196 | 354 |
Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,692 | 3,710 |
Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,476 | 1,463 |
Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,073 | 804 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,281 | 1,093 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 4,415 | 3,947 |
Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 7,722 | 3,660 |
Debt securities | 13,133 | 11,371 |
Common stock | 713 | 7 |
Total investment securities | 21,568 | 15,038 |
Recurring Basis | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,196 | 354 |
Recurring Basis | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,692 | 3,710 |
Recurring Basis | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,476 | 1,463 |
Recurring Basis | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,073 | 804 |
Recurring Basis | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,281 | 1,093 |
Recurring Basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 4,415 | 3,947 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 7,722 | 3,660 |
Debt securities | 0 | 0 |
Common stock | 713 | 7 |
Total investment securities | 8,435 | 3,667 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Debt securities | 13,133 | 11,371 |
Common stock | 0 | 0 |
Total investment securities | 13,133 | 11,371 |
Recurring Basis | Other Observable Inputs (Level 2) | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,196 | 354 |
Recurring Basis | Other Observable Inputs (Level 2) | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,692 | 3,710 |
Recurring Basis | Other Observable Inputs (Level 2) | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,476 | 1,463 |
Recurring Basis | Other Observable Inputs (Level 2) | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,073 | 804 |
Recurring Basis | Other Observable Inputs (Level 2) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,281 | 1,093 |
Recurring Basis | Other Observable Inputs (Level 2) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 4,415 | 3,947 |
Recurring Basis | Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Debt securities | 0 | 0 |
Common stock | 0 | 0 |
Total investment securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 0 | $ 0 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Term loan and commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt | $ 1,325 | |
Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt | 325 | $ 300 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt outstanding | 6,458 | 5,366 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt outstanding | $ 7,674 | $ 5,916 |
FAIR VALUE - Put and Call Optio
FAIR VALUE - Put and Call Options Measured at Fair Value (Details) $ in Millions | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Put option | Other long-term liabilities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value of financial liability | $ 151 | $ 28 |
Call option | Other long-term assets | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value of financial asset | $ 634 | $ 557 |
Options | Level 3 fair value measurement | Annualized volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.449 | 0.198 |
Options | Level 3 fair value measurement | Secured credit rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.004 | 0.022 |
Options | Level 3 fair value measurement | NOPAT | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.120 | 0.120 |
Options | Level 3 fair value measurement | Weighted average cost of capital | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.100 | 0.100 |
Options | Level 3 fair value measurement | Long term growth rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.030 | 0.030 |
MEDICARE PART D (Details)
MEDICARE PART D (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Other current assets | $ 5,170 | $ 3,806 |
Trade accounts payable and accrued expenses | (4,472) | (3,754) |
Other long-term assets | 2,510 | 1,834 |
Other long-term liabilities | (1,543) | (935) |
Risk Corridor Settlement | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 25 | 5 |
Trade accounts payable and accrued expenses | (101) | (120) |
Net current (liability) asset | (76) | (115) |
Other long-term assets | 273 | 6 |
Other long-term liabilities | (176) | (61) |
Net long-term asset (liability) | 97 | (55) |
Total net asset (liability) | 21 | (170) |
CMS Subsidies/ Discounts | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 1,226 | 585 |
Trade accounts payable and accrued expenses | (714) | (356) |
Net current (liability) asset | 512 | 229 |
Other long-term assets | 0 | 0 |
Other long-term liabilities | 0 | 0 |
Net long-term asset (liability) | 0 | 0 |
Total net asset (liability) | $ 512 | $ 229 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill by Segments (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 3,928 |
Acquisitions | 515 |
Goodwill, ending balance | 4,443 |
Retail | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 1,535 |
Acquisitions | 0 |
Goodwill, ending balance | 1,535 |
Group and Specialty | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 261 |
Acquisitions | 0 |
Goodwill, ending balance | 261 |
Healthcare Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 2,132 |
Acquisitions | 515 |
Goodwill, ending balance | $ 2,647 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible Assets Included in Other Long-Term Assets (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 9 years 3 months 18 days | |
Cost | $ 1,070 | $ 829 |
Accumulated Amortization | 718 | 652 |
Net | $ 352 | 177 |
Customer contracts/ relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 9 years 6 months | |
Cost | $ 849 | 646 |
Accumulated Amortization | 553 | 496 |
Net | $ 296 | 150 |
Trade names and technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 7 years | |
Cost | $ 122 | 84 |
Accumulated Amortization | 87 | 84 |
Net | $ 35 | 0 |
Provider contracts | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 11 years 9 months 18 days | |
Cost | $ 70 | 70 |
Accumulated Amortization | 49 | 44 |
Net | $ 21 | 26 |
Noncompetes and other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 7 years 3 months 18 days | |
Cost | $ 29 | 29 |
Accumulated Amortization | 29 | 28 |
Net | $ 0 | $ 1 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense for other intangible assets | $ 23 | $ 17 | $ 66 | $ 53 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization and Estimated Future Amortization Expense (Details) $ in Millions | Sep. 30, 2020USD ($) |
Estimated amortization remaining for the years ending December 31, | |
2020 | $ 22 |
2021 | 56 |
2022 | 53 |
2023 | 40 |
2024 | 33 |
2025 | $ 33 |
BENEFITS PAYABLE - Activity in
BENEFITS PAYABLE - Activity in Benefits Payable (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances, beginning of period | $ 6,004 | $ 4,862 |
Less: Reinsurance recoverables | (68) | (95) |
Balances, beginning of period, net | 5,936 | 4,767 |
Incurred related to: | ||
Current year | 45,693 | 40,499 |
Prior years | (278) | (331) |
Total incurred | 45,415 | 40,168 |
Paid related to: | ||
Current year | (37,810) | (34,625) |
Prior years | (5,334) | (4,158) |
Total paid | (43,144) | (38,783) |
Reinsurance recoverable | 1 | 68 |
Balances, end of period | 8,208 | 6,220 |
Retail | ||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances, beginning of period | 5,363 | 4,338 |
Less: Reinsurance recoverables | (68) | (95) |
Balances, beginning of period, net | 5,295 | 4,243 |
Incurred related to: | ||
Current year | 42,186 | 36,762 |
Prior years | (235) | (366) |
Total incurred | 41,951 | 36,396 |
Paid related to: | ||
Current year | (34,946) | (31,476) |
Prior years | (4,759) | (3,634) |
Total paid | (39,705) | (35,110) |
Reinsurance recoverable | 1 | 68 |
Balances, end of period | 7,542 | 5,597 |
Total IBNR included in benefits payable | 4,600 | |
Group and Specialty | ||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances, beginning of period | 641 | 517 |
Incurred related to: | ||
Current year | 3,929 | 4,142 |
Prior years | (43) | 35 |
Total incurred | 3,886 | 4,177 |
Paid related to: | ||
Current year | (3,286) | (3,547) |
Prior years | (575) | (524) |
Total paid | (3,861) | (4,071) |
Balances, end of period | 666 | $ 623 |
Total IBNR included in benefits payable | $ 576 |
BENEFITS PAYABLE - Reconciliati
BENEFITS PAYABLE - Reconciliation to Consolidated (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | $ 8,207 | |||
Reinsurance recoverable on unpaid claims | 1 | $ 68 | $ 68 | $ 95 |
Benefits payable | 8,208 | 6,004 | 6,220 | 4,862 |
Retail | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | 7,541 | |||
Reinsurance recoverable on unpaid claims | 1 | 68 | 68 | 95 |
Benefits payable | 7,542 | 5,363 | 5,597 | 4,338 |
Group and Specialty | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | 666 | |||
Benefits payable | $ 666 | $ 641 | $ 623 | $ 517 |
EARNINGS PER COMMON SHARE COM_3
EARNINGS PER COMMON SHARE COMPUTATION (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income available for common stockholders | $ 1,340 | $ 689 | $ 3,641 | $ 2,195 |
Weighted average outstanding shares of common stock used to compute basic earnings per common share (in shares) | 132,318 | 133,321 | 132,234 | 134,589 |
Shares used to compute diluted earnings per common share (in shares) | 133,196 | 134,025 | 133,010 | 135,189 |
Basic earnings per common share (in dollars per share) | $ 10.12 | $ 5.16 | $ 27.53 | $ 16.31 |
Diluted earnings per common share (in dollars per share) | $ 10.05 | $ 5.14 | $ 27.37 | $ 16.24 |
Number of antidilutive stock options and restricted stock excluded from computation (in shares) | 143 | 302 | 311 | 589 |
Employee stock options | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Dilutive effect of employee stock options and restricted stock (in shares) | 105 | 101 | 95 | 99 |
Restricted stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Dilutive effect of employee stock options and restricted stock (in shares) | 773 | 603 | 681 | 501 |
STOCKHOLDERS' EQUITY - Details
STOCKHOLDERS' EQUITY - Details of Dividend Payments (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 03, 2020 | Oct. 30, 2020 | Jul. 31, 2020 | Apr. 24, 2020 | Jan. 31, 2020 | Oct. 25, 2019 | Jul. 26, 2019 | Apr. 26, 2019 | Jan. 25, 2019 |
Dividends | |||||||||
Amount per Share (in dollars per share) | $ 0.625 | $ 0.625 | $ 0.55 | $ 0.55 | $ 0.55 | $ 0.55 | $ 0.50 | ||
Total Amount | $ 83 | $ 83 | $ 73 | $ 73 | $ 74 | $ 74 | $ 68 | ||
Subsequent Event | |||||||||
Dividends | |||||||||
Amount per Share (in dollars per share) | $ 0.625 | ||||||||
Total Amount | $ 83 | ||||||||
Dividends declared (in dollars per share) | $ 0.625 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands | Dec. 26, 2019 | Aug. 02, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 26, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Nov. 02, 2020 | Jul. 31, 2019 | Jul. 30, 2019 | Dec. 14, 2017 |
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Increase in treasury stock from stock repurchases | $ 5,000,000 | $ 1,000,000,000 | $ 30,000,000 | $ 1,010,000,000 | |||||||
Common shares acquired in connection with employee stock plans (in shares) | 80 | 30 | |||||||||
Common shares acquired in connection with employee stock plans, amount | $ 30,000,000 | $ 10,000,000 | |||||||||
July 2019 ASR | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Accelerated stock repurchase agreement amount | $ 1,000,000,000 | ||||||||||
Accelerated stock repurchase payment | $ 1,000,000,000 | ||||||||||
Shares received (in shares) | 700 | 2,700 | 3,400 | ||||||||
Increase in treasury stock from stock repurchases | $ 800,000,000 | ||||||||||
Decrease in capital in excess of par value | $ 200,000,000 | ||||||||||
Average daily volume weighted-average share price of common stock during term of agreement (in dollars per share) | $ 296.19 | ||||||||||
Reclassification from capital in excess of par value to treasury stock | $ 200,000,000 | ||||||||||
December 2017 Authorization | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Share repurchase authorization | $ 3,000,000,000 | ||||||||||
Remaining share repurchase authorization at replacement | $ 1,030,000,000 | ||||||||||
July 2019 Authorization | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Share repurchase authorization | $ 3,000,000,000 | ||||||||||
Subsequent Event | July 2019 Authorization | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Share repurchase authorization | $ 3,000,000,000 | ||||||||||
Remaining authorized amount | $ 2,000,000,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (percent) | 25.20% | 22.50% | 29.00% | 23.80% |
DEBT - Debt Outstanding (Detail
DEBT - Debt Outstanding (Details) - USD ($) | Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Total short-term debt | $ 1,724,000,000 | $ 699,000,000 | |
Long-term debt | 6,059,000,000 | 4,967,000,000 | |
Commercial paper | |||
Debt Instrument [Line Items] | |||
Short-term debt | 325,000,000 | 300,000,000 | |
Term note | |||
Debt Instrument [Line Items] | |||
Short-term debt | 1,000,000,000 | 0 | |
Senior notes | $400 million, 2.50% due December 15, 2020 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 400,000,000 | ||
Stated interest rate (percent) | 2.50% | ||
Long-term debt, current maturities | $ 399,000,000 | 399,000,000 | |
Senior notes | $600 million, 3.15% due December 1, 2022 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 600,000,000 | ||
Stated interest rate (percent) | 3.15% | ||
Long-term debt | $ 598,000,000 | 598,000,000 | |
Senior notes | $400 million, 2.90% due December 15, 2022 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 400,000,000 | ||
Stated interest rate (percent) | 2.90% | ||
Long-term debt | $ 398,000,000 | 397,000,000 | |
Senior notes | $600 million, 3.85% due October 1, 2024 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 600,000,000 | ||
Stated interest rate (percent) | 3.85% | ||
Long-term debt | $ 597,000,000 | 597,000,000 | |
Senior notes | $600 million, 4.50% due April 1, 2025 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 600,000,000 | $ 600,000,000 | |
Stated interest rate (percent) | 4.50% | 4.50% | |
Long-term debt | $ 595,000,000 | 0 | |
Senior notes | $600 million, 3.95% due March 15, 2027 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 600,000,000 | ||
Stated interest rate (percent) | 3.95% | ||
Long-term debt | $ 596,000,000 | 595,000,000 | |
Senior notes | $500 million, 3.125% due August 15, 2029 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 500,000,000 | ||
Stated interest rate (percent) | 3.125% | ||
Long-term debt | $ 495,000,000 | 495,000,000 | |
Senior notes | $500 million, 4.875% due April 1, 2030] | |||
Debt Instrument [Line Items] | |||
Face amount | $ 500,000,000 | $ 500,000,000 | |
Stated interest rate (percent) | 4.875% | 4.875% | |
Long-term debt | $ 494,000,000 | 0 | |
Senior notes | $250 million, 8.15% due June 15, 2038 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 250,000,000 | ||
Stated interest rate (percent) | 8.15% | ||
Long-term debt | $ 262,000,000 | 262,000,000 | |
Senior notes | $400 million, 4.625% due December 1, 2042 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 400,000,000 | ||
Stated interest rate (percent) | 4.625% | ||
Long-term debt | $ 396,000,000 | 396,000,000 | |
Senior notes | $750 million, 4.95% due October 1, 2044 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 750,000,000 | ||
Stated interest rate (percent) | 4.95% | ||
Long-term debt | $ 739,000,000 | 739,000,000 | |
Senior notes | $400 million, 4.80% due March 15, 2047 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 400,000,000 | ||
Stated interest rate (percent) | 4.80% | ||
Long-term debt | $ 396,000,000 | 396,000,000 | |
Senior notes | $500 million, 3.95% due August 15, 2049 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 500,000,000 | ||
Stated interest rate (percent) | 3.95% | ||
Long-term debt | $ 493,000,000 | $ 492,000,000 |
DEBT - Senior Notes (Details)
DEBT - Senior Notes (Details) - Senior notes - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||
Net proceeds from issuance of notes | $ 1,088,000,000 | |
Redemption price, percentage | 100.00% | |
$600 million, 4.50% due April 1, 2025 | ||
Debt Instrument [Line Items] | ||
Face amount | $ 600,000,000 | $ 600,000,000 |
Stated interest rate (percent) | 4.50% | 4.50% |
$500 million, 4.875% due April 1, 2030] | ||
Debt Instrument [Line Items] | ||
Face amount | $ 500,000,000 | $ 500,000,000 |
Stated interest rate (percent) | 4.875% | 4.875% |
$250 million, 8.15% due June 15, 2038 | ||
Debt Instrument [Line Items] | ||
Face amount | $ 250,000,000 | |
Stated interest rate (percent) | 8.15% |
DEBT - Credit Agreement (Detail
DEBT - Credit Agreement (Details) - Line of Credit - Unsecured Revolving Credit Agreement | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Debt instrument term (in years) | 5 years |
Maximum borrowing capacity | $ 2,000,000,000 |
Facility fee (percent) | 0.15% |
Debt to capitalization percentage, maximum | 50.00% |
Actual debt to capitalization percentage (percent) | 33.00% |
Maximum borrowing capacity including uncommitted incremental loan facility | $ 2,500,000,000 |
Uncommitted incremental loan facility | 500,000,000 |
Line of credit, outstanding borrowings | 0 |
Remaining borrowing capacity | $ 2,000,000,000 |
Revolving Credit Facility | Minimum | |
Line of Credit Facility [Line Items] | |
Facility fee (percent) | 0.09% |
Revolving Credit Facility | Maximum | |
Line of Credit Facility [Line Items] | |
Facility fee (percent) | 0.25% |
Revolving Credit Facility | LIBOR | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate (percent) | 1.10% |
Revolving Credit Facility | LIBOR | Minimum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate (percent) | 0.91% |
Revolving Credit Facility | LIBOR | Maximum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate (percent) | 1.50% |
Letter of Credit | |
Line of Credit Facility [Line Items] | |
Line of credit, outstanding borrowings | $ 0 |
DEBT - Commercial Paper (Detail
DEBT - Commercial Paper (Details) - Commercial paper - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Short-term Debt [Line Items] | ||
Maximum borrowing capacity | $ 2,000,000,000 | |
Maximum amount outstanding during period | 600,000,000 | |
Short-term debt outstanding | $ 325,000,000 | $ 300,000,000 |
Weighted average annual interest rate (percent) | 0.35% |
DEBT - Term Note (Details)
DEBT - Term Note (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Feb. 29, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Short-term Debt [Line Items] | ||||
Draw on term note commitment | $ 1,000,000,000 | $ 0 | ||
2020 Term Loan | Term note | ||||
Short-term Debt [Line Items] | ||||
Face amount | $ 1,000,000,000 | |||
Debt instrument term (in years) | 1 year | |||
Extension period term (in years) | 1 year | |||
Draw on term note commitment | $ 1,000,000,000 |
COMMITMENTS, GUARANTEES AND C_2
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Details) beneficiary in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($)State | Sep. 30, 2020USD ($)State | Sep. 30, 2020USD ($)beneficiaryState | Dec. 31, 2021 | Dec. 31, 2019 | Nov. 02, 2017USD ($) | |
Loss Contingencies [Line Items] | ||||||
Percentage of risk score calculated from claims submitted through EDS | 50.00% | 25.00% | ||||
Number of states comprising TRICARE beneficiaries | State | 32 | 32 | 32 | |||
Number of TRICARE beneficiaries | beneficiary | 6 | |||||
US Risk Corridor Premium Stabilization Program | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation recoveries sought | $ 611 | |||||
Payment received upon judgement | $ 609 | $ 609 | $ 609 | |||
Related legal fees and expenses | $ 31 | $ 31 | ||||
Tricare East Region Contract | ||||||
Loss Contingencies [Line Items] | ||||||
Contract term years | 5 years | |||||
Medicare | ||||||
Loss Contingencies [Line Items] | ||||||
Percentage of premiums and services revenue | 82.00% | |||||
Military services | ||||||
Loss Contingencies [Line Items] | ||||||
Percentage of premiums and services revenue | 1.00% | |||||
Medicaid | ||||||
Loss Contingencies [Line Items] | ||||||
Percentage of premiums and services revenue | 5.00% | |||||
Forecast | ||||||
Loss Contingencies [Line Items] | ||||||
Percentage of risk score calculated from claims submitted through EDS | 75.00% |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Segment | Sep. 30, 2019USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | Segment | 3 | |||
Member co-share amounts and government subsidies | $ 4,400 | $ 4,000 | $ 11,900 | $ 10,700 |
Depreciation and amortization classified as benefit expense | $ 33 | $ 32 | $ 94 | $ 92 |
SEGMENT INFORMATION - Segment R
SEGMENT INFORMATION - Segment Results (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Premiums | $ 18,904 | $ 15,712 | $ 55,822 | $ 47,139 |
Services revenue | 457 | 393 | 1,331 | 1,103 |
Total external revenues | 19,361 | 16,105 | 57,153 | 48,242 |
Intersegment revenues | 0 | 0 | 0 | 0 |
Investment income | 714 | 136 | 940 | 351 |
Total revenues | 20,075 | 16,241 | 58,093 | 48,593 |
Benefits | 15,611 | 13,357 | 45,415 | 40,168 |
Operating costs | 2,513 | 1,889 | 6,984 | 5,252 |
Depreciation and amortization | 128 | 127 | 362 | 343 |
Total operating expenses | 18,252 | 15,373 | 52,761 | 45,763 |
Income from operations | 1,823 | 868 | 5,332 | 2,830 |
Interest expense | 75 | 62 | 211 | 184 |
Other (income) expense, net | (7) | (82) | 63 | (217) |
Income before income taxes and equity in net earnings | 1,755 | 888 | 5,058 | 2,863 |
Equity in net earnings | 35 | 1 | 68 | 16 |
Segment earnings (loss) | 1,790 | 889 | 5,126 | 2,879 |
Individual Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 12,949 | 10,752 | 38,748 | 32,254 |
Group Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 1,880 | 1,609 | 5,867 | 4,867 |
Medicare stand-alone PDP | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 622 | 781 | 2,108 | 2,408 |
Total Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 15,451 | 13,142 | 46,723 | 39,529 |
Fully-insured | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 1,948 | 1,428 | 4,717 | 4,307 |
Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 424 | 400 | 1,278 | 1,160 |
Medicaid and other | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 1,081 | 742 | 3,104 | 2,143 |
Provider | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 107 | 136 | 316 | 367 |
ASO and other | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 193 | 204 | 590 | 601 |
Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 157 | 53 | 425 | 135 |
Services | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | 0 | 0 |
Products | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | 0 | 0 |
Operating Segments | Retail | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 16,709 | 14,034 | 50,336 | 42,106 |
Services revenue | 4 | 4 | 14 | 14 |
Total external revenues | 16,713 | 14,038 | 50,350 | 42,120 |
Intersegment revenues | 0 | 0 | 0 | 0 |
Investment income | 28 | 50 | 114 | 139 |
Total revenues | 16,741 | 14,088 | 50,464 | 42,259 |
Benefits | 14,224 | 12,050 | 41,939 | 36,396 |
Operating costs | 1,877 | 1,310 | 5,047 | 3,664 |
Depreciation and amortization | 87 | 89 | 251 | 239 |
Total operating expenses | 16,188 | 13,449 | 47,237 | 40,299 |
Income from operations | 553 | 639 | 3,227 | 1,960 |
Interest expense | 0 | 0 | 0 | 0 |
Other (income) expense, net | 0 | 0 | 0 | 0 |
Income before income taxes and equity in net earnings | 553 | 639 | 3,227 | 1,960 |
Equity in net earnings | 0 | 0 | 0 | 0 |
Segment earnings (loss) | 553 | 639 | 3,227 | 1,960 |
Operating Segments | Retail | Individual Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 12,949 | 10,752 | 38,748 | 32,254 |
Operating Segments | Retail | Group Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 1,880 | 1,609 | 5,867 | 4,867 |
Operating Segments | Retail | Medicare stand-alone PDP | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 622 | 781 | 2,108 | 2,408 |
Operating Segments | Retail | Total Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 15,451 | 13,142 | 46,723 | 39,529 |
Operating Segments | Retail | Fully-insured | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 177 | 150 | 509 | 434 |
Operating Segments | Retail | Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Retail | Medicaid and other | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 1,081 | 742 | 3,104 | 2,143 |
Operating Segments | Retail | Provider | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Operating Segments | Retail | ASO and other | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 4 | 4 | 14 | 14 |
Operating Segments | Retail | Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Operating Segments | Retail | Services | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | 0 | 0 |
Operating Segments | Retail | Products | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 1,593 | 1,678 | 4,884 | 5,033 |
Services revenue | 189 | 200 | 576 | 587 |
Total external revenues | 1,782 | 1,878 | 5,460 | 5,620 |
Intersegment revenues | 9 | 4 | 22 | 13 |
Investment income | 3 | 7 | 12 | 17 |
Total revenues | 1,794 | 1,889 | 5,494 | 5,650 |
Benefits | 1,481 | 1,448 | 3,886 | 4,177 |
Operating costs | 452 | 413 | 1,316 | 1,232 |
Depreciation and amortization | 21 | 24 | 60 | 67 |
Total operating expenses | 1,954 | 1,885 | 5,262 | 5,476 |
Income from operations | (160) | 4 | 232 | 174 |
Interest expense | 0 | 0 | 0 | 0 |
Other (income) expense, net | 0 | 0 | 0 | 0 |
Income before income taxes and equity in net earnings | (160) | 4 | 232 | 174 |
Equity in net earnings | 0 | 0 | 0 | 0 |
Segment earnings (loss) | (160) | 4 | 232 | 174 |
Operating Segments | Group and Specialty | Individual Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | Group Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | Medicare stand-alone PDP | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | Total Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | Fully-insured | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 1,169 | 1,278 | 3,606 | 3,873 |
Operating Segments | Group and Specialty | Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 424 | 400 | 1,278 | 1,160 |
Operating Segments | Group and Specialty | Medicaid and other | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | Provider | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | ASO and other | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 189 | 200 | 576 | 587 |
Operating Segments | Group and Specialty | Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | Services | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 9 | 4 | 22 | 13 |
Operating Segments | Group and Specialty | Products | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Services revenue | 264 | 189 | 741 | 502 |
Total external revenues | 264 | 189 | 741 | 502 |
Intersegment revenues | 6,865 | 6,413 | 20,414 | 18,584 |
Investment income | 2 | 0 | 2 | 1 |
Total revenues | 7,131 | 6,602 | 21,157 | 19,087 |
Benefits | 0 | 0 | 0 | 0 |
Operating costs | 6,871 | 6,348 | 20,274 | 18,371 |
Depreciation and amortization | 46 | 43 | 135 | 121 |
Total operating expenses | 6,917 | 6,391 | 20,409 | 18,492 |
Income from operations | 214 | 211 | 748 | 595 |
Interest expense | 0 | 0 | 0 | 0 |
Other (income) expense, net | 0 | 0 | 0 | 0 |
Income before income taxes and equity in net earnings | 214 | 211 | 748 | 595 |
Equity in net earnings | 35 | 1 | 68 | 16 |
Segment earnings (loss) | 249 | 212 | 816 | 611 |
Operating Segments | Healthcare Services | Individual Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Group Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Medicare stand-alone PDP | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Total Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Fully-insured | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Medicaid and other | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Provider | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 107 | 136 | 316 | 367 |
Operating Segments | Healthcare Services | ASO and other | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 157 | 53 | 425 | 135 |
Operating Segments | Healthcare Services | Services | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 4,852 | 4,654 | 14,514 | 13,456 |
Operating Segments | Healthcare Services | Products | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 2,013 | 1,759 | 5,900 | 5,128 |
Eliminations/ Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 602 | 0 | 602 | 0 |
Services revenue | 0 | 0 | 0 | 0 |
Total external revenues | 602 | 0 | 602 | 0 |
Intersegment revenues | (6,874) | (6,417) | (20,436) | (18,597) |
Investment income | 681 | 79 | 812 | 194 |
Total revenues | (5,591) | (6,338) | (19,022) | (18,403) |
Benefits | (94) | (141) | (410) | (405) |
Operating costs | (6,687) | (6,182) | (19,653) | (18,015) |
Depreciation and amortization | (26) | (29) | (84) | (84) |
Total operating expenses | (6,807) | (6,352) | (20,147) | (18,504) |
Income from operations | 1,216 | 14 | 1,125 | 101 |
Interest expense | 75 | 62 | 211 | 184 |
Other (income) expense, net | (7) | (82) | 63 | (217) |
Income before income taxes and equity in net earnings | 1,148 | 34 | 851 | 134 |
Equity in net earnings | 0 | 0 | 0 | 0 |
Segment earnings (loss) | 1,148 | 34 | 851 | 134 |
Eliminations/ Corporate | Individual Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Group Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Medicare stand-alone PDP | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Total Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Fully-insured | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 602 | 0 | 602 | 0 |
Eliminations/ Corporate | Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Medicaid and other | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Provider | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | ASO and other | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Services | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | (4,861) | (4,658) | (14,536) | (13,469) |
Eliminations/ Corporate | Products | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | $ (2,013) | $ (1,759) | $ (5,900) | $ (5,128) |