Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 15, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MOLINA HEALTHCARE INC | ||
Entity Central Index Key | 1,179,929 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 6,018.8 | ||
Entity Common Stock, Shares Outstanding | 62,460,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | |||
Premium revenue | $ 17,612 | $ 18,854 | $ 16,445 |
Service revenue | 407 | 521 | 539 |
Premium tax revenue | 417 | 438 | 468 |
Health insurer fees reimbursed | 329 | 0 | 292 |
Investment income and other revenue | 125 | 70 | 38 |
Total revenue | 18,890 | 19,883 | 17,782 |
Operating expenses: | |||
General and administrative expenses | 1,333 | 1,594 | 1,393 |
Premium tax expenses | 417 | 438 | 468 |
Health insurer fees | 348 | 0 | 217 |
Depreciation and amortization | 99 | 137 | 139 |
Restructuring and separation costs | 46 | 234 | 0 |
Impairment losses | 0 | 470 | 0 |
Total operating expenses | 17,744 | 20,438 | 17,476 |
Loss on sales of subsidiaries, net of gain | (15) | 0 | 0 |
Operating income (loss) | 1,131 | (555) | 306 |
Interest expense | 115 | 118 | 101 |
Other expenses (income), net | 17 | (61) | 0 |
Total other expenses, net | 132 | 57 | 101 |
Income (loss) before income tax expense (benefit) | 999 | (612) | 205 |
Income tax expense (benefit) | 292 | (100) | 153 |
Net income (loss) | $ 707 | $ (512) | $ 52 |
Net income (loss) per share: | |||
Basic (in dollars per share) | $ 11.57 | $ (9.07) | $ 0.93 |
Diluted (in dollars per share) | $ 10.61 | $ (9.07) | $ 0.92 |
Weighted average shares outstanding: | |||
Basic (in shares) | 61.1 | 56.4 | 55.4 |
Diluted (in shares) | 66.6 | 56.4 | 56.2 |
Medical care costs | |||
Operating expenses: | |||
Cost of revenue | $ 15,137 | $ 17,073 | $ 14,774 |
Cost of service revenue | |||
Operating expenses: | |||
Cost of revenue | $ 364 | $ 492 | $ 485 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||||||||||
Net income (loss) | $ 201 | $ 197 | $ 202 | $ 107 | $ (262) | $ (97) | $ (230) | $ 77 | $ 707 | $ (512) | $ 52 |
Other comprehensive (loss) income: | |||||||||||
Unrealized investment (loss) gain | (3) | (5) | 3 | ||||||||
Less: effect of income taxes | (1) | (2) | 1 | ||||||||
Other comprehensive (loss) income, net of tax | (2) | (3) | 2 | ||||||||
Comprehensive income (loss) | $ 705 | $ (515) | $ 54 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||||
Cash and cash equivalents | $ 2,826 | $ 3,186 | $ 2,819 | |
Investments | 1,681 | 2,524 | ||
Restricted investments | 0 | 169 | ||
Receivables | 1,330 | 871 | ||
Prepaid expenses and other current assets | 149 | 239 | ||
Derivative asset | 476 | 522 | ||
Total current assets | 6,462 | 7,511 | ||
Property, equipment, and capitalized software, net | 241 | 342 | ||
Goodwill and intangible assets, net | 190 | 255 | 760 | |
Restricted investments | 120 | 119 | ||
Deferred income taxes | 117 | 103 | ||
Other assets | 24 | 141 | ||
Total assets | 7,154 | 8,471 | 7,449 | |
Current liabilities: | ||||
Medical claims and benefits payable | 1,961 | 2,192 | $ 1,929 | $ 1,685 |
Amounts due government agencies | 967 | 1,542 | ||
Accounts payable and accrued liabilities | 390 | 366 | ||
Deferred revenue | 211 | 282 | ||
Current portion of long-term debt | 241 | 653 | ||
Derivative liability | 476 | 522 | ||
Total current liabilities | 4,246 | 5,557 | ||
Long-term debt | 1,020 | 1,318 | ||
Lease financing obligations | 197 | 198 | ||
Other long-term liabilities | 44 | 61 | ||
Total liabilities | 5,507 | 7,134 | ||
Stockholders’ equity: | ||||
Common stock, $0.001 par value per share; 150 million shares authorized; outstanding: 62 million shares at December 31, 2018 and 60 million shares at December 31, 2017 | 0 | 0 | ||
Preferred stock, $0.001 par value per share; 20 million shares authorized, no shares issued and outstanding | 0 | 0 | ||
Additional paid-in capital | 643 | 1,044 | ||
Accumulated other comprehensive loss | (8) | (5) | ||
Retained earnings | 1,012 | 298 | ||
Total stockholders’ equity | 1,647 | 1,337 | ||
Total liabilities and stockholders' equity | $ 7,154 | $ 8,471 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares outstanding | 62,000,000 | 60,000,000 |
Preferred stock, par value (dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings |
Beginning Balance, shares at Dec. 31, 2015 | 55.1 | 56 | |||
Beginning Balance at Dec. 31, 2015 | $ 1,557 | $ 0 | $ 803 | $ (4) | $ 758 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 52 | 52 | |||
Other comprehensive income (loss), net | 2 | 2 | |||
Share-based compensation, shares | 1 | ||||
Share-based compensation | 36 | 36 | |||
Tax benefit from share-based compensation | 2 | 2 | |||
Exchange of 1.625% Convertible Notes | $ 0 | ||||
Ending Balance, shares at Dec. 31, 2016 | 55.8 | 57 | |||
Ending Balance at Dec. 31, 2016 | $ 1,649 | $ 0 | 841 | (2) | 810 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (512) | (512) | |||
Other comprehensive income (loss), net | (3) | (3) | |||
Share-based compensation | 42 | 42 | |||
Exchange of 1.625% Convertible Notes, shares | 3 | ||||
Exchange of 1.625% Convertible Notes | $ 161 | 161 | |||
Ending Balance, shares at Dec. 31, 2017 | 59.3 | 60 | |||
Ending Balance at Dec. 31, 2017 | $ 1,337 | $ 0 | 1,044 | (5) | 298 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adoption of ASU | Adoption of Topic 606 | 6 | 6 | |||
Adoption of ASU | Adoption of ASU 2018-02 | 0 | (1) | 1 | ||
Net income (loss) | 707 | ||||
Other comprehensive income (loss), net | (2) | (2) | |||
Share-based compensation | 37 | 37 | |||
Exchange of 1.625% Convertible Notes, shares | 2 | ||||
Exchange of 1.625% Convertible Notes | 108 | 108 | |||
Partial termination of 1.125% Warrants | (550) | (550) | |||
Conversion of 1.625% Convertible Notes | 4 | 4 | |||
Ending Balance, shares at Dec. 31, 2018 | 62 | ||||
Ending Balance at Dec. 31, 2018 | $ 1,647 | $ 0 | $ 643 | $ (8) | $ 1,012 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) | Dec. 31, 2018 |
1.625% Convertible Notes | |
Debt Instrument [Line Items] | |
Percentage of contractual interest rate | 1.625% |
Convertible Debt | 1.625% Convertible Notes | |
Debt Instrument [Line Items] | |
Percentage of contractual interest rate | 1.625% |
1.125% Warrants | |
Debt Instrument [Line Items] | |
Stated interest rate | 1.125% |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities: | |||
Net income (loss) | $ 707 | $ (512) | $ 52 |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 127 | 178 | 182 |
Deferred income taxes | (6) | (94) | 22 |
Share-based compensation | 27 | 46 | 26 |
Non-cash restructuring charges | 17 | 60 | 0 |
Amortization of convertible senior notes and lease financing obligations | 22 | 32 | 31 |
Loss on sales of subsidiaries, net of gain | 15 | 0 | 0 |
Loss on debt extinguishment | 22 | 14 | 0 |
Impairment losses | 0 | 470 | 0 |
Other, net | 4 | 21 | 16 |
Changes in operating assets and liabilities: | |||
Receivables | (530) | 103 | (348) |
Prepaid expenses and other current assets | 6 | (56) | (69) |
Medical claims and benefits payable | (226) | 263 | 226 |
Amounts due government agencies | (574) | 341 | 473 |
Accounts payable and accrued liabilities | 45 | (12) | (4) |
Deferred revenue | (21) | (34) | 92 |
Income taxes | 51 | (16) | (26) |
Net cash (used in) provided by operating activities | (314) | 804 | 673 |
Investing activities: | |||
Purchases of investments | (1,444) | (2,697) | (1,929) |
Proceeds from sales and maturities of investments | 2,445 | 1,759 | 1,966 |
Purchases of property, equipment and capitalized software | (30) | (86) | (176) |
Net cash received from sale of subsidiaries | 190 | 0 | 0 |
Net cash paid in business combinations | 0 | 0 | (48) |
Other, net | (18) | (38) | (19) |
Net cash provided by (used in) investing activities | (1,143) | 1,062 | 206 |
Financing activities: | |||
Repayment of credit facility | (300) | 0 | 0 |
Cash paid for partial settlement of 1.125% Conversion Option | (623) | 0 | 0 |
Cash received for partial settlement of 1.125% Call Option | 623 | 0 | 0 |
Cash paid for partial termination of 1.125% Warrants | (549) | 0 | 0 |
Proceeds from senior notes offerings, net of issuance costs | 0 | 325 | 0 |
Proceeds from borrowings under credit facility | 0 | 300 | 0 |
Other, net | 18 | 11 | 19 |
Net cash (used in) provided by financing activities | (1,193) | 636 | 19 |
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | (364) | 378 | 486 |
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | 3,290 | 2,912 | 2,426 |
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | 3,290 | 2,912 | 2,426 |
Supplemental cash flow information: | |||
Income taxes | 240 | 7 | 153 |
Interest | 93 | 78 | 66 |
Schedule of non-cash investing and financing activities: | |||
Common stock issued in exchange for 1.625% Convertible Notes | 131 | 193 | 0 |
Component of 1.625% Convertible Notes allocated to additional paid-in capital, net of income taxes | (23) | (32) | 0 |
Net increase to additional paid-in capital | 108 | 161 | 0 |
Common stock used for stock-based compensation | (6) | (22) | (8) |
Details of sales of subsidiaries: | |||
Decrease in carrying amount of assets | (327) | 0 | 0 |
Decrease in carrying amount of liabilities | 85 | 0 | 0 |
Transaction costs | (15) | 0 | 0 |
Cash received from buyers | 242 | 0 | 0 |
Loss on sales of subsidiaries, net of gain | (15) | 0 | 0 |
Details of business combinations: | |||
Fair value of assets acquired | 0 | 0 | (186) |
Fair value of liabilities assumed | 0 | 0 | 28 |
Payable to seller | 0 | 0 | 8 |
Amounts advanced for acquisitions | 0 | 0 | 102 |
Net cash paid in business combinations | 0 | 0 | (48) |
Details of change in fair value of derivatives, net: | |||
Change in fair value of derivatives, net | 0 | 0 | 0 |
1.125% Call Option | |||
Details of change in fair value of derivatives, net: | |||
Change in fair value of derivatives, net | 577 | 255 | (107) |
1.125% Conversion Option | |||
Details of change in fair value of derivatives, net: | |||
Change in fair value of derivatives, net | (577) | (255) | 107 |
1.125% Notes | |||
Financing activities: | |||
Repayment of principal amount of Notes | (298) | 0 | 0 |
1.625% Notes | |||
Financing activities: | |||
Repayment of principal amount of Notes | $ (64) | $ 0 | $ 0 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) | Dec. 31, 2018 |
1.125% Call Option | |
Fixed interest rate on derivative | 1.125% |
1.125% Conversion Option | |
Fixed interest rate on derivative | 1.125% |
1.625% Convertible Notes | |
Percentage of contractual interest rate | 1.625% |
Convertible Debt | 1.625% Convertible Notes | |
Percentage of contractual interest rate | 1.625% |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization and Operations Molina Healthcare, Inc. provides managed health care services under the Medicaid and Medicare programs and through the state insurance marketplaces (the “Marketplace”). We currently have two reportable segments: our Health Plans segment and our Other segment. We manage the vast majority of our operations through our Health Plans segment. Our Other segment includes the historical results of the Pathways behavioral health subsidiary, which we sold in the fourth quarter of 2018, and certain corporate amounts not allocated to the Health Plans segment. Effective in the fourth quarter of 2018, we reclassified the historical results relating to our Molina Medicaid Solutions (“MMS”) segment, which we sold in the third quarter of 2018, to the Other segment. Previously, results for MMS were reported in a stand-alone segment. We operate health plans in 14 states and the Commonwealth of Puerto Rico. As of December 31, 2018, these health plans served approximately 3.8 million members eligible for Medicaid, Medicare, and other government-sponsored health care programs for low-income families and individuals. This membership includes Affordable Care Act Marketplace members, most of whom receive government premium subsidies. The health plans are operated by our respective wholly owned subsidiaries in those states, each of which is licensed as a health maintenance organization (“HMO”). Our state Medicaid contracts generally have terms of three to five years. These contracts typically contain renewal options exercisable by the state Medicaid agency, and allow either the state or the health plan to terminate the contract with or without cause. Such contracts are subject to risk of loss in states that issue requests for proposal (“RFP”) open to competitive bidding by other health plans. If one of our health plans is not a successful responsive bidder to a state RFP, its contract may not be renewed. In addition to contract renewal, our state Medicaid contracts may be periodically amended to include or exclude certain health benefits (such as pharmacy services, behavioral health services, or long-term care services); populations such as the aged, blind or disabled; and regions or service areas. Recent Developments – Health Plans Segment Mississippi Health Plan. Our Mississippi health plan commenced operations on October 1, 2018 and served approximately 26,000 Medicaid members as of December 31, 2018. In December 2018, our Mississippi health plan was awarded a contract by the Mississippi Division of Medicaid for the Children’s Health Insurance Program (“CHIP”). Services under the new three-year contract were initially set to begin July 1, 2019; however, the start date is now pending the outcome of a protest of the contract awards . Puerto Rico Health Plan . In July 2018, our Puerto Rico health plan was selected by the Puerto Rico Health Insurance Administration to be one of the organizations to administer the Commonwealth’s new Medicaid Managed Care contract. As of December 31, 2018, we served approximately 252,000 members under the new contract, which represents a reduction in membership compared with 320,000 members served as of September 30, 2018. The new contract commenced on November 1, 2018 and has a three-year term with an optional one year extension. The Puerto Rico health plan’s premium revenue amounted to $696 million in the year ended December 31, 2018. Florida Health Plan. In June 2018, our Florida health plan was awarded comprehensive Medicaid Managed Care contracts by the Florida Agency for Health Care Administration in Regions 8 and 11 of the Florida Statewide Medicaid Managed Care Invitation to Negotiate. Under the new contracts, effective January 1, 2019, we serve approximately 98,000 Medicaid members in those regions, which represented premium revenue of approximately $462 million in the year ended December 31, 2018 . As of December 31, 2018 , we served a total of 272,000 Medicaid members in Florida, which represented premium revenue of approximately $1,479 million in the year ended December 31, 2018. Washington Health Plan. In May 2018, our Washington health plan was selected by the Washington State Health Care Authority to enter into a managed care contract for the eight remaining regions of the state’s Apple Health Integrated Managed Care program, in addition to the two regions previously awarded to us. As of December 31, 2018 , we served approximately 751,000 Medicaid members in Washington, which represented premium revenue of approximately $2,035 million in the year ended December 31, 2018 . New Mexico Health Plan. In January 2018, we were notified by the New Mexico Medicaid agency that we had not been selected for a tentative award of a 2019 Medicaid contract. A hearing was held on our judicial protest on October 17, 2018, and our protest was rejected. We filed an appeal with the New Mexico Court of Appeals on January 28, 2019. We are continuing to manage the business in run-off until the determination of these further appeals or our decision not to pursue our appeal rights. As of December 31, 2018 , we served approximately 196,000 Medicaid members in New Mexico, and Medicaid premium revenue amounted to $1,181 million in the year ended December 31, 2018 . Our New Mexico health plan continues to serve Medicare and Marketplace members, but, effective January 1, 2019, no longer has Medicaid members. Recent Developments – Other Molina Medicaid Solutions . We closed on the sale of Molina Medicaid Solutions (“MMS”) to DXC Technology Company on September 30, 2018. The net cash selling price for the equity interests of MMS was $233 million . As a result of this transaction, we recognized a pretax gain, net of transaction costs, of $37 million . The gain, net of income tax expense, was $28 million . Pathways. We closed on the sale of our Pathways behavioral health subsidiary to Pyramid Health Holdings, LLC on October 19, 2018, for a nominal purchase price. As a result of this transaction, we recognized a pretax loss of $52 million . The loss, net of income tax benefit, was $32 million . Presentation and Reclassification We have reclassified certain amounts in the 2017 and 2016 consolidated statements of cash flows to conform to the 2018 presentation, relating to the presentation of restricted cash and cash equivalents. The reclassification is a result of our adoption of Accounting Standards Update (“ASU”) 2016-18, Restricted Cash effective January 1, 2018. See Note 2 , “ Significant Accounting Policies ,” for further information, including the amount reclassified. We have combined certain line items in the accompanying consolidated balance sheets. For all periods presented, we have combined the presentation of: • Income taxes refundable with “Prepaid expenses and other current assets;” • Income taxes payable with “Accounts payable and accrued liabilities;” and • Goodwill, and intangible assets, net to a single line. Consolidation The consolidated financial statements include the accounts of Molina Healthcare, Inc., and its subsidiaries. As of December 31, 2018, we were no longer a party to any variable interest entities following the termination of certain agreements earlier in the year and in the fourth quarter of 2018. Such variable interest entities were insignificant. All significant inter-company balances and transactions have been eliminated in consolidation. Financial information related to subsidiaries acquired during any year is included only for periods subsequent to their acquisition. In the opinion of management, all adjustments considered necessary for a fair presentation of the results as of the date and for the periods presented have been included; such adjustments consist of normal recurring adjustments. Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Principal areas requiring the use of estimates include: • The determination of medical claims and benefits payable of our Health Plans segment; • Health plans’ contractual provisions that may limit revenue recognition based upon the costs incurred or the profits realized under a specific contract; • Health plans’ quality incentives that allow us to recognize incremental revenue if certain quality standards are met; • Settlements under risk or savings sharing programs; • The assessment of long-lived and intangible assets, and goodwill, for impairment; • The determination of reserves for potential absorption of claims unpaid by insolvent providers; • The determination of reserves for the outcome of litigation; • The determination of valuation allowances for deferred tax assets; and • The determination of unrecognized tax benefits. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Certain of our significant accounting policies are discussed within the note to which they specifically relate. Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term, highly liquid investments that are both readily convertible into known amounts of cash and have a maturity of three months or less on the date of purchase. The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported within the accompanying consolidated balance sheets that sum to the total of the same such amounts presented in the accompanying consolidated statements of cash flows. The restricted cash and cash equivalents presented below are included in “Restricted investments” in the accompanying consolidated balance sheets. Year Ended December 31, 2018 2017 2016 (In millions) Cash and cash equivalents $ 2,826 $ 3,186 $ 2,819 Restricted cash and cash equivalents, non-current 100 95 93 Restricted cash and cash equivalents, current — 9 — Total cash, cash equivalents, and restricted cash and cash equivalents presented in the consolidated statements of cash flows $ 2,926 $ 3,290 $ 2,912 Investments Our investments are principally held in debt securities, which are grouped into two separate categories for accounting and reporting purposes: available-for-sale securities, and held-to-maturity securities. Available-for-sale securities are recorded at fair value and unrealized gains and losses, if any, are recorded in stockholders’ equity as other comprehensive income, net of applicable income taxes. Held-to-maturity securities are recorded at amortized cost, which approximates fair value, and unrealized holding gains or losses are not generally recognized. Realized gains and losses and unrealized losses judged to be other than temporary with respect to available-for-sale and held-to-maturity securities are included in the determination of net income (loss). The cost of securities sold is determined using the specific-identification method. Our investment policy requires that all of our investments have final maturities of 10 years or less (excluding variable rate securities where interest rates may be periodically reset), and that the average maturity be three years or less. Investments and restricted investments are subject to interest rate risk and will decrease in value if market rates increase. Declines in interest rates over time will reduce our investment income. In general, our available-for-sale securities are classified as current assets without regard to the securities’ contractual maturity dates because they may be readily liquidated. We monitor our investments for other-than-temporary impairment. For comprehensive discussions of the fair value and classification of our investments, see Note 4 , “ Fair Value Measurements ,” Note 5 , “ Investments ,” and Note 9 , “ Restricted Investments .” Long-Lived Assets, including Intangible Assets Long-lived assets consist primarily of property, equipment, capitalized software (see Note 7 , “ Property, Equipment, and Capitalized Software, Net ”), and intangible assets resulting from acquisitions. Finite-lived, separately-identified intangible assets acquired in business combinations are assets that represent future expected benefits but lack physical substance (such as purchased contract rights and provider contracts). Intangible assets are initially recorded at fair value and are then amortized on a straight-line basis over their expected useful lives, generally between five and 15 years. Our intangible assets are subject to impairment tests when events or circumstances indicate that a finite-lived intangible asset’s (or asset group’s) carrying value may not be recoverable. Consideration is given to a number of potential impairment indicators, including the ability of our health plan subsidiaries to obtain the renewal by amendment of their contracts in each state prior to the actual expiration of their contracts. However, there can be no assurance that these contracts will continue to be renewed. Following the identification of any potential impairment indicators, to determine whether an impairment exists, we would compare the carrying amount of a finite-lived intangible asset with the greater of the undiscounted cash flows that are expected to result from the use of the asset or related group of assets, or its value under the asset liquidation method. If it is determined that the carrying amount of the asset is not recoverable, the amount by which the carrying value exceeds the estimated fair value is recorded as an impairment. Refer to Note 8 , “ Goodwill and Intangible Assets, Net ”, for further details. Goodwill and Business Combinations Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment on an annual basis and more frequently if impairment indicators are present. Such events or circumstances may include experienced or expected operating cash-flow deterioration or losses, significant losses of membership, loss of state funding, loss of state contracts, and other factors. Goodwill is impaired if the carrying amount of the reporting unit exceeds its estimated fair value. This excess is recorded as an impairment loss and adjusted if necessary for the impact of tax-deductible goodwill. The loss recognized may not exceed the total goodwill allocated to the reporting unit. Our reporting units consist of our individual health plans. During the fourth quarter of 2018, we changed the date of our annual impairment testing of goodwill from December 31 to October 1. When testing goodwill for impairment, we may first assess qualitative factors, such as industry and market factors, cost factors, and changes in overall performance, to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. If our qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, we perform the quantitative assessment. We may also elect to bypass the qualitative assessment and proceed directly to the quantitative assessment. The dynamic economic and political environments in which we operate may necessitate the performance of a quantitative test to prove that goodwill is not impaired. If performing a quantitative assessment, we generally estimate the fair values of our reporting units by applying the income approach, using discounted cash flows. For the annual impairment test, the base year in the reporting units’ discounted cash flows is derived from the annual financial budgeting cycle, for which the planning process commences in the fourth quarter of the year. When computing discounted cash flows, we make assumptions about a wide variety of internal and external factors, and consider what the reporting unit’s selling price would be in an orderly transaction between market participants at the measurement date. Significant assumptions include financial projections of free cash flow (including significant assumptions about membership, premium rates, health care and operating cost trends, contract renewal and the procurement of new contracts, capital requirements and income taxes), long-term growth rates for determining terminal value beyond the discretely forecasted periods, and discount rates. When determining the discount rate, we consider the overall level of inherent risk of the reporting unit, and the expected rate an outside investor would expect to earn. As part of a quantitative assessment, we may also apply the asset liquidation method to estimate the fair value of individual reporting units, which is computed as total assets minus total liabilities, excluding intangible assets and deferred taxes. Finally, we apply a market approach to reconcile the value of our reporting units to our consolidated market value. Under the market approach, we consider publicly traded comparable company information to determine revenue and earnings multiples which are used to estimate our reporting units’ fair values. The assumptions used are consistent with those used in our long-range business plan and annual planning process. However, if these assumptions differ from actual results, the outcome of our goodwill impairment tests could be adversely affected. Accounting for acquisitions requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the final determination of the values of assets acquired or liabilities assumed, or one year after the date of acquisition, whichever comes first, any subsequent adjustments are recorded within our consolidated statements of operations. Refer to Note 8 , “ Goodwill and Intangible Assets, Net ”, for further details. Revenue Recognition We adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) effective January 1, 2018, using the modified retrospective approach. The insurance contracts of our Health Plans segment are excluded from the scope of Topic 606 because the recognition of revenue under these contracts is dictated by other accounting standards governing insurance contracts. The cumulative effect of initially applying the guidance, relating entirely to the contracts of our recently divested MMS subsidiary, resulted in an immaterial impact to beginning retained earnings as of January 1, 2018. Such impact is presented in the accompanying consolidated statement of stockholders’ equity. Premium Revenue Premium revenue is generated from our Health Plans segment contracts, including agreements with other managed care organizations for which we operate as a subcontractor. Premium revenue is generally received based on per member per month (“PMPM”) rates established in advance of the periods covered. These premium revenues are recognized in the month that members are entitled to receive health care services, and premiums collected in advance are deferred. The state Medicaid programs and the federal Medicare program periodically adjust premiums. Additionally, many of our contracts contain provisions that may adjust or limit revenue or profit, as described below. Consequently, we recognize premium revenue as it is earned under such provisions. The following table summarizes premium revenue by geography for the periods indicated: Year Ended December 31, 2018 2017 2016 Amount % of Total Amount % of Total Amount % of Total (Dollars in millions) California $ 2,150 12.2 % $ 2,701 14.3 % $ 2,378 14.4 % Florida 1,790 10.2 2,568 13.6 1,938 11.8 Illinois 793 4.5 593 3.1 603 3.7 Michigan 1,601 9.1 1,596 8.5 1,527 9.3 New Mexico 1,356 7.7 1,368 7.3 1,305 7.9 Ohio 2,388 13.6 2,216 11.8 1,967 12.0 Puerto Rico 696 3.9 732 3.9 726 4.4 South Carolina 495 2.8 445 2.4 378 2.3 Texas 3,244 18.4 2,813 14.9 2,461 15.0 Washington 2,361 13.4 2,608 13.8 2,222 13.5 Other (1) 738 4.2 1,214 6.4 940 5.7 $ 17,612 100.0 % $ 18,854 100.0 % $ 16,445 100.0 % _______________________ (1) “Other” includes the Idaho, Mississippi, New York, Utah and Wisconsin health plans, which are not individually significant to our consolidated operating results. Certain components of premium revenue are subject to accounting estimates and fall into the following categories: Contractual Provisions That May Adjust or Limit Revenue or Profit Medicaid Program Medical Cost Floors (Minimums), and Medical Cost Corridors. A portion of our premium revenue may be returned if certain minimum amounts are not spent on defined medical care costs. In the aggregate, we recorded a liability under the terms of such contract provisions of $103 million and $135 million at December 31, 2018 and December 31, 2017 , respectively, to amounts due government agencies. Approximately $87 million and $96 million of the liability accrued at December 31, 2018 and December 31, 2017 , respectively, relates to our participation in Medicaid Expansion programs. In the third and fourth quarters of 2018, we recognized adjustments of $57 million and $24 million , respectively, mainly related to the retroactive reinstatement of the Medicaid Expansion risk corridor requirement by the California Department of Health Care Services, mainly for the state fiscal years ended June 2017 and 2018. The risk corridor provision mandates a minimum loss ratio (“MLR”) of 85% and a maximum MLR of 95%. The total impact of these adjustments resulted in a reduction to premium revenue totaling approximately $81 million in the year ended December 31, 2018. In certain circumstances, the health plans may receive additional premiums if amounts spent on medical care costs exceed a defined maximum threshold. Receivables relating to such provisions were insignificant at December 31, 2018 and December 31, 2017 . Profit Sharing and Profit Ceiling. Our contracts with certain states contain profit-sharing or profit ceiling provisions under which we refund amounts to the states if our health plans generate profit above a certain specified percentage. In some cases, we are limited in the amount of administrative costs that we may deduct in calculating the refund, if any. Liabilities for profits in excess of the amount we are allowed to retain under these provisions were insignificant at December 31, 2018 and December 31, 2017 . Retroactive Premium Adjustments. State Medicaid programs periodically adjust premium rates on a retroactive basis. In these cases, we must adjust our premium revenue in the period in which we learn of the adjustment, rather than in the months of service to which the retroactive adjustment applies. Medicare Program Risk Adjusted Premiums: Our Medicare premiums are subject to retroactive increase or decrease based on the health status of our Medicare members (as measured by member risk score). We estimate our members’ risk scores and the related amount of Medicare revenue that will ultimately be realized for the periods presented based on our knowledge of our members’ health status, risk scores and CMS practices. Consolidated balance sheet amounts related to anticipated Medicare risk adjusted premiums and Medicare Part D settlements were insignificant at December 31, 2018 and December 31, 2017 . Minimum MLR: Additionally, federal regulations have established a minimum annual medical loss ratio (Minimum MLR) of 85% for Medicare. The medical loss ratio represents medical costs as a percentage of premium revenue. Federal regulations define what constitutes medical costs and premium revenue. If the Minimum MLR is not met, we may be required to pay rebates to the federal government. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of operations. Aggregate balance sheet amounts related to the Medicare Minimum MLR were insignificant at December 31, 2018 and December 31, 2017 . Marketplace Program Risk adjustment: Under this program, our health plans’ composite risk scores are compared with the overall average risk score for the relevant state and market pool. Generally, our health plans will make a risk adjustment payment into the pool if their composite risk scores are below the average risk score, and will receive a risk adjustment payment from the pool if their composite risk scores are above the average risk score. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium revenue in our consolidated statements of operations. As of December 31, 2018 , and December 31, 2017, the Marketplace risk adjustment payable amounted to $466 million and $917 million , respectively. Minimum MLR: The ACA has established a Minimum MLR of 80% for the Marketplace. If the Minimum MLR is not met, we may be required to pay rebates to our Marketplace policyholders. The Marketplace risk adjustment program is taken into consideration when computing the Minimum MLR. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of operations. Aggregate balance sheet amounts related to the Marketplace Minimum MLR were insignificant at December 31, 2018 and December 31, 2017. Quality Incentives At many of our health plans, revenue ranging from approximately 1% to 3% of certain health plan premiums is earned only if certain performance measures are met. The following table quantifies the quality incentive premium revenue recognized for the periods presented, including the amounts earned in the periods presented and prior periods. Although the reasonably possible effects of a change in estimate related to quality incentive premium revenue as of December 31, 2018 are not known, we have no reason to believe that the adjustments to prior periods noted below are not indicative of the potential future changes in our estimates as of December 31, 2018 . Year Ended December 31, 2018 2017 2016 (In millions) Maximum available quality incentive premium - current period $ 182 $ 150 $ 147 Amount of quality incentive premium revenue recognized in current period: Earned current period $ 133 $ 97 $ 104 Earned prior periods 31 10 47 Total $ 164 $ 107 $ 151 Quality incentive premium revenue recognized as a percentage of total premium revenue 0.9 % 0.6 % 0.9 % A summary of the categories of amounts due government agencies is as follows: December 31, 2018 2017 (In millions) Medicaid program: Medical cost floors and corridors $ 103 $ 135 Other amounts due to states 81 71 Marketplace program: Risk adjustment 466 917 Cost sharing reduction 183 275 Other 134 144 $ 967 $ 1,542 Medical Care Costs and Medical Claims and Benefits Payable Medical care costs are recognized in the period in which services are provided and include amounts that have been paid by us through the reporting date, as well as estimated medical claims and benefits payable for costs that have been incurred but not paid by us as of the reporting date. Medical care costs include, among other items, fee-for-service claims, pharmacy benefits, capitation payments to providers, and various other medically-related costs. We use judgment to determine the appropriate assumptions for determining the required estimates. Under fee-for-service claims arrangements, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of hospital and physician services. Pharmacy benefits represent payments for members' prescription drug costs, net of rebates from drug manufacturers. We estimate pharmacy rebates earned based on historical and current utilization of prescription drugs and contract terms. Capitation payments represent monthly contractual fees paid to physicians and other providers on a per-member, per-month basis, who are responsible for providing medical care to members, which could include medical or ancillary costs like dental, vision and other supplemental health benefits. Such capitation costs are fixed in advance of the periods covered and are not subject to significant accounting estimates. Due to insolvency or other circumstances, such providers may be unable to pay claims they have incurred with third parties in connection with referral services provided to our members. Depending on states’ laws, we may be held liable for such unpaid referral claims even though the delegated provider has contractually assumed such risk. Based on our current assessment, such losses have not been and are not expected to be significant. Other medical care costs include all medically-related administrative costs, certain provider incentive costs, provider claims, and other health care expenses. See further discussion of provider claims in Note 17 , “ Commitments and Contingencies .” Medically related administrative costs include, for example, expenses relating to health education, quality assurance, case management, care coordination, disease management, and 24-hour on-call nurses. Salary and benefit costs are a substantial portion of these expenses. Additionally, we include an estimate for the cost of settling claims incurred through the reporting date in our medical claims and benefits payable liability . The following table provides the details of our consolidated medical care costs for the periods indicated: Year Ended December 31, 2018 2017 2016 Amount PMPM % of Total Amount PMPM % of Total Amount PMPM % of Total (In millions, except PMPM amounts) Fee-for-service $ 11,278 $ 232.15 74.5 % $ 12,682 $ 229.63 74.3 % $ 10,993 $ 217.84 74.4 % Pharmacy 2,138 44.01 14.1 2,563 46.40 15.0 2,213 43.84 15.0 Capitation 1,184 24.38 7.8 1,360 24.63 8.0 1,218 24.13 8.2 Other 537 11.05 3.6 468 8.48 2.7 350 6.94 2.4 Total $ 15,137 $ 311.59 100.0 % $ 17,073 $ 309.14 100.0 % $ 14,774 $ 292.75 100.0 % The determination of our liability for fee-for-service claims incurred but not paid (“IBNP”) is particularly important to the determination of our financial position and results of operations in any given period and requires the application of a significant degree of judgment by our management. As a result, the determination of IBNP is subject to an inherent degree of uncertainty. Our IBNP claims reserve represents our best estimate of the total amount we will ultimately pay with respect to claims incurred as of the balance sheet date. We estimate our IBNP monthly using actuarial methods based on several factors. The factors we consider when estimating our IBNP include, without limitation: • claims receipt and payment experience (and variations in that experience), • changes in membership, • provider billing practices, • health care service utilization trends, • cost trends, • product mix, • seasonality, • prior authorization of medical services, • benefit changes, • known outbreaks of disease or increased incidence of illness such as influenza, • provider contract changes, • changes to Medicaid fee schedules, and • the incidence of high dollar or catastrophic claims. Our assessment of these factors is then translated into an estimate of our IBNP liability at the relevant measuring point through the calculation of a base estimate of IBNP, a further provision for adverse claims development, and an estimate of the administrative costs of settling all claims incurred through the reporting date. The base estimate of IBNP is derived through application of claims payment completion factors and trended PMPM cost estimates. For the fourth month of service prior to the reporting date and earlier, we estimate our outstanding claims liability based on actual claims paid, adjusted for estimated completion factors. Completion factors seek to measure the cumulative percentage of claims expense that will have been paid for a given month of service as of the reporting date, based on historical payment patterns. For the three months of service immediately prior to the reporting date, actual claims paid are a less reliable measure of our ultimate liability, given the inherent delay between the patient/physician encounter and the actual submission of a claim for payment. For these months of service, we estimate our claims liability based on a blend of estimated completion factors and trended PMPM cost estimates. The PMPM costs estimates are designed to reflect recent trends in payments and expense, utilization patterns, authorized services, pharmacy utilization and other relevant factors. After we have established our base IBNP reserve through the application of completion factors and trended PMPM cost estimates, we then compute an additional liability, once again using actuarial techniques, to account for adverse development in our claim payments for which the base actuarial model is not intended to and does not account. We refer to this additional liability as the provision for adverse claims development. The provision for adverse claims development is a component of our overall determination of the adequacy of our IBNP, and averages between 8% to 10% of IBNP. It is intended to capture the potential inadequacy of our IBNP estimate as a result of our inability to adequately assess the impact of factors such as changes in the speed of claims receipt and payment, the relative magnitude or severity of claims, known outbreaks of disease such as influenza, our entry into new geographical markets, our provision of services to new populations such as the aged, blind or disabled, changes to state-controlled fee schedules upon which a large proportion of our provider payments are based, modifications and upgrades to our claims processing systems and practices, and increasing medical costs. Because of the complexity of our business, the number of states in which we operate, and the need to account for different health care benefit packages among those states, we make an overall assessment of IBNP after considering the base actuarial model reserves and the provision for adverse claims development. The development of our IBNP estimate is a continuous process that we monitor and update monthly as additional claims payment information becomes available. As additional information becomes known to us, we adjust our actuarial model accordingly. Any adjustments, if appropriate, are reflected in the period known. While we believe our current estimates are adequate, we have in the past been required to increase significantly our claims reserves for periods previously reported and may be required to do so again in the future. Any significant increases to prior period claim reserves would materially decrease reported earnings for the period in which the adjustment is made. There are many related factors working in conjunction with one another that determine the accuracy of our estimates, some of which are qualitative in nature rather than quantitative. Therefore, we are seldom able to quantify the impact that any single factor has on a change in estimate. Given the variability inherent in the reserving process, we will only be able to identify specific factors if they represent a significant departure from expectations. As a result, we do not expect to be able to fully quantify the impact of individual factors on changes in estimates. We limit our risk of catastrophic losses by maintaining high deductible reinsurance coverage. Such reinsurance coverage does not relieve us of our primary obligation to our policyholders. We report reinsurance premiums as a reduction to premium revenue, while related reinsurance recoveries are reported as a reduction to medical care costs. Reinsurance premiums amounted to $16 million , $20 million and $30 million for the years ended December 31, 2018, 2017, and 2016, respectively. Reinsurance recoveries amounted to $33 million , $24 million and $65 million for the years ended December 31, 2018, 2017, and 2016, respectively. Reinsurance recoverable of $31 million , $16 million , and $61 million , as of December 31, 2018, 2017, and 2016, respectively, is included in “Receivables” in the accompanying consolidated balance sheets. Marketplace Cost Share Reduction (“CSR”) In the year ended December 31, 2018, we recognized a benefit of approximately $81 million in reduced medical care costs related to 2017 dates of service, as a result of the federal government’s confirmation that the reconciliation of 2017 Marketplace CSR subsidies would be performed on an annual basis. In the fourth quarter of 2017, we had assumed a nine-month reconciliation of this item pending confirmation of the time period to which the 2017 reconciliation would be applied. Premium Deficiency Reserves on Loss Contracts We assess the profitability of our medical care policies to identify groups of contracts where current operating results or forecasts indicate probable future losses. If anticipated future variable costs exceed anticipated future premiums and investment income, a premium deficiency reserve is recognized. No premium deficiency reserves were recorded as of December 31, 2018 and 2017. Taxes Based on Premiums Health Insurer Fee (“HIF”). The federal government under the ACA imposes an annual fee, or excise tax, on health insurers for each calendar year. The HIF is based on a company’s share of the industry’s net premiums written during the preceding calendar year and is non-deductible for income tax purposes. We recognize expense for the HIF over the year on a straight-line basis. Within our Medicaid program, we must secure additional reimbursement from our state partners for this added cost. We recognize the related revenue when we have obtained a contractual commitment or payment from a state to reimburse us for the HIF, and such HIF revenue is recognized ratably throughout the year. The Consolidated Appropriations Act of 2016 provided for a HIF moratorium in 2017. Therefore, there were no health insurer fees reimbursed, nor health insurer fees incurred, in 2017. Premium and Use Tax. Certain of our health plans are assessed a tax based on premium revenue collected. The premium revenues we receive from these states include the premium tax assessment. We have reported these taxes on a gross basis, as premium tax revenue and as premium tax expenses in the consolidated statements of operations. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments, receivables, and restricted investments. Our investments and a portion of our cash equivalents are managed by professional portfolio managers operating under documented investment guidelines. Our portfolio managers must obtain our prior approval before selling investments where the loss position of those investments exceeds certain levels. Our investments consist primarily of investment-grade debt securities with a maximum maturity of 10 years and an average duration of three years or less. Restricted investments are invested principally in certificates of deposit and U.S. Treasury securities. Concentration of credit risk with respect to accounts receivable is limited because our payors consist principally of the governments of each state in which our health plan subsidiaries operate. Risks and Uncertainties Our profitability depends in large part on our ability to accurately predict and effectively manage medical care costs. We continually review our medical costs in light of our underlying claims experience and revised actuarial data. However, several factors could adversely affect medical care costs. These factors, which include changes in health care practices, inflation, new technologies, major epidemics, natural disasters, and malpractice litigation, are beyond our control and may have an adverse effect on our ability to accurately predict and effectively control medical care costs. Costs in excess of those anticipated could have a material adverse effect on our financial condition, results of operations, or cash flows. We operate health plans primarily as a direct contractor with the states (or Commonwealth), and in Los Angeles County, California, as a subcontractor to another health plan holding a direct contract with the state. We are therefore dependent upon a small number of contracts to support our revenue. The loss of any one of those contracts could have a material adverse effect on our financial position, results of operations, or cash flows. Our ability to arrange for the provision of medical services to our members is dependent upon our ability to develop and maintain adequate provider networks. Our inability to develop or maintain such networks might, in certain circumstances, have a material adverse effect on our financial position, results of operations, or cash flows. Recent Accounting Pronouncements Adopted Revenue Recognition (Topic 606). See discussion above, in “Revenue Recognition.” Comprehensive Income. In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting fro |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The following table sets forth the calculation of basic and diluted net income (loss) per share: Year Ended December 31, 2018 2017 2016 (In millions, except net income (loss) per share) Numerator: Net income (loss) $ 707 $ (512 ) $ 52 Denominator: Shares outstanding at the beginning of the period 59.3 55.8 55.1 Weighted-average number of shares issued: Exchange of 1.625% Convertible Notes (1) 1.4 0.1 — Conversion of 1.625% Convertible Notes (1) 0.2 — — Stock-based compensation 0.2 0.5 0.3 Denominator for basic net income (loss) per share 61.1 56.4 55.4 Effect of dilutive securities: 1.125% Warrants (1) 4.8 — 0.5 1.625% Convertible Notes (1) 0.4 — — Stock-based compensation 0.3 — 0.3 Denominator for diluted net income (loss) per share 66.6 56.4 56.2 Net income (loss) per share: (2) Basic $ 11.57 $ (9.07 ) $ 0.93 Diluted $ 10.61 $ (9.07 ) $ 0.92 Potentially dilutive common shares excluded from calculations: (1) 1.125% Warrants (1) — 1.9 — 1.625% Convertible Notes (1) — 0.4 — Stock-based compensation — 0.3 — _______________________________ (1) For more information regarding the 1.625% Convertible Notes, refer to Note 11 , “ Debt .” For more information and definitions regarding the 1.125% Warrants, refer to Note 14 , “ Stockholders' Equity .” The dilutive effect of all potentially dilutive common shares is calculated using the treasury stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income (loss) per share because to do so would have been anti-dilutive. (2) Source data for calculations in thousands. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We consider the carrying amounts of current assets and current liabilities (not including derivatives and the current portion of long-term debt) to approximate their fair values because of the relatively short period of time between the origination of these instruments and their expected realization or payment. For our financial instruments measured at fair value on a recurring basis, we prioritize the inputs used in measuring fair value according to a three-tier fair value hierarchy as follows: Level 1 — Observable Inputs. Level 1 financial instruments are actively traded and therefore the fair value for these securities is based on quoted market prices for identical securities in active markets. Level 2 — Directly or Indirectly Observable Inputs. Fair value for these investments is determined using a market approach based on quoted prices for similar securities in active markets or quoted prices for identical securities in inactive markets. Level 3 — Unobservable Inputs. Level 3 financial instruments are valued using unobservable inputs that represent management’s best estimate of what market participants would use in pricing the financial instrument at the measurement date. Our Level 3 financial instruments consist primarily of derivative financial instruments. The derivatives include the 1.125% Call Option derivative asset and the 1.125% Conversion Option derivative liability. These derivatives are not actively traded and are valued based on an option pricing model that uses observable and unobservable market data for inputs. Significant market data inputs used to determine fair value as of December 31, 2018 , included the price of our common stock, the time to maturity of the derivative instruments, the risk-free interest rate, and the implied volatility of our common stock. As described further in Note 12 , “ Derivatives ,” the 1.125% Call Option asset and the 1.125% Conversion Option liability were designed such that changes in their fair values offset, with minimal impact to the consolidated statements of operations. Therefore, the sensitivity of changes in the unobservable inputs to the option pricing model for such instruments is mitigated. The net changes in fair value of Level 3 financial instruments were insignificant to our results of operations for the years ended December 31, 2018 , and 2017. Our financial instruments measured at fair value on a recurring basis at December 31, 2018 , were as follows: Total Level 1 Level 2 Level 3 (In millions) Corporate debt securities $ 1,123 $ — $ 1,123 $ — U.S. Treasury notes 181 — 181 — Government-sponsored enterprise securities (GSEs) 163 — 163 — Municipal securities 114 — 114 — Asset-backed securities 82 — 82 — Certificates of deposit 14 — 14 — Other 4 — 4 — Subtotal - current investments 1,681 — 1,681 — 1.125% Call Option derivative asset 476 — — 476 Total assets $ 2,157 $ — $ 1,681 $ 476 1.125% Conversion Option derivative liability $ 476 $ — $ — $ 476 Total liabilities $ 476 $ — $ — $ 476 Our financial instruments measured at fair value on a recurring basis at December 31, 2017 , were as follows: Total Level 1 Level 2 Level 3 (In millions) Corporate debt securities $ 1,588 $ — $ 1,588 $ — U.S. Treasury notes 388 — 388 — GSEs 253 — 253 — Municipal securities 141 — 141 — Asset-backed securities 117 — 117 — Certificates of deposit 37 — 37 — Subtotal - current investments 2,524 — 2,524 — Corporate debt securities 101 — 101 — U.S. Treasury notes 68 — 68 — Subtotal - current restricted investments 169 — 169 — 1.125% Call Option derivative asset 522 — — 522 Total assets $ 3,215 $ — $ 2,693 $ 522 1.125% Conversion Option derivative liability $ 522 $ — $ — $ 522 Total liabilities $ 522 $ — $ — $ 522 Fair Value Measurements – Disclosure Only The carrying amounts and estimated fair values of our senior notes are classified as Level 2 financial instruments. Fair value for these securities is determined using a market approach based on quoted market prices for similar securities in active markets or quoted prices for identical securities in inactive markets. December 31, 2018 December 31, 2017 Carrying Fair Value Carrying Fair Value Amount Amount (In millions) 5.375% Notes $ 694 $ 674 $ 692 $ 730 4.875% Notes 326 301 325 329 1.125% Convertible Notes (1),(2) 240 732 496 1,052 Credit Facility (2) — — 300 300 1.625% Convertible Notes (2) — — 157 220 $ 1,260 $ 1,707 $ 1,970 $ 2,631 _______________________________ (1) The fair value of the 1.125% Conversion Option derivative liability (the embedded cash conversion option), which is included in the fair value amounts presented above, amounted to $476 million and $522 million as of December 31, 2018 and 2017, respectively. See further discussion at Note 11 , “ Debt ,” and Note 12 , “ Derivatives .” (2) For more information on debt repayments in the year ended December 31, 2018, refer to Note 11 , “ Debt .” |
Investments
Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments We consider all of our investments classified as current assets to be available-for-sale. The following tables summarize our current investments as of the dates indicated: December 31, 2018 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value (In millions) Corporate debt securities $ 1,131 $ — $ 8 $ 1,123 U.S. Treasury notes 181 — — 181 GSEs 164 — 1 163 Municipal securities 115 — 1 114 Asset-backed securities 83 — 1 82 Certificates of deposit 14 — — 14 Other 4 — — 4 Total current investments $ 1,692 $ — $ 11 $ 1,681 December 31, 2017 Amortized Cost Gross Unrealized Estimated Fair Value Gains Losses (In millions) Corporate debt securities $ 1,591 $ 1 $ 4 $ 1,588 U.S. Treasury notes 389 — 1 388 GSEs 255 — 2 253 Municipal securities 142 — 1 141 Asset-backed securities 117 — — 117 Certificates of deposit 37 — — 37 Subtotal - current investments 2,531 1 8 2,524 Corporate debt securities 101 — — 101 U.S. Treasury notes 68 — — 68 Subtotal - current restricted investments 169 — — 169 $ 2,700 $ 1 $ 8 $ 2,693 The contractual maturities of our current investments as of December 31, 2018 are summarized below: Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 1,000 $ 997 Due after one year through five years 692 684 $ 1,692 $ 1,681 As discussed further in Note 11 , “ Debt ,” the 4.875% Notes’ indenture required us to hold a portion of the net proceeds from their issuance in a segregated account to be used to settle the conversion of the 1.625% Convertible Notes. Prior to September 30, 2018, this account was reported as a current asset, entitled “Restricted investments,” in the accompanying consolidated balance sheets. Because this account was used to settle the conversion of the 1.625% Convertible Notes in the third quarter of 2018, current restricted investments, as of December 31, 2018, was reduced to zero. Gross realized gains and losses from sales of available-for-sale securities are calculated under the specific identification method and are included in investment income. Gross realized investment gains and losses for the years ended December 31, 2018 , 2017 and 2016 were insignificant. We have determined that unrealized losses at December 31, 2018 and 2017 are temporary in nature, because the change in market value for these securities resulted from fluctuating interest rates, rather than a deterioration of the creditworthiness of the issuers. So long as we maintain the intent and ability to hold these securities to maturity, we are unlikely to experience losses. In the event that we dispose of these securities before maturity, we expect that realized losses, if any, will be insignificant. The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a continuous loss position for 12 months or more as of December 31, 2018 . In a Continuous Loss Position for Less than 12 Months In a Continuous Loss Position for 12 Months or More Estimated Fair Value Unrealized Losses Total Number of Positions Estimated Fair Value Unrealized Losses Total Number of Positions (Dollars in millions) Corporate debt securities $ 509 $ 3 285 $ 412 $ 5 298 GSEs — — — 127 1 76 Municipal securities — — — 87 1 90 Asset backed securities — — — 68 1 52 $ 509 $ 3 285 $ 694 $ 8 516 The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a continuous loss position for 12 months or more as of December 31, 2017 . In a Continuous Loss Position for Less than 12 Months In a Continuous Loss Position for 12 Months or More Estimated Fair Value Unrealized Losses Total Number of Positions Estimated Fair Value Unrealized Losses Total Number of Positions (Dollars in millions) Corporate debt securities $ 1,297 $ 3 561 $ 94 $ 1 69 U.S. Treasury notes 470 1 89 — — — GSEs 173 1 69 95 1 47 Municipal securities — — — 38 1 48 $ 1,940 $ 5 719 $ 227 $ 3 164 |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Receivables | Receivables Receivables consist primarily of amounts due from government agencies, which may be subject to potential retroactive adjustments. Because all of our receivable amounts are readily determinable and substantially all of our creditors are governmental authorities, our allowance for doubtful accounts is insignificant. Any amounts determined to be uncollectible are charged to expense when such determination is made. December 31, 2018 2017 (In millions) Premiums and other receivables 855 695 Pharmacy administrative services receivables 179 — Pharmacy rebate receivables 155 154 Health insurer fee reimbursement receivables 141 22 $ 1,330 $ 871 |
Property, Equipment, and Capita
Property, Equipment, and Capitalized Software, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment, and Capitalized Software, Net | Property, Equipment, and Capitalized Software, Net Property and equipment are stated at historical cost. Replacements and major improvements are capitalized, and repairs and maintenance are charged to expense as incurred. Furniture and equipment are generally depreciated using the straight-line method over estimated useful lives ranging from three to seven years. Software developed for internal use is capitalized. Software is generally amortized over its estimated useful life of three years. Leasehold improvements are amortized over the term of the lease, or over their useful lives from five to 10 years, whichever is shorter. Buildings are depreciated over their estimated useful lives of 31.5 to 40 years. A summary of property, equipment, and capitalized software is as follows: December 31, 2018 2017 (In millions) Capitalized software $ 373 $ 417 Furniture and equipment 231 289 Building and improvements 154 161 Land 16 16 Total cost 774 883 Less: accumulated amortization - capitalized software (320 ) (308 ) Less: accumulated depreciation and amortization - building and improvements, furniture and equipment (213 ) (233 ) Total accumulated depreciation and amortization (533 ) (541 ) Property, equipment, and capitalized software, net $ 241 $ 342 The following table presents all depreciation and amortization recognized in our consolidated statements of operations, whether the item appears as depreciation and amortization, or as cost of service revenue. Year Ended December 31, 2018 2017 2016 (In millions) Recorded in depreciation and amortization: Amortization of capitalized software $ 42 $ 64 $ 62 Depreciation of property and equipment 36 42 45 Amortization of intangible assets 21 31 32 Subtotal 99 137 139 Recorded in cost of service revenue: Amortization of capitalized software 19 28 22 Amortization of deferred contract costs 9 13 21 Subtotal 28 41 43 Total depreciation and amortization recognized $ 127 $ 178 $ 182 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill The following table presents the changes in the carrying amounts of goodwill, by segment, for the year ended December 31, 2018 . The 2017 goodwill impairment losses were reported as “Impairment losses” in the accompanying consolidated statements of operations. See Note 18 , “ Segments ,” for a discussion of the change in our reportable segments in 2018. Health Plans Other Total (In millions) Historical goodwill, gross $ 445 $ 233 $ 678 Accumulated impairment losses at December 31, 2017 (302 ) (190 ) (492 ) Balance, December 31, 2017 143 43 186 Sale of subsidiary — (43 ) (43 ) Balance, December 31, 2018 $ 143 $ — $ 143 Accumulated impairment losses at December 31, 2018 $ 302 $ 190 $ 492 Impairment Analysis Results 2018 . We performed a qualitative goodwill assessment of our reporting units, which resulted in no goodwill impairment losses in the year ended December 31, 2018 . 2017 – Health Plans Segment. We performed quantitative goodwill assessments using the discounted cash flows and asset liquidation methods, which resulted in Health Plans segment goodwill impairment losses of $ 244 million in the year ended December 31, 2017, primarily due to the following: • Medicaid contract terminations announced in early 2018 at our Florida and New Mexico health plans; and • Future cash flow projections insufficient to produce an estimated fair value in excess of the Illinois health plan’s carrying amount. 2017 – Other Segment . Our recently divested Molina Medicaid Solutions and Pathways businesses are reported in the Other segment. The quantitative goodwill assessments of these reporting units, using the discounted cash flows method, resulted in goodwill impairment losses of $190 million in the year ended December 31, 2017, primarily due to the following: • Management’s conclusion that Molina Medicaid Solutions would provide fewer future benefits for its support of the Health Plans segment; and • Management’s conclusion that Pathways would not provide future benefits relating to the integration of its operations with the Health Plans segment to the extent previously expected. 2016 . We performed a quantitative goodwill assessment of our reporting units using the discounted cash flows method, which resulted in no impairment losses in the year ended December 31, 2016 . Intangible Assets, Net The following table provides the details of identified intangible assets, by major class, for the periods indicated: Cost Accumulated Carrying Amount (In millions) Intangible assets: Contract rights and licenses $ 201 $ 162 $ 39 Provider networks 20 12 8 Balance at December 31, 2018 $ 221 $ 174 $ 47 Intangible assets: Contract rights and licenses $ 201 $ 141 $ 60 Provider networks 20 11 9 Balance at December 31, 2017 $ 221 $ 152 $ 69 Based on the balances of our identifiable intangible assets as of December 31, 2018 , we estimate that our intangible asset amortization will be approximately $18 million in 2019 , $14 million in 2020 , $5 million in 2021 , and $3 million in 2022 and 2023 . For a presentation of our intangible assets by reportable segment, refer to Note 18 , “ Segments .” Impairment Analysis Results 2018 . No impairment charges relating to intangible assets were recorded in the year ended December 31, 2018. See Note 15 , “ Restructuring and Separation Costs ,” for a description of certain long-lived assets written off in 2018, in connection with our 2017 Restructuring Plan. 2017 – Health Plans Segment. As a result of the impairment indicators described above for the Florida and New Mexico reporting units of the Health Plans segment in 2017, we performed undiscounted cash flows analyses of the reporting units, which resulted in Health Plans segment intangible asset impairment losses of $25 million in the year ended December 31, 2017. 2017 – Other Segment . As a result of management’s conclusion that Pathways would not provide future benefits relating to the integration of its operations with the Health Plans segment to the extent previously expected, we computed an undiscounted cash flows analysis of reporting units, which resulted in Other segment intangible asset impairment losses of $11 million . 2016 . No significant impairment charges relating to long-lived assets, including intangible assets, were recorded in the year ended December 31, 2016 . |
Restricted Investments
Restricted Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Restricted Investments | Restricted Investments Pursuant to the regulations governing our Health Plans segment subsidiaries, we maintain statutory deposits and deposits required by government authorities primarily in certificates of deposit and U.S. Treasury securities. We also maintain restricted investments as protection against the insolvency of certain capitated providers. The use of these funds is limited as required by regulation in the various states in which we operate, or as needed in the event of insolvency of capitated providers. Therefore, such investments are reported as “Restricted investments” in the accompanying consolidated balance sheets. We have the ability to hold these restricted investments until maturity, and as a result, we would not expect the value of these investments to decline significantly due to a sudden change in market interest rates. The following table presents the balances of restricted investments: December 31, 2018 2017 (In millions) Florida $ 32 $ 31 New Mexico 43 43 Ohio 12 12 Puerto Rico 10 10 Other 23 23 Total Health Plans segment $ 120 $ 119 The contractual maturities of our held-to-maturity restricted investments, which are carried at amortized cost, which approximates fair value, as of December 31, 2018 are summarized below. Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 105 $ 105 Due after one year through five years 15 15 $ 120 $ 120 |
Medical Claims and Benefits Pay
Medical Claims and Benefits Payable | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Medical Claims and Benefits Payable | Medical Claims and Benefits Payable The following table provides the details of our medical claims and benefits payable as of the dates indicated. December 31, 2018 2017 2016 (In millions) Fee-for-service claims incurred but not paid (“IBNP”) $ 1,562 $ 1,717 $ 1,352 Pharmacy payable 115 112 112 Capitation payable 52 67 37 Other 232 296 428 $ 1,961 $ 2,192 $ 1,929 “Other” medical claims and benefits payable include amounts payable to certain providers for which we act as an intermediary on behalf of various government agencies without assuming financial risk. Such receipts and payments do not impact our consolidated statements of operations. Non-risk provider payables amounted to $107 million , $122 million and $225 million , as of December 31, 2018 , 2017 , and 2016 , respectively. The following table presents the components of the change in our medical claims and benefits payable for the periods indicated. The amounts presented for “Components of medical care costs related to: Prior periods” represent the amount by which our original estimate of medical claims and benefits payable at the beginning of the period were (more) less than the actual amount of the liability based on information (principally the payment of claims) developed since that liability was first reported. Year Ended December 31, 2018 2017 2016 (In millions) Medical claims and benefits payable, beginning balance $ 2,192 $ 1,929 $ 1,685 Components of medical care costs related to: Current period 15,478 17,037 14,966 Prior periods (1) (341 ) 36 (192 ) Total medical care costs 15,137 17,073 14,774 Change in non-risk provider payables 13 (106 ) 58 Payments for medical care costs related to: Current period 13,671 15,130 13,304 Prior periods 1,710 1,574 1,284 Total paid 15,381 16,704 14,588 Medical claims and benefits payable, ending balance $ 1,961 $ 2,192 $ 1,929 ________________ (1) Includes the 2018 benefit of the 2017 Marketplace CSR reimbursement of $81 million . The following tables provide information about incurred and paid claims development as of December 31, 2018 , as well as cumulative claims frequency and the total of incurred but not paid claims liabilities. The cumulative claim frequency is measured by claim event, and includes claims covered under capitated arrangements. Incurred Claims and Allocated Claims Adjustment Expenses Total IBNP Cumulative number of reported claims Benefit Year 2016 2017 2018 (Unaudited) (Unaudited) (In millions) 2016 $ 15,064 $ 15,093 $ 15,057 $ 18 105 2017 17,037 16,728 57 119 2018 15,478 1,477 105 $ 47,263 $ 1,552 Cumulative Paid Claims and Allocated Claims Adjustment Expenses Benefit Year 2016 2017 2018 (Unaudited) (Unaudited) (In millions) 2016 $ 13,403 $ 14,952 $ 15,039 2017 15,130 16,752 2018 13,671 $ 45,462 The following table represents a reconciliation of claims development to the aggregate carrying amount of the liability for medical claims and benefits payable. 2018 (In millions) Incurred claims and allocated claims adjustment expenses $ 47,263 Less: cumulative paid clams and allocated claims adjustment expenses (45,462 ) All outstanding liabilities before 2016 10 Non-risk provider payables and other 150 Medical claims and benefits payable $ 1,961 Our estimates of medical claims and benefits payable recorded at December 31, 2017, 2016 and 2015 developed favorably (unfavorably) by approximately $341 million , $(36) million and $192 million in 2018, 2017 and 2016, respectively. The favorable prior year development recognized in 2018 includes a benefit of approximately $81 million in reduced medical care costs relating to Marketplace CSR subsidies for 2017 dates of service. The remainder of the favorable prior period development was primarily due to lower than expected utilization of medical services by our Medicaid and Marketplace members and improved operating performance. The differences between our original estimates in 2017 and the ultimate costs in 2018 were not discernable until additional information was provided to us in 2018 and the effect became clearer over time as claim payments were processed. The unfavorable prior year development in 2017 was primarily due to higher than expected costs for settling certain claims with certain providers in states where we had recently commenced operations, such as in Illinois and Puerto Rico, or had instituted significant changes due to provider contract changes, such as in Florida and New Mexico. The differences between our original estimates in 2016 and the ultimate costs in 2017 were not discernable until additional information was provided to us in 2017 and the effect became clearer over time as claim payments were processed. The favorable prior year development we recognized in 2016 was primarily due to reprocessing a significant number of claims in 2016 for provider submission of claims that were not compliant with new diagnostic coding requirements instituted in late 2015; several high-dollar claims at our New Mexico health plan that were settled for amounts lower than we initially estimated; recoveries on certain outpatient facility claims at our Washington health plan; and lower than expected claims costs for Medicaid Expansion members that were new to our California health plan in 2015. The differences between our original estimates in 2015 and the ultimate costs in 2016 were not discernable until additional information was provided to us in 2016 and the effect became clearer over time as claim payments were processed. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of December 31, 2018 , contractual maturities of debt for the years ending December 31 were as follows. All amounts represent the principal amounts of the debt instruments outstanding. Total 2019 2020 2021 2022 2023 Thereafter (In millions) 5.375% Notes $ 700 $ — $ — $ — $ 700 $ — $ — 4.875% Notes 330 — — — — — 330 1.125% Convertible Notes 252 — 252 — — — — $ 1,282 $ — $ 252 $ — $ 700 $ — $ 330 All of our debt is held at the parent which is reported, for segment purposes, in “Other.” The following table summarizes our outstanding debt obligations and their classification in the accompanying consolidated balance sheets: December 31, 2018 2017 (In millions) Current portion of long-term debt: 1.125% Convertible Notes, net of unamortized discount $ 241 $ 499 1.625% Convertible Notes, net of unamortized discount — 157 Lease financing obligations 1 1 Debt issuance costs (1 ) (4 ) 241 653 Non-current portion of long-term debt: 5.375% Notes 700 700 4.875% Notes 330 330 Credit Facility — 300 Debt issuance costs (10 ) (12 ) 1,020 1,318 Lease financing obligations 197 198 $ 1,458 $ 2,169 Interest cost recognized relating to our convertible senior notes, the 1.125% Convertible Notes and the 1.625% Convertible Notes, was as follows: Years Ended December 31, 2018 2017 2016 (In millions) Contractual interest at coupon rate $ 6 $ 11 $ 11 Amortization of the discount 21 32 30 $ 27 $ 43 $ 41 Credit Agreement In January 2017, we entered into an amended Credit Agreement, which provides for an unsecured $500 million revolving credit facility (the “Credit Facility”). The Credit Facility has a term of five years and all amounts outstanding (other than the Term Loan, as described below) will be due and payable on January 31, 2022. In May 2018, we repaid the $300 million outstanding borrowings under the Credit Facility. As of December 31, 2018 , no amounts were outstanding under the Credit Facility, and outstanding letters of credit amounting to $7 million reduced our remaining borrowing capacity under the Credit Facility to $493 million . Borrowings under our Credit Agreement, including both the Credit Facility and the Term Loan, bear interest based, at our election, on a base rate or other defined rate, plus in each case the applicable margin. In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the Credit Agreement, we are required to pay a quarterly commitment fee. Subsequent Event On January 31, 2019, we entered into a Sixth Amendment to the Credit Agreement that provides for the following: • A delayed draw term loan facility in an aggregate principal amount of $600 million (the “Term Loan”), under which we may request up to ten advances, each in a minimum principal amount of $50 million, until 18 months after January 31, 2019 (“Delayed Draw Commitment Period”). The Term Loan will amortize in quarterly installments, commencing on the last day of the first fiscal quarter after the Delayed Draw Commitment Period, equal to the principal amount of the Term Loan outstanding on the last day of the Delayed Draw Commitment Period multiplied by an amortization payment percentage ranging from 1.25% to 2.50% (depending on the applicable fiscal quarter) for each fiscal quarter. We will pay a delayed draw ticking fee in an amount equal to 37.5 basis points ( 0.375% ) per annum of the undrawn amount of the Term Loan commencing on January 31, 2019, and continuing until the last day of the Delayed Draw Commitment Period, payable quarterly. All amounts outstanding under the Term Loan will be due and payable on January 31, 2024; • Addition of definitions for various terms that apply to the Term Loan; and • Various other amendments relating to the administration of the Credit Agreement. In addition, effective as of January 31, 2019, Molina Pathways, LLC was automatically and unconditionally released as a guarantor under the Credit Agreement. As a result, as of January 31, 2019, no guarantors were parties to the Credit Agreement. The Credit Agreement contains customary non-financial and financial covenants, including a net leverage ratio and an interest coverage ratio. As of December 31, 2018 , we were in compliance with all financial and non-financial covenants under the Credit Agreement and other long-term debt. 5.375% Notes due 2022 We have $700 million aggregate principal amount of senior notes (the “ 5.375% Notes”) outstanding as of December 31, 2018 , which are due November 15, 2022, unless earlier redeemed. Interest on the 5.375% Notes is payable semiannually in arrears on May 15 and November 15. As noted above, effective January 31, 2019, none of our subsidiaries is a guarantor of the 5.375% Notes. The 5.375% Notes are senior unsecured obligations of Molina and rank equally in right of payment with all existing and future senior debt, and senior to all existing and future subordinated debt of Molina. The 5.375% Notes contain customary non-financial covenants and change in control provisions. 4.875% Notes due 2025 We have $330 million aggregate principal amount of senior notes (the “ 4.875% Notes”) outstanding as of December 31, 2018 , which are due June 15, 2025, unless earlier redeemed. Interest on the 4.875% Notes is payable semiannually in arrears on June 15 and December 15. As noted above, effective January 31, 2019, none of our subsidiaries is a guarantor of the 4.875% Notes. The 4.875% Notes are senior unsecured obligations of Molina, respectively, and rank equally in right of payment with all existing and future senior debt, and senior to all existing and future subordinated debt of Molina. The 4.875% Notes contain customary non-financial covenants and change of control provisions. 1.125% Cash Convertible Senior Notes due 2020 In the second, third and fourth quarters of 2018, we entered into privately negotiated note purchase agreements with certain holders of our outstanding 1.125% cash convertible senior notes due January 15, 2020 (the “1.125% Convertible Notes”). In each case, the difference between the principal amount extinguished and our cash payments primarily represented the settlement of the 1.125% Convertible Notes’ embedded cash conversion option feature at fair value (which is a derivative liability we refer to as the 1.125% Conversion Option). Activity during the year was as follows: • In the fourth quarter of 2018, we repaid $62 million aggregate principal amount of the 1.125% Convertible Notes, plus accrued interest, for a total cash payment of $202 million . • In the third quarter of 2018, we repaid $140 million aggregate principal amount of the 1.125% Convertible Notes, plus accrued interest, for a total cash payment of $483 million . • In the second quarter of 2018, we repaid $96 million aggregate principal amount of the 1.125% Convertible Notes, plus accrued interest, for a total cash payment of $228 million . In the year ended December 31, 2018, we have recorded an aggregate net loss on debt extinguishment of $12 million for the 1.125% Convertible Notes purchases, primarily relating to the acceleration of the debt discount. This loss is reported in “Other expenses (income), net” in the accompanying consolidated statements of operations. No common shares were issued in connection with these transactions. In connection with each of the 1.125% Convertible Notes purchases, we also entered into privately negotiated termination agreements with each of the counterparties in 2018, to partially terminate the Call Spread Overlay, defined and further discussed in Notes 12 , “ Derivatives ,” and 14 , “ Stockholders' Equity .” The net cash proceeds from the Call Spread Overlay partial termination transactions partially offset the cash paid to settle the 1.125% Convertible Notes. Following the transactions described above, we have $252 million aggregate principal amount of 1.125% Convertible Notes outstanding at December 31, 2018. Interest is payable semiannually in arrears on January 15 and July 15. The 1.125% Convertible Notes are senior unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the 1.125% Convertible Notes; equal in right of payment to any of our unsecured indebtedness that is not subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities of our subsidiaries. The 1.125% Convertible Notes are convertible only into cash, and not into shares of our common stock or any other securities. The initial conversion rate for the 1.125% Convertible Notes is 24.5277 shares of our common stock per $1,000 principal amount, or approximately $40.77 per share of our common stock. Upon conversion, in lieu of receiving shares of our common stock, a holder will receive an amount in cash, per $1,000 principal amount of 1.125% Convertible Notes, equal to the settlement amount, determined in the manner set forth in the indenture. We may not redeem the 1.125% Convertible Notes prior to the maturity date. Holders may convert their 1.125% Convertible Notes only under the following circumstances: • During any calendar quarter commencing after the calendar quarter ending on June 30, 2013 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • During the five business day period immediately after any five consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of 1.125% Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; • Upon the occurrence of specified corporate events; or • At any time on or after July 15, 2019 until the close of business on the second scheduled trading day immediately preceding the maturity date. The 1.125% Convertible Notes are convertible by the holders within one year of December 31, 2018, until they mature; therefore, they are reported in current portion of long-term debt. Concurrent with the issuance of the 1.125% Convertible Notes, the 1.125% Conversion Option was separated from the 1.125% Convertible Notes and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of operations until the 1.125% Conversion Option settles or expires. This initial liability simultaneously reduced the carrying value of the 1.125% Convertible Notes’ principal amount (effectively an original issuance discount), which is amortized to the principal amount through the recognition of non-cash interest expense over the expected life of the debt. The effective interest rate approximating what we would have incurred had nonconvertible debt with otherwise similar terms been issued is approximately 6% . As of December 31, 2018 , the 1.125% Convertible Notes have a remaining amortization period of one year, and their ‘if-converted’ value exceeded their principal amount by approximately $581 million and $406 million as of December 31, 2018 and 2017, respectively. 1.625% Convertible Senior Notes due 2044 Conversion. On July 11, 2018, we announced notice of our election to redeem the remaining $64 million aggregate principal amount of the 1.625% convertible senior notes due 2044 (the “1.625% Convertible Notes”) on August 20, 2018 (the “Redemption Date”), pursuant to the terms of the indenture. Also pursuant to the indenture, the 1.625% Convertible Notes were convertible until August 17, 2018, at a conversion rate of 17.2157 shares of our common stock per $1,000 principal amount equal to the settlement amount (as defined in the related indenture), or approximately $ 58.09 per share of our common stock. At December 31, 2017, the equity component of the 1.625% Convertible Notes, including the impact of deferred taxes, was $12 million . Through August 17, 2018, we received conversion notices from substantially all of the remaining holders of the 1.625% Convertible Notes outstanding. Under the conversions, we paid cash for the remaining $64 million aggregate principal amount and delivered 0.6 million shares of our common stock to the converting holders on the settlement dates in September 2018. Exchange. In March 2018, we entered into separate, privately negotiated, synthetic exchange agreements with certain holders of our outstanding 1.625% Convertible Notes, under which we exchanged $97 million aggregate principal amount and accrued interest for 1.8 million shares of our common stock. We recorded a loss on debt extinguishment, including transaction fees, of $10 million , primarily relating to the inducement premium paid to the bondholders, which is recorded in “Other expenses (income), net” in the accompanying consolidated statements of operations. We did not receive any proceeds from the transaction. In December 2017, we entered into separate, privately negotiated, synthetic exchange agreements with certain holders of our outstanding 1.625% Convertible Notes, under which we exchanged $141 million aggregate principal amount and accrued interest for 2.6 million shares of our common stock. We recorded a loss on debt extinguishment, including transaction fees, of $14 million , primarily relating to the inducement premium paid to the bondholders, which is recorded in “Other expenses (income), net” in the accompanying consolidated statements of operations. We did not receive any proceeds from the transaction. Cross-Default Provisions The indentures governing the 4.875% Notes, the 5.375% Notes and the 1.125% Convertible Notes contain cross-default provisions that are triggered upon default by us or any of our subsidiaries on any indebtedness in excess of the amount specified in the applicable indenture. Bridge Credit Agreement In January 2018, we entered into a bridge credit agreement with several banks, which was subsequently terminated in August 2018. Lease Financing Obligations Molina Center and Ohio Exchange. In 2013, we entered into a sale-leaseback transaction for the Molina Center and our Ohio health plan office building located in Columbus, Ohio, also known as the Ohio Exchange. Based on certain lease terms, we retained continuing involvement with these leased properties. Rent increases 3% per year through the initial term, which expires in 2038. The lease provides for six five -year renewal options, with renewal rent to be the higher of the 3% annual escalator or the then-fair market value. 6th and Pine. Also in 2013, we entered into a construction and lease transaction for two office buildings in Long Beach, California (“6th and Pine”). Due to our participation in the construction project, we retained continuing involvement in the properties. Rent increases 3.4% per year through the initial term, which expires in 2029. The lease provides for two five -year renewal options, with renewal rent to be determined based on the then-fair market value. Because of our continuing involvement in the leasing transactions, as noted above, the sale of these properties did not qualify for sales recognition and we remain the owner of the properties under these leases for accounting purposes as of December 31, 2018. The assets are therefore included in our consolidated balance sheets, and are depreciated over their remaining useful lives. The lease financing obligations are amortized over the initial lease terms, such that there will be no gain or loss recorded if the leases are not extended beyond their expiration dates. Payments under the leases adjust the lease financing obligations, and the imputed interest is recorded to interest expense in our consolidated statements of operations. Aggregate interest expense under these leases amounted to $17 million in each of the years ended December 31, 2018 , 2017 and 2016. For information regarding the future minimum lease obligations, refer to Note 17 , “ Commitments and Contingencies ” and Note 2 , “ Significant Accounting Policies ,” Recent Accounting Pronouncements Not Yet Adopted, Leases . |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives The following table summarizes the fair values and the presentation of our derivative financial instruments (defined and discussed individually below) in the consolidated balance sheets: December 31, Balance Sheet Location 2018 2017 (In millions) Derivative asset: 1.125% Call Option Current assets: Derivative asset $ 476 $ 522 Derivative liability: 1.125% Conversion Option Current liabilities: Derivative liability $ 476 $ 522 Our derivative financial instruments do not qualify for hedge treatment; therefore, the change in fair value of these instruments is recognized immediately in our consolidated statements of operations, and reported in “Other expenses (income), net.” Gains and losses for our derivative financial instruments are presented individually in the accompanying consolidated statements of cash flows, “Supplemental cash flow information.” 1.125% Convertible Notes Call Spread Overlay. Concurrent with the issuance of the 1.125% Convertible Notes in 2013, we entered into privately negotiated hedge transactions (collectively, the “1.125% Call Option”) and warrant transactions (collectively, the “1.125% Warrants”), with certain of the initial purchasers of the 1.125% Convertible Notes (the “Counterparties”). We refer to these transactions collectively as the Call Spread Overlay. Under the Call Spread Overlay, the cost of the 1.125% Call Option we purchased to cover the cash outlay upon conversion of the 1.125% Convertible Notes was reduced by proceeds from the sale of the 1.125% Warrants. Assuming full performance by the Counterparties (and 1.125% Warrants strike prices in excess of the conversion price of the 1.125% Convertible Notes), these transactions are intended to offset cash payments in excess of the principal amount of the 1.125% Convertible Notes due upon any conversion of such notes. In the second, third and fourth quarters of 2018, in connection with the 1.125% Convertible Notes purchases (described in Note 11 , “ Debt ”), we entered into privately negotiated termination agreements with each of the Counterparties to partially terminate the Call Spread Overlay, in notional amounts corresponding to the aggregate principal amount of the 1.125% Convertible Notes purchased. • In the fourth quarter of 2018, this resulted in our receipt of $146 million for the settlement of the 1.125% Call Option (which is a derivative asset), and the payment of $130 million for the partial termination of the 1.125% Warrants, for an aggregate net cash receipt of $16 million from the Counterparties. • In the third quarter of 2018, this resulted in our receipt of $343 million for the settlement of the 1.125% Call Option, and the payment of $306 million for the partial termination of the 1.125% Warrants, for an aggregate net cash receipt of $37 million from the Counterparties. • In the second quarter of 2018, this resulted in our receipt of $134 million for the settlement of the 1.125% Call Option, and the payment of $113 million for the partial termination of the 1.125% Warrants, for an aggregate net cash receipt of $21 million from the Counterparties. 1.125% Call Option. The 1.125% Call Option, which is indexed to our common stock, is a derivative asset that requires mark-to-market accounting treatment due to cash settlement features until the 1.125% Call Option settles or expires. For further discussion of the inputs used to determine the fair value of the 1.125% Call Option, refer to Note 4 , “ Fair Value Measurements .” 1.125% Conversion Option. The embedded cash conversion option within the 1.125% Convertible Notes is accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of operations until the cash conversion option settles or expires. For further discussion of the inputs used to determine the fair value of the 1.125% Conversion Option, refer to Note 4 , “ Fair Value Measurements .” As of December 31, 2018 , the 1.125% Call Option and the 1.125% Conversion Option were classified as a current asset and current liability, respectively, because the 1.125% Convertible Notes may be converted within twelve months of December 31, 2018 , as described in Note 11 , “ Debt .” |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense (benefit) is determined using an estimated annual effective tax rate, which generally differs from the U.S. federal statutory rate primarily because of state taxes, nondeductible expenses such as the HIF, goodwill impairment, certain compensation, and other general and administrative expenses. The effective tax rate was not impacted by the HIF in 2017, given the 2017 HIF moratorium. The effective tax rate may be subject to fluctuations during the year, particularly as a result of the level of pretax earnings, and also as new information is obtained. Such information may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of pretax earnings in the various tax jurisdictions in which we operate, valuation allowances against deferred tax assets, the recognition or the reversal of the recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities, along with net operating loss and tax credit carryovers. The TCJA, in part, reduced the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018. TCJA’s change in the federal rate required that we revalue deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally the new 21% federal corporate tax rate plus applicable state tax rate. We applied the guidance in SEC Staff Accounting Bulletin No. 118 when accounting for the enactment-date effects of the TCJA in 2017 and throughout 2018. As of December 31, 2017, we recorded a provisional amount of $54 million for the revaluation of deferred tax assets and liabilities because we had not yet completed our accounting for all of the enactment-date income tax effects of the TJCA under ASC 740, Income Taxes. Upon further analysis of certain aspects of the TCJA and refinement of our calculations in the year ended December 31, 2018, we reduced this provisional amount by $4 million , which is included as a component of income tax expense in the accompanying consolidated statement of operations. As of December 31, 2018, the accounting for all of the enactment-date income tax effects of the TCJA is complete. Income tax expense (benefit) consisted of the following: Year Ended December 31, 2018 2017 2016 (In millions) Current: Federal $ 272 $ (9 ) $ 134 State 18 3 3 Foreign 8 — (6 ) Total current 298 (6 ) 131 Deferred: Federal (3 ) (85 ) 19 State (3 ) (9 ) 2 Foreign — — 1 Total deferred (6 ) (94 ) 22 Income tax expense (benefit) $ 292 $ (100 ) $ 153 A reconciliation of the U.S. federal statutory income tax rate to the combined effective income tax rate is as follows: Year Ended December 31, 2018 2017 2016 Statutory federal tax (benefit) rate 21.0 % (35.0 )% 35.0 % State income provision (benefit), net of federal 1.2 (0.7 ) 1.6 Nondeductible health insurer fee (“HIF”) 7.3 — 37.0 Nondeductible compensation 0.7 2.8 3.1 Nondeductible goodwill impairment — 6.6 — Worthless stock deduction (1.0 ) — — Revaluation of net deferred tax assets (0.4 ) 8.8 — Change in purchase agreement that increased tax basis in assets — — (2.2 ) Other 0.4 1.1 0.3 Effective tax (benefit) rate 29.2 % (16.4 )% 74.8 % Our effective tax rate is based on expected income (loss), statutory tax rates, and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant management estimates and judgments are required in determining our effective tax rate. We are routinely under audit by federal, state, or local authorities regarding the timing and amount of deductions, nexus of income among various tax jurisdictions, and compliance with federal, state, foreign, and local tax laws. Deferred tax assets and liabilities are classified as non-current. Significant components of our deferred tax assets and liabilities as of December 31, 2018 and 2017 were as follows: December 31, 2018 2017 (In millions) Accrued expenses $ 32 $ 15 Reserve liabilities 7 11 Other accrued medical costs 12 16 Net operating losses 16 27 Fixed assets and intangibles 30 23 Unearned premiums 9 19 Lease financing obligation 30 30 Tax credit carryover 12 15 Other 3 3 Valuation allowance (28 ) (41 ) Total deferred income tax assets, net of valuation allowance 123 118 Prepaid expenses (6 ) (6 ) Basis in debt — (9 ) Total deferred income tax liabilities (6 ) (15 ) Net deferred income tax asset $ 117 $ 103 At December 31, 2018, we had state net operating loss carryforwards of $332 million , which begin expiring in 2027. At December 31, 2018 , we had California research and development and enterprise zone tax credit carryovers of $14 million , which will begin to expire in 2024. We evaluate the need for a valuation allowance taking into consideration the ability to carry back and carry forward tax credits and losses, available tax planning strategies and future income, including reversal of temporary differences. We have determined that as of December 31, 2018 , $28 million of deferred tax assets did not satisfy the recognition criteria. Therefore, we decreased our valuation allowance by $13 million , from $41 million at December 31, 2017 , to $28 million as of December 31, 2018 . We recognize tax benefits only if the tax position is more likely than not to be sustained. We are subject to income taxes in the United States, Puerto Rico, and numerous state jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. The roll forward of our unrecognized tax benefits is as follows: Year Ended December 31, 2018 2017 2016 (In millions) Gross unrecognized tax benefits at beginning of period $ (13 ) $ (11 ) $ (9 ) Increases in tax positions for current year (9 ) (1 ) (1 ) Increases in tax positions for prior years — (4 ) (1 ) Decreases in tax positions for prior years — 3 — Lapse in statute of limitations 2 — — Gross unrecognized tax benefits at end of period $ (20 ) $ (13 ) $ (11 ) The total amount of unrecognized tax benefits at December 31, 2018 , 2017 and 2016 that, if recognized, would affect the effective tax rates is $18 million , $12 million , and $9 million , respectively. We expect that during the next 12 months it is reasonably possible that unrecognized tax benefit liabilities may decrease by as much as $3 million due to the expiration of statutes of limitation. Our continuing practice is to recognize interest and/or penalties related to unrecognized tax benefits in income tax expense. Amounts accrued for the payment of interest and penalties as of December 31, 2018 , 2017 and 2016 were insignificant. We may be subject to federal examination for calendar years 2015 through 2017. With a few exceptions, which are immaterial in the aggregate, we no longer are subject to state, local, and Puerto Rico tax examinations for years before 2014. We are not aware of any material adjustments that may be proposed. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity 1.625% Convertible Notes Conversion. As described in Note 11 , “ Debt ,” we issued 0.6 million shares of our common stock in connection with the conversion of the 1.625% Convertible Notes in the third quarter of 2018. Exchange. As described in Note 11 , “ Debt ,” we issued 1.8 million shares and 2.6 million shares of our common stock in connection with the exchange of the 1.625% Convertible Notes in March 2018 and December 2017, respectively. 1.125% Warrants In connection with the Call Spread Overlay transaction described in Note 12 , “ Derivatives ,” in 2013, we issued 13.5 million warrants with a strike price of $53.8475 per share. Under certain circumstances, beginning in April 2020, if the price of our common stock exceeds the strike price of the 1.125% Warrants, we will be obligated to issue shares of our common stock subject to a share delivery cap. The 1.125% Warrants could separately have a dilutive effect to the extent that the market value per share of our common stock exceeds the applicable strike price of the 1.125% Warrants. Refer to Note 3 , “ Net Income (Loss) Per Share ,” for dilution information for the periods presented. We will not receive any additional proceeds if the 1.125% Warrants are exercised. Following the transactions described below, 6.2 million of the 1.125% Warrants remain outstanding. As described in Note 12 , “ Derivatives ,” in the second, third and fourth quarters of 2018, we entered into privately negotiated termination agreements with each of the Counterparties to terminate the respective portion of the Call Spread Overlay, in notional amounts corresponding to the aggregate principal amount of the 1.125% Convertible Notes repaid. In each case, additional paid-in capital was reduced for the same amount paid to the Counterparties for the termination of the 1.125% Warrants. • In the fourth quarter of 2018, we paid $130 million to the Counterparties for the termination of 1.5 million of the 1.125% Warrants outstanding. • In the third quarter of 2018, we paid $306 million to the Counterparties for the termination of 3.4 million of the 1.125% Warrants outstanding. • In the second quarter of 2018, we paid $113 million to the Counterparties for the termination of 2.4 million of the 1.125% Warrants outstanding. Share-Based Compensation At December 31, 2018 , we had employee equity incentives outstanding under our 2011 Equity Incentive Plan (“2011 Plan”). The 2011 Plan provides for the award of restricted stock (“RSAs”), performance stock (“PSAs”), performance stock units (“PSUs”), stock options and stock bonuses to the company’s officers, employees, directors, consultants, advisers, and other service providers. The 2011 Plan provides for the issuance of up to 4.5 million shares of common stock. In connection with the 2011 Plan and employee stock purchase plan, approximately 365,000 shares and 857,000 shares of common stock were purchased or vested, net of shares used to settle employees’ income tax obligations, during the years ended December 31, 2018 , and 2017, respectively. Except as noted below, we record share-based compensation as “General and administrative expenses” in the accompanying consolidated statements of operations. Total share-based compensation expense was as follows: Year Ended December 31, 2018 2017 2016 (In millions) Pretax Net-of-Tax Pretax Net-of-Tax Pretax Net-of-Tax RSAs, PSAs and PSUs $ 17 $ 17 $ 39 $ 35 $ 20 $ 17 Employee stock purchase plan and stock options 10 9 7 5 6 5 $ 27 $ 26 $ 46 $ 40 $ 26 $ 22 RSAs, PSAs and PSUs are granted with a fair value equal to the market price of our common stock on the date of grant, and generally vest in equal annual installments over periods up to four years from the date of grant. Certain PSUs may vest in their entirety at the end of three-year performance periods, if their performance conditions are met. We generally recognize expense for RSAs, PSAs and PSUs on a straight-line basis. Activity for such awards in the year ended December 31, 2018 is summarized below: RSAs PSAs PSUs Total Shares Weighted Unvested balance as of December 31, 2017 401,804 84,762 91,828 578,394 $ 58.35 Granted 363,740 — 214,952 578,692 75.38 Vested (192,609 ) (32,929 ) — (225,538 ) 59.08 Forfeited (173,140 ) (48,701 ) (105,397 ) (327,238 ) 63.69 Unvested balance as of December 31, 2018 399,795 3,132 201,383 604,310 $ 71.50 As of December 31, 2018 , there was $35 million of total unrecognized compensation expense related to unvested RSAs, PSAs and PSUs, which we expect to recognize over a remaining weighted-average period of 2.6 years , 0.2 years and 2.0 years , respectively. This unrecognized compensation cost assumed an estimated forfeiture rate of 16.1% for non-executive employees as of December 31, 2018 , based on actual forfeitures over the last 4 years. The total grant date fair value of awards granted and vested is presented in the following table: Year Ended December 31, 2018 2017 2016 (In millions) Granted: RSAs $ 28 $ 20 $ 19 PSAs — — 15 PSUs 16 16 — $ 44 $ 36 $ 34 Vested: RSAs $ 15 $ 23 $ 22 PSAs 3 15 — PSUs — 9 — $ 18 $ 47 $ 22 During the year ended December 31, 2017, the vesting of 133,957 RSAs, 153,574 PSAs and 139,272 PSUs was accelerated in connection with the termination of our former Chief Executive Officer and former Chief Financial Officer in May 2017. The incremental charge relating to this acceleration, or $23 million , is reported in “Restructuring and separation costs” in the accompanying consolidated statements of operations. This amount is included in the 2017 “Pretax Charges” in the table above. Stock Options. Stock option awards generally have an exercise price equal to the fair market value of our common stock on the date of grant, vest in equal annual installments over periods up to four years from the date of grant, and have a maximum term of ten years from the date of grant. Stock option activity for the year ended December 31, 2018 is summarized below: Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual term (In millions) (Years) Stock options outstanding as of December 31, 2017 405,000 $ 64.79 Granted — — Exercised — — Stock options outstanding as of December 31, 2018 405,000 64.79 $ 21 8.5 Stock options exercisable and expected to vest as of December 31, 2018 405,000 64.79 $ 21 8.5 Exercisable as of December 31, 2018 155,000 60.69 $ 9 8.0 The weighted-average grant date fair value per share of stock options awarded in 2017 was $41.43 . We estimate the fair value of each stock option award on the grant date using the Black-Scholes option pricing model. To determine the fair value of the stock options awarded in 2017 we applied a risk-free interest rate of 2.3% , expected volatility of 38.4% , dividend yield of 0% and expected life of 8.4 years . No stock options were granted in 2018 and 2016 . Also as of December 31, 2018 , there was $9 million of total unrecognized compensation expense related to unvested stock options, which we expect to recognize over a weighted-average period of 1.8 years . The total intrinsic value of options exercised during the years ended December 31, 2017 , and 2016 was $2 million , and $1 million , respectively. No stock options were exercised in 2018. The following is a summary of information about stock options outstanding and exercisable at December 31, 2018: Options Outstanding Options Exercisable Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted-Average Exercise Price Number Exercisable Weighted-Average Exercise Price Range of Exercise Prices $33.02 30,000 4.2 $ 33.02 30,000 $ 33.02 $67.33 375,000 8.9 67.33 125,000 67.33 405,000 155,000 Employee Stock Purchase Plan. Under our employee stock purchase plan (“ESPP”), eligible employees may purchase common shares at 85% of the lower of the fair market value of our common stock on either the first or last trading day of each six-month offering period. Each participant is limited to a maximum purchase of $25,000 (as measured by the fair value of the stock acquired) per year through payroll deductions. We estimate the fair value of the stock issued using the Black-Scholes option pricing model. For the years ended December 31, 2018 , 2017 , and 2016 , the inputs to this model were as follows: risk-free interest rates of approximately 0.4% to 1.9% ; expected volatilities ranging from approximately 31% to 44% , dividend yields of 0% , and an average expected life of 0.5 years. We issued approximately 216,000 , 351,000 and 410,000 shares of our common stock under the ESPP during the years ended December 31, 2018 , 2017 , and 2016 , respectively. The 2011 ESPP provides for the issuance of up to three million shares of common stock. |
Restructuring and Separation Co
Restructuring and Separation Costs | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Separation Costs | Restructuring and Separation Costs Restructuring and separation costs are reported by the same name in the accompanying consolidated statements of operations. IT Restructuring Plan Following the 2017 Restructuring Plan noted below, our new executive team has focused on a margin recovery plan that includes identification and implementation of various profit improvement initiatives. To that end, we began the implementation of a plan to restructure our information technology department (the “IT Restructuring Plan”) in the third quarter of 2018. On February 4, 2019, we entered into a master services agreement with Infosys Limited pursuant to which Infosys will manage certain of our information technology infrastructure services including, among other things, our information technology operations, end-user services, and data centers. Expected Costs In addition to $9 million incurred in the last half of 2018, we expect to incur approximately $11 million for the IT Restructuring Plan in 2019. We expect such costs to consist primarily of one-time termination benefits and other costs in the Other segment. We expect the IT Restructuring Plan to be completed by the end of 2019. Costs Incurred We have incurred expenses under the IT Restructuring Plan as follows: Year Ended December 31, 2018 One-Time Termination Benefits Other Restructuring Costs Total Consulting Fees (In millions) Other $ 7 $ 2 $ 9 Reconciliation of Liability For those restructuring costs that require cash settlement (such as one-time termination benefits and consulting fees), the following table presents a roll-forward of the accrued liability, which is reported in “Accounts payable and accrued liabilities” in the accompanying consolidated balance sheets. One-Time Termination Benefits Other Restructuring Costs Total (In millions) Accrued as of December 31, 2017 $ — $ — $ — Charges 7 2 9 Cash payments (2 ) (1 ) (3 ) Accrued as of December 31, 2018 $ 5 $ 1 $ 6 2017 Restructuring Plan Following a management-initiated, broad operational assessment in early 2017, our board of directors approved, and we committed to, a comprehensive restructuring and profitability improvement plan in June 2017 (the “2017 Restructuring Plan”). Key activities under this plan to date have included: • Streamlining of our organizational structure to eliminate redundant layers of management, consolidate regional support services, and other staff reductions to improve efficiency and the speed and quality of decision making; • Re-design of core operating processes such as provider payment, utilization management, quality monitoring and improvement, and information technology, to achieve more effective and cost-efficient outcomes; • Remediation of high-cost provider contracts and enhancement of high quality, cost-effective networks; • Restructuring, including selective exits, of direct delivery operations; and • Partnering with the lowest-cost, most effective vendors. Costs Incurred In our 2017 Annual Report on Form 10-K, we reported that we had incurred approximately $234 million of costs associated with the 2017 Restructuring Plan in 2017. In the year ended December 31, 2018, we incurred an additional $37 million in such costs, primarily resulting from a write-off of costs associated with a terminated utilization and care management project that was inconsistent with the goals of the 2017 Restructuring Plan. We also recorded nominal amounts for one-time termination benefits, and true-ups of certain lease contract termination costs recorded in 2017. As of December 31, 2018 , we had incurred $271 million in total costs under the 2017 Restructuring Plan. We completed all activities under the 2017 Restructuring Plan in 2018, with the exception of the cash settlement of lease termination liabilities. We expect to continue to settle those liabilities through 2025, unless the leases are terminated sooner. The following table presents the major types of such costs by segment. Current and long-lived assets include current and non-current capitalized project costs, and capitalized software determined to be unrecoverable. Year Ended December 31, 2018 Separation Costs - Former Executives One-Time Termination Benefits Other Restructuring Costs Total Write-offs of Current and Long-lived Assets Consulting Fees Contract Termination Costs (In millions) Health Plans $ — $ — $ (1 ) $ — $ 12 $ 11 Other — 5 20 1 — 26 $ — $ 5 $ 19 $ 1 $ 12 $ 37 Year Ended December 31, 2017 Separation Costs - Former Executives One-Time Termination Benefits Other Restructuring Costs Total Write-offs of Long-lived Assets Consulting Fees Contract Termination Costs (In millions) Health Plans $ — $ 33 $ 16 $ — $ 24 $ 73 Other 36 34 45 44 2 161 $ 36 $ 67 $ 61 $ 44 $ 26 $ 234 As of December 31, 2018 , we had incurred cumulative restructuring costs under the 2017 Restructuring Plan as follows: Separation Costs - Former Executives One-Time Termination Benefits Other Restructuring Costs Total Write-offs of Current and Long-lived Assets Consulting Fees Contract Termination Costs (In millions) Health Plans $ — $ 33 $ 15 $ — $ 36 $ 84 Other 36 39 65 45 2 187 $ 36 $ 72 $ 80 $ 45 $ 38 $ 271 Reconciliation of Liability For those restructuring and separation costs that require cash settlement (primarily separation costs not including equity incentives, termination benefits, consulting fees and contract termination costs), the following table presents a roll-forward of the accrued liability, which is reported primarily in “Accounts payable and accrued liabilities” in the accompanying consolidated balance sheets. Certain contract termination cost accruals are non-current, recorded in “Other long-term liabilities.” Separation Costs - Former Executives One-Time Termination Benefits Other Restructuring Costs Total (In millions) Accrued as of December 31, 2017 $ 2 $ 11 $ 35 $ 48 Adjustments — (1 ) 11 10 Charges — 6 2 8 Cash payments (2 ) (15 ) (31 ) (48 ) Accrued as of December 31, 2018 $ — $ 1 $ 17 $ 18 |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2018 | |
Postemployment Benefits [Abstract] | |
Employee Benefits | Employee Benefits We sponsor defined contribution 401(k) plans that cover substantially all employees of our company and its subsidiaries. Eligible employees are permitted to contribute up to the maximum amount allowed by law. We generally match up to the first 4% of compensation contributed by employees. Expense recognized in connection with our contributions to the 401(k) plans amounted to $36 million , $43 million , and $36 million in the years ended December 31, 2018 , 2017 , and 2016 , respectively. We also have a non-qualified deferred compensation plan for certain key employees. Under this plan, eligible participants may defer up to 100% of their base salary and 100% of their bonus to provide tax-deferred growth for retirement. The funds deferred are invested in corporate-owned life insurance, under a rabbi trust. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Regulatory Capital Requirements and Dividend Restrictions Our health plans, which are operated by our respective wholly owned subsidiaries in those states, are subject to state laws and regulations that, among other things, require the maintenance of minimum levels of statutory capital, as defined by each state. The National Association of Insurance Commissioners (“NAIC”), has adopted rules which, if implemented by the states, set minimum capitalization requirements for insurance companies, HMOs, and other entities bearing risk for health care coverage. The requirements take the form of risk-based capital (“RBC”) rules which may vary from state to state. All of the states in which our health plans operate, except California, Florida and New York, have adopted these rules. Such requirements, if adopted by California, Florida and New York, may increase the minimum capital required for those states. Regulators in some states may also enforce capital requirements that require the retention of net worth in excess of amounts formally required by statute or regulation. As of December 31, 2018 , our health plans had aggregate statutory capital and surplus of approximately $2,388 million compared with the required minimum aggregate statutory capital and surplus of approximately $1,040 million . All of our health plans were in compliance with the minimum capital requirements at December 31, 2018 . We have the ability and commitment to provide additional capital to each of our health plans when necessary to ensure that statutory capital and surplus continue to meet regulatory requirements. Such statutes, regulations and informal capital requirements also restrict the timing, payment, and amount of dividends and other distributions that may be paid to us as the sole stockholder. To the extent our subsidiaries must comply with these regulations, they may not have the financial flexibility to transfer funds to us. Based on current statutes and regulations, the net assets in these subsidiaries (after intercompany eliminations) which may not be transferable to us in the form of loans, advances, or cash dividends was approximately $2,262 million at December 31, 2018 , and $1,691 million at December 31, 2017 . Because of the statutory restrictions that inhibit the ability of our health plans to transfer net assets to us, the amount of retained earnings readily available to pay dividends to our stockholders is generally limited to cash, cash equivalents and investments held by the parent company – Molina Healthcare, Inc. Such cash, cash equivalents and investments amounted to $170 million and $696 million as of December 31, 2018 and 2017 , respectively. Legal Proceedings The health care industry is subject to numerous laws and regulations of federal, state, and local governments. Compliance with these laws and regulations can be subject to government review and interpretation, as well as regulatory actions unknown and unasserted at this time. Penalties associated with violations of these laws and regulations include significant fines and penalties, exclusion from participating in publicly funded programs, and the repayment of previously billed and collected revenues. We are involved in legal actions in the ordinary course of business, some of which seek monetary damages, including claims for punitive damages, which are not covered by insurance. We have accrued liabilities for certain matters for which we deem the loss to be both probable and estimable. Although we believe that our estimates of such losses are reasonable, these estimates could change as a result of further developments of these matters. The outcome of legal actions is inherently uncertain and such pending matters for which accruals have not been established have not progressed sufficiently through discovery and/or development of important factual information and legal issues to enable us to estimate a range of possible loss, if any. While it is not possible to accurately predict or determine the eventual outcomes of these items, an adverse determination in one or more of these pending matters could have a material adverse effect on our consolidated financial position, results of operations, or cash flows. Steamfitters Local 449 Pension Plan v. Molina Healthcare, Inc., et al. On October 5, 2018, the Steamfitters Local 449 Pension Plan filed its first amended class action securities complaint in the Central District Court of California against the Company and its former executive officers, J. Mario Molina, John C. Molina, Terry P. Bayer, and Rick Hopfer, Case 2:18-cv-03579. The amended complaint purports to seek recovery on behalf of all persons or entities who purchased Molina common stock between October 31, 2014, and August 2, 2017, for alleged violations under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The plaintiff alleges the defendants misled investors regarding the scalability of the Company’s administrative infrastructure during the identified class period. On December 13, 2018, the Court granted the Company’s motion to dismiss in its entirety and closed the case. On January 9, 2019, plaintiffs appealed to the United States Court of Appeals for the Ninth Circuit. Plaintiff’s opening brief is due April 10, 2019, the Company’s response is due May 10, 2019, and Plaintiff’s reply is due May 31, 2019. Oral argument will likely occur within 9-12 months after the briefing is completed. The Company believes it has meritorious defenses to the alleged claims and intends to defend the matter vigorously. At this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations, or cash flows. States’ Budgets Nearly all of our premium revenues come from the joint federal and state funding of the Medicaid, Medicare, and CHIP programs. The states in which we operate our health plans regularly face significant budgetary pressures. Lease Obligations We lease administrative facilities and certain equipment under non-cancelable operating leases expiring at various dates through 2026. Facility lease terms generally range from five to 10 years with one to two renewal options for extended terms. In most cases, we are required to make additional payments under facility operating leases for taxes, insurance and other operating expenses incurred during the lease period. Certain of our leases contain rent escalation clauses or lease incentives, including rent abatements and tenant improvement allowances. Rent escalation clauses and lease incentives are taken into account in determining total rent expense to be recognized during the lease term. Future minimum lease payments by year and in the aggregate under operating leases and lease financing obligations consist of the following amounts: Lease Financing Obligations Operating Leases Total (In millions) 2019 $ 19 $ 46 $ 65 2020 19 34 53 2021 20 24 44 2022 21 16 37 2023 21 12 33 Thereafter 311 15 326 $ 411 $ 147 $ 558 Rental expense related to operating leases amounted to $62 million , $75 million , and $64 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. The amounts reported in “Lease Financing Obligations” above represent our contractual lease commitments for the properties described in Note 11 , “ Debt ” under the subheading “Lease Financing Obligations.” Professional Liability Insurance We carry medical professional liability insurance for health care services rendered in the primary care institutions that we manage. In addition, we also carry errors and omissions insurance for all Molina entities. Provider Claims Many of our medical contracts are complex in nature and may be subject to differing interpretations regarding amounts due for the provision of various services. Such differing interpretations have led certain medical providers to pursue us for additional compensation. The claims made by providers in such circumstances often involve issues of contract compliance, interpretation, payment methodology, and intent. These claims often extend to services provided by the providers over a number of years. Various providers have contacted us seeking additional compensation for claims that we believe to have been settled. These matters, when finally concluded and determined, will not, in our opinion, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segments We currently have two reportable segments: our Health Plans segment and our Other segment. We manage the vast majority of our operations through our Health Plans segment. Our Other segment includes the historical results of the Pathways behavioral health subsidiary, which we sold in the fourth quarter of 2018, and certain corporate amounts not allocated to the Health Plans segment. Effective in the fourth quarter of 2018, we reclassified the historical results relating to our Molina Medicaid Solutions (“MMS”) segment, which we sold in the third quarter of 2018, to the Other segment. Previously, results for MMS were reported in a stand-alone segment. Refer to Note 1 , “ Organization and Basis of Presentation ,” for further details on the sales of Pathways and MMS. We regularly evaluate the appropriateness of our reportable segments, particularly in light of organizational changes, acquisition and divestiture activity, and changing laws and regulations. Therefore, these reportable segments may change in the future. Description of Earnings Measures for Reportable Segments Margin is the appropriate earnings measure for our reportable segments, based on how our chief operating decision maker currently reviews results, assesses performance, and allocates resources. Margin for our Health Plans segment is referred to as “Medical margin,” which represents the amount earned by the segments after medical costs are deducted from premium revenue. The medical care ratio represents the amount of medical care costs as a percentage of premium revenue, and is one of the key metrics used to assess the performance of the segments. Therefore, the underlying medical margin is the most important measure of earnings reviewed by the chief operating decision maker. Health Plans Other Consolidated (In millions) 2018 Total revenue $ 18,471 $ 419 18,890 Margin 2,475 43 2,518 Goodwill, and intangible assets, net 190 — 190 Total assets 6,165 989 7,154 2017 Total revenue $ 19,352 $ 531 $ 19,883 Margin 1,781 29 1,810 Goodwill, and intangible assets, net 212 43 255 Total assets 6,347 2,124 8,471 2016 Total revenue $ 17,234 $ 548 $ 17,782 Margin 1,671 54 1,725 Goodwill, and intangible assets, net 513 247 760 Total assets 5,897 1,552 7,449 The following table reconciles margin by segment to consolidated income (loss) before income tax expense (benefit): Year Ended December 31, 2018 2017 2016 (In millions) Margin: Health Plans $ 2,475 $ 1,781 $ 1,671 Other 43 29 54 Total margin 2,518 1,810 1,725 Add: other operating revenues (1) 871 508 798 Less: other operating expenses (2) (2,243 ) (2,873 ) (2,217 ) Less: loss on sales of subsidiaries, net of gain (15 ) — — Operating income (loss) 1,131 (555 ) 306 Less: other expenses, net 132 57 101 Income (loss) before income tax expense (benefit) $ 999 $ (612 ) $ 205 ______________________ (1) Other operating revenues include premium tax revenue, health insurer fees reimbursed, investment income and other revenue. (2) Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fees, depreciation and amortization, impairment losses, and restructuring and separation costs. |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (Unaudited) | Quarterly Results of Operations (Unaudited) The following table summarizes quarterly unaudited results of operations for the years ended December 31, 2018 and 2017 . For The Quarter Ended March 31, June 30, Sept. 30, 2018 December 31, (In millions, except per-share data) Total revenue $ 4,646 $ 4,883 $ 4,697 $ 4,664 Margin 615 673 566 664 Gain (loss) on sales of subsidiaries — — 37 (52 ) Restructuring and separation costs 25 8 5 8 Net income 107 202 197 201 Net income per share (1) : Basic $ 1.79 $ 3.29 $ 3.22 $ 3.24 Diluted $ 1.64 $ 3.02 $ 2.90 $ 3.01 For The Quarter Ended March 31, June 30, Sept. 30, 2017 December 31, (In millions, except per-share data) Total revenue $ 4,904 $ 4,999 $ 5,031 $ 4,949 Margin 546 254 564 446 Impairment losses — 72 129 269 Restructuring and separation costs — 43 118 73 Net income (loss) 77 (230 ) (97 ) (262 ) Net income (loss) per share (1) : Basic $ 1.38 $ (4.10 ) $ (1.70 ) $ (4.59 ) Diluted $ 1.37 $ (4.10 ) $ (1.70 ) $ (4.59 ) _______________________________ (1) The dilutive effect of all potentially dilutive common shares is calculated using the treasury stock method and is based on the weighted-average common share equivalents outstanding during each quarter. Accordingly, the sum of the quarterly net income (loss) per share may not agree to the total for the year. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income (loss) per share because to do so would be anti-dilutive. |
Condensed Financial Information
Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Information of Registrant | Condensed Financial Information of Registrant The condensed balance sheets as of December 31, 2018 and 2017 , and the related condensed statements of operations, comprehensive income (loss) and cash flows for each of the three years in the period ended December 31, 2018 for our parent company Molina Healthcare, Inc. (the “Registrant”), are presented below. Condensed Balance Sheets December 31, 2018 2017 (In millions, except share data) ASSETS Current assets: Cash and cash equivalents $ 70 $ 504 Investments 100 192 Restricted investments — 169 Receivables 2 2 Due from affiliates 90 148 Prepaid expenses and other current assets 47 103 Derivative asset 476 522 Total current assets 785 1,640 Property, equipment, and capitalized software, net 176 223 Goodwill and intangible assets, net 13 15 Investments in subsidiaries 2,768 2,306 Deferred income taxes 39 17 Advances to related parties and other assets 40 32 $ 3,821 $ 4,233 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Medical claims and benefits payable $ 4 $ 3 Accounts payable and accrued liabilities 223 178 Current portion of long-term debt 241 653 Derivative liability 476 522 Total current liabilities 944 1,356 Long-term debt 1,020 1,318 Lease financing obligations 197 198 Other long-term liabilities 13 24 Total liabilities 2,174 2,896 Stockholders’ equity: Common stock, $0.001 par value; 150 million shares authorized; outstanding: 62 million shares at December 31, 2018 and 60 million shares at December 31, 2017 — — Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding — — Additional paid-in capital 643 1,044 Accumulated other comprehensive loss (8 ) (5 ) Retained earnings 1,012 298 Total stockholders’ equity 1,647 1,337 $ 3,821 $ 4,233 See accompanying notes. Condensed Statements of Operations Year Ended December 31, 2018 2017 2016 (In millions) Revenue: Management fees $ 1,138 $ 1,317 $ 1,062 Investment income and other revenue 17 16 16 Total revenue 1,155 1,333 1,078 Expenses: Medical care costs 8 16 73 General and administrative expenses 1,007 1,082 899 Depreciation and amortization 69 93 95 Restructuring and separation costs 35 153 — Impairment losses — 39 — Total operating expenses 1,119 1,383 1,067 Gain on sale of subsidiary 37 — — Operating income (loss) 73 (50 ) 11 Interest expense 114 117 101 Other expense (income) 17 (61 ) — Loss before income tax (benefit) expense and equity in net earnings (losses) of subsidiaries (58 ) (106 ) (90 ) Income tax (benefit) expense (14 ) 8 (24 ) Net loss before equity in net earnings (losses) of subsidiaries (44 ) (114 ) (66 ) Equity in net earnings (losses) of subsidiaries 751 (398 ) 118 Net income (loss) $ 707 $ (512 ) $ 52 Condensed Statements of Comprehensive Income (Loss) Year Ended December 31, 2018 2017 2016 (In millions) Net income (loss) $ 707 $ (512 ) $ 52 Other comprehensive (loss) income: Unrealized investment (loss) gain (3 ) (5 ) 3 Less: effect of income taxes (1 ) (2 ) 1 Other comprehensive (loss) income, net of tax (2 ) (3 ) 2 Comprehensive income (loss) $ 705 $ (515 ) $ 54 See accompanying notes. Condensed Statements of Cash Flows Year Ended December 31, 2018 2017 2016 (In millions) Operating activities: Net cash provided by operating activities $ 118 $ 166 $ 55 Investing activities: Capital contributions to subsidiaries (145 ) (370 ) (386 ) Dividends received from subsidiaries 298 286 101 Purchases of investments (136 ) (331 ) (115 ) Proceeds from sales and maturities of investments 388 156 188 Purchases of property, equipment and capitalized software (22 ) (67 ) (125 ) Net cash received from sale of subsidiaries 242 — — Change in amounts due to/from affiliates 6 (49 ) (18 ) Other, net — — 6 Net cash provided by (used in) investing activities 631 (375 ) (349 ) Financing activities: Repayment of credit facility (300 ) — — Repayment of principal amount of 1.125% Convertible Notes (298 ) — — Cash paid for partial settlement of 1.125% Conversion Option (623 ) — — Cash received for partial settlement of 1.125% Call Option 623 — — Cash paid for partial termination of 1.125% Warrants (549 ) — — Repayment of principal amount of 1.625% Convertible Notes (64 ) — — Proceeds from senior notes offerings, net of issuance costs — 325 — Proceeds from borrowings under credit facility — 300 — Other, net 19 11 20 Net cash (used in) provided by financing activities (1,192 ) 636 20 Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents (443 ) 427 (274 ) Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 513 86 360 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 70 $ 513 $ 86 Notes to Condensed Financial Information of Registrant Note A - Basis of Presentation The Registrant was incorporated in 2002. Prior to that date, Molina Healthcare of California (formerly known as Molina Medical Centers) operated as a California health plan and as the parent company for three other state health plans. In June 2003, the employees and operations of the corporate entity were transferred from Molina Healthcare of California to the Registrant. The Registrant’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The accompanying condensed financial information of the Registrant should be read in conjunction with the consolidated financial statements and accompanying notes. Note B - Transactions with Subsidiaries The Registrant provides certain centralized medical and administrative services to our subsidiaries pursuant to administrative services agreements that include, but are not limited to, information technology, product development and administration, underwriting, claims processing, customer service, certain care management services, human resources, legal, marketing, purchasing, risk management, actuarial, underwriting, finance, accounting, legal and public relations. Fees are based on the fair market value of services rendered and are recorded as operating revenue. Payment is subordinated to the subsidiaries’ ability to comply with minimum capital and other restrictive financial requirements of the states in which they operate. Charges in 2018 , 2017 , and 2016 for these services amounted to $1,137 million , $1,317 million , and $1,062 million , respectively, and are included in operating revenue. The Registrant and its subsidiaries are included in the consolidated federal and state income tax returns filed by the Registrant. Income taxes are allocated to each subsidiary in accordance with an intercompany tax allocation agreement. The agreement allocates income taxes in an amount generally equivalent to the amount which would be expensed by the subsidiary if it filed a separate tax return. Net operating loss benefits are paid to the subsidiary by the Registrant to the extent such losses are utilized in the consolidated tax returns. Note C - Dividends and Capital Contributions When the Registrant receives dividends from its subsidiaries, such amounts are recorded as a reduction to the investments in the respective subsidiaries. For all periods presented, the Registrant made capital contributions to certain subsidiaries primarily to comply with minimum net worth requirements and to fund business combinations. Such amounts have been recorded as an increase in investment in the respective subsidiaries. |
Supplemental Condensed Consolid
Supplemental Condensed Consolidating Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information [Abstract] | |
Supplemental Condensed Consolidating Financial Information | Supplemental Condensed Consolidating Financial Information On November 10, 2015, the Parent issued $700 million aggregate principal amount of the 5.375% Notes in a private placement to institutional investors. The 5.375% Notes were registered with the SEC in September 2016. Pursuant to the terms of the indenture governing the 5.375% Notes (the “Indenture”), the 5.375% Notes are required to be guaranteed by each of the Parent’s existing and future direct and indirect domestic restricted subsidiaries that guarantee the Parent’s Credit Agreement. At the time of issuance, there were two subsidiaries of the Parent that guaranteed the Notes: MMS and Molina Medical Management, Inc. (“MMM”). On November 1, 2015, the Parent acquired all of the outstanding ownership interests of Pathways Health and Community Support LLC (“Pathways”). As a result of that acquisition, and pursuant to the terms of the Indenture, effective February 16, 2016, Pathways and 15 of its subsidiaries were added as guarantors of the 5.375% Notes. Subsequently, effective January 3, 2017, MMM and 14 Pathways subsidiaries were released as guarantors of the 5.375% Notes, leaving MMS, Pathways, and Molina Pathways, LLC as the only subsidiary guarantors. MMS and Pathways were released as guarantors effective September 30, 2018, and October 19, 2018, respectively, in connection with their divestitures. Accordingly, as of December 31, 2018, Molina Pathways, LLC was the sole wholly owned subsidiary guarantor of the 5.375% Notes, on a full and unconditional basis. As discussed in Note 11 , “ Debt ,” effective as of January 31, 2019, Molina Pathways, LLC was released as a guarantor of the 5.375% Notes. For all periods presented, the following condensed consolidating financial statements present Molina Healthcare, Inc. (as “Parent Issuer”), Molina Pathways, LLC (as “Other Guarantor”), the subsidiary non-guarantors (as “Non-Guarantors”) and “Eliminations,” according to the guarantor structure as assessed as of and for the year ended December 31, 2018. CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Year Ended December 31, 2018 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 1,155 $ 3 $ 18,884 $ (1,152 ) $ 18,890 Expenses: Medical care costs 8 — 15,129 — 15,137 Cost of service revenue — — 364 — 364 General and administrative expenses 1,007 4 1,474 (1,152 ) 1,333 Premium tax expenses — — 417 — 417 Health insurer fees — — 348 — 348 Depreciation and amortization 69 — 30 — 99 Restructuring and separation costs 35 — 11 — 46 Total operating expenses 1,119 4 17,773 (1,152 ) 17,744 Gain (loss) on sales of subsidiaries 37 (52 ) — — (15 ) Operating income (loss) 73 (53 ) 1,111 — 1,131 Interest expense 114 — 1 — 115 Other expense 17 — — — 17 (Loss) income before income tax (benefit) expense (58 ) (53 ) 1,110 — 999 Income tax (benefit) expense (14 ) (11 ) 317 — 292 Net (loss) income before equity in net earnings (losses) of subsidiaries (44 ) (42 ) 793 — 707 Equity in net earnings (losses) of subsidiaries 751 (5 ) — (746 ) — Net income (loss) $ 707 $ (47 ) $ 793 $ (746 ) $ 707 Year Ended December 31, 2017 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 1,333 $ 2 $ 19,904 $ (1,356 ) $ 19,883 Expenses: Medical care costs 16 — 17,058 (1 ) 17,073 Cost of service revenue — — 492 — 492 General and administrative expenses 1,082 2 1,865 (1,355 ) 1,594 Premium tax expenses — — 438 — 438 Depreciation and amortization 93 — 44 — 137 Restructuring and separation costs 153 — 81 — 234 Impairment losses 39 — 431 — 470 Total operating expenses 1,383 2 20,409 (1,356 ) 20,438 Operating loss (50 ) — (505 ) — (555 ) Total other expenses, net 56 — 1 — 57 Loss before income taxes (106 ) — (506 ) — (612 ) Income tax expense (benefit) 8 — (108 ) — (100 ) Net loss before equity in net (losses) earnings of subsidiaries (114 ) — (398 ) — (512 ) Equity in net (losses) earnings of subsidiaries (398 ) (164 ) 8 554 — Net loss $ (512 ) $ (164 ) $ (390 ) $ 554 $ (512 ) Year Ended December 31, 2016 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 1,078 $ — $ 17,786 $ (1,082 ) $ 17,782 Expenses: Medical care costs 73 — 14,702 (1 ) 14,774 Cost of service revenue — — 485 — 485 General and administrative expenses 899 2 1,573 (1,081 ) 1,393 Premium tax expenses — — 468 — 468 Health insurer fees — — 217 — 217 Depreciation and amortization 95 — 44 — 139 Total operating expenses 1,067 2 17,489 (1,082 ) 17,476 Operating income (loss) 11 (2 ) 297 — 306 Total other expenses, net 101 — — — 101 (Loss) income before income taxes (90 ) (2 ) 297 — 205 Income tax (benefit) expense (24 ) (1 ) 178 — 153 Net (loss) income before equity in earnings of subsidiaries (66 ) (1 ) 119 — 52 Equity in net earnings of subsidiaries 118 2 — (120 ) — Net income $ 52 $ 1 $ 119 $ (120 ) $ 52 CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31, 2018 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Net income (loss) $ 707 $ (47 ) $ 793 $ (746 ) $ 707 Other comprehensive loss, net of tax (2 ) — (2 ) 2 (2 ) Comprehensive income (loss) $ 705 $ (47 ) $ 791 $ (744 ) $ 705 Year Ended December 31, 2017 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Net loss $ (512 ) $ (164 ) $ (390 ) $ 554 $ (512 ) Other comprehensive loss, net of tax (3 ) — (2 ) 2 (3 ) Comprehensive loss $ (515 ) $ (164 ) $ (392 ) $ 556 $ (515 ) Year Ended December 31, 2016 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Net income $ 52 $ 1 $ 119 $ (120 ) $ 52 Other comprehensive income, net of tax 2 — 1 (1 ) 2 Comprehensive income $ 54 $ 1 $ 120 $ (121 ) $ 54 CONDENSED CONSOLIDATING BALANCE SHEETS December 31, 2018 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) ASSETS Current assets: Cash and cash equivalents $ 70 $ 2 $ 2,754 $ — $ 2,826 Investments 100 — 1,581 — 1,681 Receivables 2 — 1,328 — 1,330 Due from (to) affiliates 90 7 (97 ) — — Prepaid expenses and other current assets 47 29 73 — 149 Derivative asset 476 — — — 476 Total current assets 785 38 5,639 — 6,462 Property, equipment, and capitalized software, net 176 — 65 — 241 Goodwill and intangible assets, net 13 — 177 — 190 Restricted investments — — 120 — 120 Investment in subsidiaries, net 2,768 (5 ) — (2,763 ) — Deferred income taxes 39 — 78 — 117 Other assets 40 — 5 (21 ) 24 $ 3,821 $ 33 $ 6,084 $ (2,784 ) $ 7,154 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Medical claims and benefits payable $ 4 $ — $ 1,957 $ — $ 1,961 Amounts due government agencies — — 967 — 967 Accounts payable and accrued liabilities 223 — 167 — 390 Deferred revenue — — 211 — 211 Current portion of long-term debt 241 — — — 241 Derivative liability 476 — — — 476 Total current liabilities 944 — 3,302 — 4,246 Long-term debt and lease financing obligations 1,217 — 20 (20 ) 1,217 Other long-term liabilities 13 — 32 (1 ) 44 Total liabilities 2,174 — 3,354 (21 ) 5,507 Total stockholders’ equity 1,647 33 2,730 (2,763 ) 1,647 $ 3,821 $ 33 $ 6,084 $ (2,784 ) $ 7,154 CONDENSED CONSOLIDATING BALANCE SHEETS December 31, 2017 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) ASSETS Current assets: Cash and cash equivalents $ 504 $ — $ 2,682 $ — $ 3,186 Investments 192 — 2,332 — 2,524 Restricted investments 169 — — — 169 Receivables 2 — 869 — 871 Due from (to) affiliates 148 2 (150 ) — — Prepaid expenses and other current assets 103 2 150 (16 ) 239 Derivative asset 522 — — — 522 Total current assets 1,640 4 5,883 (16 ) 7,511 Property, equipment, and capitalized software, net 223 — 119 — 342 Goodwill and intangible assets, net 15 — 240 — 255 Restricted investments — — 119 — 119 Investment in subsidiaries, net 2,306 75 — (2,381 ) — Deferred income taxes 17 — 101 (15 ) 103 Other assets 32 — 110 (1 ) 141 $ 4,233 $ 79 $ 6,572 $ (2,413 ) $ 8,471 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Medical claims and benefits payable $ 3 $ — $ 2,189 $ — $ 2,192 Amounts due government agencies — — 1,542 — 1,542 Accounts payable and accrued liabilities 178 1 188 (1 ) 366 Deferred revenue — — 282 — 282 Current portion of long-term debt 653 — 16 (16 ) 653 Derivative liability 522 — — — 522 Total current liabilities 1,356 1 4,217 (17 ) 5,557 Long-term debt and lease financing obligations 1,516 — — — 1,516 Deferred income taxes — — 15 (15 ) — Other long-term liabilities 24 — 37 — 61 Total liabilities 2,896 1 4,269 (32 ) 7,134 Total stockholders’ equity 1,337 78 2,303 (2,381 ) 1,337 $ 4,233 $ 79 $ 6,572 $ (2,413 ) $ 8,471 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Year Ended December 31, 2018 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by (used in) operating activities $ 118 (2 ) (430 ) — $ (314 ) Investing activities: Purchases of investments (136 ) — (1,308 ) — (1,444 ) Proceeds from sales and maturities of investments 388 — 2,057 — 2,445 Purchases of property, equipment and capitalized software (22 ) — (8 ) — (30 ) Net cash received from sales of subsidiaries 242 — (52 ) — 190 Capital contributions to subsidiaries (145 ) — 145 — — Dividends received from subsidiaries 298 — (298 ) — — Change in amounts due to/from affiliates 6 4 (10 ) — — Other, net — — (18 ) — (18 ) Net cash provided by investing activities 631 4 508 — 1,143 Financing activities: Repayment of credit facility (300 ) — — — (300 ) Repayment of principal amount of 1.125% Convertible Notes (298 ) — — — (298 ) Cash paid for partial settlement of 1.125% Conversion Option (623 ) — — — (623 ) Cash received for partial settlement of 1.125% Call Option 623 — — — 623 Cash paid for partial termination of 1.125% Warrants (549 ) — — — (549 ) Repayment of principal amount of 1.625% Convertible Notes (64 ) — — — (64 ) Other, net 19 — (1 ) — 18 Net cash used in financing activities (1,192 ) — (1 ) — (1,193 ) Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents (443 ) 2 77 — (364 ) Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 513 — 2,777 — 3,290 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 70 $ 2 $ 2,854 $ — $ 2,926 Year Ended December 31, 2017 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 166 — 638 — $ 804 Investing activities: Purchases of investments (331 ) — (2,366 ) — (2,697 ) Proceeds from sales and maturities of investments 156 — 1,603 — 1,759 Purchases of property, equipment and capitalized software (67 ) — (19 ) — (86 ) Capital contributions to subsidiaries (370 ) 2 368 — — Dividends received from subsidiaries 286 — (286 ) — — Change in amounts due to/from affiliates (49 ) (2 ) 51 — — Other, net — — (38 ) — (38 ) Net cash used in investing activities (375 ) — (687 ) — (1,062 ) Financing activities: Proceeds from senior notes offerings, net of issuance costs 325 — — — 325 Proceeds from borrowings under credit facility 300 — — — 300 Other, net 11 — — — 11 Net cash provided by financing activities 636 — — — 636 Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents 427 — (49 ) — 378 Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 86 — 2,826 — 2,912 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 513 $ — $ 2,777 $ — $ 3,290 Year Ended December 31, 2016 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by (used in) operating activities $ 55 (1 ) 619 — $ 673 Investing activities: Purchases of investments (115 ) — (1,814 ) — (1,929 ) Proceeds from sales and maturities of investments 188 — 1,778 — 1,966 Purchases of property, equipment and capitalized software (125 ) — (51 ) — (176 ) Net cash paid in business combinations — — (48 ) — (48 ) Capital contributions to subsidiaries (386 ) 7 379 — — Dividends received from subsidiaries 101 — (101 ) — — Change in amounts due to/from affiliates (18 ) (6 ) 24 — — Other, net 6 — (25 ) — (19 ) Net cash (used in) provided by investing activities (349 ) 1 142 — (206 ) Financing activities: Other, net 20 — (1 ) — 19 Net cash provided by (used in) financing activities 20 — (1 ) — 19 Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents (274 ) — 760 — 486 Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 360 — 2,066 — 2,426 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 86 $ — $ 2,826 $ — $ 2,912 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Consolidation and Presentation | Consolidation The consolidated financial statements include the accounts of Molina Healthcare, Inc., and its subsidiaries. As of December 31, 2018, we were no longer a party to any variable interest entities following the termination of certain agreements earlier in the year and in the fourth quarter of 2018. Such variable interest entities were insignificant. All significant inter-company balances and transactions have been eliminated in consolidation. Financial information related to subsidiaries acquired during any year is included only for periods subsequent to their acquisition. In the opinion of management, all adjustments considered necessary for a fair presentation of the results as of the date and for the periods presented have been included; such adjustments consist of normal recurring adjustments. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Principal areas requiring the use of estimates include: • The determination of medical claims and benefits payable of our Health Plans segment; • Health plans’ contractual provisions that may limit revenue recognition based upon the costs incurred or the profits realized under a specific contract; • Health plans’ quality incentives that allow us to recognize incremental revenue if certain quality standards are met; • Settlements under risk or savings sharing programs; • The assessment of long-lived and intangible assets, and goodwill, for impairment; • The determination of reserves for potential absorption of claims unpaid by insolvent providers; • The determination of reserves for the outcome of litigation; • The determination of valuation allowances for deferred tax assets; and • The determination of unrecognized tax benefits. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term, highly liquid investments that are both readily convertible into known amounts of cash and have a maturity of three months or less on the date of purchase. The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported within the accompanying consolidated balance sheets that sum to the total of the same such amounts presented in the accompanying consolidated statements of cash flows. The restricted cash and cash equivalents presented below are included in “Restricted investments” in the accompanying consolidated balance sheets. |
Investments | Investments Our investments are principally held in debt securities, which are grouped into two separate categories for accounting and reporting purposes: available-for-sale securities, and held-to-maturity securities. Available-for-sale securities are recorded at fair value and unrealized gains and losses, if any, are recorded in stockholders’ equity as other comprehensive income, net of applicable income taxes. Held-to-maturity securities are recorded at amortized cost, which approximates fair value, and unrealized holding gains or losses are not generally recognized. Realized gains and losses and unrealized losses judged to be other than temporary with respect to available-for-sale and held-to-maturity securities are included in the determination of net income (loss). The cost of securities sold is determined using the specific-identification method. Our investment policy requires that all of our investments have final maturities of 10 years or less (excluding variable rate securities where interest rates may be periodically reset), and that the average maturity be three years or less. Investments and restricted investments are subject to interest rate risk and will decrease in value if market rates increase. Declines in interest rates over time will reduce our investment income. In general, our available-for-sale securities are classified as current assets without regard to the securities’ contractual maturity dates because they may be readily liquidated. We monitor our investments for other-than-temporary impairment. |
Long-Lived Assets, Including Intangible Assets | Long-Lived Assets, including Intangible Assets Long-lived assets consist primarily of property, equipment, capitalized software (see Note 7 , “ Property, Equipment, and Capitalized Software, Net ”), and intangible assets resulting from acquisitions. Finite-lived, separately-identified intangible assets acquired in business combinations are assets that represent future expected benefits but lack physical substance (such as purchased contract rights and provider contracts). Intangible assets are initially recorded at fair value and are then amortized on a straight-line basis over their expected useful lives, generally between five and 15 years. Our intangible assets are subject to impairment tests when events or circumstances indicate that a finite-lived intangible asset’s (or asset group’s) carrying value may not be recoverable. Consideration is given to a number of potential impairment indicators, including the ability of our health plan subsidiaries to obtain the renewal by amendment of their contracts in each state prior to the actual expiration of their contracts. However, there can be no assurance that these contracts will continue to be renewed. Following the identification of any potential impairment indicators, to determine whether an impairment exists, we would compare the carrying amount of a finite-lived intangible asset with the greater of the undiscounted cash flows that are expected to result from the use of the asset or related group of assets, or its value under the asset liquidation method. If it is determined that the carrying amount of the asset is not recoverable, the amount by which the carrying value exceeds the estimated fair value is recorded as an impairment. Property and equipment are stated at historical cost. Replacements and major improvements are capitalized, and repairs and maintenance are charged to expense as incurred. Furniture and equipment are generally depreciated using the straight-line method over estimated useful lives ranging from three to seven years. Software developed for internal use is capitalized. Software is generally amortized over its estimated useful life of three years. Leasehold improvements are amortized over the term of the lease, or over their useful lives from five to 10 years, whichever is shorter. Buildings are depreciated over their estimated useful lives of 31.5 to 40 years. |
Business Combinations | Goodwill and Business Combinations Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment on an annual basis and more frequently if impairment indicators are present. Such events or circumstances may include experienced or expected operating cash-flow deterioration or losses, significant losses of membership, loss of state funding, loss of state contracts, and other factors. Goodwill is impaired if the carrying amount of the reporting unit exceeds its estimated fair value. This excess is recorded as an impairment loss and adjusted if necessary for the impact of tax-deductible goodwill. The loss recognized may not exceed the total goodwill allocated to the reporting unit. Our reporting units consist of our individual health plans. During the fourth quarter of 2018, we changed the date of our annual impairment testing of goodwill from December 31 to October 1. When testing goodwill for impairment, we may first assess qualitative factors, such as industry and market factors, cost factors, and changes in overall performance, to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. If our qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, we perform the quantitative assessment. We may also elect to bypass the qualitative assessment and proceed directly to the quantitative assessment. The dynamic economic and political environments in which we operate may necessitate the performance of a quantitative test to prove that goodwill is not impaired. If performing a quantitative assessment, we generally estimate the fair values of our reporting units by applying the income approach, using discounted cash flows. For the annual impairment test, the base year in the reporting units’ discounted cash flows is derived from the annual financial budgeting cycle, for which the planning process commences in the fourth quarter of the year. When computing discounted cash flows, we make assumptions about a wide variety of internal and external factors, and consider what the reporting unit’s selling price would be in an orderly transaction between market participants at the measurement date. Significant assumptions include financial projections of free cash flow (including significant assumptions about membership, premium rates, health care and operating cost trends, contract renewal and the procurement of new contracts, capital requirements and income taxes), long-term growth rates for determining terminal value beyond the discretely forecasted periods, and discount rates. When determining the discount rate, we consider the overall level of inherent risk of the reporting unit, and the expected rate an outside investor would expect to earn. As part of a quantitative assessment, we may also apply the asset liquidation method to estimate the fair value of individual reporting units, which is computed as total assets minus total liabilities, excluding intangible assets and deferred taxes. Finally, we apply a market approach to reconcile the value of our reporting units to our consolidated market value. Under the market approach, we consider publicly traded comparable company information to determine revenue and earnings multiples which are used to estimate our reporting units’ fair values. The assumptions used are consistent with those used in our long-range business plan and annual planning process. However, if these assumptions differ from actual results, the outcome of our goodwill impairment tests could be adversely affected. Accounting for acquisitions requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the final determination of the values of assets acquired or liabilities assumed, or one year after the date of acquisition, whichever comes first, any subsequent adjustments are recorded within our consolidated statements of operations. |
Premium Revenue - Health Plans | Premium Revenue Premium revenue is generated from our Health Plans segment contracts, including agreements with other managed care organizations for which we operate as a subcontractor. Premium revenue is generally received based on per member per month (“PMPM”) rates established in advance of the periods covered. These premium revenues are recognized in the month that members are entitled to receive health care services, and premiums collected in advance are deferred. The state Medicaid programs and the federal Medicare program periodically adjust premiums. Additionally, many of our contracts contain provisions that may adjust or limit revenue or profit, as described below. Consequently, we recognize premium revenue as it is earned under such provisions. The following table summarizes premium revenue by geography for the periods indicated: Year Ended December 31, 2018 2017 2016 Amount % of Total Amount % of Total Amount % of Total (Dollars in millions) California $ 2,150 12.2 % $ 2,701 14.3 % $ 2,378 14.4 % Florida 1,790 10.2 2,568 13.6 1,938 11.8 Illinois 793 4.5 593 3.1 603 3.7 Michigan 1,601 9.1 1,596 8.5 1,527 9.3 New Mexico 1,356 7.7 1,368 7.3 1,305 7.9 Ohio 2,388 13.6 2,216 11.8 1,967 12.0 Puerto Rico 696 3.9 732 3.9 726 4.4 South Carolina 495 2.8 445 2.4 378 2.3 Texas 3,244 18.4 2,813 14.9 2,461 15.0 Washington 2,361 13.4 2,608 13.8 2,222 13.5 Other (1) 738 4.2 1,214 6.4 940 5.7 $ 17,612 100.0 % $ 18,854 100.0 % $ 16,445 100.0 % _______________________ (1) “Other” includes the Idaho, Mississippi, New York, Utah and Wisconsin health plans, which are not individually significant to our consolidated operating results. Certain components of premium revenue are subject to accounting estimates and fall into the following categories: Contractual Provisions That May Adjust or Limit Revenue or Profit Medicaid Program Medical Cost Floors (Minimums), and Medical Cost Corridors. A portion of our premium revenue may be returned if certain minimum amounts are not spent on defined medical care costs. In the aggregate, we recorded a liability under the terms of such contract provisions of $103 million and $135 million at December 31, 2018 and December 31, 2017 , respectively, to amounts due government agencies. Approximately $87 million and $96 million of the liability accrued at December 31, 2018 and December 31, 2017 , respectively, relates to our participation in Medicaid Expansion programs. In the third and fourth quarters of 2018, we recognized adjustments of $57 million and $24 million , respectively, mainly related to the retroactive reinstatement of the Medicaid Expansion risk corridor requirement by the California Department of Health Care Services, mainly for the state fiscal years ended June 2017 and 2018. The risk corridor provision mandates a minimum loss ratio (“MLR”) of 85% and a maximum MLR of 95%. The total impact of these adjustments resulted in a reduction to premium revenue totaling approximately $81 million in the year ended December 31, 2018. In certain circumstances, the health plans may receive additional premiums if amounts spent on medical care costs exceed a defined maximum threshold. Receivables relating to such provisions were insignificant at December 31, 2018 and December 31, 2017 . Profit Sharing and Profit Ceiling. Our contracts with certain states contain profit-sharing or profit ceiling provisions under which we refund amounts to the states if our health plans generate profit above a certain specified percentage. In some cases, we are limited in the amount of administrative costs that we may deduct in calculating the refund, if any. Liabilities for profits in excess of the amount we are allowed to retain under these provisions were insignificant at December 31, 2018 and December 31, 2017 . Retroactive Premium Adjustments. State Medicaid programs periodically adjust premium rates on a retroactive basis. In these cases, we must adjust our premium revenue in the period in which we learn of the adjustment, rather than in the months of service to which the retroactive adjustment applies. Medicare Program Risk Adjusted Premiums: Our Medicare premiums are subject to retroactive increase or decrease based on the health status of our Medicare members (as measured by member risk score). We estimate our members’ risk scores and the related amount of Medicare revenue that will ultimately be realized for the periods presented based on our knowledge of our members’ health status, risk scores and CMS practices. Consolidated balance sheet amounts related to anticipated Medicare risk adjusted premiums and Medicare Part D settlements were insignificant at December 31, 2018 and December 31, 2017 . Minimum MLR: Additionally, federal regulations have established a minimum annual medical loss ratio (Minimum MLR) of 85% for Medicare. The medical loss ratio represents medical costs as a percentage of premium revenue. Federal regulations define what constitutes medical costs and premium revenue. If the Minimum MLR is not met, we may be required to pay rebates to the federal government. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of operations. Aggregate balance sheet amounts related to the Medicare Minimum MLR were insignificant at December 31, 2018 and December 31, 2017 . Marketplace Program Risk adjustment: Under this program, our health plans’ composite risk scores are compared with the overall average risk score for the relevant state and market pool. Generally, our health plans will make a risk adjustment payment into the pool if their composite risk scores are below the average risk score, and will receive a risk adjustment payment from the pool if their composite risk scores are above the average risk score. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium revenue in our consolidated statements of operations. As of December 31, 2018 , and December 31, 2017, the Marketplace risk adjustment payable amounted to $466 million and $917 million , respectively. Minimum MLR: The ACA has established a Minimum MLR of 80% for the Marketplace. If the Minimum MLR is not met, we may be required to pay rebates to our Marketplace policyholders. The Marketplace risk adjustment program is taken into consideration when computing the Minimum MLR. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of operations. Aggregate balance sheet amounts related to the Marketplace Minimum MLR were insignificant at December 31, 2018 and December 31, 2017. Quality Incentives At many of our health plans, revenue ranging from approximately 1% to 3% of certain health plan premiums is earned only if certain performance measures are met |
Medical Care Costs - Health Plans | Medical Care Costs and Medical Claims and Benefits Payable Medical care costs are recognized in the period in which services are provided and include amounts that have been paid by us through the reporting date, as well as estimated medical claims and benefits payable for costs that have been incurred but not paid by us as of the reporting date. Medical care costs include, among other items, fee-for-service claims, pharmacy benefits, capitation payments to providers, and various other medically-related costs. We use judgment to determine the appropriate assumptions for determining the required estimates. Under fee-for-service claims arrangements, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of hospital and physician services. Pharmacy benefits represent payments for members' prescription drug costs, net of rebates from drug manufacturers. We estimate pharmacy rebates earned based on historical and current utilization of prescription drugs and contract terms. Capitation payments represent monthly contractual fees paid to physicians and other providers on a per-member, per-month basis, who are responsible for providing medical care to members, which could include medical or ancillary costs like dental, vision and other supplemental health benefits. Such capitation costs are fixed in advance of the periods covered and are not subject to significant accounting estimates. Due to insolvency or other circumstances, such providers may be unable to pay claims they have incurred with third parties in connection with referral services provided to our members. Depending on states’ laws, we may be held liable for such unpaid referral claims even though the delegated provider has contractually assumed such risk. Based on our current assessment, such losses have not been and are not expected to be significant. Other medical care costs include all medically-related administrative costs, certain provider incentive costs, provider claims, and other health care expenses. See further discussion of provider claims in Note 17 , “ Commitments and Contingencies .” Medically related administrative costs include, for example, expenses relating to health education, quality assurance, case management, care coordination, disease management, and 24-hour on-call nurses. Salary and benefit costs are a substantial portion of these expenses. Additionally, we include an estimate for the cost of settling claims incurred through the reporting date in our medical claims and benefits payable liability . The following table provides the details of our consolidated medical care costs for the periods indicated: Year Ended December 31, 2018 2017 2016 Amount PMPM % of Total Amount PMPM % of Total Amount PMPM % of Total (In millions, except PMPM amounts) Fee-for-service $ 11,278 $ 232.15 74.5 % $ 12,682 $ 229.63 74.3 % $ 10,993 $ 217.84 74.4 % Pharmacy 2,138 44.01 14.1 2,563 46.40 15.0 2,213 43.84 15.0 Capitation 1,184 24.38 7.8 1,360 24.63 8.0 1,218 24.13 8.2 Other 537 11.05 3.6 468 8.48 2.7 350 6.94 2.4 Total $ 15,137 $ 311.59 100.0 % $ 17,073 $ 309.14 100.0 % $ 14,774 $ 292.75 100.0 % The determination of our liability for fee-for-service claims incurred but not paid (“IBNP”) is particularly important to the determination of our financial position and results of operations in any given period and requires the application of a significant degree of judgment by our management. As a result, the determination of IBNP is subject to an inherent degree of uncertainty. Our IBNP claims reserve represents our best estimate of the total amount we will ultimately pay with respect to claims incurred as of the balance sheet date. We estimate our IBNP monthly using actuarial methods based on several factors. The factors we consider when estimating our IBNP include, without limitation: • claims receipt and payment experience (and variations in that experience), • changes in membership, • provider billing practices, • health care service utilization trends, • cost trends, • product mix, • seasonality, • prior authorization of medical services, • benefit changes, • known outbreaks of disease or increased incidence of illness such as influenza, • provider contract changes, • changes to Medicaid fee schedules, and • the incidence of high dollar or catastrophic claims. Our assessment of these factors is then translated into an estimate of our IBNP liability at the relevant measuring point through the calculation of a base estimate of IBNP, a further provision for adverse claims development, and an estimate of the administrative costs of settling all claims incurred through the reporting date. The base estimate of IBNP is derived through application of claims payment completion factors and trended PMPM cost estimates. For the fourth month of service prior to the reporting date and earlier, we estimate our outstanding claims liability based on actual claims paid, adjusted for estimated completion factors. Completion factors seek to measure the cumulative percentage of claims expense that will have been paid for a given month of service as of the reporting date, based on historical payment patterns. For the three months of service immediately prior to the reporting date, actual claims paid are a less reliable measure of our ultimate liability, given the inherent delay between the patient/physician encounter and the actual submission of a claim for payment. For these months of service, we estimate our claims liability based on a blend of estimated completion factors and trended PMPM cost estimates. The PMPM costs estimates are designed to reflect recent trends in payments and expense, utilization patterns, authorized services, pharmacy utilization and other relevant factors. After we have established our base IBNP reserve through the application of completion factors and trended PMPM cost estimates, we then compute an additional liability, once again using actuarial techniques, to account for adverse development in our claim payments for which the base actuarial model is not intended to and does not account. We refer to this additional liability as the provision for adverse claims development. The provision for adverse claims development is a component of our overall determination of the adequacy of our IBNP, and averages between 8% to 10% of IBNP. It is intended to capture the potential inadequacy of our IBNP estimate as a result of our inability to adequately assess the impact of factors such as changes in the speed of claims receipt and payment, the relative magnitude or severity of claims, known outbreaks of disease such as influenza, our entry into new geographical markets, our provision of services to new populations such as the aged, blind or disabled, changes to state-controlled fee schedules upon which a large proportion of our provider payments are based, modifications and upgrades to our claims processing systems and practices, and increasing medical costs. Because of the complexity of our business, the number of states in which we operate, and the need to account for different health care benefit packages among those states, we make an overall assessment of IBNP after considering the base actuarial model reserves and the provision for adverse claims development. The development of our IBNP estimate is a continuous process that we monitor and update monthly as additional claims payment information becomes available. As additional information becomes known to us, we adjust our actuarial model accordingly. Any adjustments, if appropriate, are reflected in the period known. While we believe our current estimates are adequate, we have in the past been required to increase significantly our claims reserves for periods previously reported and may be required to do so again in the future. Any significant increases to prior period claim reserves would materially decrease reported earnings for the period in which the adjustment is made. There are many related factors working in conjunction with one another that determine the accuracy of our estimates, some of which are qualitative in nature rather than quantitative. Therefore, we are seldom able to quantify the impact that any single factor has on a change in estimate. Given the variability inherent in the reserving process, we will only be able to identify specific factors if they represent a significant departure from expectations. As a result, we do not expect to be able to fully quantify the impact of individual factors on changes in estimates. We limit our risk of catastrophic losses by maintaining high deductible reinsurance coverage. Such reinsurance coverage does not relieve us of our primary obligation to our policyholders. We report reinsurance premiums as a reduction to premium revenue, while related reinsurance recoveries are reported as a reduction to medical care costs. Reinsurance premiums amounted to $16 million , $20 million and $30 million for the years ended December 31, 2018, 2017, and 2016, respectively. Reinsurance recoveries amounted to $33 million , $24 million and $65 million for the years ended December 31, 2018, 2017, and 2016, respectively. Reinsurance recoverable of $31 million , $16 million , and $61 million , as of December 31, 2018, 2017, and 2016, respectively, is included in “Receivables” in the accompanying consolidated balance sheets. |
Taxes Based on Premiums | Taxes Based on Premiums Health Insurer Fee (“HIF”). The federal government under the ACA imposes an annual fee, or excise tax, on health insurers for each calendar year. The HIF is based on a company’s share of the industry’s net premiums written during the preceding calendar year and is non-deductible for income tax purposes. We recognize expense for the HIF over the year on a straight-line basis. Within our Medicaid program, we must secure additional reimbursement from our state partners for this added cost. We recognize the related revenue when we have obtained a contractual commitment or payment from a state to reimburse us for the HIF, and such HIF revenue is recognized ratably throughout the year. The Consolidated Appropriations Act of 2016 provided for a HIF moratorium in 2017. Therefore, there were no health insurer fees reimbursed, nor health insurer fees incurred, in 2017. Premium and Use Tax. Certain of our health plans are assessed a tax based on premium revenue collected. The premium revenues we receive from these states include the premium tax assessment. We have reported these taxes on a gross basis, as premium tax revenue and as premium tax expenses in the consolidated statements of operations. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments, receivables, and restricted investments. Our investments and a portion of our cash equivalents are managed by professional portfolio managers operating under documented investment guidelines. Our portfolio managers must obtain our prior approval before selling investments where the loss position of those investments exceeds certain levels. Our investments consist primarily of investment-grade debt securities with a maximum maturity of 10 years and an average duration of three years or less. Restricted investments are invested principally in certificates of deposit and U.S. Treasury securities. Concentration of credit risk with respect to accounts receivable is limited because our payors consist principally of the governments of each state in which our health plan subsidiaries operate |
Risks and Uncertainties | Risks and Uncertainties Our profitability depends in large part on our ability to accurately predict and effectively manage medical care costs. We continually review our medical costs in light of our underlying claims experience and revised actuarial data. However, several factors could adversely affect medical care costs. These factors, which include changes in health care practices, inflation, new technologies, major epidemics, natural disasters, and malpractice litigation, are beyond our control and may have an adverse effect on our ability to accurately predict and effectively control medical care costs. Costs in excess of those anticipated could have a material adverse effect on our financial condition, results of operations, or cash flows. We operate health plans primarily as a direct contractor with the states (or Commonwealth), and in Los Angeles County, California, as a subcontractor to another health plan holding a direct contract with the state. We are therefore dependent upon a small number of contracts to support our revenue. The loss of any one of those contracts could have a material adverse effect on our financial position, results of operations, or cash flows. Our ability to arrange for the provision of medical services to our members is dependent upon our ability to develop and maintain adequate provider networks. Our inability to develop or maintain such networks might, in certain circumstances, have a material adverse effect on our financial position, results of operations, or cash flows |
Recent Accounting Pronouncements Not Yet Adopted and Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted Revenue Recognition (Topic 606). See discussion above, in “Revenue Recognition.” Comprehensive Income. In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (“TCJA”), which was enacted on December 22, 2017. ASU 2018-02 is effective beginning January 1, 2019; we early adopted this ASU effective January 1, 2018. The effect of applying the guidance resulted in an immaterial impact to beginning retained earnings, as presented in the accompanying consolidated statements of stockholders’ equity. Restricted Cash. In November 2016, the FASB issued ASU 2016-18, Restricted Cash, which requires us to include in our consolidated statements of cash flows the changes in the balances of cash, cash equivalents, restricted cash and restricted cash equivalents. We adopted ASU 2016-18 on January 1, 2018. We have applied the guidance retrospectively to all periods presented. Such retrospective adoption resulted in a $104 million and $93 million reclassification of restricted cash and cash equivalents from “Investing activities,” to the beginning and ending balances of cash and cash equivalents in our consolidated statements of cash flows for the years ended December 31, 2017 and 2016, respectively. There was no impact to our consolidated statements of operations, balance sheets, or stockholders’ equity. The reconciliation of cash and cash equivalents to cash, cash equivalents, and restricted cash and cash equivalents is presented at the beginning of this note. Recent Accounting Pronouncements Not Yet Adopted Software Licenses. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective beginning January 1, 2020 and can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption; early adoption is permitted. We are evaluating the effect of this guidance. Credit Losses. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments . Rather than generally recognizing credit losses when it is probable that the loss has been incurred, the revised guidance requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument’s contractual life. ASU 2016-13 is effective beginning January 1, 2020 and must be adopted as a cumulative effect adjustment to retained earnings; early adoption is permitted. We are in the early stages of evaluating the effect of this guidance. Leases. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), as modified by: • ASU 2017-03, Transition and Open Effective Date Information; • ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842; • ASU 2018-10, Codification Improvements to Topic 842, Leases; and • ASU 2018-11, Leases (Topic 842): Targeted Improvements. Under Topic 842, an entity will be required to recognize assets and liabilities for the rights and obligations created by leases on the entity’s balance sheet for both financing and operating leases. Topic 842 also requires new disclosures that depict the amount, timing, and uncertainty of cash flows pertaining to an entity’s leases. We will adopt Topic 842 effective January 1, 2019, using the modified retrospective method. Under this method, we will recognize the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings on January 1, 2019. In addition, we have elected the transition option provided under ASU 2018-11, which allows entities to continue to apply the legacy guidance in Topic 840, Leases , including its disclosure requirements, in the comparative periods presented in the year of adoption. Under Topic 842, we will record right-of-use assets and liabilities relating primarily to leases of office space for administrative and health plan operations. Specifically, on January 1, 2019, we expect to record operating lease right-of-use assets of approximately $80 million to $90 million , and operating lease liabilities of approximately $90 million to $100 million . In addition, in connection with the transition provisions relating to failed sale-leaseback transactions, we expect to record finance lease right-of-use assets of approximately $230 million to $240 million ; record finance lease liabilities of approximately $230 million to $240 million ; reduce property, equipment, and capitalized software net, by approximately $75 million to $95 million ; reduce lease financing obligations by approximately $195 million to $205 million ; and record an increase of approximately $80 million to $100 million to opening retained earnings. |
Receivables | Receivables consist primarily of amounts due from government agencies, which may be subject to potential retroactive adjustments. Because all of our receivable amounts are readily determinable and substantially all of our creditors are governmental authorities, our allowance for doubtful accounts is insignificant. Any amounts determined to be uncollectible are charged to expense when such determination is made. |
Income Taxes | (benefit) is determined using an estimated annual effective tax rate, which generally differs from the U.S. federal statutory rate primarily because of state taxes, nondeductible expenses such as the HIF, goodwill impairment, certain compensation, and other general and administrative expenses. The effective tax rate was not impacted by the HIF in 2017, given the 2017 HIF moratorium. The effective tax rate may be subject to fluctuations during the year, particularly as a result of the level of pretax earnings, and also as new information is obtained. Such information may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of pretax earnings in the various tax jurisdictions in which we operate, valuation allowances against deferred tax assets, the recognition or the reversal of the recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities, along with net operating loss and tax credit carryovers. The TCJA, in part, reduced the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018. TCJA’s change in the federal rate required that we revalue deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally the new 21% federal corporate tax rate plus applicable state tax rate. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Restricted cash and cash equivalents | The restricted cash and cash equivalents presented below are included in “Restricted investments” in the accompanying consolidated balance sheets. Year Ended December 31, 2018 2017 2016 (In millions) Cash and cash equivalents $ 2,826 $ 3,186 $ 2,819 Restricted cash and cash equivalents, non-current 100 95 93 Restricted cash and cash equivalents, current — 9 — Total cash, cash equivalents, and restricted cash and cash equivalents presented in the consolidated statements of cash flows $ 2,926 $ 3,290 $ 2,912 |
Summarized premium revenue | The following table summarizes premium revenue by geography for the periods indicated: Year Ended December 31, 2018 2017 2016 Amount % of Total Amount % of Total Amount % of Total (Dollars in millions) California $ 2,150 12.2 % $ 2,701 14.3 % $ 2,378 14.4 % Florida 1,790 10.2 2,568 13.6 1,938 11.8 Illinois 793 4.5 593 3.1 603 3.7 Michigan 1,601 9.1 1,596 8.5 1,527 9.3 New Mexico 1,356 7.7 1,368 7.3 1,305 7.9 Ohio 2,388 13.6 2,216 11.8 1,967 12.0 Puerto Rico 696 3.9 732 3.9 726 4.4 South Carolina 495 2.8 445 2.4 378 2.3 Texas 3,244 18.4 2,813 14.9 2,461 15.0 Washington 2,361 13.4 2,608 13.8 2,222 13.5 Other (1) 738 4.2 1,214 6.4 940 5.7 $ 17,612 100.0 % $ 18,854 100.0 % $ 16,445 100.0 % _______________________ (1) “Other” includes the Idaho, Mississippi, New York, Utah and Wisconsin health plans, which are not individually significant to our consolidated operating results. |
Quality incentive premium revenue recognized | The following table quantifies the quality incentive premium revenue recognized for the periods presented, including the amounts earned in the periods presented and prior periods. Although the reasonably possible effects of a change in estimate related to quality incentive premium revenue as of December 31, 2018 are not known, we have no reason to believe that the adjustments to prior periods noted below are not indicative of the potential future changes in our estimates as of December 31, 2018 . Year Ended December 31, 2018 2017 2016 (In millions) Maximum available quality incentive premium - current period $ 182 $ 150 $ 147 Amount of quality incentive premium revenue recognized in current period: Earned current period $ 133 $ 97 $ 104 Earned prior periods 31 10 47 Total $ 164 $ 107 $ 151 Quality incentive premium revenue recognized as a percentage of total premium revenue 0.9 % 0.6 % 0.9 % |
Amounts due to government agencies | A summary of the categories of amounts due government agencies is as follows: December 31, 2018 2017 (In millions) Medicaid program: Medical cost floors and corridors $ 103 $ 135 Other amounts due to states 81 71 Marketplace program: Risk adjustment 466 917 Cost sharing reduction 183 275 Other 134 144 $ 967 $ 1,542 |
Consolidated medical care costs | The following table provides the details of our consolidated medical care costs for the periods indicated: Year Ended December 31, 2018 2017 2016 Amount PMPM % of Total Amount PMPM % of Total Amount PMPM % of Total (In millions, except PMPM amounts) Fee-for-service $ 11,278 $ 232.15 74.5 % $ 12,682 $ 229.63 74.3 % $ 10,993 $ 217.84 74.4 % Pharmacy 2,138 44.01 14.1 2,563 46.40 15.0 2,213 43.84 15.0 Capitation 1,184 24.38 7.8 1,360 24.63 8.0 1,218 24.13 8.2 Other 537 11.05 3.6 468 8.48 2.7 350 6.94 2.4 Total $ 15,137 $ 311.59 100.0 % $ 17,073 $ 309.14 100.0 % $ 14,774 $ 292.75 100.0 % |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Summary of denominators for the computation of basic and diluted earnings per share | The following table sets forth the calculation of basic and diluted net income (loss) per share: Year Ended December 31, 2018 2017 2016 (In millions, except net income (loss) per share) Numerator: Net income (loss) $ 707 $ (512 ) $ 52 Denominator: Shares outstanding at the beginning of the period 59.3 55.8 55.1 Weighted-average number of shares issued: Exchange of 1.625% Convertible Notes (1) 1.4 0.1 — Conversion of 1.625% Convertible Notes (1) 0.2 — — Stock-based compensation 0.2 0.5 0.3 Denominator for basic net income (loss) per share 61.1 56.4 55.4 Effect of dilutive securities: 1.125% Warrants (1) 4.8 — 0.5 1.625% Convertible Notes (1) 0.4 — — Stock-based compensation 0.3 — 0.3 Denominator for diluted net income (loss) per share 66.6 56.4 56.2 Net income (loss) per share: (2) Basic $ 11.57 $ (9.07 ) $ 0.93 Diluted $ 10.61 $ (9.07 ) $ 0.92 Potentially dilutive common shares excluded from calculations: (1) 1.125% Warrants (1) — 1.9 — 1.625% Convertible Notes (1) — 0.4 — Stock-based compensation — 0.3 — _______________________________ (1) For more information regarding the 1.625% Convertible Notes, refer to Note 11 , “ Debt .” For more information and definitions regarding the 1.125% Warrants, refer to Note 14 , “ Stockholders' Equity .” The dilutive effect of all potentially dilutive common shares is calculated using the treasury stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income (loss) per share because to do so would have been anti-dilutive. (2) Source data for calculations in thousands. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value of assets measured on recurring basis | Our financial instruments measured at fair value on a recurring basis at December 31, 2018 , were as follows: Total Level 1 Level 2 Level 3 (In millions) Corporate debt securities $ 1,123 $ — $ 1,123 $ — U.S. Treasury notes 181 — 181 — Government-sponsored enterprise securities (GSEs) 163 — 163 — Municipal securities 114 — 114 — Asset-backed securities 82 — 82 — Certificates of deposit 14 — 14 — Other 4 — 4 — Subtotal - current investments 1,681 — 1,681 — 1.125% Call Option derivative asset 476 — — 476 Total assets $ 2,157 $ — $ 1,681 $ 476 1.125% Conversion Option derivative liability $ 476 $ — $ — $ 476 Total liabilities $ 476 $ — $ — $ 476 Our financial instruments measured at fair value on a recurring basis at December 31, 2017 , were as follows: Total Level 1 Level 2 Level 3 (In millions) Corporate debt securities $ 1,588 $ — $ 1,588 $ — U.S. Treasury notes 388 — 388 — GSEs 253 — 253 — Municipal securities 141 — 141 — Asset-backed securities 117 — 117 — Certificates of deposit 37 — 37 — Subtotal - current investments 2,524 — 2,524 — Corporate debt securities 101 — 101 — U.S. Treasury notes 68 — 68 — Subtotal - current restricted investments 169 — 169 — 1.125% Call Option derivative asset 522 — — 522 Total assets $ 3,215 $ — $ 2,693 $ 522 1.125% Conversion Option derivative liability $ 522 $ — $ — $ 522 Total liabilities $ 522 $ — $ — $ 522 |
Fair value measurements of senior notes | December 31, 2018 December 31, 2017 Carrying Fair Value Carrying Fair Value Amount Amount (In millions) 5.375% Notes $ 694 $ 674 $ 692 $ 730 4.875% Notes 326 301 325 329 1.125% Convertible Notes (1),(2) 240 732 496 1,052 Credit Facility (2) — — 300 300 1.625% Convertible Notes (2) — — 157 220 $ 1,260 $ 1,707 $ 1,970 $ 2,631 _______________________________ (1) The fair value of the 1.125% Conversion Option derivative liability (the embedded cash conversion option), which is included in the fair value amounts presented above, amounted to $476 million and $522 million as of December 31, 2018 and 2017, respectively. See further discussion at Note 11 , “ Debt ,” and Note 12 , “ Derivatives .” (2) For more information on debt repayments in the year ended December 31, 2018, refer to Note 11 , “ Debt .” |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | The following tables summarize our current investments as of the dates indicated: December 31, 2018 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value (In millions) Corporate debt securities $ 1,131 $ — $ 8 $ 1,123 U.S. Treasury notes 181 — — 181 GSEs 164 — 1 163 Municipal securities 115 — 1 114 Asset-backed securities 83 — 1 82 Certificates of deposit 14 — — 14 Other 4 — — 4 Total current investments $ 1,692 $ — $ 11 $ 1,681 December 31, 2017 Amortized Cost Gross Unrealized Estimated Fair Value Gains Losses (In millions) Corporate debt securities $ 1,591 $ 1 $ 4 $ 1,588 U.S. Treasury notes 389 — 1 388 GSEs 255 — 2 253 Municipal securities 142 — 1 141 Asset-backed securities 117 — — 117 Certificates of deposit 37 — — 37 Subtotal - current investments 2,531 1 8 2,524 Corporate debt securities 101 — — 101 U.S. Treasury notes 68 — — 68 Subtotal - current restricted investments 169 — — 169 $ 2,700 $ 1 $ 8 $ 2,693 |
Contractual maturities of investments | The contractual maturities of our current investments as of December 31, 2018 are summarized below: Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 1,000 $ 997 Due after one year through five years 692 684 $ 1,692 $ 1,681 |
Available-for-sale investments | The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a continuous loss position for 12 months or more as of December 31, 2018 . In a Continuous Loss Position for Less than 12 Months In a Continuous Loss Position for 12 Months or More Estimated Fair Value Unrealized Losses Total Number of Positions Estimated Fair Value Unrealized Losses Total Number of Positions (Dollars in millions) Corporate debt securities $ 509 $ 3 285 $ 412 $ 5 298 GSEs — — — 127 1 76 Municipal securities — — — 87 1 90 Asset backed securities — — — 68 1 52 $ 509 $ 3 285 $ 694 $ 8 516 The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a continuous loss position for 12 months or more as of December 31, 2017 . In a Continuous Loss Position for Less than 12 Months In a Continuous Loss Position for 12 Months or More Estimated Fair Value Unrealized Losses Total Number of Positions Estimated Fair Value Unrealized Losses Total Number of Positions (Dollars in millions) Corporate debt securities $ 1,297 $ 3 561 $ 94 $ 1 69 U.S. Treasury notes 470 1 89 — — — GSEs 173 1 69 95 1 47 Municipal securities — — — 38 1 48 $ 1,940 $ 5 719 $ 227 $ 3 164 |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Summary of accounts receivable | December 31, 2018 2017 (In millions) Premiums and other receivables 855 695 Pharmacy administrative services receivables 179 — Pharmacy rebate receivables 155 154 Health insurer fee reimbursement receivables 141 22 $ 1,330 $ 871 |
Property, Equipment, and Capi_2
Property, Equipment, and Capitalized Software, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of property and equipment | A summary of property, equipment, and capitalized software is as follows: December 31, 2018 2017 (In millions) Capitalized software $ 373 $ 417 Furniture and equipment 231 289 Building and improvements 154 161 Land 16 16 Total cost 774 883 Less: accumulated amortization - capitalized software (320 ) (308 ) Less: accumulated depreciation and amortization - building and improvements, furniture and equipment (213 ) (233 ) Total accumulated depreciation and amortization (533 ) (541 ) Property, equipment, and capitalized software, net $ 241 $ 342 |
Depreciation and amortization | The following table presents all depreciation and amortization recognized in our consolidated statements of operations, whether the item appears as depreciation and amortization, or as cost of service revenue. Year Ended December 31, 2018 2017 2016 (In millions) Recorded in depreciation and amortization: Amortization of capitalized software $ 42 $ 64 $ 62 Depreciation of property and equipment 36 42 45 Amortization of intangible assets 21 31 32 Subtotal 99 137 139 Recorded in cost of service revenue: Amortization of capitalized software 19 28 22 Amortization of deferred contract costs 9 13 21 Subtotal 28 41 43 Total depreciation and amortization recognized $ 127 $ 178 $ 182 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table presents the changes in the carrying amounts of goodwill, by segment, for the year ended December 31, 2018 . The 2017 goodwill impairment losses were reported as “Impairment losses” in the accompanying consolidated statements of operations. See Note 18 , “ Segments ,” for a discussion of the change in our reportable segments in 2018. Health Plans Other Total (In millions) Historical goodwill, gross $ 445 $ 233 $ 678 Accumulated impairment losses at December 31, 2017 (302 ) (190 ) (492 ) Balance, December 31, 2017 143 43 186 Sale of subsidiary — (43 ) (43 ) Balance, December 31, 2018 $ 143 $ — $ 143 Accumulated impairment losses at December 31, 2018 $ 302 $ 190 $ 492 |
Summary of identified intangible assets, by major class | The following table provides the details of identified intangible assets, by major class, for the periods indicated: Cost Accumulated Carrying Amount (In millions) Intangible assets: Contract rights and licenses $ 201 $ 162 $ 39 Provider networks 20 12 8 Balance at December 31, 2018 $ 221 $ 174 $ 47 Intangible assets: Contract rights and licenses $ 201 $ 141 $ 60 Provider networks 20 11 9 Balance at December 31, 2017 $ 221 $ 152 $ 69 |
Restricted Investments (Tables)
Restricted Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of restricted investments by health plan | The following table presents the balances of restricted investments: December 31, 2018 2017 (In millions) Florida $ 32 $ 31 New Mexico 43 43 Ohio 12 12 Puerto Rico 10 10 Other 23 23 Total Health Plans segment $ 120 $ 119 |
Contractual maturities of our held-to-maturity restricted investments | The contractual maturities of our held-to-maturity restricted investments, which are carried at amortized cost, which approximates fair value, as of December 31, 2018 are summarized below. Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 105 $ 105 Due after one year through five years 15 15 $ 120 $ 120 |
Medical Claims and Benefits P_2
Medical Claims and Benefits Payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Schedule of liability for unpaid claims and claims adjustment expense | The following table provides the details of our medical claims and benefits payable as of the dates indicated. December 31, 2018 2017 2016 (In millions) Fee-for-service claims incurred but not paid (“IBNP”) $ 1,562 $ 1,717 $ 1,352 Pharmacy payable 115 112 112 Capitation payable 52 67 37 Other 232 296 428 $ 1,961 $ 2,192 $ 1,929 |
Components of the change in medical claims and benefits payable | The following table presents the components of the change in our medical claims and benefits payable for the periods indicated. The amounts presented for “Components of medical care costs related to: Prior periods” represent the amount by which our original estimate of medical claims and benefits payable at the beginning of the period were (more) less than the actual amount of the liability based on information (principally the payment of claims) developed since that liability was first reported. Year Ended December 31, 2018 2017 2016 (In millions) Medical claims and benefits payable, beginning balance $ 2,192 $ 1,929 $ 1,685 Components of medical care costs related to: Current period 15,478 17,037 14,966 Prior periods (1) (341 ) 36 (192 ) Total medical care costs 15,137 17,073 14,774 Change in non-risk provider payables 13 (106 ) 58 Payments for medical care costs related to: Current period 13,671 15,130 13,304 Prior periods 1,710 1,574 1,284 Total paid 15,381 16,704 14,588 Medical claims and benefits payable, ending balance $ 1,961 $ 2,192 $ 1,929 |
Incurred and paid claims development | The following tables provide information about incurred and paid claims development as of December 31, 2018 , as well as cumulative claims frequency and the total of incurred but not paid claims liabilities. The cumulative claim frequency is measured by claim event, and includes claims covered under capitated arrangements. Incurred Claims and Allocated Claims Adjustment Expenses Total IBNP Cumulative number of reported claims Benefit Year 2016 2017 2018 (Unaudited) (Unaudited) (In millions) 2016 $ 15,064 $ 15,093 $ 15,057 $ 18 105 2017 17,037 16,728 57 119 2018 15,478 1,477 105 $ 47,263 $ 1,552 Cumulative Paid Claims and Allocated Claims Adjustment Expenses Benefit Year 2016 2017 2018 (Unaudited) (Unaudited) (In millions) 2016 $ 13,403 $ 14,952 $ 15,039 2017 15,130 16,752 2018 13,671 $ 45,462 |
Reconciliation of claims development to liability | The following table represents a reconciliation of claims development to the aggregate carrying amount of the liability for medical claims and benefits payable. 2018 (In millions) Incurred claims and allocated claims adjustment expenses $ 47,263 Less: cumulative paid clams and allocated claims adjustment expenses (45,462 ) All outstanding liabilities before 2016 10 Non-risk provider payables and other 150 Medical claims and benefits payable $ 1,961 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Maturities of long-term debt | As of December 31, 2018 , contractual maturities of debt for the years ending December 31 were as follows. All amounts represent the principal amounts of the debt instruments outstanding. Total 2019 2020 2021 2022 2023 Thereafter (In millions) 5.375% Notes $ 700 $ — $ — $ — $ 700 $ — $ — 4.875% Notes 330 — — — — — 330 1.125% Convertible Notes 252 — 252 — — — — $ 1,282 $ — $ 252 $ — $ 700 $ — $ 330 |
Long term debt | The following table summarizes our outstanding debt obligations and their classification in the accompanying consolidated balance sheets: December 31, 2018 2017 (In millions) Current portion of long-term debt: 1.125% Convertible Notes, net of unamortized discount $ 241 $ 499 1.625% Convertible Notes, net of unamortized discount — 157 Lease financing obligations 1 1 Debt issuance costs (1 ) (4 ) 241 653 Non-current portion of long-term debt: 5.375% Notes 700 700 4.875% Notes 330 330 Credit Facility — 300 Debt issuance costs (10 ) (12 ) 1,020 1,318 Lease financing obligations 197 198 $ 1,458 $ 2,169 |
Debt instruments interest cost recognized | Interest cost recognized relating to our convertible senior notes, the 1.125% Convertible Notes and the 1.625% Convertible Notes, was as follows: Years Ended December 31, 2018 2017 2016 (In millions) Contractual interest at coupon rate $ 6 $ 11 $ 11 Amortization of the discount 21 32 30 $ 27 $ 43 $ 41 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Values of Derivative Financial Instruments | The following table summarizes the fair values and the presentation of our derivative financial instruments (defined and discussed individually below) in the consolidated balance sheets: December 31, Balance Sheet Location 2018 2017 (In millions) Derivative asset: 1.125% Call Option Current assets: Derivative asset $ 476 $ 522 Derivative liability: 1.125% Conversion Option Current liabilities: Derivative liability $ 476 $ 522 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes | ncome tax expense (benefit) consisted of the following: Year Ended December 31, 2018 2017 2016 (In millions) Current: Federal $ 272 $ (9 ) $ 134 State 18 3 3 Foreign 8 — (6 ) Total current 298 (6 ) 131 Deferred: Federal (3 ) (85 ) 19 State (3 ) (9 ) 2 Foreign — — 1 Total deferred (6 ) (94 ) 22 Income tax expense (benefit) $ 292 $ (100 ) $ 153 |
Effective income tax rate reconciliation to the statutory federal income tax rate | A reconciliation of the U.S. federal statutory income tax rate to the combined effective income tax rate is as follows: Year Ended December 31, 2018 2017 2016 Statutory federal tax (benefit) rate 21.0 % (35.0 )% 35.0 % State income provision (benefit), net of federal 1.2 (0.7 ) 1.6 Nondeductible health insurer fee (“HIF”) 7.3 — 37.0 Nondeductible compensation 0.7 2.8 3.1 Nondeductible goodwill impairment — 6.6 — Worthless stock deduction (1.0 ) — — Revaluation of net deferred tax assets (0.4 ) 8.8 — Change in purchase agreement that increased tax basis in assets — — (2.2 ) Other 0.4 1.1 0.3 Effective tax (benefit) rate 29.2 % (16.4 )% 74.8 % |
Significant components of deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities as of December 31, 2018 and 2017 were as follows: December 31, 2018 2017 (In millions) Accrued expenses $ 32 $ 15 Reserve liabilities 7 11 Other accrued medical costs 12 16 Net operating losses 16 27 Fixed assets and intangibles 30 23 Unearned premiums 9 19 Lease financing obligation 30 30 Tax credit carryover 12 15 Other 3 3 Valuation allowance (28 ) (41 ) Total deferred income tax assets, net of valuation allowance 123 118 Prepaid expenses (6 ) (6 ) Basis in debt — (9 ) Total deferred income tax liabilities (6 ) (15 ) Net deferred income tax asset $ 117 $ 103 |
Unrecognized tax benefits roll forward | The roll forward of our unrecognized tax benefits is as follows: Year Ended December 31, 2018 2017 2016 (In millions) Gross unrecognized tax benefits at beginning of period $ (13 ) $ (11 ) $ (9 ) Increases in tax positions for current year (9 ) (1 ) (1 ) Increases in tax positions for prior years — (4 ) (1 ) Decreases in tax positions for prior years — 3 — Lapse in statute of limitations 2 — — Gross unrecognized tax benefits at end of period $ (20 ) $ (13 ) $ (11 ) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stock based compensation expense | Total share-based compensation expense was as follows: Year Ended December 31, 2018 2017 2016 (In millions) Pretax Net-of-Tax Pretax Net-of-Tax Pretax Net-of-Tax RSAs, PSAs and PSUs $ 17 $ 17 $ 39 $ 35 $ 20 $ 17 Employee stock purchase plan and stock options 10 9 7 5 6 5 $ 27 $ 26 $ 46 $ 40 $ 26 $ 22 |
Restricted and performance stock activity | ctivity for such awards in the year ended December 31, 2018 is summarized below: RSAs PSAs PSUs Total Shares Weighted Unvested balance as of December 31, 2017 401,804 84,762 91,828 578,394 $ 58.35 Granted 363,740 — 214,952 578,692 75.38 Vested (192,609 ) (32,929 ) — (225,538 ) 59.08 Forfeited (173,140 ) (48,701 ) (105,397 ) (327,238 ) 63.69 Unvested balance as of December 31, 2018 399,795 3,132 201,383 604,310 $ 71.50 |
Stock Options, Activity | The total grant date fair value of awards granted and vested is presented in the following table: Year Ended December 31, 2018 2017 2016 (In millions) Granted: RSAs $ 28 $ 20 $ 19 PSAs — — 15 PSUs 16 16 — $ 44 $ 36 $ 34 Vested: RSAs $ 15 $ 23 $ 22 PSAs 3 15 — PSUs — 9 — $ 18 $ 47 $ 22 Stock Options. Stock option awards generally have an exercise price equal to the fair market value of our common stock on the date of grant, vest in equal annual installments over periods up to four years from the date of grant, and have a maximum term of ten years from the date of grant. Stock option activity for the year ended December 31, 2018 is summarized below: Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual term (In millions) (Years) Stock options outstanding as of December 31, 2017 405,000 $ 64.79 Granted — — Exercised — — Stock options outstanding as of December 31, 2018 405,000 64.79 $ 21 8.5 Stock options exercisable and expected to vest as of December 31, 2018 405,000 64.79 $ 21 8.5 Exercisable as of December 31, 2018 155,000 60.69 $ 9 8.0 |
Stock Option Plans, by Exercise Price Range | The following is a summary of information about stock options outstanding and exercisable at December 31, 2018: Options Outstanding Options Exercisable Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted-Average Exercise Price Number Exercisable Weighted-Average Exercise Price Range of Exercise Prices $33.02 30,000 4.2 $ 33.02 30,000 $ 33.02 $67.33 375,000 8.9 67.33 125,000 67.33 405,000 155,000 |
Restructuring and Separation _2
Restructuring and Separation Costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | The following table presents the major types of such costs by segment. Current and long-lived assets include current and non-current capitalized project costs, and capitalized software determined to be unrecoverable. Year Ended December 31, 2018 Separation Costs - Former Executives One-Time Termination Benefits Other Restructuring Costs Total Write-offs of Current and Long-lived Assets Consulting Fees Contract Termination Costs (In millions) Health Plans $ — $ — $ (1 ) $ — $ 12 $ 11 Other — 5 20 1 — 26 $ — $ 5 $ 19 $ 1 $ 12 $ 37 Year Ended December 31, 2017 Separation Costs - Former Executives One-Time Termination Benefits Other Restructuring Costs Total Write-offs of Long-lived Assets Consulting Fees Contract Termination Costs (In millions) Health Plans $ — $ 33 $ 16 $ — $ 24 $ 73 Other 36 34 45 44 2 161 $ 36 $ 67 $ 61 $ 44 $ 26 $ 234 As of December 31, 2018 , we had incurred cumulative restructuring costs under the 2017 Restructuring Plan as follows: Separation Costs - Former Executives One-Time Termination Benefits Other Restructuring Costs Total Write-offs of Current and Long-lived Assets Consulting Fees Contract Termination Costs (In millions) Health Plans $ — $ 33 $ 15 $ — $ 36 $ 84 Other 36 39 65 45 2 187 $ 36 $ 72 $ 80 $ 45 $ 38 $ 271 We have incurred expenses under the IT Restructuring Plan as follows: Year Ended December 31, 2018 One-Time Termination Benefits Other Restructuring Costs Total Consulting Fees (In millions) Other $ 7 $ 2 $ 9 Reconciliation of Liability For those restructuring costs that require cash settlement (such as one-time termination benefits and consulting fees), the following table presents a roll-forward of the accrued liability, which is reported in “Accounts payable and accrued liabilities” in the accompanying consolidated balance sheets. One-Time Termination Benefits Other Restructuring Costs Total (In millions) Accrued as of December 31, 2017 $ — $ — $ — Charges 7 2 9 Cash payments (2 ) (1 ) (3 ) Accrued as of December 31, 2018 $ 5 $ 1 $ 6 |
Restructuring Reserve | For those restructuring and separation costs that require cash settlement (primarily separation costs not including equity incentives, termination benefits, consulting fees and contract termination costs), the following table presents a roll-forward of the accrued liability, which is reported primarily in “Accounts payable and accrued liabilities” in the accompanying consolidated balance sheets. Certain contract termination cost accruals are non-current, recorded in “Other long-term liabilities.” Separation Costs - Former Executives One-Time Termination Benefits Other Restructuring Costs Total (In millions) Accrued as of December 31, 2017 $ 2 $ 11 $ 35 $ 48 Adjustments — (1 ) 11 10 Charges — 6 2 8 Cash payments (2 ) (15 ) (31 ) (48 ) Accrued as of December 31, 2018 $ — $ 1 $ 17 $ 18 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of future minimum lease payments | Future minimum lease payments by year and in the aggregate under operating leases and lease financing obligations consist of the following amounts: Lease Financing Obligations Operating Leases Total (In millions) 2019 $ 19 $ 46 $ 65 2020 19 34 53 2021 20 24 44 2022 21 16 37 2023 21 12 33 Thereafter 311 15 326 $ 411 $ 147 $ 558 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Operating segment information | Health Plans Other Consolidated (In millions) 2018 Total revenue $ 18,471 $ 419 18,890 Margin 2,475 43 2,518 Goodwill, and intangible assets, net 190 — 190 Total assets 6,165 989 7,154 2017 Total revenue $ 19,352 $ 531 $ 19,883 Margin 1,781 29 1,810 Goodwill, and intangible assets, net 212 43 255 Total assets 6,347 2,124 8,471 2016 Total revenue $ 17,234 $ 548 $ 17,782 Margin 1,671 54 1,725 Goodwill, and intangible assets, net 513 247 760 Total assets 5,897 1,552 7,449 The following table reconciles margin by segment to consolidated income (loss) before income tax expense (benefit): Year Ended December 31, 2018 2017 2016 (In millions) Margin: Health Plans $ 2,475 $ 1,781 $ 1,671 Other 43 29 54 Total margin 2,518 1,810 1,725 Add: other operating revenues (1) 871 508 798 Less: other operating expenses (2) (2,243 ) (2,873 ) (2,217 ) Less: loss on sales of subsidiaries, net of gain (15 ) — — Operating income (loss) 1,131 (555 ) 306 Less: other expenses, net 132 57 101 Income (loss) before income tax expense (benefit) $ 999 $ (612 ) $ 205 ______________________ (1) Other operating revenues include premium tax revenue, health insurer fees reimbursed, investment income and other revenue. (2) Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fees, depreciation and amortization, impairment losses, and restructuring and separation costs. |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of quarterly results of operations | The following table summarizes quarterly unaudited results of operations for the years ended December 31, 2018 and 2017 . For The Quarter Ended March 31, June 30, Sept. 30, 2018 December 31, (In millions, except per-share data) Total revenue $ 4,646 $ 4,883 $ 4,697 $ 4,664 Margin 615 673 566 664 Gain (loss) on sales of subsidiaries — — 37 (52 ) Restructuring and separation costs 25 8 5 8 Net income 107 202 197 201 Net income per share (1) : Basic $ 1.79 $ 3.29 $ 3.22 $ 3.24 Diluted $ 1.64 $ 3.02 $ 2.90 $ 3.01 For The Quarter Ended March 31, June 30, Sept. 30, 2017 December 31, (In millions, except per-share data) Total revenue $ 4,904 $ 4,999 $ 5,031 $ 4,949 Margin 546 254 564 446 Impairment losses — 72 129 269 Restructuring and separation costs — 43 118 73 Net income (loss) 77 (230 ) (97 ) (262 ) Net income (loss) per share (1) : Basic $ 1.38 $ (4.10 ) $ (1.70 ) $ (4.59 ) Diluted $ 1.37 $ (4.10 ) $ (1.70 ) $ (4.59 ) _______________________________ (1) The dilutive effect of all potentially dilutive common shares is calculated using the treasury stock method and is based on the weighted-average common share equivalents outstanding during each quarter. Accordingly, the sum of the quarterly net income (loss) per share may not agree to the total for the year. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income (loss) per share because to do so would be anti-dilutive. |
Condensed Financial Informati_2
Condensed Financial Information of Registrant (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Balance Sheets | Condensed Balance Sheets December 31, 2018 2017 (In millions, except share data) ASSETS Current assets: Cash and cash equivalents $ 70 $ 504 Investments 100 192 Restricted investments — 169 Receivables 2 2 Due from affiliates 90 148 Prepaid expenses and other current assets 47 103 Derivative asset 476 522 Total current assets 785 1,640 Property, equipment, and capitalized software, net 176 223 Goodwill and intangible assets, net 13 15 Investments in subsidiaries 2,768 2,306 Deferred income taxes 39 17 Advances to related parties and other assets 40 32 $ 3,821 $ 4,233 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Medical claims and benefits payable $ 4 $ 3 Accounts payable and accrued liabilities 223 178 Current portion of long-term debt 241 653 Derivative liability 476 522 Total current liabilities 944 1,356 Long-term debt 1,020 1,318 Lease financing obligations 197 198 Other long-term liabilities 13 24 Total liabilities 2,174 2,896 Stockholders’ equity: Common stock, $0.001 par value; 150 million shares authorized; outstanding: 62 million shares at December 31, 2018 and 60 million shares at December 31, 2017 — — Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding — — Additional paid-in capital 643 1,044 Accumulated other comprehensive loss (8 ) (5 ) Retained earnings 1,012 298 Total stockholders’ equity 1,647 1,337 $ 3,821 $ 4,233 CONDENSED CONSOLIDATING BALANCE SHEETS December 31, 2018 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) ASSETS Current assets: Cash and cash equivalents $ 70 $ 2 $ 2,754 $ — $ 2,826 Investments 100 — 1,581 — 1,681 Receivables 2 — 1,328 — 1,330 Due from (to) affiliates 90 7 (97 ) — — Prepaid expenses and other current assets 47 29 73 — 149 Derivative asset 476 — — — 476 Total current assets 785 38 5,639 — 6,462 Property, equipment, and capitalized software, net 176 — 65 — 241 Goodwill and intangible assets, net 13 — 177 — 190 Restricted investments — — 120 — 120 Investment in subsidiaries, net 2,768 (5 ) — (2,763 ) — Deferred income taxes 39 — 78 — 117 Other assets 40 — 5 (21 ) 24 $ 3,821 $ 33 $ 6,084 $ (2,784 ) $ 7,154 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Medical claims and benefits payable $ 4 $ — $ 1,957 $ — $ 1,961 Amounts due government agencies — — 967 — 967 Accounts payable and accrued liabilities 223 — 167 — 390 Deferred revenue — — 211 — 211 Current portion of long-term debt 241 — — — 241 Derivative liability 476 — — — 476 Total current liabilities 944 — 3,302 — 4,246 Long-term debt and lease financing obligations 1,217 — 20 (20 ) 1,217 Other long-term liabilities 13 — 32 (1 ) 44 Total liabilities 2,174 — 3,354 (21 ) 5,507 Total stockholders’ equity 1,647 33 2,730 (2,763 ) 1,647 $ 3,821 $ 33 $ 6,084 $ (2,784 ) $ 7,154 CONDENSED CONSOLIDATING BALANCE SHEETS December 31, 2017 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) ASSETS Current assets: Cash and cash equivalents $ 504 $ — $ 2,682 $ — $ 3,186 Investments 192 — 2,332 — 2,524 Restricted investments 169 — — — 169 Receivables 2 — 869 — 871 Due from (to) affiliates 148 2 (150 ) — — Prepaid expenses and other current assets 103 2 150 (16 ) 239 Derivative asset 522 — — — 522 Total current assets 1,640 4 5,883 (16 ) 7,511 Property, equipment, and capitalized software, net 223 — 119 — 342 Goodwill and intangible assets, net 15 — 240 — 255 Restricted investments — — 119 — 119 Investment in subsidiaries, net 2,306 75 — (2,381 ) — Deferred income taxes 17 — 101 (15 ) 103 Other assets 32 — 110 (1 ) 141 $ 4,233 $ 79 $ 6,572 $ (2,413 ) $ 8,471 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Medical claims and benefits payable $ 3 $ — $ 2,189 $ — $ 2,192 Amounts due government agencies — — 1,542 — 1,542 Accounts payable and accrued liabilities 178 1 188 (1 ) 366 Deferred revenue — — 282 — 282 Current portion of long-term debt 653 — 16 (16 ) 653 Derivative liability 522 — — — 522 Total current liabilities 1,356 1 4,217 (17 ) 5,557 Long-term debt and lease financing obligations 1,516 — — — 1,516 Deferred income taxes — — 15 (15 ) — Other long-term liabilities 24 — 37 — 61 Total liabilities 2,896 1 4,269 (32 ) 7,134 Total stockholders’ equity 1,337 78 2,303 (2,381 ) 1,337 $ 4,233 $ 79 $ 6,572 $ (2,413 ) $ 8,471 |
Condensed Statements of Income | Condensed Statements of Operations Year Ended December 31, 2018 2017 2016 (In millions) Revenue: Management fees $ 1,138 $ 1,317 $ 1,062 Investment income and other revenue 17 16 16 Total revenue 1,155 1,333 1,078 Expenses: Medical care costs 8 16 73 General and administrative expenses 1,007 1,082 899 Depreciation and amortization 69 93 95 Restructuring and separation costs 35 153 — Impairment losses — 39 — Total operating expenses 1,119 1,383 1,067 Gain on sale of subsidiary 37 — — Operating income (loss) 73 (50 ) 11 Interest expense 114 117 101 Other expense (income) 17 (61 ) — Loss before income tax (benefit) expense and equity in net earnings (losses) of subsidiaries (58 ) (106 ) (90 ) Income tax (benefit) expense (14 ) 8 (24 ) Net loss before equity in net earnings (losses) of subsidiaries (44 ) (114 ) (66 ) Equity in net earnings (losses) of subsidiaries 751 (398 ) 118 Net income (loss) $ 707 $ (512 ) $ 52 CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Year Ended December 31, 2018 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 1,155 $ 3 $ 18,884 $ (1,152 ) $ 18,890 Expenses: Medical care costs 8 — 15,129 — 15,137 Cost of service revenue — — 364 — 364 General and administrative expenses 1,007 4 1,474 (1,152 ) 1,333 Premium tax expenses — — 417 — 417 Health insurer fees — — 348 — 348 Depreciation and amortization 69 — 30 — 99 Restructuring and separation costs 35 — 11 — 46 Total operating expenses 1,119 4 17,773 (1,152 ) 17,744 Gain (loss) on sales of subsidiaries 37 (52 ) — — (15 ) Operating income (loss) 73 (53 ) 1,111 — 1,131 Interest expense 114 — 1 — 115 Other expense 17 — — — 17 (Loss) income before income tax (benefit) expense (58 ) (53 ) 1,110 — 999 Income tax (benefit) expense (14 ) (11 ) 317 — 292 Net (loss) income before equity in net earnings (losses) of subsidiaries (44 ) (42 ) 793 — 707 Equity in net earnings (losses) of subsidiaries 751 (5 ) — (746 ) — Net income (loss) $ 707 $ (47 ) $ 793 $ (746 ) $ 707 Year Ended December 31, 2017 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 1,333 $ 2 $ 19,904 $ (1,356 ) $ 19,883 Expenses: Medical care costs 16 — 17,058 (1 ) 17,073 Cost of service revenue — — 492 — 492 General and administrative expenses 1,082 2 1,865 (1,355 ) 1,594 Premium tax expenses — — 438 — 438 Depreciation and amortization 93 — 44 — 137 Restructuring and separation costs 153 — 81 — 234 Impairment losses 39 — 431 — 470 Total operating expenses 1,383 2 20,409 (1,356 ) 20,438 Operating loss (50 ) — (505 ) — (555 ) Total other expenses, net 56 — 1 — 57 Loss before income taxes (106 ) — (506 ) — (612 ) Income tax expense (benefit) 8 — (108 ) — (100 ) Net loss before equity in net (losses) earnings of subsidiaries (114 ) — (398 ) — (512 ) Equity in net (losses) earnings of subsidiaries (398 ) (164 ) 8 554 — Net loss $ (512 ) $ (164 ) $ (390 ) $ 554 $ (512 ) Year Ended December 31, 2016 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 1,078 $ — $ 17,786 $ (1,082 ) $ 17,782 Expenses: Medical care costs 73 — 14,702 (1 ) 14,774 Cost of service revenue — — 485 — 485 General and administrative expenses 899 2 1,573 (1,081 ) 1,393 Premium tax expenses — — 468 — 468 Health insurer fees — — 217 — 217 Depreciation and amortization 95 — 44 — 139 Total operating expenses 1,067 2 17,489 (1,082 ) 17,476 Operating income (loss) 11 (2 ) 297 — 306 Total other expenses, net 101 — — — 101 (Loss) income before income taxes (90 ) (2 ) 297 — 205 Income tax (benefit) expense (24 ) (1 ) 178 — 153 Net (loss) income before equity in earnings of subsidiaries (66 ) (1 ) 119 — 52 Equity in net earnings of subsidiaries 118 2 — (120 ) — Net income $ 52 $ 1 $ 119 $ (120 ) $ 52 |
Condensed Statements of Comprehensive (Loss) Income | Condensed Statements of Comprehensive Income (Loss) Year Ended December 31, 2018 2017 2016 (In millions) Net income (loss) $ 707 $ (512 ) $ 52 Other comprehensive (loss) income: Unrealized investment (loss) gain (3 ) (5 ) 3 Less: effect of income taxes (1 ) (2 ) 1 Other comprehensive (loss) income, net of tax (2 ) (3 ) 2 Comprehensive income (loss) $ 705 $ (515 ) $ 54 |
Condensed Statements of Cash Flows | Condensed Statements of Cash Flows Year Ended December 31, 2018 2017 2016 (In millions) Operating activities: Net cash provided by operating activities $ 118 $ 166 $ 55 Investing activities: Capital contributions to subsidiaries (145 ) (370 ) (386 ) Dividends received from subsidiaries 298 286 101 Purchases of investments (136 ) (331 ) (115 ) Proceeds from sales and maturities of investments 388 156 188 Purchases of property, equipment and capitalized software (22 ) (67 ) (125 ) Net cash received from sale of subsidiaries 242 — — Change in amounts due to/from affiliates 6 (49 ) (18 ) Other, net — — 6 Net cash provided by (used in) investing activities 631 (375 ) (349 ) Financing activities: Repayment of credit facility (300 ) — — Repayment of principal amount of 1.125% Convertible Notes (298 ) — — Cash paid for partial settlement of 1.125% Conversion Option (623 ) — — Cash received for partial settlement of 1.125% Call Option 623 — — Cash paid for partial termination of 1.125% Warrants (549 ) — — Repayment of principal amount of 1.625% Convertible Notes (64 ) — — Proceeds from senior notes offerings, net of issuance costs — 325 — Proceeds from borrowings under credit facility — 300 — Other, net 19 11 20 Net cash (used in) provided by financing activities (1,192 ) 636 20 Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents (443 ) 427 (274 ) Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 513 86 360 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 70 $ 513 $ 86 See accompanying notes. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Year Ended December 31, 2018 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by (used in) operating activities $ 118 (2 ) (430 ) — $ (314 ) Investing activities: Purchases of investments (136 ) — (1,308 ) — (1,444 ) Proceeds from sales and maturities of investments 388 — 2,057 — 2,445 Purchases of property, equipment and capitalized software (22 ) — (8 ) — (30 ) Net cash received from sales of subsidiaries 242 — (52 ) — 190 Capital contributions to subsidiaries (145 ) — 145 — — Dividends received from subsidiaries 298 — (298 ) — — Change in amounts due to/from affiliates 6 4 (10 ) — — Other, net — — (18 ) — (18 ) Net cash provided by investing activities 631 4 508 — 1,143 Financing activities: Repayment of credit facility (300 ) — — — (300 ) Repayment of principal amount of 1.125% Convertible Notes (298 ) — — — (298 ) Cash paid for partial settlement of 1.125% Conversion Option (623 ) — — — (623 ) Cash received for partial settlement of 1.125% Call Option 623 — — — 623 Cash paid for partial termination of 1.125% Warrants (549 ) — — — (549 ) Repayment of principal amount of 1.625% Convertible Notes (64 ) — — — (64 ) Other, net 19 — (1 ) — 18 Net cash used in financing activities (1,192 ) — (1 ) — (1,193 ) Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents (443 ) 2 77 — (364 ) Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 513 — 2,777 — 3,290 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 70 $ 2 $ 2,854 $ — $ 2,926 Year Ended December 31, 2017 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 166 — 638 — $ 804 Investing activities: Purchases of investments (331 ) — (2,366 ) — (2,697 ) Proceeds from sales and maturities of investments 156 — 1,603 — 1,759 Purchases of property, equipment and capitalized software (67 ) — (19 ) — (86 ) Capital contributions to subsidiaries (370 ) 2 368 — — Dividends received from subsidiaries 286 — (286 ) — — Change in amounts due to/from affiliates (49 ) (2 ) 51 — — Other, net — — (38 ) — (38 ) Net cash used in investing activities (375 ) — (687 ) — (1,062 ) Financing activities: Proceeds from senior notes offerings, net of issuance costs 325 — — — 325 Proceeds from borrowings under credit facility 300 — — — 300 Other, net 11 — — — 11 Net cash provided by financing activities 636 — — — 636 Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents 427 — (49 ) — 378 Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 86 — 2,826 — 2,912 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 513 $ — $ 2,777 $ — $ 3,290 Year Ended December 31, 2016 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by (used in) operating activities $ 55 (1 ) 619 — $ 673 Investing activities: Purchases of investments (115 ) — (1,814 ) — (1,929 ) Proceeds from sales and maturities of investments 188 — 1,778 — 1,966 Purchases of property, equipment and capitalized software (125 ) — (51 ) — (176 ) Net cash paid in business combinations — — (48 ) — (48 ) Capital contributions to subsidiaries (386 ) 7 379 — — Dividends received from subsidiaries 101 — (101 ) — — Change in amounts due to/from affiliates (18 ) (6 ) 24 — — Other, net 6 — (25 ) — (19 ) Net cash (used in) provided by investing activities (349 ) 1 142 — (206 ) Financing activities: Other, net 20 — (1 ) — 19 Net cash provided by (used in) financing activities 20 — (1 ) — 19 Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents (274 ) — 760 — 486 Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 360 — 2,066 — 2,426 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 86 $ — $ 2,826 $ — $ 2,912 |
Supplemental Condensed Consol_2
Supplemental Condensed Consolidating Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information [Abstract] | |
Condensed Consolidating Statements of Income | Condensed Statements of Operations Year Ended December 31, 2018 2017 2016 (In millions) Revenue: Management fees $ 1,138 $ 1,317 $ 1,062 Investment income and other revenue 17 16 16 Total revenue 1,155 1,333 1,078 Expenses: Medical care costs 8 16 73 General and administrative expenses 1,007 1,082 899 Depreciation and amortization 69 93 95 Restructuring and separation costs 35 153 — Impairment losses — 39 — Total operating expenses 1,119 1,383 1,067 Gain on sale of subsidiary 37 — — Operating income (loss) 73 (50 ) 11 Interest expense 114 117 101 Other expense (income) 17 (61 ) — Loss before income tax (benefit) expense and equity in net earnings (losses) of subsidiaries (58 ) (106 ) (90 ) Income tax (benefit) expense (14 ) 8 (24 ) Net loss before equity in net earnings (losses) of subsidiaries (44 ) (114 ) (66 ) Equity in net earnings (losses) of subsidiaries 751 (398 ) 118 Net income (loss) $ 707 $ (512 ) $ 52 CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Year Ended December 31, 2018 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 1,155 $ 3 $ 18,884 $ (1,152 ) $ 18,890 Expenses: Medical care costs 8 — 15,129 — 15,137 Cost of service revenue — — 364 — 364 General and administrative expenses 1,007 4 1,474 (1,152 ) 1,333 Premium tax expenses — — 417 — 417 Health insurer fees — — 348 — 348 Depreciation and amortization 69 — 30 — 99 Restructuring and separation costs 35 — 11 — 46 Total operating expenses 1,119 4 17,773 (1,152 ) 17,744 Gain (loss) on sales of subsidiaries 37 (52 ) — — (15 ) Operating income (loss) 73 (53 ) 1,111 — 1,131 Interest expense 114 — 1 — 115 Other expense 17 — — — 17 (Loss) income before income tax (benefit) expense (58 ) (53 ) 1,110 — 999 Income tax (benefit) expense (14 ) (11 ) 317 — 292 Net (loss) income before equity in net earnings (losses) of subsidiaries (44 ) (42 ) 793 — 707 Equity in net earnings (losses) of subsidiaries 751 (5 ) — (746 ) — Net income (loss) $ 707 $ (47 ) $ 793 $ (746 ) $ 707 Year Ended December 31, 2017 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 1,333 $ 2 $ 19,904 $ (1,356 ) $ 19,883 Expenses: Medical care costs 16 — 17,058 (1 ) 17,073 Cost of service revenue — — 492 — 492 General and administrative expenses 1,082 2 1,865 (1,355 ) 1,594 Premium tax expenses — — 438 — 438 Depreciation and amortization 93 — 44 — 137 Restructuring and separation costs 153 — 81 — 234 Impairment losses 39 — 431 — 470 Total operating expenses 1,383 2 20,409 (1,356 ) 20,438 Operating loss (50 ) — (505 ) — (555 ) Total other expenses, net 56 — 1 — 57 Loss before income taxes (106 ) — (506 ) — (612 ) Income tax expense (benefit) 8 — (108 ) — (100 ) Net loss before equity in net (losses) earnings of subsidiaries (114 ) — (398 ) — (512 ) Equity in net (losses) earnings of subsidiaries (398 ) (164 ) 8 554 — Net loss $ (512 ) $ (164 ) $ (390 ) $ 554 $ (512 ) Year Ended December 31, 2016 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 1,078 $ — $ 17,786 $ (1,082 ) $ 17,782 Expenses: Medical care costs 73 — 14,702 (1 ) 14,774 Cost of service revenue — — 485 — 485 General and administrative expenses 899 2 1,573 (1,081 ) 1,393 Premium tax expenses — — 468 — 468 Health insurer fees — — 217 — 217 Depreciation and amortization 95 — 44 — 139 Total operating expenses 1,067 2 17,489 (1,082 ) 17,476 Operating income (loss) 11 (2 ) 297 — 306 Total other expenses, net 101 — — — 101 (Loss) income before income taxes (90 ) (2 ) 297 — 205 Income tax (benefit) expense (24 ) (1 ) 178 — 153 Net (loss) income before equity in earnings of subsidiaries (66 ) (1 ) 119 — 52 Equity in net earnings of subsidiaries 118 2 — (120 ) — Net income $ 52 $ 1 $ 119 $ (120 ) $ 52 |
Condensed Consolidating Statements of Comprehensive Income (Loss) | CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31, 2018 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Net income (loss) $ 707 $ (47 ) $ 793 $ (746 ) $ 707 Other comprehensive loss, net of tax (2 ) — (2 ) 2 (2 ) Comprehensive income (loss) $ 705 $ (47 ) $ 791 $ (744 ) $ 705 Year Ended December 31, 2017 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Net loss $ (512 ) $ (164 ) $ (390 ) $ 554 $ (512 ) Other comprehensive loss, net of tax (3 ) — (2 ) 2 (3 ) Comprehensive loss $ (515 ) $ (164 ) $ (392 ) $ 556 $ (515 ) Year Ended December 31, 2016 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Net income $ 52 $ 1 $ 119 $ (120 ) $ 52 Other comprehensive income, net of tax 2 — 1 (1 ) 2 Comprehensive income $ 54 $ 1 $ 120 $ (121 ) $ 54 |
Condensed Consolidating Balance Sheets | Condensed Balance Sheets December 31, 2018 2017 (In millions, except share data) ASSETS Current assets: Cash and cash equivalents $ 70 $ 504 Investments 100 192 Restricted investments — 169 Receivables 2 2 Due from affiliates 90 148 Prepaid expenses and other current assets 47 103 Derivative asset 476 522 Total current assets 785 1,640 Property, equipment, and capitalized software, net 176 223 Goodwill and intangible assets, net 13 15 Investments in subsidiaries 2,768 2,306 Deferred income taxes 39 17 Advances to related parties and other assets 40 32 $ 3,821 $ 4,233 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Medical claims and benefits payable $ 4 $ 3 Accounts payable and accrued liabilities 223 178 Current portion of long-term debt 241 653 Derivative liability 476 522 Total current liabilities 944 1,356 Long-term debt 1,020 1,318 Lease financing obligations 197 198 Other long-term liabilities 13 24 Total liabilities 2,174 2,896 Stockholders’ equity: Common stock, $0.001 par value; 150 million shares authorized; outstanding: 62 million shares at December 31, 2018 and 60 million shares at December 31, 2017 — — Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding — — Additional paid-in capital 643 1,044 Accumulated other comprehensive loss (8 ) (5 ) Retained earnings 1,012 298 Total stockholders’ equity 1,647 1,337 $ 3,821 $ 4,233 CONDENSED CONSOLIDATING BALANCE SHEETS December 31, 2018 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) ASSETS Current assets: Cash and cash equivalents $ 70 $ 2 $ 2,754 $ — $ 2,826 Investments 100 — 1,581 — 1,681 Receivables 2 — 1,328 — 1,330 Due from (to) affiliates 90 7 (97 ) — — Prepaid expenses and other current assets 47 29 73 — 149 Derivative asset 476 — — — 476 Total current assets 785 38 5,639 — 6,462 Property, equipment, and capitalized software, net 176 — 65 — 241 Goodwill and intangible assets, net 13 — 177 — 190 Restricted investments — — 120 — 120 Investment in subsidiaries, net 2,768 (5 ) — (2,763 ) — Deferred income taxes 39 — 78 — 117 Other assets 40 — 5 (21 ) 24 $ 3,821 $ 33 $ 6,084 $ (2,784 ) $ 7,154 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Medical claims and benefits payable $ 4 $ — $ 1,957 $ — $ 1,961 Amounts due government agencies — — 967 — 967 Accounts payable and accrued liabilities 223 — 167 — 390 Deferred revenue — — 211 — 211 Current portion of long-term debt 241 — — — 241 Derivative liability 476 — — — 476 Total current liabilities 944 — 3,302 — 4,246 Long-term debt and lease financing obligations 1,217 — 20 (20 ) 1,217 Other long-term liabilities 13 — 32 (1 ) 44 Total liabilities 2,174 — 3,354 (21 ) 5,507 Total stockholders’ equity 1,647 33 2,730 (2,763 ) 1,647 $ 3,821 $ 33 $ 6,084 $ (2,784 ) $ 7,154 CONDENSED CONSOLIDATING BALANCE SHEETS December 31, 2017 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) ASSETS Current assets: Cash and cash equivalents $ 504 $ — $ 2,682 $ — $ 3,186 Investments 192 — 2,332 — 2,524 Restricted investments 169 — — — 169 Receivables 2 — 869 — 871 Due from (to) affiliates 148 2 (150 ) — — Prepaid expenses and other current assets 103 2 150 (16 ) 239 Derivative asset 522 — — — 522 Total current assets 1,640 4 5,883 (16 ) 7,511 Property, equipment, and capitalized software, net 223 — 119 — 342 Goodwill and intangible assets, net 15 — 240 — 255 Restricted investments — — 119 — 119 Investment in subsidiaries, net 2,306 75 — (2,381 ) — Deferred income taxes 17 — 101 (15 ) 103 Other assets 32 — 110 (1 ) 141 $ 4,233 $ 79 $ 6,572 $ (2,413 ) $ 8,471 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Medical claims and benefits payable $ 3 $ — $ 2,189 $ — $ 2,192 Amounts due government agencies — — 1,542 — 1,542 Accounts payable and accrued liabilities 178 1 188 (1 ) 366 Deferred revenue — — 282 — 282 Current portion of long-term debt 653 — 16 (16 ) 653 Derivative liability 522 — — — 522 Total current liabilities 1,356 1 4,217 (17 ) 5,557 Long-term debt and lease financing obligations 1,516 — — — 1,516 Deferred income taxes — — 15 (15 ) — Other long-term liabilities 24 — 37 — 61 Total liabilities 2,896 1 4,269 (32 ) 7,134 Total stockholders’ equity 1,337 78 2,303 (2,381 ) 1,337 $ 4,233 $ 79 $ 6,572 $ (2,413 ) $ 8,471 |
Condensed Consolidating Statements of Cash Flows | Condensed Statements of Cash Flows Year Ended December 31, 2018 2017 2016 (In millions) Operating activities: Net cash provided by operating activities $ 118 $ 166 $ 55 Investing activities: Capital contributions to subsidiaries (145 ) (370 ) (386 ) Dividends received from subsidiaries 298 286 101 Purchases of investments (136 ) (331 ) (115 ) Proceeds from sales and maturities of investments 388 156 188 Purchases of property, equipment and capitalized software (22 ) (67 ) (125 ) Net cash received from sale of subsidiaries 242 — — Change in amounts due to/from affiliates 6 (49 ) (18 ) Other, net — — 6 Net cash provided by (used in) investing activities 631 (375 ) (349 ) Financing activities: Repayment of credit facility (300 ) — — Repayment of principal amount of 1.125% Convertible Notes (298 ) — — Cash paid for partial settlement of 1.125% Conversion Option (623 ) — — Cash received for partial settlement of 1.125% Call Option 623 — — Cash paid for partial termination of 1.125% Warrants (549 ) — — Repayment of principal amount of 1.625% Convertible Notes (64 ) — — Proceeds from senior notes offerings, net of issuance costs — 325 — Proceeds from borrowings under credit facility — 300 — Other, net 19 11 20 Net cash (used in) provided by financing activities (1,192 ) 636 20 Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents (443 ) 427 (274 ) Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 513 86 360 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 70 $ 513 $ 86 See accompanying notes. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Year Ended December 31, 2018 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by (used in) operating activities $ 118 (2 ) (430 ) — $ (314 ) Investing activities: Purchases of investments (136 ) — (1,308 ) — (1,444 ) Proceeds from sales and maturities of investments 388 — 2,057 — 2,445 Purchases of property, equipment and capitalized software (22 ) — (8 ) — (30 ) Net cash received from sales of subsidiaries 242 — (52 ) — 190 Capital contributions to subsidiaries (145 ) — 145 — — Dividends received from subsidiaries 298 — (298 ) — — Change in amounts due to/from affiliates 6 4 (10 ) — — Other, net — — (18 ) — (18 ) Net cash provided by investing activities 631 4 508 — 1,143 Financing activities: Repayment of credit facility (300 ) — — — (300 ) Repayment of principal amount of 1.125% Convertible Notes (298 ) — — — (298 ) Cash paid for partial settlement of 1.125% Conversion Option (623 ) — — — (623 ) Cash received for partial settlement of 1.125% Call Option 623 — — — 623 Cash paid for partial termination of 1.125% Warrants (549 ) — — — (549 ) Repayment of principal amount of 1.625% Convertible Notes (64 ) — — — (64 ) Other, net 19 — (1 ) — 18 Net cash used in financing activities (1,192 ) — (1 ) — (1,193 ) Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents (443 ) 2 77 — (364 ) Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 513 — 2,777 — 3,290 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 70 $ 2 $ 2,854 $ — $ 2,926 Year Ended December 31, 2017 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 166 — 638 — $ 804 Investing activities: Purchases of investments (331 ) — (2,366 ) — (2,697 ) Proceeds from sales and maturities of investments 156 — 1,603 — 1,759 Purchases of property, equipment and capitalized software (67 ) — (19 ) — (86 ) Capital contributions to subsidiaries (370 ) 2 368 — — Dividends received from subsidiaries 286 — (286 ) — — Change in amounts due to/from affiliates (49 ) (2 ) 51 — — Other, net — — (38 ) — (38 ) Net cash used in investing activities (375 ) — (687 ) — (1,062 ) Financing activities: Proceeds from senior notes offerings, net of issuance costs 325 — — — 325 Proceeds from borrowings under credit facility 300 — — — 300 Other, net 11 — — — 11 Net cash provided by financing activities 636 — — — 636 Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents 427 — (49 ) — 378 Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 86 — 2,826 — 2,912 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 513 $ — $ 2,777 $ — $ 3,290 Year Ended December 31, 2016 Parent Issuer Other Guarantor Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by (used in) operating activities $ 55 (1 ) 619 — $ 673 Investing activities: Purchases of investments (115 ) — (1,814 ) — (1,929 ) Proceeds from sales and maturities of investments 188 — 1,778 — 1,966 Purchases of property, equipment and capitalized software (125 ) — (51 ) — (176 ) Net cash paid in business combinations — — (48 ) — (48 ) Capital contributions to subsidiaries (386 ) 7 379 — — Dividends received from subsidiaries 101 — (101 ) — — Change in amounts due to/from affiliates (18 ) (6 ) 24 — — Other, net 6 — (25 ) — (19 ) Net cash (used in) provided by investing activities (349 ) 1 142 — (206 ) Financing activities: Other, net 20 — (1 ) — 19 Net cash provided by (used in) financing activities 20 — (1 ) — 19 Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents (274 ) — 760 — 486 Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 360 — 2,066 — 2,426 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 86 $ — $ 2,826 $ — $ 2,912 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) $ in Millions | Oct. 19, 2018USD ($) | Dec. 31, 2018USD ($)memberStatemedical_member | Sep. 30, 2018USD ($)member | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($)memberStatemedical_member | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Basis Of Presentation [Line Items] | ||||||||
Loss on sales of subsidiaries, net of gain | $ (52) | $ 37 | $ 0 | $ 0 | $ (15) | $ 0 | $ 0 | |
Health Plans | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of States in which company operates (in state) | State | 14 | 14 | ||||||
Number of members eligible for the health care programs | member | 3,800,000 | 3,800,000 | ||||||
Minimum contract terms | 3 years | |||||||
Maximum contract terms | 5 years | |||||||
Mississippi | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Expected number of members | member | 26,000 | 26,000 | ||||||
New Mexico | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of members served, approximately (in member) | member | 196,000 | 196,000 | ||||||
Puerto Rico | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of members served, approximately (in member) | member | 252,000 | 320,000 | 252,000 | |||||
Medical care costs | Health Plans | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Premium revenue | $ 17,612 | 18,854 | 16,445 | |||||
Medical care costs | New Mexico | Health Plans | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Premium revenue | 1,356 | 1,368 | 1,305 | |||||
Medical care costs | Puerto Rico | Health Plans | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Premium revenue | 696 | 732 | 726 | |||||
Medical care costs | Florida | Health Plans | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Premium revenue | $ 1,790 | 2,568 | 1,938 | |||||
Medical care costs | Miami Dade and Monroe Counties | Health Plans | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of members served, approximately (in member) | medical_member | 98,000 | 98,000 | ||||||
Premium revenue | $ 462 | |||||||
Medical care costs | Washington | Health Plans | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Premium revenue | 2,361 | $ 2,608 | $ 2,222 | |||||
Molina Medicaid Solutions | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Net cash selling price of equity interests | $ 233 | 233 | ||||||
Loss on sales of subsidiaries, net of gain | 37 | |||||||
Gain (loss) on disposition of business, net of tax | $ 28 | |||||||
Pathways Health and Community Support LLC | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Loss on sales of subsidiaries, net of gain | $ 52 | |||||||
Gain (loss) on disposition of business, net of tax | $ (32) | |||||||
Medicaid | Washington | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of members served, approximately (in member) | member | 751,000 | 751,000 | ||||||
Medicaid | Medical care costs | New Mexico | Health Plans | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Premium revenue | $ 1,181 | |||||||
Medicaid | Medical care costs | Florida | Health Plans | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of members served, approximately (in member) | member | 272,000 | 272,000 | ||||||
Premium revenue | $ 1,479 | |||||||
Medicaid | Medical care costs | Washington | Health Plans | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Premium revenue | $ 2,035 |
Significant Accounting Polici_4
Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 2,826 | $ 3,186 | $ 2,819 | |
Restricted cash and cash equivalents, non-current | 100 | 95 | 93 | |
Restricted cash and cash equivalents, current | 0 | 9 | 0 | |
Total cash, cash equivalents, and restricted cash and cash equivalents presented in the consolidated statements of cash flows | $ 2,926 | $ 3,290 | $ 2,912 | $ 2,426 |
Significant Accounting Polici_5
Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||||||
Final maturities of investments | 10 years | ||||||
Average maturity of investments | 3 years | ||||||
Amounts due government agencies | $ 967 | $ 967 | $ 1,542 | ||||
Premium revenue | 17,612 | 18,854 | $ 16,445 | ||||
Prepaid reinsurance premiums | 16 | 16 | 20 | 30 | |||
Reinsurance recoveries | 33 | 24 | 65 | ||||
Reinsurance recoverable for unpaid claims adjustments | 31 | 31 | 16 | 61 | |||
Marketplace risk adjustment payable | (466) | (466) | (917) | ||||
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | 2,926 | 2,926 | 3,290 | 2,912 | $ 2,426 | ||
Net cash provided by (used in) investing activities | 1,143 | (1,062) | (206) | ||||
Medicaid Expansion | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Amounts due government agencies | 87 | 87 | 96 | ||||
Medical Premium Liability Due to Agency | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Medical premium liability based on medical costs threshold | 103 | $ 103 | 135 | ||||
Minimum | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Useful life | 5 years | ||||||
Minimum | California, Illinois, New Mexico, Ohio, South Carolina, Texas, Washington, and Wisconsin | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Percentage of additional incremental revenue earned | 1.00% | ||||||
Maximum | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Useful life | 15 years | ||||||
Maximum | California, Illinois, New Mexico, Ohio, South Carolina, Texas, Washington, and Wisconsin | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Percentage of additional incremental revenue earned | 3.00% | ||||||
CMS Subsidies | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Disposal group, operating expense | $ 81 | ||||||
California Department of Health Care Services | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Premium revenue | $ (24) | $ 57 | |||||
Forecast | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Finance lease, liability | $ 230 | ||||||
Forecast | Minimum | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Operating lease, right-of-use asset | 80 | ||||||
Operating lease, liability | 90 | ||||||
Finance lease, right-of-use asset | 230 | ||||||
Forecast | Minimum | Property, Plant and Equipment | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Adoption of ASU | 75 | ||||||
Forecast | Minimum | Lease Financing Obligations | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Adoption of ASU | 195 | ||||||
Forecast | Minimum | Retained Earnings | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Adoption of ASU | 80 | ||||||
Forecast | Maximum | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Operating lease, right-of-use asset | 90 | ||||||
Operating lease, liability | 100 | ||||||
Finance lease, right-of-use asset | 240 | ||||||
Finance lease, liability | 240 | ||||||
Forecast | Maximum | Property, Plant and Equipment | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Adoption of ASU | 95 | ||||||
Forecast | Maximum | Lease Financing Obligations | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Adoption of ASU | 205 | ||||||
Forecast | Maximum | Retained Earnings | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Adoption of ASU | $ 100 | ||||||
Accounting Standards Update 2016-18 | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | 104 | 93 | |||||
Net cash provided by (used in) investing activities | $ (104) | $ (93) |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Premium Revenue (Details) - Health Plans - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue percentage | 100.00% | 100.00% | 100.00% |
Medical care costs | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue | $ 17,612 | $ 18,854 | $ 16,445 |
California | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue percentage | 12.20% | 14.30% | 14.40% |
California | Medical care costs | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue | $ 2,150 | $ 2,701 | $ 2,378 |
Florida | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue percentage | 10.20% | 13.60% | 11.80% |
Florida | Medical care costs | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue | $ 1,790 | $ 2,568 | $ 1,938 |
Illinois | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue percentage | 4.50% | 3.10% | 3.70% |
Illinois | Medical care costs | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue | $ 793 | $ 593 | $ 603 |
Michigan | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue percentage | 9.10% | 8.50% | 9.30% |
Michigan | Medical care costs | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue | $ 1,601 | $ 1,596 | $ 1,527 |
New Mexico | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue percentage | 7.70% | 7.30% | 7.90% |
New Mexico | Medical care costs | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue | $ 1,356 | $ 1,368 | $ 1,305 |
Ohio | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue percentage | 13.60% | 11.80% | 12.00% |
Ohio | Medical care costs | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue | $ 2,388 | $ 2,216 | $ 1,967 |
Puerto Rico | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue percentage | 3.90% | 3.90% | 4.40% |
Puerto Rico | Medical care costs | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue | $ 696 | $ 732 | $ 726 |
South Carolina | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue percentage | 2.80% | 2.40% | 2.30% |
South Carolina | Medical care costs | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue | $ 495 | $ 445 | $ 378 |
Texas | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue percentage | 18.40% | 14.90% | 15.00% |
Texas | Medical care costs | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue | $ 3,244 | $ 2,813 | $ 2,461 |
Washington | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue percentage | 13.40% | 13.80% | 13.50% |
Washington | Medical care costs | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue | $ 2,361 | $ 2,608 | $ 2,222 |
Other | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue percentage | 4.20% | 6.40% | 5.70% |
Other | Medical care costs | |||
Schedule of Premium Revenue by Health Plan Type [Line Items] | |||
Premium revenue | $ 738 | $ 1,214 | $ 940 |
Significant Accounting Polici_7
Significant Accounting Policies - Quality Incentive Premium Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Maximum available quality incentive premium - current period | $ 182 | $ 150 | $ 147 |
Amount of quality incentive premium revenue recognized in current period - Earned current period | 133 | 97 | 104 |
Amount of quality incentive premium revenue recognized in current period - Earned prior periods | 31 | 10 | 47 |
Total quality incentive premium revenue recognized | $ 164 | $ 107 | $ 151 |
Quality incentive premium revenue recognized as a percentage of total premium revenue | 0.90% | 0.60% | 0.90% |
Significant Accounting Polici_8
Significant Accounting Policies - Due to Government Agencies (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Medicaid program: | ||
Medical cost floors and corridors | $ 103 | $ 135 |
Other amounts due to states | 81 | 71 |
Marketplace program: | ||
Risk adjustment | 466 | 917 |
Cost sharing reduction | 183 | 275 |
Other | 134 | 144 |
Amounts due government agencies | $ 967 | $ 1,542 |
Significant Accounting Polici_9
Significant Accounting Policies - Consolidated Medical Care Costs (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Medical Care Costs | |||
Fee-for-service | $ 11,278,000,000 | $ 12,682,000,000 | $ 10,993,000,000 |
Pharmacy | 2,138,000,000 | 2,563,000,000 | 2,213,000,000 |
Capitation | 1,184,000,000 | 1,360,000,000 | 1,218,000,000 |
Other | 537,000,000 | 468,000,000 | 350,000,000 |
Total | 15,137,000,000 | 17,073,000,000 | 14,774,000,000 |
Medical Care Costs, PMPM | |||
Fee-for-service (per member per month) | 232.15 | 229.63 | 217.84 |
Pharmacy (per member per month) | 44.01 | 46.40 | 43.84 |
Capitation (per member per month) | 24.38 | 24.63 | 24.13 |
Other (per member per month) | 11.05 | 8.48 | 6.94 |
Total (per member per month) | $ 311.59 | $ 309.14 | $ 292.75 |
Medical Care Costs, Percentage | |||
Percentage of total in Fee for service | 74.50% | 74.30% | 74.40% |
Percentage of total in pharmacy | 14.10% | 15.00% | 15.00% |
Percentage of total in capitation | 7.80% | 8.00% | 8.20% |
Percentage of total in other | 3.60% | 2.70% | 2.40% |
Percentage of total | 100.00% | 100.00% | 100.00% |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | ||||||||||||
Net income (loss) | $ 201 | $ 197 | $ 202 | $ 107 | $ (262) | $ (97) | $ (230) | $ 77 | $ 707 | $ (512) | $ 52 | |
Denominator: | ||||||||||||
Shares outstanding at the beginning of the period (in shares) | 59.3 | 59.3 | 55.8 | 55.1 | ||||||||
Weighted-average number of shares issued: | ||||||||||||
Exchange of 1.625% Convertible Notes (in shares) | 1.4 | 0.1 | 0 | |||||||||
Conversion of 1.625% Convertible Notes (in shares) | 0.2 | 0 | 0 | |||||||||
Stock-based compensation (in shares) | 0.2 | 0.5 | 0.3 | |||||||||
Denominator for basic net income (loss) per share (in shares) | 61.1 | 56.4 | 55.4 | |||||||||
Effect of dilutive securities: | ||||||||||||
1.125% Warrants (in shares) | 4.8 | 0 | 0.5 | |||||||||
1.625% Convertible Notes (in shares) | 0.4 | 0 | 0 | |||||||||
Share-based compensation (in shares) | 0.3 | 0 | 0.3 | |||||||||
Denominator for diluted net (loss) income per share (in shares) | 66.6 | 56.4 | 56.2 | |||||||||
Net income (loss) per share: | ||||||||||||
Basic (in dollars per share) | $ 3.24 | $ 3.22 | $ 3.29 | $ 1.79 | $ (4.59) | $ (1.70) | $ (4.10) | $ 1.38 | $ 11.57 | $ (9.07) | $ 0.93 | |
Diluted (in dollars per share) | $ 3.01 | $ 2.90 | $ 3.02 | $ 1.64 | $ (4.59) | $ (1.70) | $ (4.10) | $ 1.37 | $ 10.61 | $ (9.07) | $ 0.92 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||||||
Stock-based compensation (in shares) | 0 | 0.3 | 0 | |||||||||
1.125% Warrants | ||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||||||
Potentially dilutive common shares excluded from calculations (in shares) | 0 | 1.9 | 0 | |||||||||
1.625% Notes | ||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||||||
Potentially dilutive common shares excluded from calculations (in shares) | 0 | 0.4 | 0 | |||||||||
Stated interest rate | 1.625% | 1.625% | ||||||||||
1.125% Warrants | ||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||||||
Stated interest rate | 1.125% | 1.125% |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | Dec. 31, 2018 |
1.125% Call Option | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fixed interest rate on derivative | 1.125% |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments on a Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair value of assets measured on recurring basis | ||
Total assets | $ 2,157 | $ 3,215 |
Total liabilities | 476 | 522 |
Corporate debt securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 101 | |
U.S. Treasury notes | ||
Fair value of assets measured on recurring basis | ||
Total assets | 68 | |
Subtotal - current restricted investments | ||
Fair value of assets measured on recurring basis | ||
Total assets | 169 | |
Corporate debt securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 1,123 | 1,588 |
U.S. Treasury notes | ||
Fair value of assets measured on recurring basis | ||
Total assets | 181 | 388 |
Government-sponsored enterprise securities (GSEs) | ||
Fair value of assets measured on recurring basis | ||
Total assets | 163 | 253 |
Municipal securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 114 | 141 |
Asset-backed securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 82 | 117 |
Certificates of deposit | ||
Fair value of assets measured on recurring basis | ||
Total assets | 14 | 37 |
Other | ||
Fair value of assets measured on recurring basis | ||
Total assets | 4 | |
Subtotal - current investments | ||
Fair value of assets measured on recurring basis | ||
Total assets | 1,681 | 2,524 |
1.125% Call Option derivative asset | ||
Fair value of assets measured on recurring basis | ||
Total assets | 476 | 522 |
Level 1 | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Total liabilities | 0 | 0 |
Level 1 | Corporate debt securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | |
Level 1 | U.S. Treasury notes | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | |
Level 1 | Subtotal - current restricted investments | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | |
Level 1 | Corporate debt securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 1 | U.S. Treasury notes | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 1 | Government-sponsored enterprise securities (GSEs) | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 1 | Municipal securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 1 | Asset-backed securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 1 | Certificates of deposit | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 1 | Other | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | |
Level 1 | Subtotal - current investments | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 1 | 1.125% Call Option derivative asset | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 1 | 1.125% Conversion Option | ||
Fair value of assets measured on recurring basis | ||
1.125% Conversion Option derivative liability | 0 | 0 |
Level 2 | ||
Fair value of assets measured on recurring basis | ||
Total assets | 1,681 | 2,693 |
Total liabilities | 0 | 0 |
Level 2 | Corporate debt securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 101 | |
Level 2 | U.S. Treasury notes | ||
Fair value of assets measured on recurring basis | ||
Total assets | 68 | |
Level 2 | Subtotal - current restricted investments | ||
Fair value of assets measured on recurring basis | ||
Total assets | 169 | |
Level 2 | Corporate debt securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 1,123 | 1,588 |
Level 2 | U.S. Treasury notes | ||
Fair value of assets measured on recurring basis | ||
Total assets | 181 | 388 |
Level 2 | Government-sponsored enterprise securities (GSEs) | ||
Fair value of assets measured on recurring basis | ||
Total assets | 163 | 253 |
Level 2 | Municipal securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 114 | 141 |
Level 2 | Asset-backed securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 82 | 117 |
Level 2 | Certificates of deposit | ||
Fair value of assets measured on recurring basis | ||
Total assets | 14 | 37 |
Level 2 | Other | ||
Fair value of assets measured on recurring basis | ||
Total assets | 4 | |
Level 2 | Subtotal - current investments | ||
Fair value of assets measured on recurring basis | ||
Total assets | 1,681 | 2,524 |
Level 2 | 1.125% Call Option derivative asset | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 2 | 1.125% Conversion Option | ||
Fair value of assets measured on recurring basis | ||
1.125% Conversion Option derivative liability | 0 | 0 |
Level 3 | ||
Fair value of assets measured on recurring basis | ||
Total assets | 476 | 522 |
Total liabilities | 476 | 522 |
Level 3 | Corporate debt securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | |
Level 3 | U.S. Treasury notes | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | |
Level 3 | Subtotal - current restricted investments | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | |
Level 3 | Corporate debt securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 3 | U.S. Treasury notes | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 3 | Government-sponsored enterprise securities (GSEs) | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 3 | Municipal securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 3 | Asset-backed securities | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 3 | Certificates of deposit | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 3 | Other | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | |
Level 3 | Subtotal - current investments | ||
Fair value of assets measured on recurring basis | ||
Total assets | 0 | 0 |
Level 3 | 1.125% Call Option derivative asset | ||
Fair value of assets measured on recurring basis | ||
Total assets | 476 | 522 |
Level 3 | 1.125% Conversion Option | ||
Fair value of assets measured on recurring basis | ||
1.125% Conversion Option derivative liability | $ 476 | $ 522 |
Fair Value Measurements - Long-
Fair Value Measurements - Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 06, 2017 |
Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated fair values of long-term debt | $ 1,260 | $ 1,970 | |
Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated fair values of long-term debt | $ 1,707 | 2,631 | |
5.375% Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Percentage of contractual interest rate | 5.375% | ||
4.875% Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Percentage of contractual interest rate | 4.875% | ||
1.125% Convertible Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Percentage of contractual interest rate | 1.125% | ||
1.625% Convertible Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Percentage of contractual interest rate | 1.625% | ||
Senior Notes | 5.375% Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Percentage of contractual interest rate | 5.375% | ||
Senior Notes | 5.375% Notes | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated fair values of long-term debt | $ 694 | 692 | |
Senior Notes | 5.375% Notes | Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated fair values of long-term debt | $ 674 | 730 | |
Senior Notes | 4.875% Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Percentage of contractual interest rate | 4.875% | 4.875% | |
Senior Notes | 4.875% Notes | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated fair values of long-term debt | $ 326 | 325 | |
Senior Notes | 4.875% Notes | Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated fair values of long-term debt | $ 301 | 329 | |
Convertible Debt | 1.125% Convertible Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Percentage of contractual interest rate | 1.125% | ||
Convertible Debt | 1.125% Convertible Notes | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated fair values of long-term debt | $ 240 | 496 | |
Convertible Debt | 1.125% Convertible Notes | Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated fair values of long-term debt | $ 732 | 1,052 | |
Convertible Debt | 1.625% Convertible Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Percentage of contractual interest rate | 1.625% | ||
Convertible Debt | 1.625% Convertible Notes | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated fair values of long-term debt | $ 0 | 157 | |
Convertible Debt | 1.625% Convertible Notes | Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated fair values of long-term debt | 0 | 220 | |
Credit Facility | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated fair values of long-term debt | 0 | 300 | |
Credit Facility | Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated fair values of long-term debt | 0 | 300 | |
Current liabilities | 1.125% Conversion Option | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative liability | $ 476 | $ 522 |
Investments - Schedule of Inves
Investments - Schedule of Investments (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Investments | ||
Amortized Cost | $ 1,692 | $ 2,700 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | 11 | 8 |
Estimated Fair Value | 1,681 | 2,693 |
U.S. Treasury notes | ||
Investments | ||
Amortized Cost | 68 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Estimated Fair Value | 68 | |
Corporate debt securities | ||
Investments | ||
Amortized Cost | 101 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Estimated Fair Value | 101 | |
Subtotal - current restricted investments | ||
Investments | ||
Amortized Cost | 169 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Estimated Fair Value | 169 | |
Corporate debt securities | ||
Investments | ||
Amortized Cost | 1,131 | 1,591 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | 8 | 4 |
Estimated Fair Value | 1,123 | 1,588 |
U.S. Treasury notes | ||
Investments | ||
Amortized Cost | 181 | 389 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 1 |
Estimated Fair Value | 181 | 388 |
GSEs | ||
Investments | ||
Amortized Cost | 164 | 255 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 1 | 2 |
Estimated Fair Value | 163 | 253 |
Municipal securities | ||
Investments | ||
Amortized Cost | 115 | 142 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 1 | 1 |
Estimated Fair Value | 114 | 141 |
Asset-backed securities | ||
Investments | ||
Amortized Cost | 83 | 117 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 1 | 0 |
Estimated Fair Value | 82 | 117 |
Certificates of deposit | ||
Investments | ||
Amortized Cost | 14 | 37 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 14 | 37 |
Other | ||
Investments | ||
Amortized Cost | 4 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Estimated Fair Value | $ 4 | |
Subtotal - current investments | ||
Investments | ||
Amortized Cost | 2,531 | |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | 8 | |
Estimated Fair Value | $ 2,524 |
Investments - Contractual Matur
Investments - Contractual Maturities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Amortized Cost | ||
Due in one year or less | $ 1,000 | |
Due after one year through five years | 692 | |
Amortized Cost | 1,692 | $ 2,700 |
Estimated Fair Value | ||
Due in one year or less | 997 | |
Due after one year through five years | 684 | |
Estimated Fair Value | $ 1,681 |
Investments - Available-for-Sal
Investments - Available-for-Sale (Details) $ in Millions | Dec. 31, 2018USD ($)Security | Dec. 31, 2017USD ($)Security |
Available-for-sale investments | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 509 | $ 1,940 |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 3 | $ 5 |
Number of Positions, 12 Months or Less (in security) | Security | 285 | 719 |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 694 | $ 227 |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 8 | $ 3 |
Number of Positions, 12 Months or More (in security) | Security | 516 | 164 |
Corporate debt securities | ||
Available-for-sale investments | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 509 | $ 1,297 |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 3 | $ 3 |
Number of Positions, 12 Months or Less (in security) | Security | 285 | 561 |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 412 | $ 94 |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 5 | $ 1 |
Number of Positions, 12 Months or More (in security) | Security | 298 | 69 |
GSEs | ||
Available-for-sale investments | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 0 | $ 173 |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 0 | $ 1 |
Number of Positions, 12 Months or Less (in security) | Security | 0 | 69 |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 127 | $ 95 |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 1 | $ 1 |
Number of Positions, 12 Months or More (in security) | Security | 76 | 47 |
U.S. Treasury notes | ||
Available-for-sale investments | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 470 | |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 1 | |
Number of Positions, 12 Months or Less (in security) | Security | 89 | |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 0 | |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 0 | |
Number of Positions, 12 Months or More (in security) | Security | 0 | |
Municipal securities | ||
Available-for-sale investments | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 0 | $ 0 |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 0 | $ 0 |
Number of Positions, 12 Months or Less (in security) | Security | 0 | 0 |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 87 | $ 38 |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 1 | $ 1 |
Number of Positions, 12 Months or More (in security) | Security | 90 | 48 |
Asset-backed securities | ||
Available-for-sale investments | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 0 | |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 0 | |
Number of Positions, 12 Months or Less (in security) | Security | 0 | |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 68 | |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 1 | |
Number of Positions, 12 Months or More (in security) | Security | 52 |
Receivables (Details)
Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of accounts receivable | ||
Total receivables | $ 1,330 | $ 871 |
Premiums and other receivables | ||
Summary of accounts receivable | ||
Total receivables | 855 | 695 |
Pharmacy administrative services receivables | ||
Summary of accounts receivable | ||
Total receivables | 179 | 0 |
Pharmacy rebate receivables | ||
Summary of accounts receivable | ||
Total receivables | 155 | 154 |
Health insurer fee reimbursement receivables | ||
Summary of accounts receivable | ||
Total receivables | $ 141 | $ 22 |
Property, Equipment, and Capi_3
Property, Equipment, and Capitalized Software, Net - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life of property plant and equipment | 3 years |
Furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life of property plant and equipment | 7 years |
Software | |
Property, Plant and Equipment [Line Items] | |
Useful life of property plant and equipment | 3 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life of property plant and equipment | 5 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life of property plant and equipment | 10 years |
Building and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life of property plant and equipment | 31 years 6 months |
Building and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life of property plant and equipment | 40 years |
Property, Equipment, and Capi_4
Property, Equipment, and Capitalized Software, Net - Summary of Property, Equipment, and Capitalized Software (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of property and equipment | ||
Property and equipment, gross | $ 774 | $ 883 |
Less: accumulated amortization - capitalized software | (320) | (308) |
Less: accumulated depreciation and amortization - building and improvements, furniture and equipment | (213) | (233) |
Total accumulated depreciation and amortization | (533) | (541) |
Property, equipment, and capitalized software, net | 241 | 342 |
Capitalized software | ||
Summary of property and equipment | ||
Property and equipment, gross | 373 | 417 |
Furniture and equipment | ||
Summary of property and equipment | ||
Property and equipment, gross | 231 | 289 |
Building and improvements | ||
Summary of property and equipment | ||
Property and equipment, gross | 154 | 161 |
Land | ||
Summary of property and equipment | ||
Property and equipment, gross | $ 16 | $ 16 |
Property, Equipment, and Capi_5
Property, Equipment, and Capitalized Software, Net - Depreciation and Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Amortization of capitalized software | $ 42 | $ 64 | $ 62 |
Depreciation of property and equipment | 36 | 42 | 45 |
Amortization of intangible assets | 21 | 31 | 32 |
Subtotal | 99 | 137 | 139 |
Recorded in cost of service revenue: | 28 | 41 | 43 |
Total depreciation and amortization recognized | 127 | 178 | 182 |
Capitalized software | |||
Property, Plant and Equipment [Line Items] | |||
Recorded in cost of service revenue: | 19 | 28 | 22 |
Deferred contract costs | |||
Property, Plant and Equipment [Line Items] | |||
Recorded in cost of service revenue: | $ 9 | $ 13 | $ 21 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill impairment charges | $ 0 | $ 0 | ||
Impairment of intangible assets | 0 | $ 0 | ||
Future Amortization Expenses | ||||
Future amortization expense, 2019 | 18,000,000 | |||
Future amortization expense, 2020 | 14,000,000 | |||
Future amortization expense, 2021 | 5,000,000 | |||
Future amortization expense, 2022 | 3,000,000 | |||
Future amortization expense, 2023 | $ 3,000,000 | |||
Health Plans | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill impairment charges | $ 244,000,000 | |||
Impairment of intangible assets | $ (25,000,000) | |||
Other | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill impairment charges | $ 190,000,000 | |||
Impairment of intangible assets | $ 11,000,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Balances of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||
Historical goodwill | $ 678 | |
Accumulated impairment losses | $ (492) | (492) |
Changes in the carrying amount of goodwill | ||
Beginning balance | 186 | |
Sale of subsidiary | (43) | |
Ending balance | 143 | |
Health Plans | ||
Goodwill [Line Items] | ||
Historical goodwill | 445 | |
Accumulated impairment losses | (302) | (302) |
Changes in the carrying amount of goodwill | ||
Beginning balance | 143 | |
Sale of subsidiary | 0 | |
Ending balance | 143 | |
Other | ||
Goodwill [Line Items] | ||
Historical goodwill | 233 | |
Accumulated impairment losses | (190) | $ (190) |
Changes in the carrying amount of goodwill | ||
Beginning balance | 43 | |
Sale of subsidiary | (43) | |
Ending balance | $ 0 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Intangible Assets Balances (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Cost | $ 221 | $ 221 |
Accumulated Amortization | 174 | 152 |
Carrying Amount | 47 | 69 |
Contract rights and licenses | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Cost | 201 | 201 |
Accumulated Amortization | 162 | 141 |
Carrying Amount | 39 | 60 |
Provider network | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Cost | 20 | 20 |
Accumulated Amortization | 12 | 11 |
Carrying Amount | $ 8 | $ 9 |
Restricted Investments - Balan
Restricted Investments - Balances of Restricted Investments (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of restricted investments by health plan | ||
Restricted investments by health plan | $ 120 | $ 119 |
Health Plans | ||
Summary of restricted investments by health plan | ||
Restricted investments by health plan | 120 | 119 |
Health Plans | Florida | ||
Summary of restricted investments by health plan | ||
Restricted investments by health plan | 32 | 31 |
Health Plans | New Mexico | ||
Summary of restricted investments by health plan | ||
Restricted investments by health plan | 43 | 43 |
Health Plans | Ohio | ||
Summary of restricted investments by health plan | ||
Restricted investments by health plan | 12 | 12 |
Health Plans | Puerto Rico | ||
Summary of restricted investments by health plan | ||
Restricted investments by health plan | 10 | 10 |
Health Plans | Other | ||
Summary of restricted investments by health plan | ||
Restricted investments by health plan | $ 23 | $ 23 |
Restricted Investments - Matur
Restricted Investments - Maturities of Held-to-Maturity (Details) $ in Millions | Dec. 31, 2018USD ($) |
Contractual maturities of our held-to-maturity restricted investments | |
Amortized Cost, Due in one year or less | $ 105 |
Amortized Cost, Due one year through five years | 15 |
Amortized Cost, Total | 120 |
Estimated Fair Value, Due in one year or less | 105 |
Estimated Fair Value, Due one year through five years | 15 |
Estimated Fair Value, Total | $ 120 |
Medical Claims and Benefits P_3
Medical Claims and Benefits Payable - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Insurance Claims [Line Items] | |||
Medical claims and benefits payable | $ 107 | $ 122 | $ 225 |
Prior period claims expense (benefit) recognized | 341 | $ (36) | $ 192 |
CMS Subsidies | |||
Insurance Claims [Line Items] | |||
Disposal group, operating expense | $ 81 |
Medical Claims and Benefits P_4
Medical Claims and Benefits Payable - Medical Claims and Future Benefits (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Insurance [Abstract] | ||||
Fee-for-service claims incurred but not paid (“IBNP”) | $ 1,562 | $ 1,717 | $ 1,352 | |
Pharmacy payable | 115 | 112 | 112 | |
Capitation payable | 52 | 67 | 37 | |
Other | 232 | 296 | 428 | |
Medical claims and benefits payable | $ 1,961 | $ 2,192 | $ 1,929 | $ 1,685 |
Medical Claims and Benefits P_5
Medical Claims and Benefits Payable - Components of the Change (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Medical claims and benefits payable, beginning balance | $ 2,192 | $ 1,929 | $ 1,685 |
Components of medical care costs related to: | |||
Current period | 15,478 | 17,037 | 14,966 |
Prior periods | (341) | 36 | (192) |
Total medical care costs | 15,137 | 17,073 | 14,774 |
Change in non-risk provider payables | 13 | (106) | 58 |
Payments for medical care costs related to: | |||
Current period | 13,671 | 15,130 | 13,304 |
Prior periods | 1,710 | 1,574 | 1,284 |
Total paid | 15,381 | 16,704 | 14,588 |
Medical claims and benefits payable, ending balance | 1,961 | $ 2,192 | $ 1,929 |
CMS Subsidies | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
Disposal group, operating expense | $ 81 |
Medical Claims and Benefits P_6
Medical Claims and Benefits Payable - Incurred Claims and Allocated Adjustment Expense (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)claim | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Product Information [Line Items] | |||
Incurred Claims and Allocated Claims Adjustment Expenses | $ 15,137 | $ 17,073 | $ 14,774 |
Incurred Claims and Allocated Claims Adjustment Expenses | 47,263 | ||
Total IBNP | 1,552 | ||
Benefit Year 2016 | |||
Product Information [Line Items] | |||
Incurred Claims and Allocated Claims Adjustment Expenses | 15,057 | 15,093 | $ 15,064 |
Total IBNP | $ 18 | ||
Cumulative number of reported claims (in claim) | claim | 105,000,000 | ||
Benefit Year 2017 | |||
Product Information [Line Items] | |||
Incurred Claims and Allocated Claims Adjustment Expenses | $ 16,728 | $ 17,037 | |
Total IBNP | $ 57 | ||
Cumulative number of reported claims (in claim) | claim | 119,000,000 | ||
Benefit Year 2018 | |||
Product Information [Line Items] | |||
Incurred Claims and Allocated Claims Adjustment Expenses | $ 15,478 | ||
Total IBNP | $ 1,477 | ||
Cumulative number of reported claims (in claim) | claim | 105,000,000 |
Medical Claims and Benefits P_7
Medical Claims and Benefits Payable - Cumulative Paid Claims and Allocated Claims Adjustment Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 |
Product Information [Line Items] | |||
Claims paid | $ 45,462 | ||
Benefit Year 2016 | |||
Product Information [Line Items] | |||
Claims paid | 15,039 | $ 14,952 | $ 13,403 |
Benefit Year 2017 | |||
Product Information [Line Items] | |||
Claims paid | 16,752 | $ 15,130 | |
Benefit Year 2018 | |||
Product Information [Line Items] | |||
Claims paid | $ 13,671 |
Medical Claims and Benefits P_8
Medical Claims and Benefits Payable - Reconciliation of Claims Development (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Insurance [Abstract] | ||||
Incurred claims and allocated claims adjustment expenses | $ 47,263 | |||
Less: cumulative paid clams and allocated claims adjustment expenses | (45,462) | |||
All outstanding liabilities before 2016 | 10 | |||
Non-risk provider payables and other | 150 | |||
Medical claims and benefits payable | $ 1,961 | $ 2,192 | $ 1,929 | $ 1,685 |
Debt - Maturities (Details)
Debt - Maturities (Details) - USD ($) | Dec. 31, 2018 | Jun. 06, 2017 |
Maturities of Long-term Debt [Abstract] | ||
Net carrying amount | $ 1,282,000,000 | |
2,019 | 0 | |
2,020 | 252,000,000 | |
2,021 | 0 | |
2,022 | 700,000,000 | |
2,023 | 0 | |
Thereafter | $ 330,000,000 | |
5.375% Notes | ||
Maturities of Long-term Debt [Abstract] | ||
Percentage of contractual interest rate | 5.375% | |
4.875% Notes | ||
Maturities of Long-term Debt [Abstract] | ||
Percentage of contractual interest rate | 4.875% | |
1.125% Convertible Notes | ||
Maturities of Long-term Debt [Abstract] | ||
Percentage of contractual interest rate | 1.125% | |
Senior Notes | 5.375% Notes | ||
Maturities of Long-term Debt [Abstract] | ||
Net carrying amount | $ 700,000,000 | |
2,019 | 0 | |
2,020 | 0 | |
2,021 | 0 | |
2,022 | 700,000,000 | |
2,023 | 0 | |
Thereafter | $ 0 | |
Percentage of contractual interest rate | 5.375% | |
Senior Notes | 4.875% Notes | ||
Maturities of Long-term Debt [Abstract] | ||
Net carrying amount | $ 330,000,000 | |
2,019 | 0 | |
2,020 | 0 | |
2,021 | 0 | |
2,022 | 0 | |
2,023 | 0 | |
Thereafter | $ 330,000,000 | |
Percentage of contractual interest rate | 4.875% | 4.875% |
Convertible Debt | 1.125% Convertible Notes | ||
Maturities of Long-term Debt [Abstract] | ||
Net carrying amount | $ 252,000,000 | |
2,019 | 0 | |
2,020 | 252,000,000 | |
2,021 | 0 | |
2,022 | 0 | |
2,023 | 0 | |
Thereafter | $ 0 | |
Percentage of contractual interest rate | 1.125% |
Debt - Details of the Liability
Debt - Details of the Liability Component (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 06, 2017 |
Debt Instrument [Line Items] | |||
Lease financing obligations | $ 1 | $ 1 | |
Debt issuance costs | (1) | (4) | |
Current portion of long-term debt | 241 | 653 | |
Debt issuance costs | (10) | (12) | |
Long-term debt | 1,020 | 1,318 | |
Lease financing obligations | 197 | 198 | |
Long-term debt and capital lease obligations | $ 1,458 | 2,169 | |
1.125% Convertible Notes | |||
Debt Instrument [Line Items] | |||
Percentage of contractual interest rate | 1.125% | ||
1.625% Convertible Notes | |||
Debt Instrument [Line Items] | |||
Percentage of contractual interest rate | 1.625% | ||
5.375% Notes | |||
Debt Instrument [Line Items] | |||
Percentage of contractual interest rate | 5.375% | ||
4.875% Notes | |||
Debt Instrument [Line Items] | |||
Percentage of contractual interest rate | 4.875% | ||
Convertible Debt | 1.125% Convertible Notes | |||
Debt Instrument [Line Items] | |||
Current portion of long-term debt | $ 241 | 499 | |
Percentage of contractual interest rate | 1.125% | ||
Convertible Debt | 1.625% Convertible Notes | |||
Debt Instrument [Line Items] | |||
Current portion of long-term debt | $ 0 | 157 | |
Percentage of contractual interest rate | 1.625% | ||
Senior Notes | 5.375% Notes | |||
Debt Instrument [Line Items] | |||
Non-current portion of long-term debt | $ 700 | 700 | |
Percentage of contractual interest rate | 5.375% | ||
Senior Notes | 4.875% Notes | |||
Debt Instrument [Line Items] | |||
Non-current portion of long-term debt | $ 330 | 330 | |
Percentage of contractual interest rate | 4.875% | 4.875% | |
Credit Facility | |||
Debt Instrument [Line Items] | |||
Non-current portion of long-term debt | $ 0 | $ 300 |
Debt - Interest Cost Recognized
Debt - Interest Cost Recognized (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest cost recognized for the period relating to the: | |||
Contractual interest coupon rate | $ 6 | $ 11 | $ 11 |
Amortization of the discount | 21 | 32 | 30 |
Total interest cost recognized | $ 27 | $ 43 | $ 41 |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) - Credit Facility - USD ($) | Jan. 31, 2019 | Dec. 31, 2018 | May 31, 2018 | Jan. 31, 2017 |
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 300,000,000 | $ 500,000,000 | ||
Term of debt instrument | 5 years | |||
Current borrowing capacity | $ 493,000,000 | |||
Letter of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Amount outstanding under Letter of Credit | $ 7,000,000 | |||
Subsequent Event | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 600,000,000 | |||
Minimum threshold for advancements | $ 50,000,000 | |||
Delayed draw ticking fee | 0.375% | |||
Subsequent Event | Minimum | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Amortization payment percentage | 1.25% | |||
Subsequent Event | Maximum | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Amortization payment percentage | 2.50% |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) | Dec. 31, 2018 | Jun. 06, 2017 |
4.875% Notes | ||
Debt Instrument [Line Items] | ||
Percentage of contractual interest rate | 4.875% | |
5.375% Senior Notes due 2022 | ||
Debt Instrument [Line Items] | ||
Percentage of contractual interest rate | 5.375% | |
Senior Notes | 4.875% Notes | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 330,000,000 | |
Percentage of contractual interest rate | 4.875% | 4.875% |
Senior Notes | 5.375% Senior Notes due 2022 | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 700,000,000 | |
Percentage of contractual interest rate | 5.375% |
Debt - Convertible Notes (Detai
Debt - Convertible Notes (Details) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2018USD ($)$ / shares | Sep. 30, 2018USD ($)shares | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($)d$ / shares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | |||||||||
Loss on debt extinguishment | $ 22,000,000 | $ 14,000,000 | $ 0 | ||||||
Net carrying amount of debt | $ 1,282,000,000 | $ 1,282,000,000 | |||||||
Convertible debt, converted amount of instrument | $ 16,000,000 | $ 37,000,000 | $ 21,000,000 | ||||||
1.125% Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of contractual interest rate | 1.125% | 1.125% | |||||||
1.625% Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of contractual interest rate | 1.625% | 1.625% | |||||||
Convertible Debt | 1.125% Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument repayment of principal | $ 62,000,000 | 140,000,000 | 96,000,000 | ||||||
Repayments of debt | 202,000,000 | $ 483,000,000 | $ 228,000,000 | ||||||
Loss on debt extinguishment | $ 12,000,000 | ||||||||
Net carrying amount of debt | $ 252,000,000 | $ 252,000,000 | |||||||
Percentage of contractual interest rate | 1.125% | 1.125% | |||||||
Debt instrument conversion price per share (usd per share) | $ / shares | $ 40.77 | $ 40.77 | |||||||
Senior note effective interest rate | 6.00% | 6.00% | |||||||
Senior notes amortization period | 1 year | ||||||||
If-converted value in excess of principal on convertible debt | $ 581,000,000 | 406,000,000 | |||||||
Debt instrument, conversion ratio | 0.0245277 | ||||||||
Convertible Debt | 1.625% Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Loss on debt extinguishment | $ 10,000,000 | $ 14,000,000 | |||||||
Net carrying amount of debt | $ 64,000,000 | $ 64,000,000 | |||||||
Percentage of contractual interest rate | 1.625% | 1.625% | |||||||
Debt instrument conversion price per share (usd per share) | $ / shares | $ 58.09 | $ 58.09 | |||||||
Equity component | 12,000,000 | $ 12,000,000 | |||||||
Debt instrument, conversion ratio | 0.0172157 | ||||||||
Convertible debt, converted amount of instrument | $ 64,000,000 | $ 97,000,000 | $ 141,000,000 | ||||||
Convertible debt, shares converted in transaction (in shares) | shares | 1.8 | 2.6 | 0.6 | ||||||
Convertible Debt | Redemption period, option one | 1.125% Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt convertible threshold trading days | d | 20 | ||||||||
Debt convertible threshold consecutive trading days | d | 30 | ||||||||
Debt convertible threshold percentage of stock price trigger | 130.00% | ||||||||
Convertible Debt | Redemption period, option two | 1.125% Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt convertible threshold trading days | d | 5 | ||||||||
Debt convertible threshold consecutive trading days | d | 5 | ||||||||
Debt convertible maximum threshold percentage of stock price | 98.00% |
Debt - Lease Financing Obligati
Debt - Lease Financing Obligations and Debt Committment Letter (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)Lease_Renewal_Optionextensionproperty | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | |||
Interest expense under leases | $ | $ 17 | $ 17 | $ 17 |
Molina Center And Ohio Exchange | |||
Debt Instrument [Line Items] | |||
Annual increase in rental payment | 3.00% | ||
Number of extensions available (in extension) | extension | 6 | ||
Lease renewal terms | 5 years | ||
Property Subject to Operating Lease | 6th & Pine Development, LLC | |||
Debt Instrument [Line Items] | |||
Lease renewal terms | 5 years | ||
Number of properties | property | 2 | ||
Annual increase in rental payment | 3.40% | ||
Operating lease renewal options | Lease_Renewal_Option | 2 |
Derivatives (Details)
Derivatives (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||||||
Cash received for partial settlement of 1.125% Call Option | $ 623 | $ 0 | $ 0 | |||
Cash paid for partial termination of 1.125% Warrants | $ 549 | 0 | $ 0 | |||
Convertible debt, converted amount of instrument | $ 16 | $ 37 | $ 21 | |||
1.125% Convertible Notes | ||||||
Derivative [Line Items] | ||||||
Percentage of contractual interest rate | 1.125% | 1.125% | ||||
1.125% Call Option | ||||||
Derivative [Line Items] | ||||||
Fixed interest rate on derivative | 1.125% | 1.125% | ||||
1.125% Call Option | Current assets | ||||||
Derivative [Line Items] | ||||||
Derivative asset | $ 476 | $ 476 | 522 | |||
1.125% Conversion Option | ||||||
Derivative [Line Items] | ||||||
Cash received for partial settlement of 1.125% Call Option | $ 146 | 343 | 134 | |||
Fixed interest rate on derivative | 1.125% | 1.125% | ||||
1.125% Conversion Option | Current liabilities | ||||||
Derivative [Line Items] | ||||||
Derivative liability | $ 476 | $ 476 | $ 522 | |||
1.125% Warrants | ||||||
Derivative [Line Items] | ||||||
Cash paid for partial termination of 1.125% Warrants | $ 130 | $ 306 | $ 113 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 332 | ||
Change in tax rate, deferred tax asset, income tax expense (benefit) | $ 54 | ||
Income tax (benefit) expense | 292 | (100) | $ 153 |
Measurement period adjustment, income tax expense (benefit) | 4 | ||
Deferred tax assets | 28 | ||
Increase in deferred tax asset valuation allowance | 13 | ||
Valuation allowance | 28 | 41 | |
Impact on effective tax rate if tax benefits are recognized | 18 | $ 12 | $ 9 |
Liability for unrecognized tax benefits, potential decrease | 3 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryovers | $ 14 |
Income Taxes - Provision for in
Income Taxes - Provision for income taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal | $ 272 | $ (9) | $ 134 |
State | 18 | 3 | 3 |
Foreign | 8 | 0 | (6) |
Total current | 298 | (6) | 131 |
Deferred: | |||
Federal | (3) | (85) | 19 |
State | (3) | (9) | 2 |
Foreign | 0 | 0 | 1 |
Total deferred | (6) | (94) | 22 |
Income tax expense (benefit) | $ 292 | $ (100) | $ 153 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the U.S. Federal Statutory Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective income tax rate reconciliation to the statutory federal income tax rate | |||
Statutory federal tax (benefit) rate | 21.00% | 35.00% | 35.00% |
State income provision (benefit), net of federal | (1.20%) | (0.70%) | (1.60%) |
Nondeductible health insurer fee (“HIF”) | 7.30% | 0.00% | 37.00% |
Nondeductible compensation | 0.70% | (2.80%) | 3.10% |
Nondeductible goodwill impairment | 0.00% | (6.60%) | 0.00% |
Worthless stock deduction | (1.00%) | 0.00% | 0.00% |
Revaluation of net deferred tax assets | (0.40%) | (8.80%) | 0.00% |
Change in purchase agreement that increased tax basis in assets | (0.00%) | (0.00%) | (2.20%) |
Other | (0.40%) | 1.10% | (0.30%) |
Effective tax (benefit) rate | 29.20% | 16.40% | 74.80% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Significant components of deferred tax assets and liabilities | ||
Accrued expenses | $ 32 | $ 15 |
Reserve liabilities | 7 | 11 |
Other accrued medical costs | 12 | 16 |
Net operating losses | 16 | 27 |
Fixed assets and intangibles | 30 | 23 |
Unearned premiums | 9 | 19 |
Lease financing obligation | 30 | 30 |
Tax credit carryover | 12 | 15 |
Other | 3 | 3 |
Valuation allowance | (28) | (41) |
Total deferred income tax assets, net of valuation allowance | 123 | 118 |
Prepaid expenses | (6) | (6) |
Basis in debt | 0 | (9) |
Total deferred income tax liabilities | (6) | (15) |
Net deferred income tax asset | $ 117 | $ 103 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Unrecognized tax benefits roll forward | |||
Gross unrecognized tax benefits at beginning of period | $ (13) | $ (11) | $ (9) |
Increases in tax positions for current year | (9) | (1) | (1) |
Increases in tax positions for prior years | 0 | (4) | (1) |
Decreases in tax positions for prior years | 0 | 3 | 0 |
Lapse in statute of limitations | 2 | 0 | 0 |
Gross unrecognized tax benefits at end of period | $ (20) | $ (13) | $ (11) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of warrants issued (in shares) | 13,490,236 | ||||||||
Striking price of Warrants (USD per share) | $ 53.8475 | ||||||||
Cash paid for partial termination of 1.125% Warrants | $ 549,000,000 | $ 0 | $ 0 | ||||||
Unrecognized compensation expense | $ 35,000,000 | $ 35,000,000 | |||||||
Unrecognized compensation forfeited rate | 16.10% | ||||||||
Weighted average grant date fair value of stock options granted (usd per share) | $ 41.43 | ||||||||
Granted (in shares) | 0 | 0 | |||||||
Common stock issued during period (in shares) | 216,000 | 351,000 | 410,000 | ||||||
Separation Costs - Former Executives | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restructuring settled without cash | $ 23,000,000 | ||||||||
RSAs | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted average period of unrecognized compensation expense | 2 years 7 months | ||||||||
Accelerating vesting awards (in shares) | 133,957 | ||||||||
PSAs | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted average period of unrecognized compensation expense | 2 months | ||||||||
Accelerating vesting awards (in shares) | 153,574 | ||||||||
PSUs | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted average period of unrecognized compensation expense | 2 years | ||||||||
Accelerating vesting awards (in shares) | 139,272 | ||||||||
Stock options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized compensation expense | $ 9,000,000 | $ 9,000,000 | |||||||
Weighted average period of unrecognized compensation expense | 1 year 9 months | ||||||||
Risk free interest rate | 2.30% | ||||||||
Expected volatility rate | 38.40% | ||||||||
Dividend yield | 0.00% | ||||||||
Expected term of awards | 8 years 5 months | ||||||||
Options exercised, intrinsic value | $ 2,000,000 | $ 1,000,000 | |||||||
Employee Stock Purchase Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized (in shares) | 3,000,000 | 3,000,000 | |||||||
Dividend yield | 0.00% | ||||||||
Expected term of awards | 6 months 4 days | ||||||||
Employee purchase price as a percentage of stock price | 85.00% | ||||||||
Maximum annual contribution per employee | $ 25,000 | ||||||||
Risk-free interest rate, minimum | 0.40% | ||||||||
Risk-free interest rate, maximum | 1.90% | ||||||||
Minimum expected volatility rate inputs for fair value measurement | 31.00% | ||||||||
Maximum expected volatility rate inputs for fair value measurement | 44.00% | ||||||||
Common Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation (in shares) | 365,000 | 857,000 | |||||||
2011 Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized (in shares) | 4,500,000 | 4,500,000 | |||||||
2011 Plan | RSAs | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Maximum award vesting period | 4 years | ||||||||
2011 Plan | Stock options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Maximum award vesting period | 4 years | ||||||||
Stock option expiration period | 10 years | ||||||||
1.625% Convertible Notes | Convertible Debt | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Convertible debt, shares converted in transaction (in shares) | 1,800,000 | 2,600,000 | 600,000 | ||||||
1.125% Warrants | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stated interest rate | 1.125% | 1.125% | |||||||
Class of warrant | 6,200,000 | 6,200,000 | |||||||
Cash paid for partial termination of 1.125% Warrants | $ 130,000,000 | $ 306,000,000 | $ 113,000,000 | ||||||
Options terminated (in shares) | 1,500,000 | 3,400,000 | 2,400,000 |
Stockholders' Equity - Componen
Stockholders' Equity - Components of Share-based Compensation Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock based compensation expense | |||
Pretax Charges | $ 27 | $ 46 | $ 26 |
Net-of-Tax Amount | 26 | 40 | 22 |
RSAs, PSAs and PSUs | |||
Stock based compensation expense | |||
Pretax Charges | 17 | 39 | 20 |
Net-of-Tax Amount | 17 | 35 | 17 |
Employee stock purchase plan and stock options | |||
Stock based compensation expense | |||
Pretax Charges | 10 | 7 | 6 |
Net-of-Tax Amount | $ 9 | $ 5 | $ 5 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted and Performance Stock Activity (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Shares | |
Unvested, shares beginning of period (in shares) | 578,394 |
Granted (in shares) | 578,692 |
Vested (in shares) | (225,538) |
Forfeited (in shares) | (327,238) |
Unvested, shares end of period (in shares) | 604,310 |
Weighted Average Grant Date Fair Value | |
Unvested, weighted average grant date fair value beginning balance (USD per share) | $ / shares | $ 58.35 |
Granted (USD per share) | $ / shares | 75.38 |
Vested (USD per share) | $ / shares | 59.08 |
Forfeited (USD per share) | $ / shares | 63.69 |
Unvested, weighted average grant date fair value ending balance (USD per share) | $ / shares | $ 71.50 |
RSAs | |
Shares | |
Unvested, shares beginning of period (in shares) | 401,804 |
Granted (in shares) | 363,740 |
Vested (in shares) | (192,609) |
Forfeited (in shares) | (173,140) |
Unvested, shares end of period (in shares) | 399,795 |
PSAs | |
Shares | |
Unvested, shares beginning of period (in shares) | 84,762 |
Granted (in shares) | 0 |
Vested (in shares) | (32,929) |
Forfeited (in shares) | (48,701) |
Unvested, shares end of period (in shares) | 3,132 |
PSUs | |
Shares | |
Unvested, shares beginning of period (in shares) | 91,828 |
Granted (in shares) | 214,952 |
Vested (in shares) | 0 |
Forfeited (in shares) | (105,397) |
Unvested, shares end of period (in shares) | 201,383 |
Stockholders' Equity - Fair Val
Stockholders' Equity - Fair Value of Awards Granted and Vested (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of restricted shares granted | $ 44 | $ 36 | $ 34 |
Fair value of restricted shares vested | 18 | 47 | 22 |
RSAs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of restricted shares granted | 28 | 20 | 19 |
Fair value of restricted shares vested | 15 | 23 | 22 |
PSAs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of restricted shares granted | 0 | 0 | 15 |
Fair value of restricted shares vested | 3 | 15 | 0 |
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of restricted shares granted | 16 | 16 | 0 |
Fair value of restricted shares vested | $ 0 | $ 9 | $ 0 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2016 | |
Shares | ||
Beginning balance, outstanding (in shares) | 405,000 | |
Granted (in shares) | 0 | 0 |
Exercised (in shares) | 0 | |
Ending balance, outstanding (in shares) | 405,000 | |
Weighted Average Exercise Price | ||
Beginning balance, outstanding (usd per share) | $ 64.79 | |
Granted (usd per share) | 0 | |
Exercised (usd per share) | 0 | |
Ending balance, outstanding (usd per share) | $ 64.79 | |
Outstanding, Aggregate Intrinsic Value | $ 21 | |
Outstanding, Weighted Average Remaining Contractual term | 8 years 6 months | |
Stock options exercisable and expected to vest (in shares) | 405,000 | |
Stock options exercisable and expected to vest (usd per share) | $ 64.79 | |
Exercisable (in shares) | 155,000 | |
Exercisable (usd per share) | $ 60.69 | |
Exercisable, Aggregate Intrinsic Value | $ 9 | |
Exercisable, Weighted Average Remaining Contractual term | 8 years |
Stockholders' Equity - Stock _2
Stockholders' Equity - Stock Options by Exercise Price (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options | 405,000 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Exercisable Options | 155,000 |
$ 33.02 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options | 30,000 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 4 years 2 months |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 33.02 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Exercisable Options | 30,000 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 33.02 |
$ 67.33 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options | 375,000 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 8 years 11 months |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 67.33 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Exercisable Options | 125,000 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 67.33 |
Restructuring and Separation _3
Restructuring and Separation Costs - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | 24 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | $ 8 | $ 5 | $ 8 | $ 25 | $ 73 | $ 118 | $ 43 | $ 0 | $ 46 | $ 234 | $ 0 | |
2017 Restructuring Plan | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 37 | 234 | $ 271 | |||||||||
Other | IT Restructuring | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 9 | |||||||||||
Restructuring costs expected | $ 11 | 11 | 11 | |||||||||
Other | 2017 Restructuring Plan | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | $ 26 | $ 161 | $ 187 |
Restructuring and Separation _4
Restructuring and Separation Costs - Restructuring Costs by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | 24 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | $ 8 | $ 5 | $ 8 | $ 25 | $ 73 | $ 118 | $ 43 | $ 0 | $ 46 | $ 234 | $ 0 | |
IT Restructuring | Other | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 9 | |||||||||||
IT Restructuring | Other | One-Time Termination Benefits | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 7 | |||||||||||
IT Restructuring | Other | Consulting Fees | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 2 | |||||||||||
2017 Restructuring Plan | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 37 | 234 | $ 271 | |||||||||
2017 Restructuring Plan | Separation Costs - Former Executives | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 0 | 36 | 36 | |||||||||
2017 Restructuring Plan | One-Time Termination Benefits | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 5 | 67 | 72 | |||||||||
2017 Restructuring Plan | Write-offs of Current and Long-lived Assets | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 19 | 61 | 80 | |||||||||
2017 Restructuring Plan | Consulting Fees | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 1 | 44 | 45 | |||||||||
2017 Restructuring Plan | Contract Termination Costs | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 12 | 26 | 38 | |||||||||
2017 Restructuring Plan | Health Plans | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 11 | 73 | 84 | |||||||||
2017 Restructuring Plan | Health Plans | Separation Costs - Former Executives | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 0 | 0 | 0 | |||||||||
2017 Restructuring Plan | Health Plans | One-Time Termination Benefits | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 0 | 33 | 33 | |||||||||
2017 Restructuring Plan | Health Plans | Write-offs of Current and Long-lived Assets | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | (1) | 16 | 15 | |||||||||
2017 Restructuring Plan | Health Plans | Consulting Fees | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 0 | 0 | 0 | |||||||||
2017 Restructuring Plan | Health Plans | Contract Termination Costs | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 12 | 24 | 36 | |||||||||
2017 Restructuring Plan | Other | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 26 | 161 | 187 | |||||||||
2017 Restructuring Plan | Other | Separation Costs - Former Executives | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 0 | 36 | 36 | |||||||||
2017 Restructuring Plan | Other | One-Time Termination Benefits | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 5 | 34 | 39 | |||||||||
2017 Restructuring Plan | Other | Write-offs of Current and Long-lived Assets | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 20 | 45 | 65 | |||||||||
2017 Restructuring Plan | Other | Consulting Fees | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | 1 | 44 | 45 | |||||||||
2017 Restructuring Plan | Other | Contract Termination Costs | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and separation costs | $ 0 | $ 2 | $ 2 |
Restructuring and Separation _5
Restructuring and Separation Costs - Other Restructuring Costs (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Restructuring Reserve | |
Accrued, beginning of period | $ 48 |
Adjustments | 10 |
Charges | 8 |
Cash payments | (48) |
Accrued, end of period | 18 |
Separation Costs - Former Executives | |
Restructuring Reserve | |
Accrued, beginning of period | 2 |
Adjustments | 0 |
Charges | 0 |
Cash payments | (2) |
Accrued, end of period | 0 |
One-Time Termination Benefits | |
Restructuring Reserve | |
Accrued, beginning of period | 11 |
Adjustments | (1) |
Charges | 6 |
Cash payments | (15) |
Accrued, end of period | 1 |
Other Restructuring Costs | |
Restructuring Reserve | |
Accrued, beginning of period | 35 |
Adjustments | 11 |
Charges | 2 |
Cash payments | (31) |
Accrued, end of period | 17 |
IT Restructuring | |
Restructuring Reserve | |
Accrued, beginning of period | 0 |
Charges | 9 |
Cash payments | (3) |
Accrued, end of period | 6 |
IT Restructuring | One-Time Termination Benefits | |
Restructuring Reserve | |
Accrued, beginning of period | 0 |
Charges | 7 |
Cash payments | (2) |
Accrued, end of period | 5 |
IT Restructuring | Other Restructuring Costs | |
Restructuring Reserve | |
Accrued, beginning of period | 0 |
Charges | 2 |
Cash payments | (1) |
Accrued, end of period | $ 1 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Postemployment Benefits [Abstract] | |||
Maximum matching contribution by employer under defined contribution plan | 4.00% | ||
Expense recognized in connection with contributions | $ 36 | $ 43 | $ 36 |
Deferred compensation plan deferral percentage of basic salary | 100.00% | ||
Deferred compensation plan deferral percentage of bonus | 100.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)Lease_Renewal_Option | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Sale Leaseback Transaction [Line Items] | |||
Net assets of subsidiaries subject to restrictions | $ 2,262 | $ 1,691 | |
Aggregate statutory capital and surplus | 2,388 | ||
Required minimum statutory capital surplus | 1,040 | ||
Rental expense related to leases | $ 62 | 75 | $ 64 |
Minimum | |||
Sale Leaseback Transaction [Line Items] | |||
Operating lease terms | 5 years | ||
Operating lease renewal options | Lease_Renewal_Option | 1 | ||
Maximum | |||
Sale Leaseback Transaction [Line Items] | |||
Operating lease terms | 10 years | ||
Operating lease renewal options | Lease_Renewal_Option | 2 | ||
Parent Company | |||
Sale Leaseback Transaction [Line Items] | |||
Cash, cash equivalents, and investments | $ 170 | $ 696 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Millions | Dec. 31, 2018USD ($) |
Summary of future minimum lease payments | |
2,019 | $ 65 |
2,020 | 53 |
2,021 | 44 |
2,022 | 37 |
2,023 | 33 |
Thereafter | 326 |
Total minimum lease payments | 558 |
Lease Financing Obligations | |
Summary of future minimum lease payments | |
2,019 | 19 |
2,020 | 19 |
2,021 | 20 |
2,022 | 21 |
2,023 | 21 |
Thereafter | 311 |
Total minimum lease payments | 411 |
Operating Leases | |
Summary of future minimum lease payments | |
2,019 | 46 |
2,020 | 34 |
2,021 | 24 |
2,022 | 16 |
2,023 | 12 |
Thereafter | 15 |
Total minimum lease payments | $ 147 |
Segment Information - Schedule
Segment Information - Schedule of Operating Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $ 4,664 | $ 4,697 | $ 4,883 | $ 4,646 | $ 4,949 | $ 5,031 | $ 4,999 | $ 4,904 | $ 18,890 | $ 19,883 | $ 17,782 |
Margin | 664 | $ 566 | $ 673 | $ 615 | 446 | $ 564 | $ 254 | $ 546 | 2,518 | 1,810 | 1,725 |
Goodwill and intangible assets, net | 190 | 255 | 190 | 255 | 760 | ||||||
Total assets | 7,154 | 8,471 | 7,154 | 8,471 | 7,449 | ||||||
Health Plans | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 18,471 | 19,352 | 17,234 | ||||||||
Goodwill and intangible assets, net | 190 | 212 | 190 | 212 | 513 | ||||||
Total assets | 6,165 | 6,347 | 6,165 | 6,347 | 5,897 | ||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 419 | 531 | 548 | ||||||||
Margin | 43 | 29 | 54 | ||||||||
Goodwill and intangible assets, net | 0 | 43 | 0 | 43 | 247 | ||||||
Total assets | $ 989 | $ 2,124 | $ 989 | $ 2,124 | $ 1,552 |
Segment Information - Reconcili
Segment Information - Reconciliation of Gross Margin to Consolidated Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Total margin | $ 664 | $ 566 | $ 673 | $ 615 | $ 446 | $ 564 | $ 254 | $ 546 | $ 2,518 | $ 1,810 | $ 1,725 |
Add: Other operating revenues | 4,664 | 4,697 | 4,883 | 4,646 | $ 4,949 | $ 5,031 | $ 4,999 | $ 4,904 | 18,890 | 19,883 | 17,782 |
Less: Other operating expenses | (17,744) | (20,438) | (17,476) | ||||||||
Less: loss on sales of subsidiaries, net of gain | $ (52) | $ 37 | $ 0 | $ 0 | (15) | 0 | 0 | ||||
Operating income (loss) | 1,131 | (555) | 306 | ||||||||
Less: other expenses, net | 132 | 57 | 101 | ||||||||
Income (loss) before income tax expense (benefit) | 999 | (612) | 205 | ||||||||
Health Plans | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Add: Other operating revenues | 18,471 | 19,352 | 17,234 | ||||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total margin | 43 | 29 | 54 | ||||||||
Add: Other operating revenues | 419 | 531 | 548 | ||||||||
Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total margin | 2,518 | 1,810 | 1,725 | ||||||||
Operating Segments | Health Plans | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total margin | 2,475 | 1,781 | 1,671 | ||||||||
Operating Segments | Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total margin | 43 | 29 | 54 | ||||||||
Other Operating | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Add: Other operating revenues | 871 | 508 | 798 | ||||||||
Less: Other operating expenses | (2,243) | (2,873) | (2,217) | ||||||||
Less: loss on sales of subsidiaries, net of gain | $ (15) | $ 0 | $ 0 |
Quarterly Results of Operatio_3
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of quarterly results of operations | |||||||||||
Total revenue | $ 4,664 | $ 4,697 | $ 4,883 | $ 4,646 | $ 4,949 | $ 5,031 | $ 4,999 | $ 4,904 | $ 18,890 | $ 19,883 | $ 17,782 |
Margin | 664 | 566 | 673 | 615 | 446 | 564 | 254 | 546 | 2,518 | 1,810 | 1,725 |
Gain (loss) on sales of subsidiaries | (52) | 37 | 0 | 0 | (15) | 0 | 0 | ||||
Impairment losses | 269 | 129 | 72 | 0 | 0 | 470 | 0 | ||||
Restructuring and separation costs | 8 | 5 | 8 | 25 | 73 | 118 | 43 | 0 | 46 | 234 | 0 |
Net income (loss) | $ 201 | $ 197 | $ 202 | $ 107 | $ (262) | $ (97) | $ (230) | $ 77 | $ 707 | $ (512) | $ 52 |
Net income (loss) per share: | |||||||||||
Basic (in dollars per share) | $ 3.24 | $ 3.22 | $ 3.29 | $ 1.79 | $ (4.59) | $ (1.70) | $ (4.10) | $ 1.38 | $ 11.57 | $ (9.07) | $ 0.93 |
Diluted (in dollars per share) | $ 3.01 | $ 2.90 | $ 3.02 | $ 1.64 | $ (4.59) | $ (1.70) | $ (4.10) | $ 1.37 | $ 10.61 | $ (9.07) | $ 0.92 |
Condensed Financial Informati_3
Condensed Financial Information of Registrant - Condensed Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||||
Cash and cash equivalents | $ 2,826 | $ 3,186 | $ 2,819 | |
Investments | 1,681 | 2,524 | ||
Restricted investments | 0 | 169 | ||
Receivables | 1,330 | 871 | ||
Due from affiliates | 0 | 0 | ||
Prepaid expenses and other current assets | 149 | 239 | ||
Derivative asset | 476 | 522 | ||
Total current assets | 6,462 | 7,511 | ||
Property, equipment, and capitalized software, net | 241 | 342 | ||
Goodwill and intangible assets, net | 190 | 255 | 760 | |
Investments in subsidiaries | 0 | 0 | ||
Deferred income taxes | 117 | 103 | ||
Total assets | 7,154 | 8,471 | 7,449 | |
Current liabilities: | ||||
Medical claims and benefits payable | 1,961 | 2,192 | $ 1,929 | $ 1,685 |
Accounts payable and accrued liabilities | 390 | 366 | ||
Current portion of long-term debt | 241 | 653 | ||
Derivative liability | 476 | 522 | ||
Total current liabilities | 4,246 | 5,557 | ||
Other long-term liabilities | 44 | 61 | ||
Total liabilities | 5,507 | 7,134 | ||
Stockholders’ equity: | ||||
Common stock, $0.001 par value; 150 shares authorized; outstanding: 62 shares at December 31, 2018 and 60 shares at December 31, 2017 | 0 | 0 | ||
Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding | 0 | 0 | ||
Additional paid-in capital | 643 | 1,044 | ||
Accumulated other comprehensive loss | (8) | (5) | ||
Retained earnings | 1,012 | 298 | ||
Total stockholders’ equity | 1,647 | 1,337 | ||
Total liabilities and stockholders' equity | 7,154 | 8,471 | ||
Parent Company | ||||
Current assets: | ||||
Cash and cash equivalents | 70 | 504 | ||
Investments | 100 | 192 | ||
Restricted investments | 0 | 169 | ||
Receivables | 2 | 2 | ||
Due from affiliates | 90 | 148 | ||
Prepaid expenses and other current assets | 47 | 103 | ||
Derivative asset | 476 | 522 | ||
Total current assets | 785 | 1,640 | ||
Property, equipment, and capitalized software, net | 176 | 223 | ||
Goodwill and intangible assets, net | 13 | 15 | ||
Investments in subsidiaries | 2,768 | 2,306 | ||
Deferred income taxes | 39 | 17 | ||
Advances to related parties and other assets | 40 | 32 | ||
Total assets | 3,821 | 4,233 | ||
Current liabilities: | ||||
Medical claims and benefits payable | 4 | 3 | ||
Accounts payable and accrued liabilities | 223 | 178 | ||
Current portion of long-term debt | 241 | 653 | ||
Derivative liability | 476 | 522 | ||
Total current liabilities | 944 | 1,356 | ||
Long-term debt | 1,020 | 1,318 | ||
Lease financing obligations | 197 | 198 | ||
Other long-term liabilities | 13 | 24 | ||
Total liabilities | 2,174 | 2,896 | ||
Stockholders’ equity: | ||||
Common stock, $0.001 par value; 150 shares authorized; outstanding: 62 shares at December 31, 2018 and 60 shares at December 31, 2017 | 0 | 0 | ||
Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding | 0 | 0 | ||
Additional paid-in capital | 643 | 1,044 | ||
Accumulated other comprehensive loss | (8) | (5) | ||
Retained earnings | 1,012 | 298 | ||
Total stockholders’ equity | 1,647 | 1,337 | ||
Total liabilities and stockholders' equity | $ 3,821 | $ 4,233 |
Condensed Financial Informati_4
Condensed Financial Information of Registrant - Condensed Balance Sheets - Additional Information (Details) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Common stock, par value (dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares outstanding | 62,000,000 | 60,000,000 |
Preferred stock, par value (dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Parent Company | ||
Common stock, par value (dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares outstanding | 62,000,000 | 60,000,000 |
Preferred stock, par value (dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Financial Informati_5
Condensed Financial Information of Registrant - Condensed Statements of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | |||||||||||
Total revenue | $ 4,664 | $ 4,697 | $ 4,883 | $ 4,646 | $ 4,949 | $ 5,031 | $ 4,999 | $ 4,904 | $ 18,890 | $ 19,883 | $ 17,782 |
Expenses: | |||||||||||
General and administrative expenses | 1,333 | 1,594 | 1,393 | ||||||||
Depreciation and amortization | 99 | 137 | 139 | ||||||||
Impairment losses | 269 | 129 | 72 | 0 | 0 | 470 | 0 | ||||
Restructuring and separation costs | 8 | 5 | 8 | 25 | 73 | 118 | 43 | 0 | 46 | 234 | 0 |
Total operating expenses | 17,744 | 20,438 | 17,476 | ||||||||
Gain (loss) on sales of subsidiaries | (52) | 37 | 0 | 0 | (15) | 0 | 0 | ||||
Operating income (loss) | 1,131 | (555) | 306 | ||||||||
Interest expense | 115 | 118 | 101 | ||||||||
Other expense (income) | 17 | (61) | 0 | ||||||||
Income tax (benefit) expense | 292 | (100) | 153 | ||||||||
Net loss before equity in net earnings (losses) of subsidiaries | 707 | (512) | 52 | ||||||||
Equity in net earnings (losses) of subsidiaries | 0 | 0 | 0 | ||||||||
Net income (loss) | $ 201 | $ 197 | $ 202 | $ 107 | $ (262) | $ (97) | $ (230) | $ 77 | 707 | (512) | 52 |
Parent Company | |||||||||||
Revenue: | |||||||||||
Investment income and other revenue | 17 | 16 | 16 | ||||||||
Total revenue | 1,155 | 1,333 | 1,078 | ||||||||
Expenses: | |||||||||||
Medical care costs | 8 | 16 | 73 | ||||||||
General and administrative expenses | 1,007 | 1,082 | 899 | ||||||||
Depreciation and amortization | 69 | 93 | 95 | ||||||||
Impairment losses | 0 | 39 | 0 | ||||||||
Restructuring and separation costs | 35 | 153 | 0 | ||||||||
Total operating expenses | 1,119 | 1,383 | 1,067 | ||||||||
Gain (loss) on sales of subsidiaries | 37 | 0 | 0 | ||||||||
Operating income (loss) | 73 | (50) | 11 | ||||||||
Interest expense | 114 | 117 | 101 | ||||||||
Other expense (income) | 17 | (61) | 0 | ||||||||
Loss before income tax (benefit) expense and equity in net earnings (losses) of subsidiaries | (58) | (106) | (90) | ||||||||
Income tax (benefit) expense | (14) | 8 | (24) | ||||||||
Net loss before equity in net earnings (losses) of subsidiaries | (44) | (114) | (66) | ||||||||
Equity in net earnings (losses) of subsidiaries | 751 | (398) | 118 | ||||||||
Net income (loss) | 707 | (512) | 52 | ||||||||
Management Fees | Parent Company | |||||||||||
Revenue: | |||||||||||
Management fees | $ 1,138 | $ 1,317 | $ 1,062 |
Condensed Financial Informati_6
Condensed Financial Information of Registrant - Condensed Statements of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income (loss) | $ 201 | $ 197 | $ 202 | $ 107 | $ (262) | $ (97) | $ (230) | $ 77 | $ 707 | $ (512) | $ 52 |
Unrealized investment (loss) gain | (3) | (5) | 3 | ||||||||
Less: effect of income taxes | (1) | (2) | 1 | ||||||||
Other comprehensive (loss) income, net of tax | (2) | (3) | 2 | ||||||||
Comprehensive income (loss) | 705 | (515) | 54 | ||||||||
Parent Company | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income (loss) | 707 | (512) | 52 | ||||||||
Unrealized investment (loss) gain | (3) | (5) | 3 | ||||||||
Less: effect of income taxes | (1) | (2) | 1 | ||||||||
Other comprehensive (loss) income, net of tax | (2) | (3) | 2 | ||||||||
Comprehensive income (loss) | $ 705 | $ (515) | $ 54 |
Condensed Financial Informati_7
Condensed Financial Information of Registrant - Condensed Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities: | |||
Net cash provided by operating activities | $ (314) | $ 804 | $ 673 |
Investing activities: | |||
Capital contributions to subsidiaries | 0 | ||
Dividends received from subsidiaries | 0 | 0 | 0 |
Purchases of investments | (1,444) | (2,697) | (1,929) |
Proceeds from sales and maturities of investments | 2,445 | 1,759 | 1,966 |
Purchases of property, equipment and capitalized software | (30) | (86) | (176) |
Net cash received from sale of subsidiaries | 190 | 0 | 0 |
Change in amounts due to/from affiliates | 0 | 0 | 0 |
Other, net | (18) | (38) | (19) |
Net cash provided by (used in) investing activities | 1,143 | (1,062) | (206) |
Financing activities: | |||
Repayment of credit facility | (300) | 0 | 0 |
Cash paid for partial settlement of 1.125% Conversion Option | (623) | 0 | 0 |
Cash received for partial settlement of 1.125% Call Option | 623 | 0 | 0 |
Cash paid for partial termination of 1.125% Warrants | (549) | 0 | 0 |
Proceeds from senior notes offerings, net of issuance costs | 0 | 325 | 0 |
Proceeds from borrowings under credit facility | 0 | 300 | 0 |
Other, net | 18 | 11 | 19 |
Net cash (used in) provided by financing activities | (1,193) | 636 | 19 |
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | (364) | 378 | 486 |
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | 3,290 | 2,912 | 2,426 |
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | 2,926 | 3,290 | 2,912 |
Parent Company | |||
Operating activities: | |||
Net cash provided by operating activities | 118 | 166 | 55 |
Investing activities: | |||
Capital contributions to subsidiaries | (145) | (370) | (386) |
Dividends received from subsidiaries | 298 | 286 | 101 |
Purchases of investments | (136) | (331) | (115) |
Proceeds from sales and maturities of investments | 388 | 156 | 188 |
Purchases of property, equipment and capitalized software | (22) | (67) | (125) |
Net cash received from sale of subsidiaries | 242 | 0 | 0 |
Change in amounts due to/from affiliates | 6 | (49) | (18) |
Other, net | 0 | 0 | 6 |
Net cash provided by (used in) investing activities | 631 | (375) | (349) |
Financing activities: | |||
Repayment of credit facility | (300) | 0 | 0 |
Cash paid for partial settlement of 1.125% Conversion Option | (623) | 0 | 0 |
Cash received for partial settlement of 1.125% Call Option | 623 | 0 | 0 |
Cash paid for partial termination of 1.125% Warrants | (549) | 0 | 0 |
Proceeds from senior notes offerings, net of issuance costs | 0 | 325 | 0 |
Proceeds from borrowings under credit facility | 0 | 300 | 0 |
Other, net | 19 | 11 | 20 |
Net cash (used in) provided by financing activities | (1,192) | 636 | 20 |
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | (443) | 427 | (274) |
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | 513 | 86 | 360 |
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | 70 | 513 | 86 |
1.125% Notes | |||
Financing activities: | |||
Repayment of principal amount of Notes | (298) | 0 | 0 |
1.125% Notes | Parent Company | |||
Financing activities: | |||
Repayment of principal amount of Notes | (298) | 0 | 0 |
1.625% Notes | |||
Financing activities: | |||
Repayment of principal amount of Notes | (64) | 0 | 0 |
1.625% Notes | Parent Company | |||
Financing activities: | |||
Repayment of principal amount of Notes | $ (64) | $ 0 | $ 0 |
Condensed Financial Informati_8
Condensed Financial Information of Registrant - Notes to Condensed Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Parent Company | |||
Related Party Transaction [Line Items] | |||
Services revenue from subsidiaries | $ 1,137 | $ 1,317 | $ 1,062 |
Supplemental Condensed Consol_3
Supplemental Condensed Consolidating Financial Information - Additional Information (Details) - 5.375% Notes $ in Millions | Dec. 31, 2018USD ($) |
Condensed Financial Statements, Captions [Line Items] | |
Percentage of contractual interest rate on Notes | 5.375% |
Senior Notes | |
Condensed Financial Statements, Captions [Line Items] | |
Face amount of debt | $ 700 |
Percentage of contractual interest rate on Notes | 5.375% |
Supplemental Condensed Consol_4
Supplemental Condensed Consolidating Financial Information - Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | |||||||||||
Total revenue | $ 4,664 | $ 4,697 | $ 4,883 | $ 4,646 | $ 4,949 | $ 5,031 | $ 4,999 | $ 4,904 | $ 18,890 | $ 19,883 | $ 17,782 |
Expenses: | |||||||||||
General and administrative expenses | 1,333 | 1,594 | 1,393 | ||||||||
Premium tax expenses | 417 | 438 | 468 | ||||||||
Health insurer fees | 348 | 0 | 217 | ||||||||
Depreciation and amortization | 99 | 137 | 139 | ||||||||
Restructuring and separation costs | 8 | 5 | 8 | 25 | 73 | 118 | 43 | 0 | 46 | 234 | 0 |
Impairment losses | 269 | 129 | 72 | 0 | 0 | 470 | 0 | ||||
Total operating expenses | 17,744 | 20,438 | 17,476 | ||||||||
Gain (loss) on sales of subsidiaries | (52) | 37 | 0 | 0 | (15) | 0 | 0 | ||||
Operating income (loss) | 1,131 | (555) | 306 | ||||||||
Interest expense | 115 | 118 | 101 | ||||||||
Other expense | (17) | 61 | 0 | ||||||||
Total other expenses, net | (132) | (57) | (101) | ||||||||
Income (loss) before income tax expense (benefit) | 999 | (612) | 205 | ||||||||
Income tax (benefit) expense | 292 | (100) | 153 | ||||||||
Net loss before equity in net earnings (losses) of subsidiaries | 707 | (512) | 52 | ||||||||
Equity in net earnings (losses) of subsidiaries | 0 | 0 | 0 | ||||||||
Net income (loss) | $ 201 | $ 197 | $ 202 | $ 107 | $ (262) | $ (97) | $ (230) | $ 77 | 707 | (512) | 52 |
Parent Issuer | |||||||||||
Revenue: | |||||||||||
Total revenue | 1,155 | 1,333 | 1,078 | ||||||||
Expenses: | |||||||||||
General and administrative expenses | 1,007 | 1,082 | 899 | ||||||||
Depreciation and amortization | 69 | 93 | 95 | ||||||||
Restructuring and separation costs | 35 | 153 | 0 | ||||||||
Impairment losses | 0 | 39 | 0 | ||||||||
Total operating expenses | 1,119 | 1,383 | 1,067 | ||||||||
Gain (loss) on sales of subsidiaries | 37 | 0 | 0 | ||||||||
Operating income (loss) | 73 | (50) | 11 | ||||||||
Interest expense | 114 | 117 | 101 | ||||||||
Other expense | (17) | 61 | 0 | ||||||||
Income tax (benefit) expense | (14) | 8 | (24) | ||||||||
Net loss before equity in net earnings (losses) of subsidiaries | (44) | (114) | (66) | ||||||||
Equity in net earnings (losses) of subsidiaries | 751 | (398) | 118 | ||||||||
Net income (loss) | 707 | (512) | 52 | ||||||||
Reportable Legal Entities | Parent Issuer | |||||||||||
Revenue: | |||||||||||
Total revenue | 1,155 | 1,333 | 1,078 | ||||||||
Expenses: | |||||||||||
General and administrative expenses | 1,007 | 1,082 | 899 | ||||||||
Premium tax expenses | 0 | 0 | 0 | ||||||||
Health insurer fees | 0 | 0 | |||||||||
Depreciation and amortization | 69 | 93 | 95 | ||||||||
Restructuring and separation costs | 35 | 153 | |||||||||
Impairment losses | 39 | ||||||||||
Total operating expenses | 1,119 | 1,383 | 1,067 | ||||||||
Gain (loss) on sales of subsidiaries | 37 | ||||||||||
Operating income (loss) | 73 | (50) | 11 | ||||||||
Interest expense | 114 | ||||||||||
Other expense | (17) | ||||||||||
Total other expenses, net | (56) | (101) | |||||||||
Income (loss) before income tax expense (benefit) | (58) | (106) | (90) | ||||||||
Income tax (benefit) expense | (14) | 8 | (24) | ||||||||
Net loss before equity in net earnings (losses) of subsidiaries | (44) | (114) | (66) | ||||||||
Equity in net earnings (losses) of subsidiaries | 751 | (398) | 118 | ||||||||
Net income (loss) | 707 | (512) | 52 | ||||||||
Reportable Legal Entities | Other Guarantor | |||||||||||
Revenue: | |||||||||||
Total revenue | 3 | 2 | 0 | ||||||||
Expenses: | |||||||||||
General and administrative expenses | 4 | 2 | 2 | ||||||||
Premium tax expenses | 0 | 0 | 0 | ||||||||
Health insurer fees | 0 | 0 | |||||||||
Depreciation and amortization | 0 | 0 | 0 | ||||||||
Restructuring and separation costs | 0 | 0 | |||||||||
Impairment losses | 0 | ||||||||||
Total operating expenses | 4 | 2 | 2 | ||||||||
Gain (loss) on sales of subsidiaries | (52) | ||||||||||
Operating income (loss) | (53) | 0 | (2) | ||||||||
Interest expense | 0 | ||||||||||
Other expense | 0 | ||||||||||
Total other expenses, net | 0 | 0 | |||||||||
Income (loss) before income tax expense (benefit) | (53) | 0 | (2) | ||||||||
Income tax (benefit) expense | (11) | 0 | (1) | ||||||||
Net loss before equity in net earnings (losses) of subsidiaries | (42) | 0 | (1) | ||||||||
Equity in net earnings (losses) of subsidiaries | (5) | (164) | 2 | ||||||||
Net income (loss) | (47) | (164) | 1 | ||||||||
Reportable Legal Entities | Non-Guarantors | |||||||||||
Revenue: | |||||||||||
Total revenue | 18,884 | 19,904 | 17,786 | ||||||||
Expenses: | |||||||||||
General and administrative expenses | 1,474 | 1,865 | 1,573 | ||||||||
Premium tax expenses | 417 | 438 | 468 | ||||||||
Health insurer fees | 348 | 217 | |||||||||
Depreciation and amortization | 30 | 44 | 44 | ||||||||
Restructuring and separation costs | 11 | 81 | |||||||||
Impairment losses | 431 | ||||||||||
Total operating expenses | 17,773 | 20,409 | 17,489 | ||||||||
Gain (loss) on sales of subsidiaries | 0 | ||||||||||
Operating income (loss) | 1,111 | (505) | 297 | ||||||||
Interest expense | 1 | ||||||||||
Other expense | 0 | ||||||||||
Total other expenses, net | (1) | 0 | |||||||||
Income (loss) before income tax expense (benefit) | 1,110 | (506) | 297 | ||||||||
Income tax (benefit) expense | 317 | (108) | 178 | ||||||||
Net loss before equity in net earnings (losses) of subsidiaries | 793 | (398) | 119 | ||||||||
Equity in net earnings (losses) of subsidiaries | 0 | 8 | 0 | ||||||||
Net income (loss) | 793 | (390) | 119 | ||||||||
Eliminations | |||||||||||
Revenue: | |||||||||||
Total revenue | (1,152) | (1,356) | (1,082) | ||||||||
Expenses: | |||||||||||
General and administrative expenses | (1,152) | (1,355) | (1,081) | ||||||||
Premium tax expenses | 0 | 0 | 0 | ||||||||
Health insurer fees | 0 | 0 | |||||||||
Depreciation and amortization | 0 | 0 | 0 | ||||||||
Restructuring and separation costs | 0 | 0 | |||||||||
Impairment losses | 0 | ||||||||||
Total operating expenses | (1,152) | (1,356) | (1,082) | ||||||||
Gain (loss) on sales of subsidiaries | 0 | ||||||||||
Operating income (loss) | 0 | 0 | 0 | ||||||||
Interest expense | 0 | ||||||||||
Other expense | 0 | ||||||||||
Total other expenses, net | 0 | 0 | |||||||||
Income (loss) before income tax expense (benefit) | 0 | 0 | 0 | ||||||||
Income tax (benefit) expense | 0 | 0 | 0 | ||||||||
Net loss before equity in net earnings (losses) of subsidiaries | 0 | 0 | 0 | ||||||||
Equity in net earnings (losses) of subsidiaries | (746) | 554 | (120) | ||||||||
Net income (loss) | (746) | 554 | (120) | ||||||||
Medical care costs | |||||||||||
Expenses: | |||||||||||
Cost of revenue | 15,137 | 17,073 | 14,774 | ||||||||
Medical care costs | Reportable Legal Entities | Parent Issuer | |||||||||||
Expenses: | |||||||||||
Cost of revenue | 8 | 16 | 73 | ||||||||
Medical care costs | Reportable Legal Entities | Other Guarantor | |||||||||||
Expenses: | |||||||||||
Cost of revenue | 0 | 0 | 0 | ||||||||
Medical care costs | Reportable Legal Entities | Non-Guarantors | |||||||||||
Expenses: | |||||||||||
Cost of revenue | 15,129 | 17,058 | 14,702 | ||||||||
Medical care costs | Eliminations | |||||||||||
Expenses: | |||||||||||
Cost of revenue | 0 | (1) | (1) | ||||||||
Cost of service revenue | |||||||||||
Expenses: | |||||||||||
Cost of revenue | 364 | 492 | 485 | ||||||||
Cost of service revenue | Reportable Legal Entities | Parent Issuer | |||||||||||
Expenses: | |||||||||||
Cost of revenue | 0 | 0 | 0 | ||||||||
Cost of service revenue | Reportable Legal Entities | Other Guarantor | |||||||||||
Expenses: | |||||||||||
Cost of revenue | 0 | 0 | 0 | ||||||||
Cost of service revenue | Reportable Legal Entities | Non-Guarantors | |||||||||||
Expenses: | |||||||||||
Cost of revenue | 364 | 492 | 485 | ||||||||
Cost of service revenue | Eliminations | |||||||||||
Expenses: | |||||||||||
Cost of revenue | $ 0 | $ 0 | $ 0 |
Supplemental Condensed Consol_5
Supplemental Condensed Consolidating Financial Information - Condensed Consolidating Statements of Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Statement of Income Captions [Line Items] | |||||||||||
Net income (loss) | $ 201 | $ 197 | $ 202 | $ 107 | $ (262) | $ (97) | $ (230) | $ 77 | $ 707 | $ (512) | $ 52 |
Other comprehensive income (loss), net of tax | (2) | (3) | 2 | ||||||||
Comprehensive income (loss) | 705 | (515) | 54 | ||||||||
Parent Issuer | |||||||||||
Condensed Statement of Income Captions [Line Items] | |||||||||||
Net income (loss) | 707 | (512) | 52 | ||||||||
Other comprehensive income (loss), net of tax | (2) | (3) | 2 | ||||||||
Comprehensive income (loss) | 705 | (515) | 54 | ||||||||
Reportable Legal Entities | Parent Issuer | |||||||||||
Condensed Statement of Income Captions [Line Items] | |||||||||||
Net income (loss) | 707 | (512) | 52 | ||||||||
Other comprehensive income (loss), net of tax | (2) | (3) | 2 | ||||||||
Comprehensive income (loss) | 705 | (515) | 54 | ||||||||
Reportable Legal Entities | Other Guarantor | |||||||||||
Condensed Statement of Income Captions [Line Items] | |||||||||||
Net income (loss) | (47) | (164) | 1 | ||||||||
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | ||||||||
Comprehensive income (loss) | (47) | (164) | 1 | ||||||||
Reportable Legal Entities | Non-Guarantors | |||||||||||
Condensed Statement of Income Captions [Line Items] | |||||||||||
Net income (loss) | 793 | (390) | 119 | ||||||||
Other comprehensive income (loss), net of tax | (2) | (2) | 1 | ||||||||
Comprehensive income (loss) | 791 | (392) | 120 | ||||||||
Eliminations | |||||||||||
Condensed Statement of Income Captions [Line Items] | |||||||||||
Net income (loss) | (746) | 554 | (120) | ||||||||
Other comprehensive income (loss), net of tax | 2 | 2 | (1) | ||||||||
Comprehensive income (loss) | $ (744) | $ 556 | $ (121) |
Supplemental Condensed Consol_6
Supplemental Condensed Consolidating Financial Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||||
Cash and cash equivalents | $ 2,826 | $ 3,186 | $ 2,819 | |
Investments | 1,681 | 2,524 | ||
Restricted investments | 0 | 169 | ||
Receivables | 1,330 | 871 | ||
Due from (to) affiliates | 0 | 0 | ||
Prepaid expenses and other current assets | 149 | 239 | ||
Derivative asset | 476 | 522 | ||
Total current assets | 6,462 | 7,511 | ||
Property, equipment, and capitalized software, net | 241 | 342 | ||
Goodwill and intangible assets, net | 190 | 255 | 760 | |
Restricted investments | 120 | 119 | ||
Investments in subsidiaries | 0 | 0 | ||
Deferred income taxes | 117 | 103 | ||
Other assets | 24 | 141 | ||
Total assets | 7,154 | 8,471 | 7,449 | |
Current liabilities: | ||||
Medical claims and benefits payable | 1,961 | 2,192 | $ 1,929 | $ 1,685 |
Amounts due government agencies | 967 | 1,542 | ||
Accounts payable and accrued liabilities | 390 | 366 | ||
Deferred revenue | 211 | 282 | ||
Current portion of long-term debt | 241 | 653 | ||
Derivative liability | 476 | 522 | ||
Total current liabilities | 4,246 | 5,557 | ||
Long-term debt and lease financing obligations | 1,217 | 1,516 | ||
Deferred income taxes | 0 | |||
Other long-term liabilities | 44 | 61 | ||
Total liabilities | 5,507 | 7,134 | ||
Total stockholders' equity | 1,647 | 1,337 | ||
Total liabilities and stockholders' equity | 7,154 | 8,471 | ||
Parent Issuer | ||||
Current assets: | ||||
Cash and cash equivalents | 70 | 504 | ||
Investments | 100 | 192 | ||
Restricted investments | 0 | 169 | ||
Receivables | 2 | 2 | ||
Due from (to) affiliates | 90 | 148 | ||
Prepaid expenses and other current assets | 47 | 103 | ||
Derivative asset | 476 | 522 | ||
Total current assets | 785 | 1,640 | ||
Property, equipment, and capitalized software, net | 176 | 223 | ||
Goodwill and intangible assets, net | 13 | 15 | ||
Investments in subsidiaries | 2,768 | 2,306 | ||
Deferred income taxes | 39 | 17 | ||
Total assets | 3,821 | 4,233 | ||
Current liabilities: | ||||
Medical claims and benefits payable | 4 | 3 | ||
Accounts payable and accrued liabilities | 223 | 178 | ||
Current portion of long-term debt | 241 | 653 | ||
Derivative liability | 476 | 522 | ||
Total current liabilities | 944 | 1,356 | ||
Other long-term liabilities | 13 | 24 | ||
Total liabilities | 2,174 | 2,896 | ||
Total stockholders' equity | 1,647 | 1,337 | ||
Total liabilities and stockholders' equity | 3,821 | 4,233 | ||
Reportable Legal Entities | Parent Issuer | ||||
Current assets: | ||||
Cash and cash equivalents | 70 | 504 | ||
Investments | 100 | 192 | ||
Restricted investments | 169 | |||
Receivables | 2 | 2 | ||
Due from (to) affiliates | 90 | 148 | ||
Prepaid expenses and other current assets | 47 | 103 | ||
Derivative asset | 476 | 522 | ||
Total current assets | 785 | 1,640 | ||
Property, equipment, and capitalized software, net | 176 | 223 | ||
Goodwill and intangible assets, net | 13 | 15 | ||
Restricted investments | 0 | 0 | ||
Investments in subsidiaries | 2,768 | 2,306 | ||
Deferred income taxes | 39 | 17 | ||
Other assets | 40 | 32 | ||
Total assets | 3,821 | 4,233 | ||
Current liabilities: | ||||
Medical claims and benefits payable | 4 | 3 | ||
Amounts due government agencies | 0 | 0 | ||
Accounts payable and accrued liabilities | 223 | 178 | ||
Deferred revenue | 0 | 0 | ||
Current portion of long-term debt | 241 | 653 | ||
Derivative liability | 476 | 522 | ||
Total current liabilities | 944 | 1,356 | ||
Long-term debt and lease financing obligations | 1,217 | 1,516 | ||
Deferred income taxes | 0 | |||
Other long-term liabilities | 13 | 24 | ||
Total liabilities | 2,174 | 2,896 | ||
Total stockholders' equity | 1,647 | 1,337 | ||
Total liabilities and stockholders' equity | 3,821 | 4,233 | ||
Reportable Legal Entities | Other Guarantor | ||||
Current assets: | ||||
Cash and cash equivalents | 2 | 0 | ||
Investments | 0 | 0 | ||
Restricted investments | 0 | |||
Receivables | 0 | 0 | ||
Due from (to) affiliates | 7 | 2 | ||
Prepaid expenses and other current assets | 29 | 2 | ||
Derivative asset | 0 | 0 | ||
Total current assets | 38 | 4 | ||
Property, equipment, and capitalized software, net | 0 | 0 | ||
Goodwill and intangible assets, net | 0 | 0 | ||
Restricted investments | 0 | 0 | ||
Investments in subsidiaries | (5) | 75 | ||
Deferred income taxes | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total assets | 33 | 79 | ||
Current liabilities: | ||||
Medical claims and benefits payable | 0 | 0 | ||
Amounts due government agencies | 0 | 0 | ||
Accounts payable and accrued liabilities | 0 | 1 | ||
Deferred revenue | 0 | 0 | ||
Current portion of long-term debt | 0 | 0 | ||
Derivative liability | 0 | 0 | ||
Total current liabilities | 0 | 1 | ||
Long-term debt and lease financing obligations | 0 | 0 | ||
Deferred income taxes | 0 | |||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | 0 | 1 | ||
Total stockholders' equity | 33 | 78 | ||
Total liabilities and stockholders' equity | 33 | 79 | ||
Reportable Legal Entities | Non-Guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 2,754 | 2,682 | ||
Investments | 1,581 | 2,332 | ||
Restricted investments | 0 | |||
Receivables | 1,328 | 869 | ||
Due from (to) affiliates | (97) | (150) | ||
Prepaid expenses and other current assets | 73 | 150 | ||
Derivative asset | 0 | 0 | ||
Total current assets | 5,639 | 5,883 | ||
Property, equipment, and capitalized software, net | 65 | 119 | ||
Goodwill and intangible assets, net | 177 | 240 | ||
Restricted investments | 120 | 119 | ||
Investments in subsidiaries | 0 | 0 | ||
Deferred income taxes | 78 | 101 | ||
Other assets | 5 | 110 | ||
Total assets | 6,084 | 6,572 | ||
Current liabilities: | ||||
Medical claims and benefits payable | 1,957 | 2,189 | ||
Amounts due government agencies | 967 | 1,542 | ||
Accounts payable and accrued liabilities | 167 | 188 | ||
Deferred revenue | 211 | 282 | ||
Current portion of long-term debt | 0 | 16 | ||
Derivative liability | 0 | 0 | ||
Total current liabilities | 3,302 | 4,217 | ||
Long-term debt and lease financing obligations | 20 | 0 | ||
Deferred income taxes | 15 | |||
Other long-term liabilities | 32 | 37 | ||
Total liabilities | 3,354 | 4,269 | ||
Total stockholders' equity | 2,730 | 2,303 | ||
Total liabilities and stockholders' equity | 6,084 | 6,572 | ||
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Investments | 0 | 0 | ||
Restricted investments | 0 | |||
Receivables | 0 | 0 | ||
Due from (to) affiliates | 0 | 0 | ||
Prepaid expenses and other current assets | 0 | (16) | ||
Derivative asset | 0 | 0 | ||
Total current assets | 0 | (16) | ||
Property, equipment, and capitalized software, net | 0 | 0 | ||
Goodwill and intangible assets, net | 0 | 0 | ||
Restricted investments | 0 | 0 | ||
Investments in subsidiaries | (2,763) | (2,381) | ||
Deferred income taxes | 0 | (15) | ||
Other assets | (21) | (1) | ||
Total assets | (2,784) | (2,413) | ||
Current liabilities: | ||||
Medical claims and benefits payable | 0 | 0 | ||
Amounts due government agencies | 0 | 0 | ||
Accounts payable and accrued liabilities | 0 | (1) | ||
Deferred revenue | 0 | 0 | ||
Current portion of long-term debt | 0 | (16) | ||
Derivative liability | 0 | 0 | ||
Total current liabilities | 0 | (17) | ||
Long-term debt and lease financing obligations | (20) | 0 | ||
Deferred income taxes | (15) | |||
Other long-term liabilities | (1) | 0 | ||
Total liabilities | (21) | (32) | ||
Total stockholders' equity | (2,763) | (2,381) | ||
Total liabilities and stockholders' equity | $ (2,784) | $ (2,413) |
Supplemental Condensed Consol_7
Supplemental Condensed Consolidating Financial Information - Condensed Consolidating Statements of Cash Flow (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities: | |||
Net cash provided by operating activities | $ (314) | $ 804 | $ 673 |
Investing activities: | |||
Purchases of investments | (1,444) | (2,697) | (1,929) |
Proceeds from sales and maturities of investments | 2,445 | 1,759 | 1,966 |
Purchases of property, equipment and capitalized software | (30) | (86) | (176) |
Capital contributions to subsidiaries | 0 | 0 | |
Net cash received from sales of subsidiaries | 190 | ||
Net cash paid in business combinations | 0 | 0 | (48) |
Capital contributions to subsidiaries | 0 | ||
Dividends received from subsidiaries | 0 | 0 | 0 |
Change in amounts due to/from affiliates | 0 | 0 | 0 |
Other, net | (18) | (38) | (19) |
Net cash provided by (used in) investing activities | 1,143 | (1,062) | (206) |
Financing activities: | |||
Proceeds from senior notes offerings, net of issuance costs | 0 | 325 | 0 |
Proceeds from borrowings under credit facility | 0 | 300 | 0 |
Repayment of credit facility | (300) | 0 | 0 |
Cash paid for partial settlement of 1.125% Conversion Option | (623) | 0 | 0 |
Cash received for partial settlement of 1.125% Call Option | 623 | 0 | 0 |
Cash paid for partial termination of 1.125% Warrants | 549 | 0 | 0 |
Other, net | 18 | 11 | 19 |
Net cash (used in) provided by financing activities | (1,193) | 636 | 19 |
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | (364) | 378 | 486 |
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | 3,290 | 2,912 | 2,426 |
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | 2,926 | 3,290 | 2,912 |
Eliminations | |||
Operating activities: | |||
Net cash provided by operating activities | 0 | 0 | 0 |
Investing activities: | |||
Purchases of investments | 0 | 0 | 0 |
Proceeds from sales and maturities of investments | 0 | 0 | 0 |
Purchases of property, equipment and capitalized software | 0 | 0 | 0 |
Capital contributions to subsidiaries | 0 | 0 | |
Net cash received from sales of subsidiaries | 0 | ||
Net cash paid in business combinations | 0 | ||
Capital contributions to subsidiaries | 0 | ||
Dividends received from subsidiaries | 0 | 0 | 0 |
Change in amounts due to/from affiliates | 0 | 0 | 0 |
Other, net | 0 | 0 | 0 |
Net cash provided by (used in) investing activities | 0 | 0 | 0 |
Financing activities: | |||
Proceeds from senior notes offerings, net of issuance costs | 0 | ||
Proceeds from borrowings under credit facility | 0 | ||
Repayment of credit facility | 0 | ||
Cash paid for partial settlement of 1.125% Conversion Option | 0 | ||
Cash received for partial settlement of 1.125% Call Option | 0 | ||
Cash paid for partial termination of 1.125% Warrants | 0 | ||
Other, net | 0 | 0 | 0 |
Net cash (used in) provided by financing activities | 0 | 0 | 0 |
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | 0 | 0 | 0 |
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | 0 | 0 | 0 |
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | 0 | 0 | 0 |
Parent Issuer | |||
Operating activities: | |||
Net cash provided by operating activities | 118 | 166 | 55 |
Investing activities: | |||
Purchases of investments | (136) | (331) | (115) |
Proceeds from sales and maturities of investments | 388 | 156 | 188 |
Purchases of property, equipment and capitalized software | (22) | (67) | (125) |
Capital contributions to subsidiaries | (145) | (370) | (386) |
Dividends received from subsidiaries | 298 | 286 | 101 |
Change in amounts due to/from affiliates | 6 | (49) | (18) |
Other, net | 0 | 0 | 6 |
Net cash provided by (used in) investing activities | 631 | (375) | (349) |
Financing activities: | |||
Proceeds from senior notes offerings, net of issuance costs | 0 | 325 | 0 |
Proceeds from borrowings under credit facility | 0 | 300 | 0 |
Repayment of credit facility | (300) | 0 | 0 |
Cash paid for partial settlement of 1.125% Conversion Option | (623) | 0 | 0 |
Cash received for partial settlement of 1.125% Call Option | 623 | 0 | 0 |
Cash paid for partial termination of 1.125% Warrants | 549 | 0 | 0 |
Other, net | 19 | 11 | 20 |
Net cash (used in) provided by financing activities | (1,192) | 636 | 20 |
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | (443) | 427 | (274) |
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | 513 | 86 | 360 |
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | 70 | 513 | 86 |
Parent Issuer | Reportable Legal Entities | |||
Operating activities: | |||
Net cash provided by operating activities | 118 | 166 | 55 |
Investing activities: | |||
Purchases of investments | (136) | (331) | (115) |
Proceeds from sales and maturities of investments | 388 | 156 | 188 |
Purchases of property, equipment and capitalized software | (22) | (67) | (125) |
Capital contributions to subsidiaries | 145 | 370 | |
Net cash received from sales of subsidiaries | 242 | ||
Net cash paid in business combinations | 0 | ||
Capital contributions to subsidiaries | (386) | ||
Dividends received from subsidiaries | 298 | 286 | 101 |
Change in amounts due to/from affiliates | 6 | (49) | (18) |
Other, net | 0 | 0 | 6 |
Net cash provided by (used in) investing activities | 631 | (375) | (349) |
Financing activities: | |||
Proceeds from senior notes offerings, net of issuance costs | 325 | ||
Proceeds from borrowings under credit facility | 300 | ||
Repayment of credit facility | (300) | ||
Cash paid for partial settlement of 1.125% Conversion Option | (623) | ||
Cash received for partial settlement of 1.125% Call Option | 623 | ||
Cash paid for partial termination of 1.125% Warrants | 549 | ||
Other, net | 19 | 11 | 20 |
Net cash (used in) provided by financing activities | (1,192) | 636 | 20 |
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | (443) | 427 | (274) |
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | 513 | 86 | 360 |
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | 70 | 513 | 86 |
Other Guarantor | Reportable Legal Entities | |||
Operating activities: | |||
Net cash provided by operating activities | (2) | 0 | (1) |
Investing activities: | |||
Purchases of investments | 0 | 0 | 0 |
Proceeds from sales and maturities of investments | 0 | 0 | 0 |
Purchases of property, equipment and capitalized software | 0 | 0 | 0 |
Capital contributions to subsidiaries | 0 | (2) | |
Net cash received from sales of subsidiaries | 0 | ||
Net cash paid in business combinations | 0 | ||
Capital contributions to subsidiaries | 7 | ||
Dividends received from subsidiaries | 0 | 0 | 0 |
Change in amounts due to/from affiliates | 4 | (2) | (6) |
Other, net | 0 | 0 | 0 |
Net cash provided by (used in) investing activities | 4 | 0 | 1 |
Financing activities: | |||
Proceeds from senior notes offerings, net of issuance costs | 0 | ||
Proceeds from borrowings under credit facility | 0 | ||
Repayment of credit facility | 0 | ||
Cash paid for partial settlement of 1.125% Conversion Option | 0 | ||
Cash received for partial settlement of 1.125% Call Option | 0 | ||
Cash paid for partial termination of 1.125% Warrants | 0 | ||
Other, net | 0 | 0 | 0 |
Net cash (used in) provided by financing activities | 0 | 0 | 0 |
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | 2 | 0 | 0 |
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | 0 | 0 | 0 |
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | 2 | 0 | 0 |
Non-Guarantors | Reportable Legal Entities | |||
Operating activities: | |||
Net cash provided by operating activities | (430) | 638 | 619 |
Investing activities: | |||
Purchases of investments | (1,308) | (2,366) | (1,814) |
Proceeds from sales and maturities of investments | 2,057 | 1,603 | 1,778 |
Purchases of property, equipment and capitalized software | (8) | (19) | (51) |
Capital contributions to subsidiaries | (145) | (368) | |
Net cash received from sales of subsidiaries | (52) | ||
Net cash paid in business combinations | (48) | ||
Capital contributions to subsidiaries | 379 | ||
Dividends received from subsidiaries | (298) | (286) | (101) |
Change in amounts due to/from affiliates | (10) | 51 | 24 |
Other, net | (18) | (38) | (25) |
Net cash provided by (used in) investing activities | 508 | (687) | 142 |
Financing activities: | |||
Proceeds from senior notes offerings, net of issuance costs | 0 | ||
Proceeds from borrowings under credit facility | 0 | ||
Repayment of credit facility | 0 | ||
Cash paid for partial settlement of 1.125% Conversion Option | 0 | ||
Cash received for partial settlement of 1.125% Call Option | 0 | ||
Cash paid for partial termination of 1.125% Warrants | 0 | ||
Other, net | (1) | 0 | (1) |
Net cash (used in) provided by financing activities | (1) | 0 | (1) |
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | 77 | (49) | 760 |
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | 2,777 | 2,826 | 2,066 |
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | 2,854 | 2,777 | 2,826 |
1.125% Notes | |||
Financing activities: | |||
Repayment of principal amount of Notes | (298) | 0 | 0 |
1.125% Notes | Eliminations | |||
Financing activities: | |||
Repayment of principal amount of Notes | 0 | ||
1.125% Notes | Parent Issuer | |||
Financing activities: | |||
Repayment of principal amount of Notes | (298) | 0 | 0 |
1.125% Notes | Parent Issuer | Reportable Legal Entities | |||
Financing activities: | |||
Repayment of principal amount of Notes | (298) | ||
1.125% Notes | Other Guarantor | Reportable Legal Entities | |||
Financing activities: | |||
Repayment of principal amount of Notes | 0 | ||
1.125% Notes | Non-Guarantors | Reportable Legal Entities | |||
Financing activities: | |||
Repayment of principal amount of Notes | 0 | ||
1.625% Notes | |||
Financing activities: | |||
Repayment of principal amount of Notes | (64) | 0 | 0 |
1.625% Notes | Eliminations | |||
Financing activities: | |||
Repayment of principal amount of Notes | 0 | ||
1.625% Notes | Parent Issuer | |||
Financing activities: | |||
Repayment of principal amount of Notes | (64) | $ 0 | $ 0 |
1.625% Notes | Parent Issuer | Reportable Legal Entities | |||
Financing activities: | |||
Repayment of principal amount of Notes | (64) | ||
1.625% Notes | Other Guarantor | Reportable Legal Entities | |||
Financing activities: | |||
Repayment of principal amount of Notes | 0 | ||
1.625% Notes | Non-Guarantors | Reportable Legal Entities | |||
Financing activities: | |||
Repayment of principal amount of Notes | $ 0 |