Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 27, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-01011 | |
Entity Registrant Name | CVS HEALTH CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 05-0494040 | |
Entity Address, Address Line One | One CVS Drive, | |
Entity Address, City or Town | Woonsocket, | |
Entity Address, State or Province | RI | |
Entity Address, Postal Zip Code | 02895 | |
City Area Code | (401) | |
Local Phone Number | 765-1500 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | CVS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,320,058,657 | |
Entity Central Index Key | 0000064803 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Premiums | $ 18,984 | $ 17,182 | $ 56,927 | $ 51,749 |
Net investment income | 246 | 204 | 832 | 550 |
Total revenues | 73,794 | 67,056 | 215,507 | 199,152 |
Operating costs: | ||||
Cost of products sold | $ 45,011 | $ 40,940 | $ 129,425 | $ 121,529 |
Cost, Product and Service [Extensible List] | Products | Products | Products | Products |
Benefit costs | $ 16,081 | $ 14,396 | $ 47,686 | $ 40,534 |
Goodwill impairment | 431 | 0 | 431 | 0 |
Operating expenses | 9,210 | 8,471 | 27,001 | 25,702 |
Total operating costs | 70,733 | 63,807 | 204,543 | 187,765 |
Operating income | 3,061 | 3,249 | 10,964 | 11,387 |
Interest expense | 602 | 731 | 1,895 | 2,229 |
Loss on early extinguishment of debt | 363 | 766 | 363 | 766 |
Other income | (49) | (54) | (144) | (153) |
Income before income tax provision | 2,145 | 1,806 | 8,850 | 8,545 |
Income tax provision | 558 | 587 | 2,248 | 2,328 |
Net income | 1,587 | 1,219 | 6,602 | 6,217 |
Net (income) loss attributable to noncontrolling interests | 11 | 5 | 2 | (11) |
Net income attributable to CVS Health | $ 1,598 | $ 1,224 | $ 6,604 | $ 6,206 |
Net income per share attributable to CVS Health: | ||||
Net income per share attributable to CVS Health, basic (in dollars per share) | $ 1.21 | $ 0.93 | $ 5.01 | $ 4.74 |
Net income per share attributable to CVS Health, diluted (in dollars per share) | $ 1.20 | $ 0.93 | $ 4.98 | $ 4.72 |
Weighted average shares outstanding: | ||||
Weighted average basic shares outstanding (in shares) | 1,321 | 1,310 | 1,318 | 1,308 |
Weighted average diluted shares outstanding (in shares) | 1,329 | 1,315 | 1,326 | 1,314 |
Dividends declared per share (in dollars per share) | $ 0.50 | $ 0.50 | $ 1.50 | $ 1.50 |
Products | ||||
Revenues: | ||||
Revenues | $ 51,853 | $ 47,738 | $ 149,765 | $ 141,096 |
Services | ||||
Revenues: | ||||
Revenues | $ 2,711 | $ 1,932 | $ 7,983 | $ 5,757 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,587 | $ 1,219 | $ 6,602 | $ 6,217 |
Other comprehensive income (loss), net of tax: | ||||
Net unrealized investment gains (losses) | (73) | 44 | (310) | 257 |
Foreign currency translation adjustments | (5) | 1 | (6) | (5) |
Net cash flow hedges | (15) | (3) | (22) | (15) |
Pension and other postretirement benefits | 0 | 0 | 1 | (1) |
Other comprehensive income (loss) | (93) | 42 | (337) | 236 |
Comprehensive income | 1,494 | 1,261 | 6,265 | 6,453 |
Comprehensive (income) loss attributable to noncontrolling interests | 11 | 5 | 2 | (11) |
Comprehensive income attributable to CVS Health | $ 1,505 | $ 1,266 | $ 6,267 | $ 6,442 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Cash and cash equivalents | $ 9,826 | $ 7,854 |
Investments | 3,015 | 3,000 |
Accounts receivable, net | 25,283 | 21,742 |
Inventories | 17,399 | 18,496 |
Other current assets | 5,319 | 5,277 |
Total current assets | 60,842 | 56,369 |
Long-term investments | 22,370 | 20,812 |
Property and equipment, net | 12,771 | 12,606 |
Operating lease right-of-use assets | 20,462 | 20,729 |
Goodwill | 79,121 | 79,552 |
Intangible assets, net | 29,545 | 31,142 |
Separate accounts assets | 5,086 | 4,881 |
Other assets | 4,694 | 4,624 |
Total assets | 234,891 | 230,715 |
Liabilities: | ||
Accounts payable | 12,696 | 11,138 |
Pharmacy claims and discounts payable | 17,895 | 15,795 |
Health care costs payable | 8,877 | 7,936 |
Policyholders’ funds | 4,444 | 4,270 |
Accrued expenses | 16,140 | 14,243 |
Other insurance liabilities | 1,287 | 1,557 |
Current portion of operating lease liabilities | 1,809 | 1,638 |
Current portion of long-term debt | 1,561 | 5,440 |
Total current liabilities | 64,709 | 62,017 |
Long-term operating lease liabilities | 18,456 | 18,757 |
Long-term debt | 56,832 | 59,207 |
Deferred income taxes | 6,329 | 6,794 |
Separate accounts liabilities | 5,086 | 4,881 |
Other long-term insurance liabilities | 6,551 | 7,007 |
Other long-term liabilities | 2,310 | 2,351 |
Total liabilities | 160,273 | 161,014 |
Shareholders’ equity: | ||
Preferred stock, par value $0.01: 0.1 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, par value $0.01: 3,200 shares authorized; 1,743 shares issued and 1,321 shares outstanding at September 30, 2021 and 1,733 shares issued and 1,310 shares outstanding at December 31, 2020 and capital surplus | 47,133 | 46,513 |
Treasury stock, at cost: 422 shares at September 30, 2021 and 423 shares at December 31, 2020 | (28,166) | (28,178) |
Retained earnings | 54,264 | 49,640 |
Accumulated other comprehensive income | 1,077 | 1,414 |
Total CVS Health shareholders’ equity | 74,308 | 69,389 |
Noncontrolling interests | 310 | 312 |
Total shareholders’ equity | 74,618 | 69,701 |
Total liabilities and shareholders’ equity | $ 234,891 | $ 230,715 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000 | 100,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 3,200,000,000 | 3,200,000,000 |
Common stock, shares issued (in shares) | 1,743,000,000 | 1,733,000,000 |
Common stock, shares outstanding (in shares) | 1,321,000,000 | 1,310,000,000 |
Treasury stock (in shares) | 422,000,000 | 423,000,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Cash receipts from customers | $ 209,104 | $ 195,554 |
Cash paid for inventory and prescriptions dispensed by retail network pharmacies | (122,129) | (116,590) |
Insurance benefits paid | (46,965) | (40,221) |
Cash paid to other suppliers and employees | (21,840) | (22,185) |
Interest and investment income received | 582 | 622 |
Interest paid | (2,095) | (2,517) |
Income taxes paid | (2,397) | (2,365) |
Net cash provided by operating activities | 14,260 | 12,298 |
Cash flows from investing activities: | ||
Proceeds from sales and maturities of investments | 5,559 | 3,790 |
Purchases of investments | (7,417) | (6,377) |
Purchases of property and equipment | (1,923) | (1,724) |
Acquisitions (net of cash acquired) | (135) | (828) |
Proceeds from sale of subsidiary | 0 | 834 |
Other | 95 | 5 |
Net cash used in investing activities | (3,821) | (4,300) |
Cash flows from financing activities: | ||
Proceeds from issuance of long-term debt | 987 | 7,919 |
Repayments of long-term debt | (7,823) | (10,493) |
Derivative settlements | 0 | (7) |
Dividends paid | (1,965) | (1,980) |
Proceeds from exercise of stock options | 440 | 249 |
Payments for taxes related to net share settlement of equity awards | (161) | (75) |
Other | (3) | (33) |
Net cash used in financing activities | (8,525) | (4,420) |
Net increase in cash, cash equivalents and restricted cash | 1,914 | 3,578 |
Cash, cash equivalents and restricted cash at the beginning of the period | 8,130 | 5,954 |
Cash, cash equivalents and restricted cash at the end of the period | 10,044 | 9,532 |
Reconciliation of net income to net cash provided by operating activities: | ||
Net income | 6,602 | 6,217 |
Adjustments required to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 3,397 | 3,302 |
Goodwill impairment | 431 | 0 |
Stock-based compensation | 346 | 288 |
Gain on sale of subsidiary | 0 | (271) |
Loss on early extinguishment of debt | 363 | 766 |
Deferred income taxes and other noncash items | (645) | (25) |
Change in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable, net | (3,504) | (3,564) |
Inventories | 1,097 | 45 |
Other assets | (32) | (211) |
Accounts payable and pharmacy claims and discounts payable | 3,973 | 3,495 |
Health care costs payable and other insurance liabilities | 348 | (474) |
Other liabilities | 1,884 | 2,730 |
Net cash provided by operating activities | $ 14,260 | $ 12,298 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | [2] | Total CVS Health Shareholders’ Equity | Total CVS Health Shareholders’ EquityCumulative Effect, Period of Adoption, Adjustment | [2] | Common Stock | Treasury Stock | Common Stock Including Capital Surplus | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | [2] | Accumulated Other Comprehensive Income | Noncontrolling Interests | |||
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2019 | 1,727 | (425) | [1] | ||||||||||||||
Balance at beginning of period at Dec. 31, 2019 | $ 64,170 | $ (3) | $ 63,864 | $ (3) | $ (28,235) | [1] | $ 45,972 | [3] | $ 45,108 | $ (3) | $ 1,019 | $ 306 | |||||
Shareholders' Equity [Roll Forward] | |||||||||||||||||
Net income | 2,012 | 2,007 | 2,007 | 5 | |||||||||||||
Other comprehensive Income (loss) | (332) | (332) | (332) | ||||||||||||||
Stock option activity, stock awards and other (in shares) | 2 | ||||||||||||||||
Stock option activity, stock awards and other | 208 | 208 | 208 | [3] | |||||||||||||
ESPP issuances, net of purchase of treasury shares (in shares) | [1] | 1 | |||||||||||||||
ESPP issuances, net of purchase of treasury shares | 53 | 53 | $ 53 | [1] | |||||||||||||
Common stock dividends | (657) | (657) | (657) | ||||||||||||||
Other increases (decreases) in noncontrolling interests | 23 | 23 | |||||||||||||||
Shares outstanding, balance at end of period (in shares) at Mar. 31, 2020 | 1,729 | (424) | [1] | ||||||||||||||
Balance at end of period at Mar. 31, 2020 | 65,474 | 65,140 | $ (28,182) | [1] | 46,180 | [3] | 46,455 | 687 | 334 | ||||||||
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2019 | 1,727 | (425) | [1] | ||||||||||||||
Balance at beginning of period at Dec. 31, 2019 | 64,170 | $ (3) | 63,864 | $ (3) | $ (28,235) | [1] | 45,972 | [3] | 45,108 | $ (3) | 1,019 | 306 | |||||
Shareholders' Equity [Roll Forward] | |||||||||||||||||
Net income | 6,217 | ||||||||||||||||
Other comprehensive Income (loss) | 236 | ||||||||||||||||
Shares outstanding, balance at end of period (in shares) at Sep. 30, 2020 | 1,732 | (423) | [1] | ||||||||||||||
Balance at end of period at Sep. 30, 2020 | 69,112 | 68,807 | $ (28,164) | [1] | 46,388 | [3] | 49,328 | 1,255 | 305 | ||||||||
Shares outstanding, balance at beginning of period (in shares) at Mar. 31, 2020 | 1,729 | (424) | [1] | ||||||||||||||
Balance at beginning of period at Mar. 31, 2020 | 65,474 | 65,140 | $ (28,182) | [1] | 46,180 | [3] | 46,455 | 687 | 334 | ||||||||
Shareholders' Equity [Roll Forward] | |||||||||||||||||
Net income | 2,986 | 2,975 | 2,975 | 11 | |||||||||||||
Other comprehensive Income (loss) | 526 | 526 | 526 | ||||||||||||||
Stock option activity, stock awards and other (in shares) | 3 | ||||||||||||||||
Stock option activity, stock awards and other | 96 | 96 | 96 | [3] | |||||||||||||
Purchases of treasury shares, net of ESPP issuances (in shares) | [1] | (1) | |||||||||||||||
Purchase of treasury shares, net of ESPP issuances | (53) | (53) | $ (53) | [1] | |||||||||||||
Common stock dividends | (662) | (662) | (662) | ||||||||||||||
Other increases (decreases) in noncontrolling interests | (12) | (12) | |||||||||||||||
Shares outstanding, balance at end of period (in shares) at Jun. 30, 2020 | 1,732 | (425) | [1] | ||||||||||||||
Balance at end of period at Jun. 30, 2020 | 68,355 | 68,022 | $ (28,235) | [1] | 46,276 | [3] | 48,768 | 1,213 | 333 | ||||||||
Shareholders' Equity [Roll Forward] | |||||||||||||||||
Net income | 1,219 | 1,224 | 1,224 | (5) | |||||||||||||
Other comprehensive Income (loss) | 42 | 42 | 42 | ||||||||||||||
Stock option activity, stock awards and other | 112 | 112 | 112 | [3] | |||||||||||||
ESPP issuances, net of purchase of treasury shares (in shares) | [1] | 2 | |||||||||||||||
ESPP issuances, net of purchase of treasury shares | 71 | 71 | $ 71 | [1] | |||||||||||||
Common stock dividends | (664) | (664) | (664) | ||||||||||||||
Other increases (decreases) in noncontrolling interests | (23) | (23) | |||||||||||||||
Shares outstanding, balance at end of period (in shares) at Sep. 30, 2020 | 1,732 | (423) | [1] | ||||||||||||||
Balance at end of period at Sep. 30, 2020 | 69,112 | 68,807 | $ (28,164) | [1] | 46,388 | [3] | 49,328 | 1,255 | 305 | ||||||||
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2020 | 1,733 | (423) | [4] | ||||||||||||||
Balance at beginning of period at Dec. 31, 2020 | 69,701 | 69,389 | $ (28,178) | [4] | 46,513 | [5] | 49,640 | 1,414 | 312 | ||||||||
Shareholders' Equity [Roll Forward] | |||||||||||||||||
Net income | 2,224 | 2,223 | 2,223 | 1 | |||||||||||||
Other comprehensive Income (loss) | (392) | (392) | (392) | ||||||||||||||
Stock option activity, stock awards and other (in shares) | 2 | ||||||||||||||||
Stock option activity, stock awards and other | 214 | 214 | 214 | [5] | |||||||||||||
ESPP issuances, net of purchase of treasury shares (in shares) | [4] | 1 | |||||||||||||||
ESPP issuances, net of purchase of treasury shares | 76 | 76 | $ 76 | [4] | |||||||||||||
Common stock dividends | (660) | (660) | (660) | ||||||||||||||
Other increases (decreases) in noncontrolling interests | 1 | 1 | |||||||||||||||
Shares outstanding, balance at end of period (in shares) at Mar. 31, 2021 | 1,735 | (422) | [4] | ||||||||||||||
Balance at end of period at Mar. 31, 2021 | 71,164 | 70,850 | $ (28,102) | [4] | 46,727 | [5] | 51,203 | 1,022 | 314 | ||||||||
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2020 | 1,733 | (423) | [4] | ||||||||||||||
Balance at beginning of period at Dec. 31, 2020 | 69,701 | 69,389 | $ (28,178) | [4] | 46,513 | [5] | 49,640 | 1,414 | 312 | ||||||||
Shareholders' Equity [Roll Forward] | |||||||||||||||||
Net income | 6,602 | ||||||||||||||||
Other comprehensive Income (loss) | (337) | ||||||||||||||||
Shares outstanding, balance at end of period (in shares) at Sep. 30, 2021 | 1,743 | (422) | [4] | ||||||||||||||
Balance at end of period at Sep. 30, 2021 | 74,618 | 74,308 | $ (28,166) | [4] | 47,133 | [5] | 54,264 | 1,077 | 310 | ||||||||
Shares outstanding, balance at beginning of period (in shares) at Mar. 31, 2021 | 1,735 | (422) | [4] | ||||||||||||||
Balance at beginning of period at Mar. 31, 2021 | 71,164 | 70,850 | $ (28,102) | [4] | 46,727 | [5] | 51,203 | 1,022 | 314 | ||||||||
Shareholders' Equity [Roll Forward] | |||||||||||||||||
Net income | 2,791 | 2,783 | 2,783 | 8 | |||||||||||||
Other comprehensive Income (loss) | 148 | 148 | 148 | ||||||||||||||
Stock option activity, stock awards and other (in shares) | 7 | ||||||||||||||||
Stock option activity, stock awards and other | 268 | 268 | 268 | [5] | |||||||||||||
Purchases of treasury shares, net of ESPP issuances (in shares) | [4] | (2) | |||||||||||||||
Purchase of treasury shares, net of ESPP issuances | (150) | (150) | $ (150) | [4] | |||||||||||||
Common stock dividends | (655) | (655) | (655) | ||||||||||||||
Other increases (decreases) in noncontrolling interests | (1) | (1) | |||||||||||||||
Shares outstanding, balance at end of period (in shares) at Jun. 30, 2021 | 1,742 | (424) | [4] | ||||||||||||||
Balance at end of period at Jun. 30, 2021 | 73,565 | 73,244 | $ (28,252) | [4] | 46,995 | [5] | 53,331 | 1,170 | 321 | ||||||||
Shareholders' Equity [Roll Forward] | |||||||||||||||||
Net income | 1,587 | 1,598 | 1,598 | (11) | |||||||||||||
Other comprehensive Income (loss) | (93) | (93) | (93) | ||||||||||||||
Stock option activity, stock awards and other (in shares) | 1 | ||||||||||||||||
Stock option activity, stock awards and other | 138 | 138 | 138 | [5] | |||||||||||||
ESPP issuances, net of purchase of treasury shares (in shares) | [4] | 2 | |||||||||||||||
ESPP issuances, net of purchase of treasury shares | 86 | 86 | $ 86 | [4] | |||||||||||||
Common stock dividends | (665) | (665) | (665) | ||||||||||||||
Shares outstanding, balance at end of period (in shares) at Sep. 30, 2021 | 1,743 | (422) | [4] | ||||||||||||||
Balance at end of period at Sep. 30, 2021 | $ 74,618 | $ 74,308 | $ (28,166) | [4] | $ 47,133 | [5] | $ 54,264 | $ 1,077 | $ 310 | ||||||||
[1] | Treasury shares include 1 million shares held in trust and treasury stock includes $29 million related to shares held in trust as of September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019. | ||||||||||||||||
[2] | Reflects the adoption of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326), which resulted in a decrease to retained earnings of $3 million during the three months ended March 31, 2020. | ||||||||||||||||
[3] | Common stock and capital surplus includes the par value of common stock of $17 million as of September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019. | ||||||||||||||||
[4] | Treasury shares include 1 million shares held in trust and treasury stock includes $29 million related to shares held in trust as of September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020. | ||||||||||||||||
[5] | Common stock and capital surplus includes the par value of common stock of $17 million as of September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Shareholders' Equity (Parentheticals) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2019 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | |
Accounting Standards Update [Extensible List] | Accounting Standards Update 2016-13 | |||||||
Treasury shares held in trust (in shares) | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 |
Treasury share held in trust | $ 29 | $ 29 | $ 29 | $ 29 | $ 29 | $ 29 | $ 29 | $ 29 |
Common stock | 17 | 17 | $ 17 | $ 17 | 17 | $ 17 | $ 17 | $ 17 |
Decrease in retained earnings | $ (54,264) | $ (49,640) | ||||||
Accounting Standards Update 2016-13 | ||||||||
Decrease in retained earnings | $ (3) |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Description of Business CVS Health Corporation (“CVS Health”), together with its subsidiaries (collectively, the “Company”), has more than 9,900 retail locations, nearly 1,200 walk-in medical clinics, a leading pharmacy benefits manager with approximately 110 million plan members, a dedicated senior pharmacy care business serving more than one million patients per year and expanding specialty pharmacy services. The Company also serves an estimated 35 million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan (“PDP”). The Company believes its innovative health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs. The coronavirus disease 2019 (“COVID-19”) continues to impact the economies of the U.S. and other countries around the world. The impact of COVID-19 on the Company’s businesses, operating results, cash flows and financial condition, as well as information regarding certain expected impacts of COVID-19 on the Company, is discussed throughout this Quarterly Report on Form 10-Q. The Company has four reportable segments: Health Care Benefits, Pharmacy Services, Retail/LTC and Corporate/Other, which are described below. Health Care Benefits Segment The Health Care Benefits segment is one of the nation’s leading diversified health care benefits providers. The Health Care Benefits segment has the information and resources to help members, in consultation with their health care professionals, make more informed decisions about their health care. The Health Care Benefits segment offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare Supplement plans, PDPs, Medicaid health care management services and health information technology products and services. The Health Care Benefits segment also provided workers’ compensation administrative services through its Coventry Health Care Workers’ Compensation business (“Workers’ Compensation business”) prior to the sale of this business on July 31, 2020. The Health Care Benefits segment’s customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers (“providers”), governmental units, government-sponsored plans, labor groups and expatriates. The Company refers to insurance products (where it assumes all or a majority of the risk for medical and dental care costs) as “Insured” and administrative services contract products (where the plan sponsor assumes all or a majority of the risk for medical and dental care costs) as “ASC.” In addition, the Company has submitted regulatory filings for a January 2022 entrance into the individual public health insurance exchanges (“Public Exchanges”) in eight states. Pharmacy Services Segment The Pharmacy Services segment provides a full range of pharmacy benefit management (“PBM”) solutions, including plan design offerings and administration, formulary management, retail pharmacy network management services, mail order pharmacy, specialty pharmacy and infusion services, clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Pharmacy Services segment’s clients are primarily employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, plans offered on Public Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities. The Pharmacy Services segment operates retail specialty pharmacy stores, specialty mail order pharmacies, mail order dispensing pharmacies, compounding pharmacies and branches for infusion and enteral nutrition services. Retail/LTC Segment The Retail/LTC segment sells prescription drugs and a wide assortment of health and wellness products and general merchandise, provides health care services through its MinuteClinic ® walk-in medical clinics, provides medical diagnostic testing, administers vaccinations for illnesses such as influenza, COVID-19 and shingles and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings. As of September 30, 2021, the Retail/LTC segment operated more than 9,900 retail locations, nearly 1,200 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies. Corporate/Other Segment The Company presents the remainder of its financial results in the Corporate/Other segment, which primarily consists of: • Management and administrative expenses to support the Company’s overall operations, which include certain aspects of executive management and the corporate relations, legal, compliance, human resources, information technology and finance departments, expenses associated with the Company’s investments in its transformation and enterprise modernization programs and acquisition-related integration costs; and • Products for which the Company no longer solicits or accepts new customers such as its large case pensions and long-term care insurance products. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of CVS Health and its subsidiaries have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In accordance with such rules and regulations, certain information and accompanying note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted, although the Company believes the disclosures included herein are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. Because of the influence of various factors on the Company’s operations, including business combinations, certain holidays and other seasonal influences, net income for any interim period may not be comparable to the same interim period in previous years or necessarily indicative of income for the full year. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All material intercompany balances and transactions have been eliminated. The Company continually evaluates its investments to determine if they represent variable interests in a VIE. If the Company determines that it has a variable interest in a VIE, the Company then evaluates if it is the primary beneficiary of the VIE. The evaluation is a qualitative assessment as to whether the Company has the ability to direct the activities of a VIE that most significantly impact the entity’s economic performance. The Company consolidates a VIE if it is considered to be the primary beneficiary. Assets and liabilities of VIEs for which the Company is the primary beneficiary were not significant to the Company’s unaudited condensed consolidated financial statements. VIE creditors do not have recourse against the general credit of the Company. Restricted Cash Restricted cash included in other assets on the unaudited condensed consolidated balance sheets represents amounts held in a trust in one of the Company’s captive insurance companies to satisfy collateral requirements associated with the assignment of certain insurance policies. All restricted cash is invested in time deposits, money market funds or commercial paper. The following is a reconciliation of cash and cash equivalents on the unaudited condensed consolidated balance sheets to total cash, cash equivalents and restricted cash on the unaudited condensed consolidated statements of cash flows: In millions September 30, December 31, Cash and cash equivalents $ 9,826 $ 7,854 Restricted cash (included in other assets) 218 276 Total cash, cash equivalents and restricted cash in the statements of cash flows $ 10,044 $ 8,130 Accounts Receivable Accounts receivable are stated net of allowances for credit losses, customer credit allowances, contractual allowances and estimated terminations. Accounts receivable, net is composed of the following: In millions September 30, December 31, Trade receivables $ 8,398 $ 7,101 Vendor and manufacturer receivables 11,727 9,815 Premium receivables 2,391 2,628 Other receivables 2,767 2,198 Total accounts receivable, net $ 25,283 $ 21,742 The Company’s allowance for credit losses was $364 million and $358 million as of September 30, 2021 and December 31, Revenue Recognition Disaggregation of Revenue The following tables disaggregate the Company’s revenue by major source in each segment for the three and nine months ended September 30, 2021 and 2020: In millions Health Care Pharmacy Retail/ Corporate/ Intersegment Consolidated Three Months Ended September 30, 2021 Major goods/services lines: Pharmacy $ — $ 38,867 $ 19,023 $ — $ (10,857) $ 47,033 Front Store — — 5,359 — — 5,359 Premiums 18,959 — — 25 — 18,984 Net investment income (loss) 147 — (33) 132 — 246 Other 1,373 179 643 14 (37) 2,172 Total $ 20,479 $ 39,046 $ 24,992 $ 171 $ (10,894) $ 73,794 Pharmacy Services distribution channel: Pharmacy network (1) $ 23,665 Mail choice (2) 15,202 Other 179 Total $ 39,046 Three Months Ended September 30, 2020 Major goods/services lines: Pharmacy $ — $ 35,505 $ 17,608 $ — $ (10,051) $ 43,062 Front Store — — 4,740 — — 4,740 Premiums 17,165 — — 17 — 17,182 Net investment income 121 — — 83 — 204 Other 1,412 206 377 16 (143) 1,868 Total $ 18,698 $ 35,711 $ 22,725 $ 116 $ (10,194) $ 67,056 Pharmacy Services distribution channel: Pharmacy network (1) $ 21,473 Mail choice (2) 14,032 Other 206 Total $ 35,711 In millions Health Care Pharmacy Retail/ Corporate/ Intersegment Consolidated Nine Months Ended September 30, 2021 Major goods/services lines: Pharmacy $ — $ 113,161 $ 55,781 $ — $ (33,025) $ 135,917 Front Store — — 15,255 — — 15,255 Premiums 56,869 — — 58 — 56,927 Net investment income 432 — 13 387 — 832 Other 4,186 520 1,945 43 (118) 6,576 Total $ 61,487 $ 113,681 $ 72,994 $ 488 $ (33,143) $ 215,507 Pharmacy Services distribution channel: Pharmacy network (1) $ 68,476 Mail choice (2) 44,685 Other 520 Total $ 113,681 Nine Months Ended September 30, 2020 Major goods/services lines: Pharmacy $ — $ 104,924 $ 51,833 $ — $ (30,032) $ 126,725 Front Store — — 14,601 — — 14,601 Premiums 51,699 — — 50 — 51,749 Net investment income 341 — — 209 — 550 Other 4,324 659 702 33 (191) 5,527 Total $ 56,364 $ 105,583 $ 67,136 $ 292 $ (30,223) $ 199,152 Pharmacy Services distribution channel: Pharmacy network (1) $ 63,109 Mail choice (2) 41,815 Other 659 Total $ 105,583 _____________________________________________ (1) Pharmacy Services pharmacy network is defined as claims filled at retail and specialty retail pharmacies, including the Company’s retail pharmacies and LTC pharmacies, but excluding Maintenance Choice ® activity, which is included within the mail choice category. Maintenance Choice permits eligible client plan members to fill their maintenance prescriptions through mail order delivery or at a CVS Pharmacy retail store for the same price as mail order. (2) Pharmacy Services mail choice is defined as claims filled at a Pharmacy Services mail order facility, which includes specialty mail claims inclusive of Specialty Connect ® claims picked up at a retail pharmacy, as well as prescriptions filled at the Company’s retail pharmacies under the Maintenance Choice program. Contract Balances Contract liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration, and include ExtraBucks ® Rewards and unredeemed Company gift cards. The consideration received remains a contract liability until goods or services have been provided to the customer. In addition, the Company recognizes breakage on Company gift cards based on historical redemption patterns. The following table provides information about receivables and contract liabilities from contracts with customers: In millions September 30, December 31, Trade receivables (included in accounts receivable, net) $ 8,398 $ 7,101 Contract liabilities (included in accrued expenses) 78 71 During the nine months ended September 30, 2021 and 2020, the contract liabilities balance includes increases related to customers’ earnings in ExtraBucks Rewards or issuances of Company gift cards and decreases for revenues recognized during the period as a result of the redemption of ExtraBucks Rewards or Company gift cards and breakage of Company gift cards. Below is a summary of such changes: Nine Months Ended In millions 2021 2020 Contract liabilities, beginning of the period $ 71 $ 73 Rewards earnings and gift card issuances 286 266 Redemption and breakage (279) (264) Contract liabilities, end of the period $ 78 $ 75 Health Insurer Fee Since January 1, 2014, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”) has imposed an annual premium-based health insurer fee (the “HIF”). The HIF, which is payable each September, is not deductible for federal income tax purposes. In December 2019, the HIF was repealed for calendar years after 2020, therefore there was no expense related to the HIF in the three and nine months ended September 30, 2021. In the three and nine months ended September 30, 2020, operating expenses included $255 million and $774 million, respectively, related to the Company’s estimated share of the 2020 HIF. The Company paid approximately $1.0 billion, representing the Company’s portion of the non tax-deductible HIF in 2020. Related Party Transactions The Company has an equity method investment in SureScripts, LLC (“SureScripts”), which operates a clinical health information network. The Company utilizes this clinical health information network in providing services to its client plan members and retail customers. The Company expensed fees for the use of this network of $16 million and $5 million in the three months ended September 30, 2021 and 2020, respectively, and expensed fees for the use of this network of approximately $35 million and $28 million in the nine months ended September 30, 2021 and 2020, respectively. The Company’s investment in and equity in the earnings of SureScripts for all periods presented is immaterial. The Company has an equity method investment in Heartland Healthcare Services, LLC (“Heartland”). Heartland operates several LTC pharmacies in four states. Heartland paid the Company $20 million and $15 million for pharmaceutical inventory purchases during the three months ended September 30, 2021 and 2020, respectively, and $57 million and $58 million for pharmaceutical inventory purchases during the nine months ended September 30, 2021 and 2020, respectively. Additionally, the Company performs certain collection functions for Heartland and then transfers those customer cash collections to Heartland. The Company’s investment in and equity in the earnings of Heartland for all periods presented is immaterial. New Accounting Pronouncements Recently Adopted Simplifying the Accounting for Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The Company adopted this new accounting standard on January 1, 2021. The adoption of this standard did not have a material impact on the Company’s consolidated operating results, cash flows, financial condition or related disclosures. New Accounting Pronouncements Not Yet Adopted Targeted Improvements to the Accounting for Long-Duration Insurance Contracts In August 2018, the FASB issued ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944). This standard requires the Company to review cash flow assumptions for its long-duration insurance contracts at least annually and recognize the effect of changes in future cash flow assumptions in net income. This standard also requires the Company to update discount rate assumptions quarterly and recognize the effect of changes in these assumptions in other |
Investments
Investments | 9 Months Ended |
Sep. 30, 2021 | |
Investments [Abstract] | |
Investments | Investments Total investments at September 30, 2021 and December 31, 2020 were as follows: September 30, 2021 December 31, 2020 In millions Current Long-term Total Current Long-term Total Debt securities available for sale $ 2,859 $ 19,715 $ 22,574 $ 2,774 $ 18,414 $ 21,188 Mortgage loans 110 824 934 226 821 1,047 Other investments 46 1,831 1,877 — 1,577 1,577 Total investments $ 3,015 $ 22,370 $ 25,385 $ 3,000 $ 20,812 $ 23,812 Debt Securities Debt securities available for sale at September 30, 2021 and December 31, 2020 were as follows: In millions Amortized Cost (1) Gross Gross Fair September 30, 2021 Debt securities: U.S. government securities $ 2,260 $ 81 $ (1) $ 2,340 States, municipalities and political subdivisions 2,939 151 (5) 3,085 U.S. corporate securities 8,898 757 (22) 9,633 Foreign securities 2,736 221 (12) 2,945 Residential mortgage-backed securities 849 19 (5) 863 Commercial mortgage-backed securities 1,160 57 (8) 1,209 Other asset-backed securities 2,447 23 (2) 2,468 Redeemable preferred securities 28 3 — 31 Total debt securities (2) $ 21,317 $ 1,312 $ (55) $ 22,574 December 31, 2020 Debt securities: U.S. government securities $ 2,341 $ 128 $ — $ 2,469 States, municipalities and political subdivisions 2,556 172 — 2,728 U.S. corporate securities 7,879 1,023 (8) 8,894 Foreign securities 2,595 324 (1) 2,918 Residential mortgage-backed securities 673 32 — 705 Commercial mortgage-backed securities 962 84 — 1,046 Other asset-backed securities 2,369 36 (2) 2,403 Redeemable preferred securities 21 4 — 25 Total debt securities (2) $ 19,396 $ 1,803 $ (11) $ 21,188 _____________________________________________ (1) There was no allowance for expected credit losses recorded on available-for-sale debt securities at September 30, 2021 or December 31, 2020. (2) Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At September 30, 2021, debt securities with a fair value of $882 million, gross unrealized capital gains of $101 million and gross unrealized capital losses of $1 million and at December 31, 2020, debt securities with a fair value of $919 million, gross unrealized capital gains of $135 million and no gross unrealized capital losses were included in total debt securities, but support experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive income. The amortized cost and fair value of debt securities at September 30, 2021 are shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity. In millions Amortized Fair Due to mature: Less than one year $ 1,056 $ 1,071 One year through five years 7,123 7,390 After five years through ten years 4,492 4,718 Greater than ten years 4,190 4,855 Residential mortgage-backed securities 849 863 Commercial mortgage-backed securities 1,160 1,209 Other asset-backed securities 2,447 2,468 Total $ 21,317 $ 22,574 Summarized below are the debt securities the Company held at September 30, 2021 and December 31, 2020 that were in an unrealized capital loss position, aggregated by the length of time the investments have been in that position: Less than 12 months Greater than 12 months Total In millions, except number of securities Number Fair Unrealized Number Fair Unrealized Number Fair Unrealized September 30, 2021 Debt securities: U.S. government securities 45 $ 204 $ 1 2 $ 1 $ — 47 $ 205 $ 1 States, municipalities and political subdivisions 234 464 5 1 4 — 235 468 5 U.S. corporate securities 1,081 1,528 19 43 51 3 1,124 1,579 22 Foreign securities 320 568 11 12 21 1 332 589 12 Residential mortgage-backed securities 122 476 5 9 10 — 131 486 5 Commercial mortgage-backed securities 127 342 6 15 47 2 142 389 8 Other asset-backed securities 312 652 2 18 17 — 330 669 2 Redeemable preferred securities 2 5 — — — — 2 5 — Total debt securities 2,243 $ 4,239 $ 49 100 $ 151 $ 6 2,343 $ 4,390 $ 55 December 31, 2020 Debt securities: U.S. government securities 32 $ 205 $ — — $ — $ — 32 $ 205 $ — States, municipalities and political subdivisions 49 83 — — — — 49 83 — U.S. corporate securities 145 155 8 2 — — 147 155 8 Foreign securities 41 69 1 5 5 — 46 74 1 Residential mortgage-backed securities 23 26 — 3 — — 26 26 — Commercial mortgage-backed securities 22 75 — — — — 22 75 — Other asset-backed securities 156 256 1 49 41 1 205 297 2 Total debt securities 468 $ 869 $ 10 59 $ 46 $ 1 527 $ 915 $ 11 The Company reviewed the securities in the table above and concluded that they are performing assets generating investment income to support the needs of the Company’s business. In performing this review, the Company considered factors such as the quality of the investment security based on research performed by the Company’s internal credit analysts and external rating agencies and the prospects of realizing the carrying value of the security based on the investment’s current prospects for recovery. Unrealized capital losses at September 30, 2021 were generally caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. As of September 30, 2021, the Company did not intend to sell these securities, and did not believe it was more likely than not that it would be required to sell these securities prior to the anticipated recovery of their amortized cost basis. The maturity dates for debt securities in an unrealized capital loss position at September 30, 2021 were as follows: Supporting Supporting Total In millions Fair Unrealized Fair Unrealized Fair Unrealized Due to mature: Less than one year $ — $ — $ 22 $ — $ 22 $ — One year through five years 6 — 1,264 11 1,270 11 After five years through ten years 29 1 920 16 949 17 Greater than ten years 19 — 586 12 605 12 Residential mortgage-backed securities — — 486 5 486 5 Commercial mortgage-backed securities 6 — 383 8 389 8 Other asset-backed securities — — 669 2 669 2 Total $ 60 $ 1 $ 4,330 $ 54 $ 4,390 $ 55 Mortgage Loans The Company’s mortgage loans are collateralized by commercial real estate. During the three and nine months ended September 30, 2021 and 2020, the Company had the following activity in its mortgage loan portfolio: Three Months Ended Nine Months Ended In millions 2021 2020 2021 2020 New mortgage loans $ 53 $ 31 $ 173 $ 55 Mortgage loans fully repaid 88 37 260 114 Mortgage loans foreclosed — — — — The Company assesses mortgage loans on a regular basis for credit impairments, and assigns a credit quality indicator to each loan. The Company’s credit quality indicator is internally developed and categorizes each loan in its portfolio on a scale from 1 to 7. These indicators are based upon several factors, including current loan-to-value ratios, current and future property cash flow, property condition, market trends, creditworthiness of the borrower and deal structure. • Category 1 - Represents loans of superior quality. • Categories 2 to 4 - Represent loans where credit risk is minimal to acceptable; however, these loans may display some susceptibility to economic changes. • Categories 5 and 6 - Represent loans where credit risk is not substantial, but these loans warrant management’s close attention. • Category 7 - Represents loans where collections are potentially at risk; if necessary, an impairment is recorded. Based on the Company’s assessments at September 30, 2021 and December 31, 2020, the amortized cost basis of the Company's mortgage loans within each credit quality indicator by year of origination was as follows: Amortized Cost Basis by Year of Origination In millions, except credit quality indicator 2021 2020 2019 2018 2017 Prior Total September 30, 2021 1 $ — $ — $ — $ — $ 22 $ 29 $ 51 2 to 4 171 44 64 73 75 443 870 5 and 6 — — — 3 4 6 13 7 — — — — — — — Total $ 171 $ 44 $ 64 $ 76 $ 101 $ 478 $ 934 December 31, 2020 1 $ — $ — $ — $ 22 $ 37 $ 59 2 to 4 46 96 91 124 595 952 5 and 6 — — 3 4 29 36 7 — — — — — — Total $ 46 $ 96 $ 94 $ 150 $ 661 $ 1,047 Net Investment Income Sources of net investment income for the three and nine months ended September 30, 2021 and 2020 were as follows: Three Months Ended Nine Months Ended In millions 2021 2020 2021 2020 Debt securities $ 157 $ 151 $ 474 $ 441 Mortgage loans 13 15 41 45 Other investments 109 37 307 64 Gross investment income 279 203 822 550 Investment expenses (11) (8) (28) (25) Net investment income (excluding net realized capital gains or losses) 268 195 794 525 Net realized capital gains (losses) (1) (22) 9 38 25 Net investment income (2) $ 246 $ 204 $ 832 $ 550 _____________________________________________ (1) Net realized capital losses include yield-related impairment losses on debt securities of $3 million in the three months ended September 30, 2021. Net realized capital gains are net of yield-related impairment losses on debt securities of $35 million in the nine months ended September 30, 2021. There were no credit-related losses on debt securities in the three and nine months ended September 30, 2021. Net realized capital gains are net of credit-related and yield-related impairment losses on debt securities of $1 million and $2 million, respectively, in the three months ended September 30, 2020. Net realized capital gains are net of credit-related and yield-related impairment losses on debt securities of $4 million and $44 million, respectively, in the nine months ended September 30, 2020. (2) Net investment income includes $9 million and $28 million for the three and nine months ended September 30, 2021, respectively, and $10 million and $31 million for the three and nine months ended September 30, 2020, respectively, related to investments supporting experience-rated products. Excluding amounts related to experience-rated products, proceeds from the sale of available-for-sale debt securities and the related gross realized capital gains and losses for the three and nine months ended September 30, 2021 and 2020 were as follows: Three Months Ended Nine Months Ended In millions 2021 2020 2021 2020 Proceeds from sales $ 668 $ 905 $ 2,935 $ 2,324 Gross realized capital gains 19 17 61 60 Gross realized capital losses 2 3 12 59 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value The preparation of the Company’s unaudited condensed consolidated financial statements in accordance with GAAP requires certain assets and liabilities to be reflected at their fair value and others to be reflected on another basis, such as an adjusted historical cost basis. The Company’s assets and liabilities carried at fair value have been classified within one of three levels of a hierarchy established by GAAP. The following are the levels of the hierarchy and a brief description of the type of valuation information (“valuation inputs”) that qualifies a financial asset or liability for each level: • Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets. • Level 2 – Valuation inputs other than Level 1 that are based on observable market data. These include: quoted prices for similar assets in active markets, quoted prices for identical assets in inactive markets, valuation inputs that are observable that are not prices (such as interest rates and credit risks) and valuation inputs that are derived from or corroborated by observable markets. • Level 3 – Developed from unobservable data, reflecting the Company’s assumptions. For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see Note 4 “Fair Value” in the 2020 Form 10-K. There were no financial liabilities measured at fair value on a recurring basis on the condensed consolidated balance sheets at September 30, 2021 or December 31, 2020. Financial assets measured at fair value on a recurring basis on the condensed consolidated balance sheets at September 30, 2021 and December 31, 2020 were as follows: In millions Level 1 Level 2 Level 3 Total September 30, 2021 Cash and cash equivalents $ 4,953 $ 4,873 $ — $ 9,826 Debt securities: U.S. government securities 2,295 45 — 2,340 States, municipalities and political subdivisions — 3,085 — 3,085 U.S. corporate securities — 9,594 39 9,633 Foreign securities — 2,945 — 2,945 Residential mortgage-backed securities — 863 — 863 Commercial mortgage-backed securities — 1,209 — 1,209 Other asset-backed securities — 2,468 — 2,468 Redeemable preferred securities — 31 — 31 Total debt securities 2,295 20,240 39 22,574 Equity securities 107 — 42 149 Total $ 7,355 $ 25,113 $ 81 $ 32,549 December 31, 2020 Cash and cash equivalents $ 3,985 $ 3,869 $ — $ 7,854 Debt securities: U.S. government securities 2,370 99 — 2,469 States, municipalities and political subdivisions — 2,727 1 2,728 U.S. corporate securities — 8,842 52 8,894 Foreign securities — 2,918 — 2,918 Residential mortgage-backed securities — 705 — 705 Commercial mortgage-backed securities — 1,046 — 1,046 Other asset-backed securities — 2,403 — 2,403 Redeemable preferred securities — 24 1 25 Total debt securities 2,370 18,764 54 21,188 Equity securities 17 — 30 47 Total $ 6,372 $ 22,633 $ 84 $ 29,089 During the three and nine months ended September 30, 2021 and 2020, there were no transfers into or out of Level 3. The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the condensed consolidated balance sheets at adjusted cost or contract value at September 30, 2021 and December 31, 2020 were as follows: Carrying Estimated Fair Value In millions Level 1 Level 2 Level 3 Total September 30, 2021 Assets: Mortgage loans $ 934 $ — $ — $ 945 $ 945 Equity securities (1) 50 N/A N/A N/A N/A Liabilities: Investment contract liabilities: With a fixed maturity 5 — — 5 5 Without a fixed maturity 334 — — 378 378 Long-term debt 58,393 66,960 — — 66,960 December 31, 2020 Assets: Mortgage loans $ 1,047 $ — $ — $ 1,070 $ 1,070 Equity securities (1) 145 N/A N/A N/A N/A Liabilities: Investment contract liabilities: With a fixed maturity 5 — — 5 5 Without a fixed maturity 322 — — 371 371 Long-term debt 64,647 75,940 — — 75,940 _____________________________________________ (1) It was not practical to estimate the fair value of these cost-method investments as it represents shares of unlisted companies. Separate Accounts assets relate to the Company’s large case pensions products which represent funds maintained to meet specific objectives of contract holders. Since contract holders bear the investment risk of these assets, a corresponding Separate Accounts liability has been established equal to the assets. These assets and liabilities are carried at fair value. Separate Accounts financial assets as of September 30, 2021 and December 31, 2020 were as follows: September 30, 2021 December 31, 2020 In millions Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3 $ 216 $ — $ 219 $ 2 $ 186 $ — $ 188 Debt securities 1,214 3,083 — 4,297 1,465 2,634 — 4,099 Equity securities — 2 — 2 — 2 — 2 Common/collective trusts — 577 — 577 — 563 — 563 Total (1) $ 1,217 $ 3,878 $ — $ 5,095 $ 1,467 $ 3,385 $ — $ 4,852 _____________________________________________ (1) Excludes $9 million of other payables at September 30, 2021 and $29 million of other receivables at December 31, 2020. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill is not amortized, but is subject to annual impairment reviews, or more frequent reviews if events or circumstances indicate there may be impairment. Goodwill is evaluated for possible impairment by comparing the fair value of a reporting unit to its carrying value, including the goodwill assigned to that reporting unit. During the third quarter of 2021, the Company performed its required annual impairment tests of goodwill. The results of the impairment tests indicated an impairment of the goodwill associated with the LTC reporting unit, as the reporting unit’s carrying value exceeded its fair value as of the testing date. The results of the impairment tests of the remaining reporting units indicated that there was no impairment of goodwill as of the testing date. During 2021, the LTC reporting unit has continued to face challenges that have impacted the Company’s ability to grow the LTC reporting unit’s business at the rate estimated when its 2020 goodwill impairment test was performed. These challenges include lower net facility admissions, net long-term care facility customer losses and the prolonged adverse impact of the COVID-19 pandemic and the emerging new variants, which resulted in more significant declines in occupancy rates experienced by the Company’s long-term care facility customers than previously anticipated. During the third quarter of 2021, LTC management updated their 2021 annual forecast and submitted their long-term plan which showed deterioration in the financial results for the remainder of 2021 and beyond. The Company utilized these updated projections in performing its annual impairment test, which indicated that the fair value of the LTC reporting unit was lower than its carrying value, resulting in a $431 million goodwill impairment charge in the third quarter of 2021. The fair value of the LTC reporting unit was determined using a combination of a discounted cash flow method and a market multiple method. As of September 30, 2021, there was no remaining goodwill balance in the LTC reporting unit. The Company also performed an impairment test of the intangible assets of the LTC reporting unit and concluded these assets were not impaired as of September 30, 2021. Cumulative goodwill impairments were $6.6 billion and $6.1 billion at September 30, 2021 and December 31, 2020, respectively. Below is a summary of the changes in the carrying value of goodwill by segment for the nine months ended September 30, 2021: In millions Health Care Pharmacy Retail/ Total Balance at December 31, 2020 $ 45,130 $ 23,615 $ 10,807 $ 79,552 Impairment — — (431) (431) Balance at September 30, 2021 $ 45,130 $ 23,615 $ 10,376 $ 79,121 |
Health Care Costs Payable
Health Care Costs Payable | 9 Months Ended |
Sep. 30, 2021 | |
Health Care and Other Insurance Liabilities [Abstract] | |
Health Care Costs Payable | Health Care Costs Payable The following table shows the components of the change in health care costs payable during the nine months ended September 30, 2021 and 2020: Nine Months Ended In millions 2021 2020 Health care costs payable, beginning of the period $ 7,936 $ 6,879 Less: Reinsurance recoverables 10 5 Health care costs payable, beginning of the period, net 7,926 6,874 Acquisition — 444 Add: Components of incurred health care costs Current year 48,243 40,777 Prior years (771) (448) Total incurred health care costs (1) 47,472 40,329 Less: Claims paid Current year 39,887 34,198 Prior years 6,639 5,865 Total claims paid 46,526 40,063 Add: Premium deficiency reserve 1 1 Health care costs payable, end of the period, net 8,873 7,585 Add: Reinsurance recoverables 4 8 Health care costs payable, end of the period $ 8,877 $ 7,593 _____________________________________________ (1) Total incurred health care costs for the nine months ended September 30, 2021 and 2020 in the table above exclude (i) $1 million and $1 million, respectively, for a premium deficiency reserve related to the Company’s Medicaid products, (ii) $45 million and $31 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the Company’s unaudited condensed consolidated balance sheets and (iii) $168 million and $173 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the Company’s unaudited condensed consolidated balance sheets. The Company’s estimates of prior years’ health care costs payable decreased by $771 million and $448 million, respectively, in the nine months ended September 30, 2021 and 2020, because claims were settled for amounts less than originally estimated (i.e., the amount of claims incurred was lower than originally estimated), primarily due to lower health care cost trends as well as the actual claim submission time being faster than originally assumed (i.e., the Company’s completion factors were higher than originally assumed) in estimating health care costs payable at the end of the prior year. At September 30, 2021, the Company’s liabilities for the ultimate cost of (i) services rendered to the Company’s Insured members but not yet reported to the Company and (ii) claims which have been reported to the Company but not yet paid (collectively, “IBNR”) plus expected development on reported claims totaled approximately $6.8 billion. Substantially all of the Company’s liabilities for IBNR plus expected development on reported claims at September 30, 2021 related to the current year. |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings The following table is a summary of the Company’s borrowings at September 30, 2021 and December 31, 2020: In millions September 30, December 31, Long-term debt 3.35% senior notes due March 2021 $ — $ 2,038 Floating rate notes due March 2021 (0.950% at December 31, 2020) — 1,000 4.125% senior notes due May 2021 — 222 2.125% senior notes due June 2021 — 1,750 4.125% senior notes due June 2021 — 203 5.45% senior notes due June 2021 — 187 3.5% senior notes due July 2022 1,500 1,500 2.75% senior notes due November 2022 1,000 1,000 2.75% senior notes due December 2022 1,250 1,250 4.75% senior notes due December 2022 399 399 3.7% senior notes due March 2023 2,336 2,336 2.8% senior notes due June 2023 1,300 1,300 4% senior notes due December 2023 414 414 3.375% senior notes due August 2024 650 650 2.625% senior notes due August 2024 1,000 1,000 3.5% senior notes due November 2024 750 750 5% senior notes due December 2024 299 299 4.1% senior notes due March 2025 950 950 3.875% senior notes due July 2025 2,828 2,828 2.875% senior notes due June 2026 1,750 1,750 3% senior notes due August 2026 750 750 3.625% senior notes due April 2027 750 750 6.25% senior notes due June 2027 372 372 1.3% senior notes due August 2027 2,250 2,250 4.3% senior notes due March 2028 5,000 7,050 3.25% senior notes due August 2029 1,750 1,750 3.75% senior notes due April 2030 1,500 1,500 1.75% senior notes due August 2030 1,250 1,250 1.875% senior notes due February 2031 1,250 1,250 2.125% senior notes due September 2031 1,000 — 4.875% senior notes due July 2035 652 652 6.625% senior notes due June 2036 771 771 6.75% senior notes due December 2037 533 533 4.78% senior notes due March 2038 5,000 5,000 6.125% senior notes due September 2039 447 447 4.125% senior notes due April 2040 1,000 1,000 2.7% senior notes due August 2040 1,250 1,250 5.75% senior notes due May 2041 133 133 4.5% senior notes due May 2042 500 500 4.125% senior notes due November 2042 500 500 5.3% senior notes due December 2043 750 750 4.75% senior notes due March 2044 375 375 5.125% senior notes due July 2045 3,500 3,500 3.875% senior notes due August 2047 1,000 1,000 5.05% senior notes due March 2048 8,000 8,000 4.25% senior notes due April 2050 750 750 Finance lease liabilities 1,207 1,083 Other 321 326 Total debt principal 58,987 65,318 Debt premiums 224 238 Debt discounts and deferred financing costs (818) (909) 58,393 64,647 Less: Current portion of long-term debt (1,561) (5,440) Long-term debt $ 56,832 $ 59,207 Long-term Borrowings 2021 Notes On August 18, 2021, the Company issued $1.0 billion aggregate principal amount of 2.125% unsecured senior notes due September 15, 2031 for total proceeds of $987 million, net of discounts, underwriting fees and offering expenses. The net proceeds of this offering were used for the purchase of senior notes in connection with the Company’s cash tender offer in August 2021 as described below. Early Extinguishments of Debt In August 2021, the Company purchased approximately $2.0 billion of its outstanding 4.3% senior notes due 2028 through a cash tender offer. In connection with the purchase of such senior notes, the Company paid a premium of $332 million in excess of the aggregate principal amount of the senior notes that were purchased, wrote-off $26 million of unamortized deferred financing costs and incurred $5 million in fees, for a total loss on early extinguishment of debt of $363 million. In August 2020, the Company purchased $6.0 billion of its outstanding senior notes through cash tender offers. The senior notes purchased included the following: $723 million of its 4.0% senior notes due 2023, $2.3 billion of its 3.7% senior notes due 2023 and $3.0 billion of its 4.1% senior notes due 2025. In connection with the purchase of such senior notes, the Company paid a premium of $706 million in excess of the aggregate principal amount of the senior notes that were purchased, wrote-off $47 million of unamortized deferred financing costs and incurred $13 million in fees, for a total loss on early extinguishment of debt of $766 million. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Share Repurchases On November 2, 2016, CVS Health’s Board of Directors (the “Board”) authorized the 2016 share repurchase program (“2016 Repurchase Program”) for up to $15.0 billion of the Company’s common shares. The 2016 Repurchase Program permits the Company to effect repurchases from time to time through a combination of open market repurchases, privately negotiated transactions, accelerated share repurchase transactions, and/or other derivative transactions. The 2016 Repurchase Program can be modified or terminated by the Board at any time. During the nine months ended September 30, 2021 and 2020, the Company did not repurchase any shares of its common stock. At September 30, 2021, the Company had remaining authorization to repurchase an aggregate of up to approximately $13.9 billion of its common shares under the 2016 Repurchase Program. Dividends |
Other Comprehensive Income
Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2021 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Other Comprehensive Income | Other Comprehensive Income Shareholders’ equity included the following activity in accumulated other comprehensive income for the three and nine months ended September 30, 2021 and 2020: Three Months Ended Nine Months Ended In millions 2021 2020 2021 2020 Net unrealized investment gains (losses): Beginning of period balance $ 977 $ 987 $ 1,214 $ 774 Other comprehensive income (loss) before reclassifications ( $(73), $83, $(346), $278 pretax) (61) 52 (297) 218 Amounts reclassified from accumulated other comprehensive income ($(14), $(10), $(15), $47 pretax) (1) (12) (8) (13) 39 Other comprehensive income (loss) (73) 44 (310) 257 End of period balance 904 1,031 904 1,031 Foreign currency translation adjustments: Beginning of period balance 6 (2) 7 4 Other comprehensive income (loss) before reclassifications (5) 1 (6) (5) Other comprehensive income (loss) (5) 1 (6) (5) End of period balance 1 (1) 1 (1) Net cash flow hedges: Beginning of period balance 241 267 248 279 Other comprehensive loss before reclassifications ($0, $0, $0, $(7) pretax) — — — (5) Amounts reclassified from accumulated other comprehensive income ($(20), $(4), $(29), $(14) pretax) (2) (15) (3) (22) (10) Other comprehensive loss (15) (3) (22) (15) End of period balance 226 264 226 264 Pension and other postretirement benefits: Beginning of period balance (54) (39) (55) (38) Other comprehensive loss before reclassifications ($0, $0, $0, and $(8) pretax) — — — (6) Amounts reclassified from accumulated other comprehensive loss ($0, $0, $1 and $7 pretax) (3) — — 1 5 Other comprehensive income (loss) — — 1 (1) End of period balance (54) (39) (54) (39) Total beginning of period accumulated other comprehensive income 1,170 1,213 1,414 1,019 Total other comprehensive income (loss) (93) 42 (337) 236 Total end of period accumulated other comprehensive income $ 1,077 $ 1,255 $ 1,077 $ 1,255 _____________________________________________ (1) Amounts reclassified from accumulated other comprehensive income for specifically identified debt securities are included in net investment income in the unaudited condensed consolidated statements of operations. (2) Amounts reclassified from accumulated other comprehensive income for specifically identified cash flow hedges are included in interest expense in the unaudited condensed consolidated statements of operations. The Company expects to reclassify approximately $11 million, net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Earnings per share is computed using the two-class method. Stock appreciation rights and options to purchase 8 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share in each of the three and nine-month periods ended September 30, 2021, because their exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive. For the same reason, stock appreciation rights and options to purchase 17 million and 16 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2020, respectively. The following is a reconciliation of basic and diluted earnings per share for the respective periods: Three Months Ended Nine Months Ended In millions, except per share amounts 2021 2020 2021 2020 Numerator for earnings per share calculation: Net income attributable to CVS Health $ 1,598 $ 1,224 $ 6,604 $ 6,206 Denominator for earnings per share calculation: Weighted average shares, basic 1,321 1,310 1,318 1,308 Effect of dilutive securities 8 5 8 6 Weighted average shares, diluted 1,329 1,315 1,326 1,314 Earnings per share: Basic $ 1.21 $ 0.93 $ 5.01 $ 4.74 Diluted $ 1.20 $ 0.93 $ 4.98 $ 4.72 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies COVID-19 The COVID-19 pandemic continues to evolve. The Company believes COVID-19’s impact on its businesses, operating results, cash flows and/or financial condition primarily will be driven by the geographies impacted and the severity and duration of the pandemic; the pandemic’s impact on the U.S. and global economies and consumer behavior and health care utilization patterns; and the timing, scope and impact of stimulus legislation as well as other federal, state and local governmental responses to the pandemic. Those primary drivers are beyond the Company’s knowledge and control. As a result, the impact COVID-19 will have on the Company’s businesses, operating results, cash flows and/or financial condition is uncertain, but the impact could be adverse and material. COVID-19 also may result in legal and regulatory proceedings, investigations and claims against the Company. Lease Guarantees Between 1995 and 1997, the Company sold or spun off a number of subsidiaries, including Bob’s Stores and Linens ‘n Things, each of which subsequently filed for bankruptcy, and Marshalls. In many cases, when a former subsidiary leased a store, the Company provided a guarantee of the former subsidiary’s lease obligations for the initial lease term and any extension thereof pursuant to a renewal option provided for in the lease prior to the time of the disposition. When the subsidiaries were disposed of and accounted for as discontinued operations, the Company’s guarantees remained in place, although each initial purchaser agreed to indemnify the Company for any lease obligations the Company was required to satisfy. If any of the purchasers or any of the former subsidiaries fail to make the required payments under a store lease, the Company could be required to satisfy those obligations, and any significant adverse impact of COVID-19 on such purchasers and/or former subsidiaries increases the risk that the Company will be required to satisfy those obligations. As of September 30, 2021, the Company guaranteed 72 such store leases (excluding the lease guarantees related to Linens ‘n Things, which have been recorded as a liability on the unaudited condensed consolidated balance sheets), with the maximum remaining lease term extending through 2030. Guaranty Fund Assessments, Market Stabilization and Other Non-Voluntary Risk Sharing Pools Under guaranty fund laws existing in all states, insurers doing business in those states can be assessed (in most states up to prescribed limits) for certain obligations of insolvent insurance companies to policyholders and claimants. The life and health insurance guaranty associations in which the Company participates that operate under these laws respond to insolvencies of long-term care insurers and life insurers as well as health insurers. The Company’s assessments generally are based on a formula relating to the Company’s health care premiums in the state compared to the premiums of other insurers. Certain states allow assessments to be recovered over time as offsets to premium taxes. Some states have similar laws relating to HMOs and/or other payors such as not-for-profit consumer-governed health plans established under the ACA. In 2009, the Pennsylvania Insurance Commissioner placed long-term care insurer Penn Treaty Network America Insurance Company and one of its subsidiaries (collectively, “Penn Treaty”) in rehabilitation, an intermediate action before insolvency, and subsequently petitioned a state court to convert the rehabilitation into a liquidation. Penn Treaty was placed in liquidation in March 2017. The Company has recorded a liability for its estimated share of future assessments by applicable life and health insurance guaranty associations. It is reasonably possible that in the future the Company may record a liability and expense relating to other insolvencies which could have a material adverse effect on the Company’s operating results, financial condition and cash flows, and the risk is heightened by any significant adverse impact of the COVID-19 pandemic on the solvency of other insurers, including long-term care and life insurers. While historically the Company has ultimately recovered more than half of guaranty fund assessments through statutorily permitted premium tax offsets, significant increases in assessments could lead to legislative and/or regulatory actions that limit future offsets. HMOs in certain states in which the Company does business are subject to assessments, including market stabilization and other risk-sharing pools, for which the Company is assessed charges based on incurred claims, demographic membership mix and other factors. The Company establishes liabilities for these assessments based on applicable laws and regulations. In certain states, the ultimate assessments the Company pays are dependent upon the Company’s experience relative to other entities subject to the assessment, and the ultimate liability is not known at the financial statement date. While the ultimate amount of the assessment is dependent upon the experience of all pool participants, the Company believes it has adequate reserves to cover such assessments. Litigation and Regulatory Proceedings The Company has been involved or is currently involved in numerous legal proceedings, including litigation, arbitration, government investigations, audits, reviews and claims. These include routine, regular and special investigations, audits and reviews by the U.S. Centers for Medicare & Medicaid Services (“CMS”), state insurance and health and welfare departments, the U.S. Department of Justice (the “DOJ”), state attorneys general, the U.S. Drug Enforcement Administration (the “DEA”) and other governmental authorities. Legal proceedings, in general, and securities, class action and multi-district litigation, in particular, and governmental special investigations, audits and reviews can be expensive and disruptive. Some of the litigation matters may purport or be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years. The Company also may be named from time to time in qui tam actions initiated by private third parties that could also be separately pursued by a governmental body. The results of legal proceedings, including government investigations, are often uncertain and difficult to predict, and the costs incurred in these matters can be substantial, regardless of the outcome. The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and reasonably estimable, the Company does not establish an accrued liability. None of the Company’s accruals for outstanding legal matters are material individually or in the aggregate to the Company’s financial condition. Except as otherwise noted, the Company cannot predict with certainty the timing or outcome of the legal matters described below, and the Company is unable to reasonably estimate a possible loss or range of possible loss in excess of amounts already accrued for these matters. The Company believes that its defenses and assertions in pending legal proceedings have merit and does not believe that any of these pending matters, after consideration of applicable reserves and rights to indemnification, will have a material adverse effect on the Company’s financial position. Substantial unanticipated verdicts, fines and rulings, however, do sometimes occur, which could result in judgments against the Company, entry into settlements or a revision to its expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on its results of operations. In addition, as a result of governmental investigations or proceedings, the Company may be subject to damages, civil or criminal fines or penalties, or other sanctions including possible suspension or loss of licensure and/or exclusion from participating in government programs. The outcome of such governmental investigations of proceedings could be material to the Company. Usual and Customary Pricing Litigation The Company and certain current and former directors and officers are named as a defendant in a number of lawsuits that allege that the Company’s retail pharmacies overcharged for prescription drugs by not submitting the correct usual and customary price during the claims adjudication process. These actions are brought by a number of different types of plaintiffs, including plan members, private payors, government payors, and shareholders based on different legal theories. Some of these cases are brought as putative class actions, and in some instances, classes have been certified. The Company is defending itself against these claims. PBM Litigation and Investigations The Company is named as a defendant in a number of lawsuits and is subject to a number of investigations concerning its PBM practices. The Company is facing multiple lawsuits, including by a State Attorney General, governmental subdivisions and several putative class actions, regarding drug pricing and its rebate arrangements with drug manufacturers. These complaints, brought under a variety of legal theories, generally allege that rebate agreements between the drug manufacturers and PBMs caused inflated prices for certain drug products. The Company is defending itself against these claims. The Company has also received subpoenas, civil investigative demands (“CIDs”) and other requests for documents and information from, and is being investigated by, Attorneys General of several states and the District of Columbia regarding its PBM practices, including pricing and rebates. The Company has been providing documents and information in response to these subpoenas, CIDs and requests for information. United States ex rel. Behnke v. CVS Caremark Corporation, et al. (U.S. District Court for the Eastern District of Pennsylvania). In April 2018, the Court unsealed a complaint filed in February 2014. The government has declined to intervene in this case. The relator alleges that the Company submitted, or caused to be submitted, to Part D of the Medicare program Prescription Drug Event data and/or Direct and Indirect Remuneration reports that misrepresented true prices paid by the Company’s PBM to pharmacies for drugs dispensed to Part D beneficiaries with prescription benefits administered by the Company’s PBM. The Company is defending itself against these claims. Controlled Substances Litigation, Audits and Subpoenas In December 2017, the U.S. Judicial Panel on Multidistrict Litigation consolidated numerous cases filed against various defendants by plaintiffs such as counties, cities, hospitals, Indian tribes and third-party payors, alleging claims generally concerning the impacts of widespread prescription opioid abuse. The consolidated multidistrict litigation captioned In re National Prescription Opiate Litigation (MDL No. 2804) is pending in the U.S. District Court for the Northern District of Ohio. This multidistrict litigation presumptively includes hundreds of relevant federal court cases that name the Company as a defendant. A significant number of similar cases that name the Company as a defendant in some capacity are pending in state courts. In addition, the Company has been named as a defendant in similar cases brought by certain state Attorneys General. The Company is defending itself against all such claims. Additionally, the Company has received subpoenas, CIDs and/or other requests for information regarding opioids from state Attorneys General and insurance and other regulators of several U.S. jurisdictions. The Company has been cooperating with the government with respect to these subpoenas, CIDs and other requests for information. In June 2021, prior to the start of the New York State Court bellwether trial, the Company reached a settlement with Nassau and Suffolk Counties for an immaterial amount. In January 2020, the DOJ served the Company with a DEA administrative subpoena. The subpoena seeks documents relating to practices with respect to prescription opioids and other controlled substances at CVS Pharmacy locations in connection with an investigation concerning potential violations of the federal Controlled Substances Act and the federal False Claims Act. The Company has been providing documents and information in response to this subpoena. Prescription Processing Litigation and Investigations The Company is named as a defendant in a number of lawsuits and is subject to a number of investigations concerning its prescription processing practices, including the following: U.S. ex rel. Bassan et al. v. Omnicare, Inc. and CVS Health Corp. (U.S. District Court for the Southern District of New York). In December 2019, the U.S. Attorney’s Office for the Southern District of New York (the “SDNY”) filed a complaint-in-intervention in this previously sealed qui tam case. The complaint alleges that for certain non-skilled nursing facilities, Omnicare improperly filled prescriptions beyond one year where a valid prescription did not exist and that these dispensing events violated the federal False Claims Act. The Company is defending itself against these claims. In July 2017, the Company also received a subpoena from the California Department of Insurance requesting documents concerning the Company’s Omnicare pharmacies’ cycle fill process for assisted living facilities. The Company has been cooperating with the California Department of Insurance and providing documents and information in response to this subpoena. In December 2016, the Company received a CID from the U.S. Attorney’s Office for the Northern District of New York requesting documents and information in connection with a federal False Claims Act investigation concerning whether the Company’s retail pharmacies improperly submitted certain insulin claims to Part D of the Medicare program rather than Part B of the Medicare program. The Company has been cooperating with the government and providing documents and information in response to this CID. Provider Proceedings The Company is named as a defendant in purported class actions and individual lawsuits arising out of its practices related to the payment of claims for services rendered to its members by providers with whom the Company has a contract and with whom the Company does not have a contract (“out-of-network providers”). Among other things, these lawsuits allege that the Company paid too little to its health plan members and/or providers for out-of-network services and/or otherwise allege that the Company failed to timely or appropriately pay or administer out-of-network claims and benefits (including the Company’s post payment audit and collection practices and reductions in payments to providers due to sequestration). Other major health insurers are the subject of similar litigation or have settled similar litigation. The Company also has received subpoenas and/or requests for documents and other information from, and been investigated by, state Attorneys General and other state and/or federal regulators, legislators and agencies relating to, and the Company is involved in other litigation regarding, its out-of-network benefit payment and administration practices. It is reasonably possible that others could initiate additional litigation or additional regulatory action against the Company with respect to its out-of-network benefit payment and/or administration practices. CMS Actions CMS regularly audits the Company’s performance to determine its compliance with CMS’s regulations and its contracts with CMS and to assess the quality of services it provides to Medicare beneficiaries. CMS uses various payment mechanisms to allocate and adjust premium payments to the Company’s and other companies’ Medicare plans by considering the applicable health status of Medicare members as supported by information prepared, maintained and provided by providers. The Company collects claim and encounter data from providers and generally relies on providers to appropriately code their submissions to the Company and document their medical records, including the diagnosis data submitted to the Company with claims. CMS pays increased premiums to Medicare Advantage plans and Medicare PDP plans for members who have certain medical conditions identified with specific diagnosis codes. Federal regulators review and audit the providers’ medical records to determine whether those records support the related diagnosis codes that determine the members’ health status and the resulting risk-adjusted premium payments to the Company. In that regard, CMS has instituted risk adjustment data validation (“RADV”) audits of various Medicare Advantage plans, including certain of the Company’s plans, to validate coding practices and supporting medical record documentation maintained by providers and the resulting risk adjusted premium payments to the plans. CMS may require the Company to refund premium payments if the Company’s risk adjusted premiums are not properly supported by medical record data. The Office of the Inspector General of the U.S. Department of Health and Human Services (“HHS-OIG”) also is auditing the Company’s risk adjustment-related data and that of other companies. The Company expects CMS and the OIG to continue these types of audits. In 2012, CMS revised its audit methodology for RADV audits to determine refunds payable by Medicare Advantage plans for contract year 2011 and forward. Under the revised methodology, among other things, CMS will extrapolate the error rate identified in the audit sample of approximately 200 members to all risk adjusted premium payments made under the contract being audited. For contract years prior to 2011, CMS did not extrapolate sample error rates to the entire contract. As a result, the revised methodology may increase the Company’s exposure to premium refunds to CMS based on incomplete medical records maintained by providers. Since 2013, CMS has selected certain of the Company’s Medicare Advantage contracts for various contract years for RADV audit, and the number of RADV audits continues to increase. The Company is currently unable to predict which of its Medicare Advantage contracts will be selected for future audit, the amounts of any retroactive refunds of, or prospective adjustments to, Medicare Advantage premium payments made to the Company, the effect of any such refunds or adjustments on the actuarial soundness of the Company’s Medicare Advantage bids, or whether any RADV audit findings would require the Company to change its method of estimating future premium revenue in future bid submissions to CMS or compromise premium assumptions made in the Company’s bids for prior contract years, the current contract year or future contract years. Any premium or fee refunds or adjustments resulting from regulatory audits, whether as a result of RADV, Public Exchange related or other audits by CMS, HHS-OIG or otherwise, including audits of the Company’s minimum medical loss ratio (“MLR”) rebates, methodology and/or reports, could be material and could adversely affect the Company’s operating results, cash flows and/or financial condition. Medicare and Medicaid CIDs The Company has received CIDs from the Civil Division of the DOJ in connection with a current investigation of the Company’s patient chart review processes in connection with risk adjustment data submissions under Parts C and D of the Medicare program. The Company has been cooperating with the government and providing documents and information in response to these CIDs. In May 2017, the Company received a CID from the SDNY requesting documents and information concerning possible false claims submitted to Medicare in connection with reimbursements for prescription drugs under the Medicare Part D program. The Company has been cooperating with the government and providing documents and information in response to this CID. Stockholder Matters Beginning in February 2019, multiple class action complaints, as well as a derivative complaint, were filed by putative plaintiffs against the Company and certain current and former officers and directors. The plaintiffs in these cases assert a variety of causes of action under federal securities laws that are premised on allegations that the defendants made certain omissions and misrepresentations relating to the performance of the Company’s LTC business unit. The Company and its current and former officers and directors are defending themselves against these claims. Since filing, several of the cases have been consolidated, and the first-filed federal case, City of Miami Fire Fighters’ and Police Officers’ Retirement Trust, et al. (formerly known as Anarkat ), was dismissed with prejudice in February 2021. Plaintiffs have appealed that decision to the First Circuit after their motion for reconsideration was denied. In re CVS Health Corp. Securities Act Litigation (formerly known as Waterford ) and In re CVS Health Corp. Securities Litigation (formerly known as City of Warren and Freundlich ) have been stayed pending the outcome of the First Circuit appeal. In August and September 2020, two ERISA class actions were filed in the U.S. District Court for the District of Connecticut against CVS Health, Aetna Inc. (“Aetna”), and several current and former executives, directors and/or members of Aetna’s Compensation and Talent Management Committee: Radcliffe v. Aetna Inc., et al. and Flaim v. Aetna Inc., et al. The plaintiffs in these cases assert a variety of causes of action premised on allegations that the defendants breached fiduciary duties and engaged in prohibited transactions relating to participants in the Aetna 401(k) Plan’s investment in company stock between December 3, 2017 and February 20, 2019, claiming losses related to the performance of the Company’s LTC business unit. The district court consolidated the actions and the Company is defending itself against these claims. In October 2021, the consolidated case was dismissed without prejudice. Plaintiffs may seek leave to file an amended complaint. The Company also received a related document request pursuant to ERISA § 104(b), to which the Company has responded. Other Legal and Regulatory Proceedings The Company is also a party to other legal proceedings and is subject to government investigations, inquiries and audits and has received and is cooperating with the government in response to CIDs, subpoenas or similar process from various governmental agencies requesting information. These other legal proceedings and government actions include claims of or relating to bad faith, medical or professional malpractice, claims processing, dispensing of medications, non-compliance with state and federal regulatory regimes, marketing misconduct, failure to timely or appropriately pay or administer claims and benefits, provider network structure (including the use of performance-based networks and termination of provider contracts), rescission of insurance coverage, improper disclosure or use of personal information, anticompetitive practices, general contractual matters, product liability, intellectual property litigation and employment litigation. Some of these other legal proceedings are or are purported to be class actions or derivative claims. The Company is defending itself against the claims brought in these matters. Awards to the Company and others of certain government contracts, particularly Medicaid contracts and other contracts with government customers in the Company’s Health Care Benefits segment, frequently are subject to protests by unsuccessful bidders. These protests may result in awards to the Company being reversed, delayed or modified. The loss or delay in implementation of any government contract could adversely affect the Company’s operating results. The Company will continue to defend contract awards it receives. There also continues to be a heightened level of review and/or audit by regulatory authorities and legislators of, and increased litigation regarding, the Company’s and the rest of the health care and related benefits industry’s business and reporting practices, including premium rate increases, utilization management, development and application of medical policies, complaint, grievance and appeal processing, information privacy, provider network structure (including provider network adequacy, the use of performance-based networks and termination of provider contracts), provider directory accuracy, calculation of minimum medical loss ratios and/or payment of related rebates, delegated arrangements, rescission of insurance coverage, limited benefit health products, student health products, pharmacy benefit management practices (including manufacturers’ rebates, pricing, the use of narrow networks and the placement of drugs in formulary tiers), sales practices, customer service practices, vendor oversight and claim payment practices (including payments to out-of-network providers). As a leading national health care services company, the Company regularly is the subject of government actions of the types described above. These government actions may prevent or delay the Company from implementing planned premium rate increases and may result, and have resulted, in restrictions on the Company’s businesses, changes to or clarifications of the Company’s business practices, retroactive adjustments to premiums, refunds or other payments to members, beneficiaries, states or the federal government, withholding of premium payments to the Company by government agencies, assessments of damages, civil or criminal fines or penalties, or other sanctions, including the possible suspension or loss of licensure and/or suspension or exclusion from participation in government programs. The Company can give no assurance that its businesses, financial condition, operating results and/or cash flows will not be materially adversely affected, or that the Company will not be required to materially change its business practices, based on: (i) future enactment of new health care or other laws or regulations; (ii) the interpretation or application of existing laws or regulations as they may relate to one or more of the Company’s businesses, one or more of the industries in which the Company competes and/or the health care industry generally; (iii) pending or future federal or state government investigations of one or more of the Company’s businesses, one or more of the industries in which the Company competes and/or the health care industry generally; (iv) pending or future government audits, investigations or enforcement actions against the Company; (v) adverse developments in any pending qui tam lawsuit against the Company, whether sealed or unsealed, or in any future qui tam lawsuit that may be filed against the Company; or (vi) adverse developments in pending or future legal proceedings against the Company or affecting one or more of the industries in which the Company competes and/or the health care industry generally. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment ReportingThe Company has three operating segments, Health Care Benefits, Pharmacy Services and Retail/LTC, as well as a Corporate/Other segment. The Company’s segments maintain separate financial information, and the Company’s chief operating decision maker (the “CODM”) evaluates the segments’ operating results on a regular basis in deciding how to allocate resources among the segments and in assessing segment performance. The CODM evaluates the performance of the Company’s segments based on adjusted operating income, which is defined as operating income (GAAP measure) excluding the impact of amortization of intangible assets and other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance. See the reconciliations of consolidated operating income (GAAP measure) to consolidated adjusted operating income below for further context regarding the items excluded from operating income in determining adjusted operating income. The Company uses adjusted operating income as its principal measure of segment performance as it enhances the Company’s ability to compare past financial performance with current performance and analyze underlying business performance and trends. Non-GAAP financial measures the Company discloses, such as consolidated adjusted operating income, should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP. The following is a reconciliation of financial measures of the Company’s segments to the consolidated totals: In millions Health Care Pharmacy Services (1) Retail/ Corporate/ Intersegment Eliminations (2) Consolidated Three Months Ended September 30, 2021 Revenues from external customers $ 20,311 $ 36,851 $ 16,347 $ 39 $ — $ 73,548 Intersegment revenues 21 2,195 8,678 — (10,894) — Net investment income (loss) 147 — (33) 132 — 246 Total revenues 20,479 39,046 24,992 171 (10,894) 73,794 Adjusted operating income (loss) 1,106 1,773 1,723 (343) (186) 4,073 September 30, 2020 Revenues from external customers $ 18,557 $ 33,492 $ 14,770 $ 33 $ — $ 66,852 Intersegment revenues 20 2,219 7,955 — (10,194) — Net investment income 121 — — 83 — 204 Total revenues 18,698 35,711 22,725 116 (10,194) 67,056 Adjusted operating income (loss) 1,080 1,619 1,412 (303) (186) 3,622 Nine Months Ended September 30, 2021 Revenues from external customers $ 60,993 $ 105,909 $ 47,672 $ 101 $ — $ 214,675 Intersegment revenues 62 7,772 25,309 — (33,143) — Net investment income 432 — 13 387 — 832 Total revenues 61,487 113,681 72,994 488 (33,143) 215,507 Adjusted operating income (loss) 4,502 5,035 5,166 (1,015) (523) 13,165 September 30, 2020 Revenues from external customers $ 55,972 $ 98,233 $ 44,314 $ 83 $ — $ 198,602 Intersegment revenues 51 7,350 22,822 — (30,223) — Net investment income 341 — — 209 — 550 Total revenues 56,364 105,583 67,136 292 (30,223) 199,152 Adjusted operating income (loss) 6,035 4,127 4,371 (931) (539) 13,063 _____________________________________________ (1) Total revenues of the Pharmacy Services segment include approximately $2.8 billion and $2.5 billion of retail co-payments for the three months ended September 30, 2021 and 2020, respectively, and $9.0 billion and $8.5 billion of retail co-payments for the nine months ended September 30, 2021 and 2020, respectively. (2) Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Pharmacy Services segment, and/or the Retail/LTC segment. Intersegment adjusted operating income eliminations occur when members of Pharmacy Services Segment clients (“PSS members”) enrolled in Maintenance Choice ® elect to pick up maintenance prescriptions at one of the Company’s retail pharmacies instead of receiving them through the mail. When this occurs, both the Pharmacy Services and Retail/LTC segments record the adjusted operating income on a stand-alone basis. The following are reconciliations of consolidated operating income to adjusted operating income for the three and nine months ended September 30, 2021 and 2020: Three Months Ended Nine Months Ended In millions 2021 2020 2021 2020 Operating income (GAAP measure) $ 3,061 $ 3,249 $ 10,964 $ 11,387 Amortization of intangible assets (1) 561 587 1,730 1,751 Acquisition-related integration costs (2) 20 57 101 196 Goodwill impairment (3) 431 — 431 — Acquisition purchase price adjustment outside of measurement period (4) — — (61) — Gain on divestiture of subsidiary (5) — (271) — (271) Adjusted operating income $ 4,073 $ 3,622 $ 13,165 $ 13,063 _____________________________________________ (1) The Company’s acquisition activities have resulted in the recognition of intangible assets as required under the acquisition method of accounting which consist primarily of trademarks, customer contracts/relationships, covenants not to compete, technology, provider networks and value of business acquired. Definite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in the Company’s unaudited GAAP condensed consolidated statements of operations in operating expenses within each segment. Although intangible assets contribute to the Company’s revenue generation, the amortization of intangible assets does not directly relate to the underwriting of the Company’s insurance products, the services performed for the Company’s customers or the sale of the Company’s products or services. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of the Company’s acquisition activity. Accordingly, the Company believes excluding the amortization of intangible assets enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current performance and to analyze underlying business performance and trends. Intangible asset amortization excluded from the related non-GAAP financial measure represents the entire amount recorded within the Company’s GAAP financial statements, and the revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. Intangible asset amortization is excluded from the related non-GAAP financial measure because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised. (2) During the three and nine months ended September 30, 2021 and 2020, acquisition-related integration costs relate to the acquisition of Aetna. The acquisition-related integration costs are reflected in the Company’s unaudited GAAP condensed consolidated statements of operations in operating expenses within the Corporate/Other segment. (3) During the three and nine months ended September 30, 2021, the goodwill impairment charge relates to the LTC reporting unit within the Retail/LTC segment. (4) In June 2021, the Company received $61 million related to a purchase price working capital adjustment for an acquisition completed during the first quarter of 2020. The resolution of this matter occurred subsequent to the acquisition accounting measurement period and is reflected in the Company’s unaudited GAAP condensed consolidated statement of operations for the nine months ended September 30, 2021 as a reduction of operating expenses within the Health Care Benefits segment. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Segment Reporting | The Company has four reportable segments: Health Care Benefits, Pharmacy Services, Retail/LTC and Corporate/Other, which are described below. Health Care Benefits Segment The Health Care Benefits segment is one of the nation’s leading diversified health care benefits providers. The Health Care Benefits segment has the information and resources to help members, in consultation with their health care professionals, make more informed decisions about their health care. The Health Care Benefits segment offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare Supplement plans, PDPs, Medicaid health care management services and health information technology products and services. The Health Care Benefits segment also provided workers’ compensation administrative services through its Coventry Health Care Workers’ Compensation business (“Workers’ Compensation business”) prior to the sale of this business on July 31, 2020. The Health Care Benefits segment’s customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers (“providers”), governmental units, government-sponsored plans, labor groups and expatriates. The Company refers to insurance products (where it assumes all or a majority of the risk for medical and dental care costs) as “Insured” and administrative services contract products (where the plan sponsor assumes all or a majority of the risk for medical and dental care costs) as “ASC.” In addition, the Company has submitted regulatory filings for a January 2022 entrance into the individual public health insurance exchanges (“Public Exchanges”) in eight states. Pharmacy Services Segment The Pharmacy Services segment provides a full range of pharmacy benefit management (“PBM”) solutions, including plan design offerings and administration, formulary management, retail pharmacy network management services, mail order pharmacy, specialty pharmacy and infusion services, clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Pharmacy Services segment’s clients are primarily employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, plans offered on Public Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities. The Pharmacy Services segment operates retail specialty pharmacy stores, specialty mail order pharmacies, mail order dispensing pharmacies, compounding pharmacies and branches for infusion and enteral nutrition services. Retail/LTC Segment The Retail/LTC segment sells prescription drugs and a wide assortment of health and wellness products and general merchandise, provides health care services through its MinuteClinic ® walk-in medical clinics, provides medical diagnostic testing, administers vaccinations for illnesses such as influenza, COVID-19 and shingles and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings. As of September 30, 2021, the Retail/LTC segment operated more than 9,900 retail locations, nearly 1,200 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies. Corporate/Other Segment The Company presents the remainder of its financial results in the Corporate/Other segment, which primarily consists of: • Management and administrative expenses to support the Company’s overall operations, which include certain aspects of executive management and the corporate relations, legal, compliance, human resources, information technology and finance departments, expenses associated with the Company’s investments in its transformation and enterprise modernization programs and acquisition-related integration costs; and • Products for which the Company no longer solicits or accepts new customers such as its large case pensions and long-term care insurance products. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of CVS Health and its subsidiaries have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In accordance with such rules and regulations, certain information and accompanying note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted, although the Company believes the disclosures included herein are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. Because of the influence of various factors on the Company’s operations, including business combinations, certain holidays and other seasonal influences, net income for any interim period may not be comparable to the same interim period in previous years or necessarily indicative of income for the full year. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All material intercompany balances and transactions have been eliminated. The Company continually evaluates its investments to determine if they represent variable interests in a VIE. If the Company determines that it has a variable interest in a VIE, the Company then evaluates if it is the primary beneficiary of the VIE. The evaluation is a qualitative assessment as to whether the Company has the ability to direct the activities of a VIE that most significantly impact the entity’s economic performance. The Company consolidates a VIE if it is considered to be the primary beneficiary. Assets and liabilities of VIEs for which the Company is the primary beneficiary were not significant to the Company’s unaudited condensed consolidated financial statements. VIE creditors do not have recourse against the general credit of the Company. |
Restricted Cash | Restricted CashRestricted cash included in other assets on the unaudited condensed consolidated balance sheets represents amounts held in a trust in one of the Company’s captive insurance companies to satisfy collateral requirements associated with the assignment of certain insurance policies. All restricted cash is invested in time deposits, money market funds or commercial paper. |
Accounts Receivable | Accounts ReceivableAccounts receivable are stated net of allowances for credit losses, customer credit allowances, contractual allowances and estimated terminations |
Accounts Receivable, Allowance for Credit Losses | When developing an estimate of the Company’s expected credit losses, the Company considers all available relevant information regarding the collectability of cash flows, including historical information, current conditions and reasonable and supportable forecasts of future economic conditions over the contractual life of the receivable. The Company’s accounts receivable are short duration in nature and typically settle in less than 30 days. |
Contract Balances | Contract Balances Contract liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration, and include ExtraBucks ® Rewards and unredeemed Company gift cards. The consideration received remains a contract liability until goods or services have been provided to the customer. In addition, the Company recognizes breakage on Company gift cards based on historical redemption patterns. |
Health Insurer Fee | Health Insurer FeeSince January 1, 2014, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”) has imposed an annual premium-based health insurer fee (the “HIF”). The HIF, which is payable each September, is not deductible for federal income tax purposes. |
Related Party Transactions | Related Party Transactions The Company has an equity method investment in SureScripts, LLC (“SureScripts”), which operates a clinical health information network. The Company utilizes this clinical health information network in providing services to its client plan members and retail customers. The Company expensed fees for the use of this network of $16 million and $5 million in the three months ended September 30, 2021 and 2020, respectively, and expensed fees for the use of this network of approximately $35 million and $28 million in the nine months ended September 30, 2021 and 2020, respectively. The Company’s investment in and equity in the earnings of SureScripts for all periods presented is immaterial. The Company has an equity method investment in Heartland Healthcare Services, LLC (“Heartland”). Heartland operates several LTC pharmacies in four states. Heartland paid the Company $20 million and $15 million for pharmaceutical inventory purchases during the three months ended September 30, 2021 and 2020, respectively, and $57 million and $58 million for pharmaceutical inventory purchases during the nine months ended September 30, 2021 and 2020, respectively. Additionally, the Company performs certain collection functions for Heartland and then transfers those customer cash collections to Heartland. The Company’s investment in and equity in the earnings of Heartland for all periods presented is immaterial. |
New Accounting Pronouncements Recently Adopted and Not Yet Adopted | New Accounting Pronouncements Recently Adopted Simplifying the Accounting for Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The Company adopted this new accounting standard on January 1, 2021. The adoption of this standard did not have a material impact on the Company’s consolidated operating results, cash flows, financial condition or related disclosures. New Accounting Pronouncements Not Yet Adopted Targeted Improvements to the Accounting for Long-Duration Insurance Contracts In August 2018, the FASB issued ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944). This standard requires the Company to review cash flow assumptions for its long-duration insurance contracts at least annually and recognize the effect of changes in future cash flow assumptions in net income. This standard also requires the Company to update discount rate assumptions quarterly and recognize the effect of changes in these assumptions in other |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Reconciliation of cash and cash equivalents | The following is a reconciliation of cash and cash equivalents on the unaudited condensed consolidated balance sheets to total cash, cash equivalents and restricted cash on the unaudited condensed consolidated statements of cash flows: In millions September 30, December 31, Cash and cash equivalents $ 9,826 $ 7,854 Restricted cash (included in other assets) 218 276 Total cash, cash equivalents and restricted cash in the statements of cash flows $ 10,044 $ 8,130 |
Schedule of accounts receivable, net | Accounts receivable, net is composed of the following: In millions September 30, December 31, Trade receivables $ 8,398 $ 7,101 Vendor and manufacturer receivables 11,727 9,815 Premium receivables 2,391 2,628 Other receivables 2,767 2,198 Total accounts receivable, net $ 25,283 $ 21,742 |
Disaggregation of revenue | The following tables disaggregate the Company’s revenue by major source in each segment for the three and nine months ended September 30, 2021 and 2020: In millions Health Care Pharmacy Retail/ Corporate/ Intersegment Consolidated Three Months Ended September 30, 2021 Major goods/services lines: Pharmacy $ — $ 38,867 $ 19,023 $ — $ (10,857) $ 47,033 Front Store — — 5,359 — — 5,359 Premiums 18,959 — — 25 — 18,984 Net investment income (loss) 147 — (33) 132 — 246 Other 1,373 179 643 14 (37) 2,172 Total $ 20,479 $ 39,046 $ 24,992 $ 171 $ (10,894) $ 73,794 Pharmacy Services distribution channel: Pharmacy network (1) $ 23,665 Mail choice (2) 15,202 Other 179 Total $ 39,046 Three Months Ended September 30, 2020 Major goods/services lines: Pharmacy $ — $ 35,505 $ 17,608 $ — $ (10,051) $ 43,062 Front Store — — 4,740 — — 4,740 Premiums 17,165 — — 17 — 17,182 Net investment income 121 — — 83 — 204 Other 1,412 206 377 16 (143) 1,868 Total $ 18,698 $ 35,711 $ 22,725 $ 116 $ (10,194) $ 67,056 Pharmacy Services distribution channel: Pharmacy network (1) $ 21,473 Mail choice (2) 14,032 Other 206 Total $ 35,711 In millions Health Care Pharmacy Retail/ Corporate/ Intersegment Consolidated Nine Months Ended September 30, 2021 Major goods/services lines: Pharmacy $ — $ 113,161 $ 55,781 $ — $ (33,025) $ 135,917 Front Store — — 15,255 — — 15,255 Premiums 56,869 — — 58 — 56,927 Net investment income 432 — 13 387 — 832 Other 4,186 520 1,945 43 (118) 6,576 Total $ 61,487 $ 113,681 $ 72,994 $ 488 $ (33,143) $ 215,507 Pharmacy Services distribution channel: Pharmacy network (1) $ 68,476 Mail choice (2) 44,685 Other 520 Total $ 113,681 Nine Months Ended September 30, 2020 Major goods/services lines: Pharmacy $ — $ 104,924 $ 51,833 $ — $ (30,032) $ 126,725 Front Store — — 14,601 — — 14,601 Premiums 51,699 — — 50 — 51,749 Net investment income 341 — — 209 — 550 Other 4,324 659 702 33 (191) 5,527 Total $ 56,364 $ 105,583 $ 67,136 $ 292 $ (30,223) $ 199,152 Pharmacy Services distribution channel: Pharmacy network (1) $ 63,109 Mail choice (2) 41,815 Other 659 Total $ 105,583 _____________________________________________ (1) Pharmacy Services pharmacy network is defined as claims filled at retail and specialty retail pharmacies, including the Company’s retail pharmacies and LTC pharmacies, but excluding Maintenance Choice ® activity, which is included within the mail choice category. Maintenance Choice permits eligible client plan members to fill their maintenance prescriptions through mail order delivery or at a CVS Pharmacy retail store for the same price as mail order. (2) Pharmacy Services mail choice is defined as claims filled at a Pharmacy Services mail order facility, which includes specialty mail claims inclusive of Specialty Connect ® claims picked up at a retail pharmacy, as well as prescriptions filled at the Company’s retail pharmacies under the Maintenance Choice program. |
Schedule of receivables and contract liabilities from contracts with customers | The following table provides information about receivables and contract liabilities from contracts with customers: In millions September 30, December 31, Trade receivables (included in accounts receivable, net) $ 8,398 $ 7,101 Contract liabilities (included in accrued expenses) 78 71 During the nine months ended September 30, 2021 and 2020, the contract liabilities balance includes increases related to customers’ earnings in ExtraBucks Rewards or issuances of Company gift cards and decreases for revenues recognized during the period as a result of the redemption of ExtraBucks Rewards or Company gift cards and breakage of Company gift cards. Below is a summary of such changes: Nine Months Ended In millions 2021 2020 Contract liabilities, beginning of the period $ 71 $ 73 Rewards earnings and gift card issuances 286 266 Redemption and breakage (279) (264) Contract liabilities, end of the period $ 78 $ 75 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments [Abstract] | |
Schedule of Total Investments | Total investments at September 30, 2021 and December 31, 2020 were as follows: September 30, 2021 December 31, 2020 In millions Current Long-term Total Current Long-term Total Debt securities available for sale $ 2,859 $ 19,715 $ 22,574 $ 2,774 $ 18,414 $ 21,188 Mortgage loans 110 824 934 226 821 1,047 Other investments 46 1,831 1,877 — 1,577 1,577 Total investments $ 3,015 $ 22,370 $ 25,385 $ 3,000 $ 20,812 $ 23,812 |
Schedule of Debt Securities Available For Sale | Debt securities available for sale at September 30, 2021 and December 31, 2020 were as follows: In millions Amortized Cost (1) Gross Gross Fair September 30, 2021 Debt securities: U.S. government securities $ 2,260 $ 81 $ (1) $ 2,340 States, municipalities and political subdivisions 2,939 151 (5) 3,085 U.S. corporate securities 8,898 757 (22) 9,633 Foreign securities 2,736 221 (12) 2,945 Residential mortgage-backed securities 849 19 (5) 863 Commercial mortgage-backed securities 1,160 57 (8) 1,209 Other asset-backed securities 2,447 23 (2) 2,468 Redeemable preferred securities 28 3 — 31 Total debt securities (2) $ 21,317 $ 1,312 $ (55) $ 22,574 December 31, 2020 Debt securities: U.S. government securities $ 2,341 $ 128 $ — $ 2,469 States, municipalities and political subdivisions 2,556 172 — 2,728 U.S. corporate securities 7,879 1,023 (8) 8,894 Foreign securities 2,595 324 (1) 2,918 Residential mortgage-backed securities 673 32 — 705 Commercial mortgage-backed securities 962 84 — 1,046 Other asset-backed securities 2,369 36 (2) 2,403 Redeemable preferred securities 21 4 — 25 Total debt securities (2) $ 19,396 $ 1,803 $ (11) $ 21,188 _____________________________________________ (1) There was no allowance for expected credit losses recorded on available-for-sale debt securities at September 30, 2021 or December 31, 2020. (2) Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At September 30, 2021, debt securities with a fair value of $882 million, gross unrealized capital gains of $101 million and gross unrealized capital losses of $1 million and at December 31, 2020, debt securities with a fair value of $919 million, gross unrealized capital gains of $135 million and no gross unrealized capital losses were included in total debt securities, but support experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive income. |
Schedule of Amortized Cost and Fair Value of Debt Securities by Contractual Maturity | The amortized cost and fair value of debt securities at September 30, 2021 are shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity. In millions Amortized Fair Due to mature: Less than one year $ 1,056 $ 1,071 One year through five years 7,123 7,390 After five years through ten years 4,492 4,718 Greater than ten years 4,190 4,855 Residential mortgage-backed securities 849 863 Commercial mortgage-backed securities 1,160 1,209 Other asset-backed securities 2,447 2,468 Total $ 21,317 $ 22,574 |
Schedule of Debt Securities In An Unrealized Capital Loss Position | Summarized below are the debt securities the Company held at September 30, 2021 and December 31, 2020 that were in an unrealized capital loss position, aggregated by the length of time the investments have been in that position: Less than 12 months Greater than 12 months Total In millions, except number of securities Number Fair Unrealized Number Fair Unrealized Number Fair Unrealized September 30, 2021 Debt securities: U.S. government securities 45 $ 204 $ 1 2 $ 1 $ — 47 $ 205 $ 1 States, municipalities and political subdivisions 234 464 5 1 4 — 235 468 5 U.S. corporate securities 1,081 1,528 19 43 51 3 1,124 1,579 22 Foreign securities 320 568 11 12 21 1 332 589 12 Residential mortgage-backed securities 122 476 5 9 10 — 131 486 5 Commercial mortgage-backed securities 127 342 6 15 47 2 142 389 8 Other asset-backed securities 312 652 2 18 17 — 330 669 2 Redeemable preferred securities 2 5 — — — — 2 5 — Total debt securities 2,243 $ 4,239 $ 49 100 $ 151 $ 6 2,343 $ 4,390 $ 55 December 31, 2020 Debt securities: U.S. government securities 32 $ 205 $ — — $ — $ — 32 $ 205 $ — States, municipalities and political subdivisions 49 83 — — — — 49 83 — U.S. corporate securities 145 155 8 2 — — 147 155 8 Foreign securities 41 69 1 5 5 — 46 74 1 Residential mortgage-backed securities 23 26 — 3 — — 26 26 — Commercial mortgage-backed securities 22 75 — — — — 22 75 — Other asset-backed securities 156 256 1 49 41 1 205 297 2 Total debt securities 468 $ 869 $ 10 59 $ 46 $ 1 527 $ 915 $ 11 The maturity dates for debt securities in an unrealized capital loss position at September 30, 2021 were as follows: Supporting Supporting Total In millions Fair Unrealized Fair Unrealized Fair Unrealized Due to mature: Less than one year $ — $ — $ 22 $ — $ 22 $ — One year through five years 6 — 1,264 11 1,270 11 After five years through ten years 29 1 920 16 949 17 Greater than ten years 19 — 586 12 605 12 Residential mortgage-backed securities — — 486 5 486 5 Commercial mortgage-backed securities 6 — 383 8 389 8 Other asset-backed securities — — 669 2 669 2 Total $ 60 $ 1 $ 4,330 $ 54 $ 4,390 $ 55 |
Schedule of Activity in Mortgage Loan Portfolio | During the three and nine months ended September 30, 2021 and 2020, the Company had the following activity in its mortgage loan portfolio: Three Months Ended Nine Months Ended In millions 2021 2020 2021 2020 New mortgage loans $ 53 $ 31 $ 173 $ 55 Mortgage loans fully repaid 88 37 260 114 Mortgage loans foreclosed — — — — |
Schedule of Mortgage Loan Amortized Cost and Credit Quality Indicator | Based on the Company’s assessments at September 30, 2021 and December 31, 2020, the amortized cost basis of the Company's mortgage loans within each credit quality indicator by year of origination was as follows: Amortized Cost Basis by Year of Origination In millions, except credit quality indicator 2021 2020 2019 2018 2017 Prior Total September 30, 2021 1 $ — $ — $ — $ — $ 22 $ 29 $ 51 2 to 4 171 44 64 73 75 443 870 5 and 6 — — — 3 4 6 13 7 — — — — — — — Total $ 171 $ 44 $ 64 $ 76 $ 101 $ 478 $ 934 December 31, 2020 1 $ — $ — $ — $ 22 $ 37 $ 59 2 to 4 46 96 91 124 595 952 5 and 6 — — 3 4 29 36 7 — — — — — — Total $ 46 $ 96 $ 94 $ 150 $ 661 $ 1,047 |
Schedule of Net Investment Income | Sources of net investment income for the three and nine months ended September 30, 2021 and 2020 were as follows: Three Months Ended Nine Months Ended In millions 2021 2020 2021 2020 Debt securities $ 157 $ 151 $ 474 $ 441 Mortgage loans 13 15 41 45 Other investments 109 37 307 64 Gross investment income 279 203 822 550 Investment expenses (11) (8) (28) (25) Net investment income (excluding net realized capital gains or losses) 268 195 794 525 Net realized capital gains (losses) (1) (22) 9 38 25 Net investment income (2) $ 246 $ 204 $ 832 $ 550 _____________________________________________ (1) Net realized capital losses include yield-related impairment losses on debt securities of $3 million in the three months ended September 30, 2021. Net realized capital gains are net of yield-related impairment losses on debt securities of $35 million in the nine months ended September 30, 2021. There were no credit-related losses on debt securities in the three and nine months ended September 30, 2021. Net realized capital gains are net of credit-related and yield-related impairment losses on debt securities of $1 million and $2 million, respectively, in the three months ended September 30, 2020. Net realized capital gains are net of credit-related and yield-related impairment losses on debt securities of $4 million and $44 million, respectively, in the nine months ended September 30, 2020. |
Schedule of Proceeds and Related Gross Realized Capital Gains and Losses From the Sale of Debt Securities | Excluding amounts related to experience-rated products, proceeds from the sale of available-for-sale debt securities and the related gross realized capital gains and losses for the three and nine months ended September 30, 2021 and 2020 were as follows: Three Months Ended Nine Months Ended In millions 2021 2020 2021 2020 Proceeds from sales $ 668 $ 905 $ 2,935 $ 2,324 Gross realized capital gains 19 17 61 60 Gross realized capital losses 2 3 12 59 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Financial assets measured at fair value on a recurring basis on the condensed consolidated balance sheets at September 30, 2021 and December 31, 2020 were as follows: In millions Level 1 Level 2 Level 3 Total September 30, 2021 Cash and cash equivalents $ 4,953 $ 4,873 $ — $ 9,826 Debt securities: U.S. government securities 2,295 45 — 2,340 States, municipalities and political subdivisions — 3,085 — 3,085 U.S. corporate securities — 9,594 39 9,633 Foreign securities — 2,945 — 2,945 Residential mortgage-backed securities — 863 — 863 Commercial mortgage-backed securities — 1,209 — 1,209 Other asset-backed securities — 2,468 — 2,468 Redeemable preferred securities — 31 — 31 Total debt securities 2,295 20,240 39 22,574 Equity securities 107 — 42 149 Total $ 7,355 $ 25,113 $ 81 $ 32,549 December 31, 2020 Cash and cash equivalents $ 3,985 $ 3,869 $ — $ 7,854 Debt securities: U.S. government securities 2,370 99 — 2,469 States, municipalities and political subdivisions — 2,727 1 2,728 U.S. corporate securities — 8,842 52 8,894 Foreign securities — 2,918 — 2,918 Residential mortgage-backed securities — 705 — 705 Commercial mortgage-backed securities — 1,046 — 1,046 Other asset-backed securities — 2,403 — 2,403 Redeemable preferred securities — 24 1 25 Total debt securities 2,370 18,764 54 21,188 Equity securities 17 — 30 47 Total $ 6,372 $ 22,633 $ 84 $ 29,089 |
Fair Value, by Balance Sheet Grouping | The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the condensed consolidated balance sheets at adjusted cost or contract value at September 30, 2021 and December 31, 2020 were as follows: Carrying Estimated Fair Value In millions Level 1 Level 2 Level 3 Total September 30, 2021 Assets: Mortgage loans $ 934 $ — $ — $ 945 $ 945 Equity securities (1) 50 N/A N/A N/A N/A Liabilities: Investment contract liabilities: With a fixed maturity 5 — — 5 5 Without a fixed maturity 334 — — 378 378 Long-term debt 58,393 66,960 — — 66,960 December 31, 2020 Assets: Mortgage loans $ 1,047 $ — $ — $ 1,070 $ 1,070 Equity securities (1) 145 N/A N/A N/A N/A Liabilities: Investment contract liabilities: With a fixed maturity 5 — — 5 5 Without a fixed maturity 322 — — 371 371 Long-term debt 64,647 75,940 — — 75,940 _____________________________________________ |
Schedule of Fair Value of Separate Accounts by Major Category of Investment | Separate Accounts financial assets as of September 30, 2021 and December 31, 2020 were as follows: September 30, 2021 December 31, 2020 In millions Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3 $ 216 $ — $ 219 $ 2 $ 186 $ — $ 188 Debt securities 1,214 3,083 — 4,297 1,465 2,634 — 4,099 Equity securities — 2 — 2 — 2 — 2 Common/collective trusts — 577 — 577 — 563 — 563 Total (1) $ 1,217 $ 3,878 $ — $ 5,095 $ 1,467 $ 3,385 $ — $ 4,852 _____________________________________________ (1) Excludes $9 million of other payables at September 30, 2021 and $29 million of other receivables at December 31, 2020. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Change in goodwill | Below is a summary of the changes in the carrying value of goodwill by segment for the nine months ended September 30, 2021: In millions Health Care Pharmacy Retail/ Total Balance at December 31, 2020 $ 45,130 $ 23,615 $ 10,807 $ 79,552 Impairment — — (431) (431) Balance at September 30, 2021 $ 45,130 $ 23,615 $ 10,376 $ 79,121 |
Health Care Costs Payable (Tabl
Health Care Costs Payable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Health Care and Other Insurance Liabilities [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | The following table shows the components of the change in health care costs payable during the nine months ended September 30, 2021 and 2020: Nine Months Ended In millions 2021 2020 Health care costs payable, beginning of the period $ 7,936 $ 6,879 Less: Reinsurance recoverables 10 5 Health care costs payable, beginning of the period, net 7,926 6,874 Acquisition — 444 Add: Components of incurred health care costs Current year 48,243 40,777 Prior years (771) (448) Total incurred health care costs (1) 47,472 40,329 Less: Claims paid Current year 39,887 34,198 Prior years 6,639 5,865 Total claims paid 46,526 40,063 Add: Premium deficiency reserve 1 1 Health care costs payable, end of the period, net 8,873 7,585 Add: Reinsurance recoverables 4 8 Health care costs payable, end of the period $ 8,877 $ 7,593 _____________________________________________ (1) Total incurred health care costs for the nine months ended September 30, 2021 and 2020 in the table above exclude (i) $1 million and $1 million, respectively, for a premium deficiency reserve related to the Company’s Medicaid products, (ii) $45 million and $31 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the Company’s unaudited condensed consolidated balance sheets and (iii) $168 million and $173 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the Company’s unaudited condensed consolidated balance sheets. |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Company's Borrowings | The following table is a summary of the Company’s borrowings at September 30, 2021 and December 31, 2020: In millions September 30, December 31, Long-term debt 3.35% senior notes due March 2021 $ — $ 2,038 Floating rate notes due March 2021 (0.950% at December 31, 2020) — 1,000 4.125% senior notes due May 2021 — 222 2.125% senior notes due June 2021 — 1,750 4.125% senior notes due June 2021 — 203 5.45% senior notes due June 2021 — 187 3.5% senior notes due July 2022 1,500 1,500 2.75% senior notes due November 2022 1,000 1,000 2.75% senior notes due December 2022 1,250 1,250 4.75% senior notes due December 2022 399 399 3.7% senior notes due March 2023 2,336 2,336 2.8% senior notes due June 2023 1,300 1,300 4% senior notes due December 2023 414 414 3.375% senior notes due August 2024 650 650 2.625% senior notes due August 2024 1,000 1,000 3.5% senior notes due November 2024 750 750 5% senior notes due December 2024 299 299 4.1% senior notes due March 2025 950 950 3.875% senior notes due July 2025 2,828 2,828 2.875% senior notes due June 2026 1,750 1,750 3% senior notes due August 2026 750 750 3.625% senior notes due April 2027 750 750 6.25% senior notes due June 2027 372 372 1.3% senior notes due August 2027 2,250 2,250 4.3% senior notes due March 2028 5,000 7,050 3.25% senior notes due August 2029 1,750 1,750 3.75% senior notes due April 2030 1,500 1,500 1.75% senior notes due August 2030 1,250 1,250 1.875% senior notes due February 2031 1,250 1,250 2.125% senior notes due September 2031 1,000 — 4.875% senior notes due July 2035 652 652 6.625% senior notes due June 2036 771 771 6.75% senior notes due December 2037 533 533 4.78% senior notes due March 2038 5,000 5,000 6.125% senior notes due September 2039 447 447 4.125% senior notes due April 2040 1,000 1,000 2.7% senior notes due August 2040 1,250 1,250 5.75% senior notes due May 2041 133 133 4.5% senior notes due May 2042 500 500 4.125% senior notes due November 2042 500 500 5.3% senior notes due December 2043 750 750 4.75% senior notes due March 2044 375 375 5.125% senior notes due July 2045 3,500 3,500 3.875% senior notes due August 2047 1,000 1,000 5.05% senior notes due March 2048 8,000 8,000 4.25% senior notes due April 2050 750 750 Finance lease liabilities 1,207 1,083 Other 321 326 Total debt principal 58,987 65,318 Debt premiums 224 238 Debt discounts and deferred financing costs (818) (909) 58,393 64,647 Less: Current portion of long-term debt (1,561) (5,440) Long-term debt $ 56,832 $ 59,207 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | Shareholders’ equity included the following activity in accumulated other comprehensive income for the three and nine months ended September 30, 2021 and 2020: Three Months Ended Nine Months Ended In millions 2021 2020 2021 2020 Net unrealized investment gains (losses): Beginning of period balance $ 977 $ 987 $ 1,214 $ 774 Other comprehensive income (loss) before reclassifications ( $(73), $83, $(346), $278 pretax) (61) 52 (297) 218 Amounts reclassified from accumulated other comprehensive income ($(14), $(10), $(15), $47 pretax) (1) (12) (8) (13) 39 Other comprehensive income (loss) (73) 44 (310) 257 End of period balance 904 1,031 904 1,031 Foreign currency translation adjustments: Beginning of period balance 6 (2) 7 4 Other comprehensive income (loss) before reclassifications (5) 1 (6) (5) Other comprehensive income (loss) (5) 1 (6) (5) End of period balance 1 (1) 1 (1) Net cash flow hedges: Beginning of period balance 241 267 248 279 Other comprehensive loss before reclassifications ($0, $0, $0, $(7) pretax) — — — (5) Amounts reclassified from accumulated other comprehensive income ($(20), $(4), $(29), $(14) pretax) (2) (15) (3) (22) (10) Other comprehensive loss (15) (3) (22) (15) End of period balance 226 264 226 264 Pension and other postretirement benefits: Beginning of period balance (54) (39) (55) (38) Other comprehensive loss before reclassifications ($0, $0, $0, and $(8) pretax) — — — (6) Amounts reclassified from accumulated other comprehensive loss ($0, $0, $1 and $7 pretax) (3) — — 1 5 Other comprehensive income (loss) — — 1 (1) End of period balance (54) (39) (54) (39) Total beginning of period accumulated other comprehensive income 1,170 1,213 1,414 1,019 Total other comprehensive income (loss) (93) 42 (337) 236 Total end of period accumulated other comprehensive income $ 1,077 $ 1,255 $ 1,077 $ 1,255 _____________________________________________ (1) Amounts reclassified from accumulated other comprehensive income for specifically identified debt securities are included in net investment income in the unaudited condensed consolidated statements of operations. (2) Amounts reclassified from accumulated other comprehensive income for specifically identified cash flow hedges are included in interest expense in the unaudited condensed consolidated statements of operations. The Company expects to reclassify approximately $11 million, net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | The following is a reconciliation of basic and diluted earnings per share for the respective periods: Three Months Ended Nine Months Ended In millions, except per share amounts 2021 2020 2021 2020 Numerator for earnings per share calculation: Net income attributable to CVS Health $ 1,598 $ 1,224 $ 6,604 $ 6,206 Denominator for earnings per share calculation: Weighted average shares, basic 1,321 1,310 1,318 1,308 Effect of dilutive securities 8 5 8 6 Weighted average shares, diluted 1,329 1,315 1,326 1,314 Earnings per share: Basic $ 1.21 $ 0.93 $ 5.01 $ 4.74 Diluted $ 1.20 $ 0.93 $ 4.98 $ 4.72 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summarized Financial Information Of Segments | The following is a reconciliation of financial measures of the Company’s segments to the consolidated totals: In millions Health Care Pharmacy Services (1) Retail/ Corporate/ Intersegment Eliminations (2) Consolidated Three Months Ended September 30, 2021 Revenues from external customers $ 20,311 $ 36,851 $ 16,347 $ 39 $ — $ 73,548 Intersegment revenues 21 2,195 8,678 — (10,894) — Net investment income (loss) 147 — (33) 132 — 246 Total revenues 20,479 39,046 24,992 171 (10,894) 73,794 Adjusted operating income (loss) 1,106 1,773 1,723 (343) (186) 4,073 September 30, 2020 Revenues from external customers $ 18,557 $ 33,492 $ 14,770 $ 33 $ — $ 66,852 Intersegment revenues 20 2,219 7,955 — (10,194) — Net investment income 121 — — 83 — 204 Total revenues 18,698 35,711 22,725 116 (10,194) 67,056 Adjusted operating income (loss) 1,080 1,619 1,412 (303) (186) 3,622 Nine Months Ended September 30, 2021 Revenues from external customers $ 60,993 $ 105,909 $ 47,672 $ 101 $ — $ 214,675 Intersegment revenues 62 7,772 25,309 — (33,143) — Net investment income 432 — 13 387 — 832 Total revenues 61,487 113,681 72,994 488 (33,143) 215,507 Adjusted operating income (loss) 4,502 5,035 5,166 (1,015) (523) 13,165 September 30, 2020 Revenues from external customers $ 55,972 $ 98,233 $ 44,314 $ 83 $ — $ 198,602 Intersegment revenues 51 7,350 22,822 — (30,223) — Net investment income 341 — — 209 — 550 Total revenues 56,364 105,583 67,136 292 (30,223) 199,152 Adjusted operating income (loss) 6,035 4,127 4,371 (931) (539) 13,063 _____________________________________________ (1) Total revenues of the Pharmacy Services segment include approximately $2.8 billion and $2.5 billion of retail co-payments for the three months ended September 30, 2021 and 2020, respectively, and $9.0 billion and $8.5 billion of retail co-payments for the nine months ended September 30, 2021 and 2020, respectively. (2) Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Pharmacy Services segment, and/or the Retail/LTC segment. Intersegment adjusted operating income eliminations occur when members of Pharmacy Services Segment clients (“PSS members”) enrolled in Maintenance Choice ® elect to pick up maintenance prescriptions at one of the Company’s retail pharmacies instead of receiving them through the mail. When this occurs, both the Pharmacy Services and Retail/LTC segments record the adjusted operating income on a stand-alone basis. |
Reconciliation of Operating Earnings to Net Income | The following are reconciliations of consolidated operating income to adjusted operating income for the three and nine months ended September 30, 2021 and 2020: Three Months Ended Nine Months Ended In millions 2021 2020 2021 2020 Operating income (GAAP measure) $ 3,061 $ 3,249 $ 10,964 $ 11,387 Amortization of intangible assets (1) 561 587 1,730 1,751 Acquisition-related integration costs (2) 20 57 101 196 Goodwill impairment (3) 431 — 431 — Acquisition purchase price adjustment outside of measurement period (4) — — (61) — Gain on divestiture of subsidiary (5) — (271) — (271) Adjusted operating income $ 4,073 $ 3,622 $ 13,165 $ 13,063 _____________________________________________ (1) The Company’s acquisition activities have resulted in the recognition of intangible assets as required under the acquisition method of accounting which consist primarily of trademarks, customer contracts/relationships, covenants not to compete, technology, provider networks and value of business acquired. Definite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in the Company’s unaudited GAAP condensed consolidated statements of operations in operating expenses within each segment. Although intangible assets contribute to the Company’s revenue generation, the amortization of intangible assets does not directly relate to the underwriting of the Company’s insurance products, the services performed for the Company’s customers or the sale of the Company’s products or services. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of the Company’s acquisition activity. Accordingly, the Company believes excluding the amortization of intangible assets enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current performance and to analyze underlying business performance and trends. Intangible asset amortization excluded from the related non-GAAP financial measure represents the entire amount recorded within the Company’s GAAP financial statements, and the revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. Intangible asset amortization is excluded from the related non-GAAP financial measure because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised. (2) During the three and nine months ended September 30, 2021 and 2020, acquisition-related integration costs relate to the acquisition of Aetna. The acquisition-related integration costs are reflected in the Company’s unaudited GAAP condensed consolidated statements of operations in operating expenses within the Corporate/Other segment. (3) During the three and nine months ended September 30, 2021, the goodwill impairment charge relates to the LTC reporting unit within the Retail/LTC segment. (4) In June 2021, the Company received $61 million related to a purchase price working capital adjustment for an acquisition completed during the first quarter of 2020. The resolution of this matter occurred subsequent to the acquisition accounting measurement period and is reflected in the Company’s unaudited GAAP condensed consolidated statement of operations for the nine months ended September 30, 2021 as a reduction of operating expenses within the Health Care Benefits segment. |
Significant Accounting Polici_4
Significant Accounting Policies - Narrative (Details) people in Millions, patient in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)patientclinicpeoplelocationstate | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)Segmentpatientclinicpeoplestatelocation | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Significant Accounting Policies [Line Items] | |||||
Number of pharmacy plan members | people | 110 | 110 | |||
Number of patients served per year | patient | 1 | 1 | |||
Number of reportable segments | Segment | 4 | ||||
Health insurer fee | $ 0 | $ 255,000,000 | $ 0 | $ 774,000,000 | |
Payments to HIF | $ 1,000,000,000 | ||||
Related party transaction, expenses from transactions with related party | 16,000,000 | 5,000,000 | 35,000,000 | 28,000,000 | |
Related party transaction, other revenues from transactions with related party | $ 20,000,000 | $ 15,000,000 | $ 57,000,000 | $ 58,000,000 | |
Heartland Healthcare Services | |||||
Significant Accounting Policies [Line Items] | |||||
Number of states in which entity operates | state | 4 | 4 | |||
Retail/ LTC | |||||
Significant Accounting Policies [Line Items] | |||||
Number of stores | location | 9,900 | 9,900 | |||
Number of walk in medical clinics | clinic | 1,200 | 1,200 | |||
Health Care Benefits | |||||
Significant Accounting Policies [Line Items] | |||||
Number of people served | people | 35 | 35 | |||
Individual Public Health Insurance Exchanges, Submitted Regulatory Filings, Number of States | state | 8 |
Significant Accounting Polici_5
Significant Accounting Policies - Cash and Cash Equivalents, Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 9,826 | $ 7,854 | ||
Restricted cash (included in other assets) | 218 | 276 | ||
Total cash, cash equivalents and restricted cash in the statements of cash flows | $ 10,044 | $ 8,130 | $ 9,532 | $ 5,954 |
Significant Accounting Polici_6
Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Trade receivables | $ 8,398 | $ 7,101 |
Vendor and manufacturer receivables | 11,727 | 9,815 |
Premium receivables | 2,391 | 2,628 |
Other receivables | 2,767 | 2,198 |
Total accounts receivable, net | 25,283 | 21,742 |
Allowance for credit losses | $ 364 | $ 358 |
Significant Accounting Polici_7
Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 73,548 | $ 66,852 | $ 214,675 | $ 198,602 |
Net investment income (loss) | 246 | 204 | 832 | 550 |
Total revenues | 73,794 | 67,056 | 215,507 | 199,152 |
Pharmacy | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 47,033 | 43,062 | 135,917 | 126,725 |
Front Store | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 5,359 | 4,740 | 15,255 | 14,601 |
Premiums | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 18,984 | 17,182 | 56,927 | 51,749 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,172 | 1,868 | 6,576 | 5,527 |
Health Care Benefits | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 20,479 | 18,698 | 61,487 | 56,364 |
Pharmacy Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 39,046 | 35,711 | 113,681 | 105,583 |
Retail/ LTC | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 24,992 | 22,725 | 72,994 | 67,136 |
Operating Segments | Health Care Benefits | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 20,311 | 18,557 | 60,993 | 55,972 |
Net investment income (loss) | 147 | 121 | 432 | 341 |
Total revenues | 20,479 | 18,698 | 61,487 | 56,364 |
Operating Segments | Health Care Benefits | Pharmacy | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segments | Health Care Benefits | Front Store | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segments | Health Care Benefits | Premiums | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 18,959 | 17,165 | 56,869 | 51,699 |
Operating Segments | Health Care Benefits | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,373 | 1,412 | 4,186 | 4,324 |
Operating Segments | Pharmacy Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 36,851 | 33,492 | 105,909 | 98,233 |
Net investment income (loss) | 0 | 0 | 0 | 0 |
Total revenues | 39,046 | 35,711 | 113,681 | 105,583 |
Operating Segments | Pharmacy Services | Pharmacy network | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 23,665 | 21,473 | 68,476 | 63,109 |
Operating Segments | Pharmacy Services | Mail choice | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 15,202 | 14,032 | 44,685 | 41,815 |
Operating Segments | Pharmacy Services | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 179 | 206 | 520 | 659 |
Operating Segments | Pharmacy Services | Pharmacy | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 38,867 | 35,505 | 113,161 | 104,924 |
Operating Segments | Pharmacy Services | Front Store | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segments | Pharmacy Services | Premiums | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segments | Pharmacy Services | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 179 | 206 | 520 | 659 |
Operating Segments | Retail/ LTC | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 16,347 | 14,770 | 47,672 | 44,314 |
Net investment income (loss) | (33) | 0 | 13 | 0 |
Total revenues | 24,992 | 22,725 | 72,994 | 67,136 |
Operating Segments | Retail/ LTC | Pharmacy | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 19,023 | 17,608 | 55,781 | 51,833 |
Operating Segments | Retail/ LTC | Front Store | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 5,359 | 4,740 | 15,255 | 14,601 |
Operating Segments | Retail/ LTC | Premiums | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segments | Retail/ LTC | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 643 | 377 | 1,945 | 702 |
Corporate/ Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 39 | 33 | 101 | 83 |
Net investment income (loss) | 132 | 83 | 387 | 209 |
Total revenues | 171 | 116 | 488 | 292 |
Corporate/ Other | Pharmacy | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Corporate/ Other | Front Store | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Corporate/ Other | Premiums | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 25 | 17 | 58 | 50 |
Corporate/ Other | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 14 | 16 | 43 | 33 |
Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Net investment income (loss) | 0 | 0 | 0 | 0 |
Total revenues | (10,894) | (10,194) | (33,143) | (30,223) |
Intersegment Eliminations | Pharmacy | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (10,857) | (10,051) | (33,025) | (30,032) |
Intersegment Eliminations | Front Store | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Intersegment Eliminations | Premiums | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Intersegment Eliminations | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ (37) | $ (143) | $ (118) | $ (191) |
Significant Accounting Polici_8
Significant Accounting Policies - Receivables and Contracted Balances (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||||
Trade receivables (included in accounts receivable, net) | $ 8,398 | $ 7,101 | ||
Contract liabilities (included in accrued expenses) | $ 78 | $ 71 | $ 75 | $ 73 |
Significant Accounting Polici_9
Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Change in Contract with Customer, Liability [Roll Forward] | ||
Contract liabilities, beginning of the period | $ 71 | $ 73 |
Rewards earnings and gift card issuances | 286 | 266 |
Redemption and breakage | (279) | (264) |
Contract liabilities, end of the period | $ 78 | $ 75 |
Investments - Total Investment
Investments - Total Investment Schedule (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Total Investments [Line Items] | ||
Current | $ 3,015 | $ 3,000 |
Long-term | 22,370 | 20,812 |
Total | 25,385 | 23,812 |
Debt securities available for sale | ||
Total Investments [Line Items] | ||
Current | 2,859 | 2,774 |
Long-term | 19,715 | 18,414 |
Total | 22,574 | 21,188 |
Mortgage loans | ||
Total Investments [Line Items] | ||
Current | 110 | 226 |
Long-term | 824 | 821 |
Total | 934 | 1,047 |
Other investments | ||
Total Investments [Line Items] | ||
Current | 46 | 0 |
Long-term | 1,831 | 1,577 |
Total | $ 1,877 | $ 1,577 |
Investments - Debt Securities (
Investments - Debt Securities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 21,317 | $ 19,396 |
Gross Unrealized Gains | 1,312 | 1,803 |
Gross Unrealized Losses | (55) | (11) |
Fair Value | 22,574 | 21,188 |
Allowance for credit losses recorded | 0 | 0 |
Supporting experience-rated products | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross Unrealized Gains | 101 | 135 |
Gross Unrealized Losses | (1) | 0 |
Fair Value | 882 | 919 |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,260 | 2,341 |
Gross Unrealized Gains | 81 | 128 |
Gross Unrealized Losses | (1) | 0 |
Fair Value | 2,340 | 2,469 |
States, municipalities and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,939 | 2,556 |
Gross Unrealized Gains | 151 | 172 |
Gross Unrealized Losses | (5) | 0 |
Fair Value | 3,085 | 2,728 |
U.S. corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 8,898 | 7,879 |
Gross Unrealized Gains | 757 | 1,023 |
Gross Unrealized Losses | (22) | (8) |
Fair Value | 9,633 | 8,894 |
Foreign securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,736 | 2,595 |
Gross Unrealized Gains | 221 | 324 |
Gross Unrealized Losses | (12) | (1) |
Fair Value | 2,945 | 2,918 |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 849 | 673 |
Gross Unrealized Gains | 19 | 32 |
Gross Unrealized Losses | (5) | 0 |
Fair Value | 863 | 705 |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,160 | 962 |
Gross Unrealized Gains | 57 | 84 |
Gross Unrealized Losses | (8) | 0 |
Fair Value | 1,209 | 1,046 |
Other asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,447 | 2,369 |
Gross Unrealized Gains | 23 | 36 |
Gross Unrealized Losses | (2) | (2) |
Fair Value | 2,468 | 2,403 |
Redeemable preferred securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 28 | 21 |
Gross Unrealized Gains | 3 | 4 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 31 | $ 25 |
Investments - Debt Securities b
Investments - Debt Securities by Maturity (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Amortized Cost | ||
Less than one year | $ 1,056 | |
One year through five years | 7,123 | |
After five years through ten years | 4,492 | |
Greater than ten years | 4,190 | |
Amortized Cost | 21,317 | $ 19,396 |
Fair Value | ||
Less than one year | 1,071 | |
One year through five years | 7,390 | |
After five years through ten years | 4,718 | |
Greater than ten years | 4,855 | |
Total | 22,574 | 21,188 |
Residential mortgage-backed securities | ||
Amortized Cost | ||
Debt securities, maturity, without single maturity date | 849 | |
Amortized Cost | 849 | 673 |
Fair Value | ||
Debt securities, maturity, without single maturity date | 863 | |
Total | 863 | 705 |
Commercial mortgage-backed securities | ||
Amortized Cost | ||
Debt securities, maturity, without single maturity date | 1,160 | |
Amortized Cost | 1,160 | 962 |
Fair Value | ||
Debt securities, maturity, without single maturity date | 1,209 | |
Total | 1,209 | 1,046 |
Other asset-backed securities | ||
Amortized Cost | ||
Debt securities, maturity, without single maturity date | 2,447 | |
Amortized Cost | 2,447 | 2,369 |
Fair Value | ||
Debt securities, maturity, without single maturity date | 2,468 | |
Total | $ 2,468 | $ 2,403 |
Investments - Unrealized Loss P
Investments - Unrealized Loss Position (Details) $ in Millions | Sep. 30, 2021USD ($)security | Dec. 31, 2020USD ($)security |
Number of Securities | ||
Number of Securities, Less than 12 months | security | 2,243 | 468 |
Number of Securities, Greater than 12 months | security | 100 | 59 |
Number of Securities | security | 2,343 | 527 |
Fair Value | ||
Fair Value, Less than 12 months | $ 4,239 | $ 869 |
Fair Value, Greater than 12 months | 151 | 46 |
Fair Value | 4,390 | 915 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 months | 49 | 10 |
Unrealized Losses, Greater than 12 months | 6 | 1 |
Unrealized Losses | $ 55 | $ 11 |
U.S. government securities | ||
Number of Securities | ||
Number of Securities, Less than 12 months | security | 45 | 32 |
Number of Securities, Greater than 12 months | security | 2 | 0 |
Number of Securities | security | 47 | 32 |
Fair Value | ||
Fair Value, Less than 12 months | $ 204 | $ 205 |
Fair Value, Greater than 12 months | 1 | 0 |
Fair Value | 205 | 205 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 months | 1 | 0 |
Unrealized Losses, Greater than 12 months | 0 | 0 |
Unrealized Losses | $ 1 | $ 0 |
States, municipalities and political subdivisions | ||
Number of Securities | ||
Number of Securities, Less than 12 months | security | 234 | 49 |
Number of Securities, Greater than 12 months | security | 1 | 0 |
Number of Securities | security | 235 | 49 |
Fair Value | ||
Fair Value, Less than 12 months | $ 464 | $ 83 |
Fair Value, Greater than 12 months | 4 | 0 |
Fair Value | 468 | 83 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 months | 5 | 0 |
Unrealized Losses, Greater than 12 months | 0 | 0 |
Unrealized Losses | $ 5 | $ 0 |
U.S. corporate securities | ||
Number of Securities | ||
Number of Securities, Less than 12 months | security | 1,081 | 145 |
Number of Securities, Greater than 12 months | security | 43 | 2 |
Number of Securities | security | 1,124 | 147 |
Fair Value | ||
Fair Value, Less than 12 months | $ 1,528 | $ 155 |
Fair Value, Greater than 12 months | 51 | 0 |
Fair Value | 1,579 | 155 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 months | 19 | 8 |
Unrealized Losses, Greater than 12 months | 3 | 0 |
Unrealized Losses | $ 22 | $ 8 |
Foreign securities | ||
Number of Securities | ||
Number of Securities, Less than 12 months | security | 320 | 41 |
Number of Securities, Greater than 12 months | security | 12 | 5 |
Number of Securities | security | 332 | 46 |
Fair Value | ||
Fair Value, Less than 12 months | $ 568 | $ 69 |
Fair Value, Greater than 12 months | 21 | 5 |
Fair Value | 589 | 74 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 months | 11 | 1 |
Unrealized Losses, Greater than 12 months | 1 | 0 |
Unrealized Losses | $ 12 | $ 1 |
Residential mortgage-backed securities | ||
Number of Securities | ||
Number of Securities, Less than 12 months | security | 122 | 23 |
Number of Securities, Greater than 12 months | security | 9 | 3 |
Number of Securities | security | 131 | 26 |
Fair Value | ||
Fair Value, Less than 12 months | $ 476 | $ 26 |
Fair Value, Greater than 12 months | 10 | 0 |
Fair Value | 486 | 26 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 months | 5 | 0 |
Unrealized Losses, Greater than 12 months | 0 | 0 |
Unrealized Losses | $ 5 | $ 0 |
Commercial mortgage-backed securities | ||
Number of Securities | ||
Number of Securities, Less than 12 months | security | 127 | 22 |
Number of Securities, Greater than 12 months | security | 15 | 0 |
Number of Securities | security | 142 | 22 |
Fair Value | ||
Fair Value, Less than 12 months | $ 342 | $ 75 |
Fair Value, Greater than 12 months | 47 | 0 |
Fair Value | 389 | 75 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 months | 6 | 0 |
Unrealized Losses, Greater than 12 months | 2 | 0 |
Unrealized Losses | $ 8 | $ 0 |
Other asset-backed securities | ||
Number of Securities | ||
Number of Securities, Less than 12 months | security | 312 | 156 |
Number of Securities, Greater than 12 months | security | 18 | 49 |
Number of Securities | security | 330 | 205 |
Fair Value | ||
Fair Value, Less than 12 months | $ 652 | $ 256 |
Fair Value, Greater than 12 months | 17 | 41 |
Fair Value | 669 | 297 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 months | 2 | 1 |
Unrealized Losses, Greater than 12 months | 0 | 1 |
Unrealized Losses | $ 2 | $ 2 |
Redeemable preferred securities | ||
Number of Securities | ||
Number of Securities, Less than 12 months | security | 2 | |
Number of Securities, Greater than 12 months | security | 0 | |
Number of Securities | security | 2 | |
Fair Value | ||
Fair Value, Less than 12 months | $ 5 | |
Fair Value, Greater than 12 months | 0 | |
Fair Value | 5 | |
Unrealized Losses | ||
Unrealized Losses, Less than 12 months | 0 | |
Unrealized Losses, Greater than 12 months | 0 | |
Unrealized Losses | $ 0 |
Investments - Unrealized Loss_2
Investments - Unrealized Loss Position Maturities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value | ||
Less than one year | $ 22 | |
One year through five years | 1,270 | |
After five years through ten years | 949 | |
Greater than ten years | 605 | |
Fair Value | 4,390 | $ 915 |
Unrealized Losses | ||
Less than one year | 0 | |
One year through five years | 11 | |
After five years through ten years | 17 | |
Greater than ten years | 12 | |
Unrealized Losses | 55 | 11 |
Residential mortgage-backed securities | ||
Fair Value | ||
Debt securities, maturity, without single maturity date, fair value | 486 | |
Fair Value | 486 | 26 |
Unrealized Losses | ||
Debt securities, maturity, without single maturity date, unrealized losses | 5 | |
Unrealized Losses | 5 | 0 |
Commercial mortgage-backed securities | ||
Fair Value | ||
Debt securities, maturity, without single maturity date, fair value | 389 | |
Fair Value | 389 | 75 |
Unrealized Losses | ||
Debt securities, maturity, without single maturity date, unrealized losses | 8 | |
Unrealized Losses | 8 | 0 |
Other asset-backed securities | ||
Fair Value | ||
Debt securities, maturity, without single maturity date, fair value | 669 | |
Fair Value | 669 | 297 |
Unrealized Losses | ||
Debt securities, maturity, without single maturity date, unrealized losses | 2 | |
Unrealized Losses | 2 | $ 2 |
Supporting experience-rated products | ||
Fair Value | ||
Less than one year | 0 | |
One year through five years | 6 | |
After five years through ten years | 29 | |
Greater than ten years | 19 | |
Fair Value | 60 | |
Unrealized Losses | ||
Less than one year | 0 | |
One year through five years | 0 | |
After five years through ten years | 1 | |
Greater than ten years | 0 | |
Unrealized Losses | 1 | |
Supporting experience-rated products | Residential mortgage-backed securities | ||
Fair Value | ||
Debt securities, maturity, without single maturity date, fair value | 0 | |
Unrealized Losses | ||
Debt securities, maturity, without single maturity date, unrealized losses | 0 | |
Supporting experience-rated products | Commercial mortgage-backed securities | ||
Fair Value | ||
Debt securities, maturity, without single maturity date, fair value | 6 | |
Unrealized Losses | ||
Debt securities, maturity, without single maturity date, unrealized losses | 0 | |
Supporting experience-rated products | Other asset-backed securities | ||
Fair Value | ||
Debt securities, maturity, without single maturity date, fair value | 0 | |
Unrealized Losses | ||
Debt securities, maturity, without single maturity date, unrealized losses | 0 | |
Supporting remaining products | ||
Fair Value | ||
Less than one year | 22 | |
One year through five years | 1,264 | |
After five years through ten years | 920 | |
Greater than ten years | 586 | |
Fair Value | 4,330 | |
Unrealized Losses | ||
Less than one year | 0 | |
One year through five years | 11 | |
After five years through ten years | 16 | |
Greater than ten years | 12 | |
Unrealized Losses | 54 | |
Supporting remaining products | Residential mortgage-backed securities | ||
Fair Value | ||
Debt securities, maturity, without single maturity date, fair value | 486 | |
Unrealized Losses | ||
Debt securities, maturity, without single maturity date, unrealized losses | 5 | |
Supporting remaining products | Commercial mortgage-backed securities | ||
Fair Value | ||
Debt securities, maturity, without single maturity date, fair value | 383 | |
Unrealized Losses | ||
Debt securities, maturity, without single maturity date, unrealized losses | 8 | |
Supporting remaining products | Other asset-backed securities | ||
Fair Value | ||
Debt securities, maturity, without single maturity date, fair value | 669 | |
Unrealized Losses | ||
Debt securities, maturity, without single maturity date, unrealized losses | $ 2 |
Investments - Mortgage Loans (D
Investments - Mortgage Loans (Details) - Commercial Real Estate - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Mortgage Loans on Real Estate [Line Items] | ||||
New mortgage loans | $ 53 | $ 31 | $ 173 | $ 55 |
Mortgage loans fully repaid | 88 | 37 | 260 | 114 |
Mortgage loans foreclosed | $ 0 | $ 0 | $ 0 | $ 0 |
Investments - Mortgage Loans Cr
Investments - Mortgage Loans Credit Ratings Indicator (Details) - Commercial Real Estate - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | $ 934 | $ 1,047 |
Category 1 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 51 | 59 |
Category 2 to 4 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 870 | 952 |
Categories 5 and 6 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 13 | 36 |
Category 7 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | 0 |
2021 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 171 | |
2021 | Category 1 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | |
2021 | Category 2 to 4 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 171 | |
2021 | Categories 5 and 6 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | |
2021 | Category 7 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | |
2020 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 44 | 46 |
2020 | Category 1 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | 0 |
2020 | Category 2 to 4 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 44 | 46 |
2020 | Categories 5 and 6 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | 0 |
2020 | Category 7 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | 0 |
2019 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 64 | 96 |
2019 | Category 1 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | 0 |
2019 | Category 2 to 4 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 64 | 96 |
2019 | Categories 5 and 6 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | 0 |
2019 | Category 7 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | 0 |
2018 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 76 | 94 |
2018 | Category 1 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | 0 |
2018 | Category 2 to 4 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 73 | 91 |
2018 | Categories 5 and 6 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 3 | 3 |
2018 | Category 7 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | 0 |
2017 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 101 | 150 |
2017 | Category 1 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 22 | 22 |
2017 | Category 2 to 4 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 75 | 124 |
2017 | Categories 5 and 6 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 4 | 4 |
2017 | Category 7 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 0 | 0 |
Prior | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 478 | 661 |
Prior | Category 1 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 29 | 37 |
Prior | Category 2 to 4 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 443 | 595 |
Prior | Categories 5 and 6 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | 6 | 29 |
Prior | Category 7 | ||
Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans | $ 0 | $ 0 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | $ 279 | $ 203 | $ 822 | $ 550 |
Investment expenses | (11) | (8) | (28) | (25) |
Net investment income (excluding net realized capital gains or losses) | 268 | 195 | 794 | 525 |
Net realized capital gains (losses) | (22) | 9 | 38 | 25 |
Net investment income | 246 | 204 | 832 | 550 |
Yield-related impairment loss | 3 | 2 | 35 | 44 |
Credit-related impairment loss | 0 | 1 | 0 | 4 |
Supporting experience-rated products | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Net investment income | 9 | 10 | 28 | 31 |
Debt securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 157 | 151 | 474 | 441 |
Mortgage loans | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 13 | 15 | 41 | 45 |
Other investments | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | $ 109 | $ 37 | $ 307 | $ 64 |
Investments - Realized Gains (D
Investments - Realized Gains (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Investments [Abstract] | ||||
Proceeds from sales | $ 668 | $ 905 | $ 2,935 | $ 2,324 |
Gross realized capital gains | 19 | 17 | 61 | 60 |
Gross realized capital losses | $ 2 | $ 3 | $ 12 | $ 59 |
Fair Value - Measurement on a R
Fair Value - Measurement on a Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 22,574 | $ 21,188 |
U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,340 | 2,469 |
States, municipalities and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,085 | 2,728 |
U.S. corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 9,633 | 8,894 |
Foreign securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,945 | 2,918 |
Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 863 | 705 |
Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,209 | 1,046 |
Other asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,468 | 2,403 |
Redeemable preferred securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 31 | 25 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial liabilities at fair value on a recurring basis | 0 | 0 |
Cash and cash equivalents | 9,826 | 7,854 |
Debt securities | 22,574 | 21,188 |
Equity securities | 149 | 47 |
Total | 32,549 | 29,089 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 4,953 | 3,985 |
Debt securities | 2,295 | 2,370 |
Equity securities | 107 | 17 |
Total | 7,355 | 6,372 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 4,873 | 3,869 |
Debt securities | 20,240 | 18,764 |
Equity securities | 0 | 0 |
Total | 25,113 | 22,633 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Debt securities | 39 | 54 |
Equity securities | 42 | 30 |
Total | 81 | 84 |
Recurring | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,340 | 2,469 |
Recurring | U.S. government securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,295 | 2,370 |
Recurring | U.S. government securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 45 | 99 |
Recurring | U.S. government securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring | States, municipalities and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,085 | 2,728 |
Recurring | States, municipalities and political subdivisions | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring | States, municipalities and political subdivisions | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,085 | 2,727 |
Recurring | States, municipalities and political subdivisions | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 1 |
Recurring | U.S. corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 9,633 | 8,894 |
Recurring | U.S. corporate securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring | U.S. corporate securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 9,594 | 8,842 |
Recurring | U.S. corporate securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 39 | 52 |
Recurring | Foreign securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,945 | 2,918 |
Recurring | Foreign securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring | Foreign securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,945 | 2,918 |
Recurring | Foreign securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 863 | 705 |
Recurring | Residential mortgage-backed securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring | Residential mortgage-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 863 | 705 |
Recurring | Residential mortgage-backed securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,209 | 1,046 |
Recurring | Commercial mortgage-backed securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring | Commercial mortgage-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,209 | 1,046 |
Recurring | Commercial mortgage-backed securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring | Other asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,468 | 2,403 |
Recurring | Other asset-backed securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring | Other asset-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,468 | 2,403 |
Recurring | Other asset-backed securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring | Redeemable preferred securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 31 | 25 |
Recurring | Redeemable preferred securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring | Redeemable preferred securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 31 | 24 |
Recurring | Redeemable preferred securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 0 | $ 1 |
Fair Value - Carrying Value and
Fair Value - Carrying Value and Fair Value Classified by Level (Details) - Nonrecurring - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Carrying Value | ||
Assets: | ||
Mortgage loans | $ 934 | $ 1,047 |
Equity securities | 50 | 145 |
Liabilities: | ||
Investment contracts liabilities with a fixed maturity | 5 | 5 |
Investment contracts liabilities without a fixed maturity | 334 | 322 |
Long-term debt | 58,393 | 64,647 |
Level 1 | Estimated Fair Value | ||
Assets: | ||
Mortgage loans | 0 | 0 |
Liabilities: | ||
Investment contracts liabilities with a fixed maturity | 0 | 0 |
Investment contracts liabilities without a fixed maturity | 0 | 0 |
Long-term debt | 66,960 | 75,940 |
Level 2 | Estimated Fair Value | ||
Assets: | ||
Mortgage loans | 0 | 0 |
Liabilities: | ||
Investment contracts liabilities with a fixed maturity | 0 | 0 |
Investment contracts liabilities without a fixed maturity | 0 | 0 |
Long-term debt | 0 | 0 |
Level 3 | Estimated Fair Value | ||
Assets: | ||
Mortgage loans | 945 | 1,070 |
Liabilities: | ||
Investment contracts liabilities with a fixed maturity | 5 | 5 |
Investment contracts liabilities without a fixed maturity | 378 | 371 |
Long-term debt | 0 | 0 |
Total | Estimated Fair Value | ||
Assets: | ||
Mortgage loans | 945 | 1,070 |
Liabilities: | ||
Investment contracts liabilities with a fixed maturity | 5 | 5 |
Investment contracts liabilities without a fixed maturity | 378 | 371 |
Long-term debt | $ 66,960 | $ 75,940 |
Fair Value - Separate Accounts
Fair Value - Separate Accounts Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | $ 5,086 | $ 4,881 |
Recurring | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 5,095 | 4,852 |
Recurring | Other Payables | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 9 | |
Recurring | Other Receivables | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 29 | |
Recurring | Cash and cash equivalents | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 219 | 188 |
Recurring | Debt securities | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 4,297 | 4,099 |
Recurring | Equity securities | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 2 | 2 |
Recurring | Common/collective trusts | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 577 | 563 |
Recurring | Level 1 | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 1,217 | 1,467 |
Recurring | Level 1 | Cash and cash equivalents | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 3 | 2 |
Recurring | Level 1 | Debt securities | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 1,214 | 1,465 |
Recurring | Level 1 | Equity securities | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 0 | 0 |
Recurring | Level 1 | Common/collective trusts | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 0 | 0 |
Recurring | Level 2 | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 3,878 | 3,385 |
Recurring | Level 2 | Cash and cash equivalents | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 216 | 186 |
Recurring | Level 2 | Debt securities | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 3,083 | 2,634 |
Recurring | Level 2 | Equity securities | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 2 | 2 |
Recurring | Level 2 | Common/collective trusts | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 577 | 563 |
Recurring | Level 3 | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 0 | 0 |
Recurring | Level 3 | Cash and cash equivalents | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 0 | 0 |
Recurring | Level 3 | Debt securities | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 0 | 0 |
Recurring | Level 3 | Equity securities | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | 0 | 0 |
Recurring | Level 3 | Common/collective trusts | ||
Fair Value, Separate Account Investment [Line Items] | ||
Separate accounts assets | $ 0 | $ 0 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Goodwill [Line Items] | |||||
Goodwill impairment | $ 431 | $ 0 | $ 431 | $ 0 | |
Goodwill | 79,121 | 79,121 | $ 79,552 | ||
Cumulative goodwill impairments | 6,600 | 6,600 | 6,100 | ||
Long-Term Care Reporting Unit | |||||
Goodwill [Line Items] | |||||
Goodwill impairment | 431 | ||||
Goodwill | 0 | 0 | |||
Retail/ LTC | |||||
Goodwill [Line Items] | |||||
Goodwill impairment | 431 | ||||
Goodwill | $ 10,376 | $ 10,376 | $ 10,807 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles - Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill [Roll Forward] | ||||
Balance, beginning of the period | $ 79,552 | |||
Goodwill impairment | $ (431) | $ 0 | (431) | $ 0 |
Balance, end of the period | 79,121 | 79,121 | ||
Health Care Benefits | ||||
Goodwill [Roll Forward] | ||||
Balance, beginning of the period | 45,130 | |||
Goodwill impairment | 0 | |||
Balance, end of the period | 45,130 | 45,130 | ||
Pharmacy Services | ||||
Goodwill [Roll Forward] | ||||
Balance, beginning of the period | 23,615 | |||
Goodwill impairment | 0 | |||
Balance, end of the period | 23,615 | 23,615 | ||
Retail/ LTC | ||||
Goodwill [Roll Forward] | ||||
Balance, beginning of the period | 10,807 | |||
Goodwill impairment | (431) | |||
Balance, end of the period | $ 10,376 | $ 10,376 |
Health Care Costs Payable - Com
Health Care Costs Payable - Components of Change in Health Care Costs Payable (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Health care costs payable, beginning of the period, net | $ 7,936 | |
Less: Claims paid | ||
Health care costs payable, end of the period, net | 8,877 | |
Health Care Benefits | ||
Less: Claims paid | ||
Benefit costs recorded in other insurance liabilities | 45 | $ 31 |
Corporate / Other | ||
Less: Claims paid | ||
Benefit costs recorded in other insurance liabilities | 168 | 173 |
Health Insurance Product Line | ||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Health care costs payable, beginning of the period | 7,936 | 6,879 |
Less: Reinsurance recoverables | 10 | 5 |
Health care costs payable, beginning of the period, net | 7,926 | 6,874 |
Acquisition | 0 | 444 |
Add: Components of incurred health care costs | ||
Current year | 48,243 | 40,777 |
Prior years | (771) | (448) |
Total incurred health care costs | 47,472 | 40,329 |
Less: Claims paid | ||
Current year | 39,887 | 34,198 |
Prior years | 6,639 | 5,865 |
Total claims paid | 46,526 | 40,063 |
Add: Premium deficiency reserve | 1 | 1 |
Health care costs payable, end of the period, net | 8,873 | 7,585 |
Add: Reinsurance recoverables | 4 | 8 |
Health care costs payable, end of the period | 8,877 | 7,593 |
Premium deficiency reserve | $ 1 | $ 1 |
Health Care Costs Payable - Nar
Health Care Costs Payable - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Incurred but not reported (IBNR) claims liability, net | $ 6,800 | |
Health Insurance Product Line | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Decrease in prior years' healthcare costs payable | $ (771) | $ (448) |
Borrowings - Schedule of Borrow
Borrowings - Schedule of Borrowings (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Aug. 18, 2021 | Dec. 31, 2020 | Aug. 31, 2020 |
Debt Instrument [Line Items] | ||||
Finance lease liabilities | $ 1,207 | $ 1,083 | ||
Total debt principal | 58,987 | 65,318 | ||
Debt premiums | 224 | 238 | ||
Debt discounts and deferred financing costs | (818) | (909) | ||
Long-term debt and lease obligation | 58,393 | 64,647 | ||
Current portion of long-term debt | (1,561) | (5,440) | ||
Long-term debt | $ 56,832 | 59,207 | ||
Senior Notes | 3.35% senior notes due March 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 3.35% | |||
Long-term debt | $ 0 | 2,038 | ||
Senior Notes | 4.125% senior notes due May 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.125% | |||
Long-term debt | $ 0 | 222 | ||
Senior Notes | 2.125% senior notes due June 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 2.125% | |||
Long-term debt | $ 0 | 1,750 | ||
Senior Notes | 4.125% senior notes due June 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.125% | |||
Long-term debt | $ 0 | 203 | ||
Senior Notes | 5.45% senior notes due June 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 5.45% | |||
Long-term debt | $ 0 | 187 | ||
Senior Notes | 3.5% senior notes due July 2022 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 3.50% | |||
Long-term debt | $ 1,500 | 1,500 | ||
Senior Notes | 2.75% senior notes due November 2022 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 2.75% | |||
Long-term debt | $ 1,000 | 1,000 | ||
Senior Notes | 2.75% senior notes due December 2022 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 2.75% | |||
Long-term debt | $ 1,250 | 1,250 | ||
Senior Notes | 4.75% senior notes due December 2022 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.75% | |||
Long-term debt | $ 399 | 399 | ||
Senior Notes | 3.7% senior notes due March 2023 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 3.70% | 3.70% | ||
Long-term debt | $ 2,336 | 2,336 | ||
Senior Notes | 2.8% senior notes due June 2023 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 2.80% | |||
Long-term debt | $ 1,300 | 1,300 | ||
Senior Notes | 4% senior notes due December 2023 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.00% | 4.00% | ||
Long-term debt | $ 414 | 414 | ||
Senior Notes | 3.375% senior notes due August 2024 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 3.375% | |||
Long-term debt | $ 650 | 650 | ||
Senior Notes | 2.625% senior notes due August 2024 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 2.625% | |||
Long-term debt | $ 1,000 | 1,000 | ||
Senior Notes | 3.5% senior notes due November 2024 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 3.50% | |||
Long-term debt | $ 750 | 750 | ||
Senior Notes | 5% senior notes due December 2024 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 5.00% | |||
Long-term debt | $ 299 | 299 | ||
Senior Notes | 4.1% senior notes due March 2025 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.10% | 4.10% | ||
Long-term debt | $ 950 | 950 | ||
Senior Notes | 3.875% senior notes due July 2025 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 3.875% | |||
Long-term debt | $ 2,828 | 2,828 | ||
Senior Notes | 2.875% senior notes due June 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 2.875% | |||
Long-term debt | $ 1,750 | 1,750 | ||
Senior Notes | 3% senior notes due August 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 3.00% | |||
Long-term debt | $ 750 | 750 | ||
Senior Notes | 3.625% senior notes due April 2027 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 3.625% | |||
Long-term debt | $ 750 | 750 | ||
Senior Notes | 6.25% senior notes due June 2027 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 6.25% | |||
Long-term debt | $ 372 | 372 | ||
Senior Notes | 1.3% senior notes due August 2027 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 1.30% | |||
Long-term debt | $ 2,250 | 2,250 | ||
Senior Notes | 4.3% senior notes due March 2028 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.30% | |||
Long-term debt | $ 5,000 | 7,050 | ||
Senior Notes | 3.25% senior notes due August 2029 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 3.25% | |||
Long-term debt | $ 1,750 | 1,750 | ||
Senior Notes | 3.75% senior notes due April 2030 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 3.75% | |||
Long-term debt | $ 1,500 | 1,500 | ||
Senior Notes | 1.75% senior notes due August 2030 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 1.75% | |||
Long-term debt | $ 1,250 | 1,250 | ||
Senior Notes | 1.875% senior notes due February 2031 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 1.875% | |||
Long-term debt | $ 1,250 | 1,250 | ||
Senior Notes | 2.125% senior notes due September 2031 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 2.125% | 2.125% | ||
Long-term debt | $ 1,000 | 0 | ||
Senior Notes | 4.875% senior notes due July 2035 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.875% | |||
Long-term debt | $ 652 | 652 | ||
Senior Notes | 6.625% senior notes due June 2036 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 6.625% | |||
Long-term debt | $ 771 | 771 | ||
Senior Notes | 6.75% senior notes due December 2037 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 6.75% | |||
Long-term debt | $ 533 | 533 | ||
Senior Notes | 4.78% senior notes due March 2038 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.78% | |||
Long-term debt | $ 5,000 | 5,000 | ||
Senior Notes | 6.125% senior notes due September 2039 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 6.125% | |||
Long-term debt | $ 447 | 447 | ||
Senior Notes | 4.125% senior notes due April 2040 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.125% | |||
Long-term debt | $ 1,000 | 1,000 | ||
Senior Notes | 2.7% senior notes due August 2040 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 2.70% | |||
Long-term debt | $ 1,250 | 1,250 | ||
Senior Notes | 5.75% senior notes due May 2041 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 5.75% | |||
Long-term debt | $ 133 | 133 | ||
Senior Notes | 4.5% senior notes due May 2042 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.50% | |||
Long-term debt | $ 500 | 500 | ||
Senior Notes | 4.125% senior notes due November 2042 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.125% | |||
Long-term debt | $ 500 | 500 | ||
Senior Notes | 5.3% senior notes due December 2043 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 5.30% | |||
Long-term debt | $ 750 | 750 | ||
Senior Notes | 4.75% senior notes due March 2044 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.75% | |||
Long-term debt | $ 375 | 375 | ||
Senior Notes | 5.125% senior notes due July 2045 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 5.125% | |||
Long-term debt | $ 3,500 | 3,500 | ||
Senior Notes | 3.875% senior notes due August 2047 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 3.875% | |||
Long-term debt | $ 1,000 | 1,000 | ||
Senior Notes | 5.05% senior notes due March 2048 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 5.05% | |||
Long-term debt | $ 8,000 | 8,000 | ||
Senior Notes | 4.25% senior notes due April 2050 | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 4.25% | |||
Long-term debt | $ 750 | $ 750 | ||
Floating Rate Notes | Floating rate notes due March 2021 (0.950% at December 31, 2020) | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 0.95% | |||
Long-term debt | 0 | $ 1,000 | ||
Other Debt Obligations | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 321 | $ 326 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | Aug. 18, 2021 | Aug. 31, 2021 | Aug. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Debt Instrument [Line Items] | |||||||
Proceeds from issuance of long-term debt | $ 987,000,000 | $ 7,919,000,000 | |||||
Loss on early extinguishment of debt | $ 363,000,000 | $ 766,000,000 | $ 363,000,000 | $ 766,000,000 | |||
Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Premium paid in excess of debt principal | $ 706,000,000 | ||||||
Write off of deferred debt issuance cost | 47,000,000 | ||||||
Debt Extinguishment Fees | 13,000,000 | ||||||
Loss on early extinguishment of debt | 766,000,000 | ||||||
Senior Notes | 2.125% senior notes due September 2031 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount of debt | $ 1,000,000,000 | ||||||
Debt interest rate | 2.125% | 2.125% | 2.125% | ||||
Proceeds from issuance of long-term debt | $ 987,000,000 | ||||||
Senior Notes | Senior Notes, 4.3%, Due 2028 | |||||||
Debt Instrument [Line Items] | |||||||
Debt interest rate | 4.30% | ||||||
Aggregate principal of debt extinguished | $ 2,000,000,000 | ||||||
Premium paid in excess of debt principal | 332,000,000 | ||||||
Write off of deferred debt issuance cost | 26,000,000 | ||||||
Debt Extinguishment Fees | 5,000,000 | ||||||
Loss on early extinguishment of debt | $ 363,000,000 | ||||||
Senior Notes | Outstanding Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal of debt extinguished | $ 6,000,000,000 | ||||||
Senior Notes | 4% senior notes due December 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Debt interest rate | 4.00% | 4.00% | 4.00% | ||||
Aggregate principal of debt extinguished | $ 723,000,000 | ||||||
Senior Notes | 3.7% senior notes due March 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Debt interest rate | 3.70% | 3.70% | 3.70% | ||||
Aggregate principal of debt extinguished | $ 2,300,000,000 | ||||||
Senior Notes | 4.1% senior notes due March 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Debt interest rate | 4.10% | 4.10% | 4.10% | ||||
Aggregate principal of debt extinguished | $ 3,000,000,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Nov. 02, 2016 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Stock repurchased during period (in shares) | 0 | 0 | |||
Dividends declared per share (in dollars per share) | $ 0.50 | $ 0.50 | $ 1.50 | $ 1.50 | |
2016 Repurchase Program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock repurchase program, authorized amount | $ 15,000,000,000 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 13,900,000,000 | $ 13,900,000,000 |
Other Comprehensive Income (Det
Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||||||||
Balance at beginning of period | $ 73,565 | $ 71,164 | $ 69,701 | $ 68,355 | $ 65,474 | $ 64,170 | $ 69,701 | $ 64,170 |
Other comprehensive income (loss) | (93) | 148 | (392) | 42 | 526 | (332) | (337) | 236 |
Balance at end of period | 74,618 | 73,565 | 71,164 | 69,112 | 68,355 | 65,474 | 74,618 | 69,112 |
Net unrealized investment gains (losses) | ||||||||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||||||||
Balance at beginning of period | 977 | 1,214 | 987 | 774 | 1,214 | 774 | ||
Other Comprehensive income (loss) before reclassifications, net of tax | (61) | 52 | (297) | 218 | ||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | (12) | (8) | (13) | 39 | ||||
Other comprehensive income (loss) | (73) | 44 | (310) | 257 | ||||
Balance at end of period | 904 | 977 | 1,031 | 987 | 904 | 1,031 | ||
OCI before Reclass, pre-tax | (73) | 83 | (346) | 278 | ||||
Amounts reclassified, pre-tax | (14) | (10) | (15) | 47 | ||||
Foreign currency translation adjustments | ||||||||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||||||||
Balance at beginning of period | 6 | 7 | (2) | 4 | 7 | 4 | ||
Other Comprehensive income (loss) before reclassifications, net of tax | (5) | 1 | (6) | (5) | ||||
Other comprehensive income (loss) | (5) | 1 | (6) | (5) | ||||
Balance at end of period | 1 | 6 | (1) | (2) | 1 | (1) | ||
Net cash flow hedges | ||||||||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||||||||
Balance at beginning of period | 241 | 248 | 267 | 279 | 248 | 279 | ||
Other Comprehensive income (loss) before reclassifications, net of tax | 0 | 0 | 0 | (5) | ||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | (15) | (3) | (22) | (10) | ||||
Other comprehensive income (loss) | (15) | (3) | (22) | (15) | ||||
Balance at end of period | 226 | 241 | 264 | 267 | 226 | 264 | ||
OCI before Reclass, pre-tax | 0 | 0 | 0 | (7) | ||||
Amounts reclassified, pre-tax | (20) | (4) | (29) | (14) | ||||
Amount expected to be reclassified | 11 | 11 | ||||||
Pension and OPEB plans | ||||||||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||||||||
Balance at beginning of period | (54) | (55) | (39) | (38) | (55) | (38) | ||
Other Comprehensive income (loss) before reclassifications, net of tax | 0 | 0 | 0 | (6) | ||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | 0 | 0 | 1 | 5 | ||||
Other comprehensive income (loss) | 0 | 0 | 1 | (1) | ||||
Balance at end of period | (54) | (54) | (39) | (39) | (54) | (39) | ||
OCI before Reclass, pre-tax | 0 | 0 | 0 | (8) | ||||
Amounts reclassified, pre-tax | 0 | 0 | 1 | 7 | ||||
AOCI Including Portion Attributable to Noncontrolling Interest | ||||||||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||||||||
Balance at beginning of period | 1,170 | $ 1,414 | 1,213 | $ 1,019 | 1,414 | 1,019 | ||
Balance at end of period | $ 1,077 | $ 1,170 | $ 1,255 | $ 1,213 | $ 1,077 | $ 1,255 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of EPS (in shares) | 8 | 17 | 8 | 16 |
Numerator for earnings per share calculation: | ||||
Net income attributable to CVS Health | $ 1,598 | $ 1,224 | $ 6,604 | $ 6,206 |
Denominator for earnings per share calculation: | ||||
Weighted average shares, basic (in shares) | 1,321 | 1,310 | 1,318 | 1,308 |
Effect of dilutive securities (in shares) | 8 | 5 | 8 | 6 |
Weighted average diluted shares outstanding (in shares) | 1,329 | 1,315 | 1,326 | 1,314 |
Earnings per share: | ||||
Earnings per share, basic (in dollars per share) | $ 1.21 | $ 0.93 | $ 5.01 | $ 4.74 |
Earnings per share, diluted (in dollars per share) | $ 1.20 | $ 0.93 | $ 4.98 | $ 4.72 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 12 Months Ended | ||
Dec. 31, 2012member | Sep. 30, 2021store | Dec. 31, 2020claim | |
Commitments and Contingencies Disclosure [Abstract] | |||
Guarantor obligations, number of leases | store | 72 | ||
Sample size | member | 200 | ||
Radcliffe and Flaim v. Aetna Inc., et al | Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Number of claims | claim | 2 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 9 Months Ended |
Sep. 30, 2021Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Financial Measures of Segments to Consolidated Totals (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue, Major Customer [Line Items] | ||||
Revenues from external customers | $ 73,548 | $ 66,852 | $ 214,675 | $ 198,602 |
Net investment income (loss) | 246 | 204 | 832 | 550 |
Total revenues | 73,794 | 67,056 | 215,507 | 199,152 |
Adjusted operating income (loss) | 4,073 | 3,622 | 13,165 | 13,063 |
Health Care Benefits | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 20,479 | 18,698 | 61,487 | 56,364 |
Pharmacy Services | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 39,046 | 35,711 | 113,681 | 105,583 |
Retail/ LTC | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 24,992 | 22,725 | 72,994 | 67,136 |
Operating Segments | Health Care Benefits | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues from external customers | 20,311 | 18,557 | 60,993 | 55,972 |
Net investment income (loss) | 147 | 121 | 432 | 341 |
Total revenues | 20,479 | 18,698 | 61,487 | 56,364 |
Adjusted operating income (loss) | 1,106 | 1,080 | 4,502 | 6,035 |
Operating Segments | Pharmacy Services | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues from external customers | 36,851 | 33,492 | 105,909 | 98,233 |
Net investment income (loss) | 0 | 0 | 0 | 0 |
Total revenues | 39,046 | 35,711 | 113,681 | 105,583 |
Adjusted operating income (loss) | 1,773 | 1,619 | 5,035 | 4,127 |
Copayments | 2,800 | 2,500 | 9,000 | 8,500 |
Operating Segments | Retail/ LTC | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues from external customers | 16,347 | 14,770 | 47,672 | 44,314 |
Net investment income (loss) | (33) | 0 | 13 | 0 |
Total revenues | 24,992 | 22,725 | 72,994 | 67,136 |
Adjusted operating income (loss) | 1,723 | 1,412 | 5,166 | 4,371 |
Intersegment Eliminations | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | (10,894) | (10,194) | (33,143) | (30,223) |
Net investment income (loss) | 0 | 0 | 0 | 0 |
Total revenues | (10,894) | (10,194) | (33,143) | (30,223) |
Adjusted operating income (loss) | (186) | (186) | (523) | (539) |
Intersegment Eliminations | Health Care Benefits | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 21 | 20 | 62 | 51 |
Intersegment Eliminations | Pharmacy Services | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 2,195 | 2,219 | 7,772 | 7,350 |
Intersegment Eliminations | Retail/ LTC | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 8,678 | 7,955 | 25,309 | 22,822 |
Corporate/ Other | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues from external customers | 39 | 33 | 101 | 83 |
Net investment income (loss) | 132 | 83 | 387 | 209 |
Total revenues | 171 | 116 | 488 | 292 |
Adjusted operating income (loss) | $ (343) | $ (303) | $ (1,015) | $ (931) |
Segment Reporting - Reconcili_2
Segment Reporting - Reconciliation from Operating Income to Adjusted Operating Income (Details) - USD ($) $ in Millions | Jul. 31, 2020 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Segment Reporting [Abstract] | ||||||
Operating income (GAAP measure) | $ 3,061 | $ 3,249 | $ 10,964 | $ 11,387 | ||
Amortization of intangible assets | 561 | 587 | 1,730 | 1,751 | ||
Acquisition-related integration costs | 20 | 57 | 101 | 196 | ||
Goodwill impairment | 431 | 0 | 431 | 0 | ||
Acquisition purchase price adjustment outside of measurement period | 0 | (271) | (61) | (271) | ||
Adjusted operating income (loss) | $ 4,073 | $ 3,622 | 13,165 | 13,063 | ||
Revenue, Major Customer [Line Items] | ||||||
Proceeds from sale of subsidiary | 0 | $ 834 | ||||
Health Care Benefits | ||||||
Segment Reporting [Abstract] | ||||||
Goodwill impairment | $ 0 | |||||
Revenue, Major Customer [Line Items] | ||||||
Receipt related purchase price adjustment from acquisition | $ 61 | |||||
Health Care Benefits | Discontinued Operations, Disposed of by Sale | Coventry Health Care Workers Compensation business | ||||||
Revenue, Major Customer [Line Items] | ||||||
Proceeds from sale of subsidiary | $ 850 |