Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Jan. 31, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | HUMANA INC | ||
Trading Symbol | HUM | ||
Entity Central Index Key | 49,071 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 135,566,909 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Public Float | $ 41,129,697,151 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 2,343 | $ 4,042 |
Investment securities | 10,026 | 9,557 |
Receivables, less allowance for doubtful accounts of $79 in 2018 and $96 in 2017 | 1,015 | 854 |
Other current assets | 3,564 | 2,949 |
Total current assets | 16,948 | 17,402 |
Property and equipment, net | 1,735 | 1,584 |
Long-term investment securities | 411 | 2,745 |
Equity method investment in Kindred at Home | 1,047 | 0 |
Goodwill | 3,897 | 3,281 |
Other long-term assets | 1,375 | 2,166 |
Total assets | 25,413 | 27,178 |
Current liabilities: | ||
Benefits payable | 4,862 | 4,668 |
Trade accounts payable and accrued expenses | 3,067 | 4,069 |
Book overdraft | 171 | 141 |
Unearned revenues | 283 | 378 |
Short-term debt | 1,694 | 150 |
Total current liabilities | 10,077 | 9,406 |
Long-term debt | 4,375 | 4,770 |
Future policy benefits payable | 219 | 2,923 |
Other long-term liabilities | 581 | 237 |
Total liabilities | 15,252 | 17,336 |
Commitments and contingencies (Note 16) | ||
Stockholders’ equity: | ||
Preferred stock, $1 par; 10,000,000 shares authorized; none issued | 0 | 0 |
Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 198,594,841 shares issued at December 31, 2018 and 198,572,458 shares issued at December 31, 2017 | 33 | 33 |
Capital in excess of par value | 2,535 | 2,445 |
Retained earnings | 15,072 | 13,670 |
Accumulated other comprehensive (loss) income | (159) | 19 |
Treasury stock, at cost, 63,028,169 shares at December 31, 2018 and 60,893,762 shares at December 31, 2017 | (7,320) | (6,325) |
Total stockholders’ equity | 10,161 | 9,842 |
Total liabilities and stockholders’ equity | $ 25,413 | $ 27,178 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 79 | $ 96 |
Preferred stock, par (in USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par (in USD per share) | $ 0.1667 | $ 0.1667 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 198,594,841 | 198,572,458 |
Treasury stock (in shares) | 63,028,169 | 60,893,762 |
Consolidated Statements Of Inco
Consolidated Statements Of Income - 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 | |
Revenues: | |||||||||||
Premiums | $ 54,941 | $ 52,380 | $ 53,021 | ||||||||
Services | 1,457 | 982 | 969 | ||||||||
Investment income | 514 | 405 | 389 | ||||||||
Total revenues | $ 14,168 | $ 14,206 | $ 14,259 | $ 14,279 | $ 13,189 | $ 13,282 | $ 13,534 | $ 13,762 | 56,912 | 53,767 | 54,379 |
Operating expenses: | |||||||||||
Benefits | 45,882 | 43,496 | 45,007 | ||||||||
Operating costs | 7,525 | 6,567 | 7,173 | ||||||||
Merger termination fee and related costs, net | 0 | (936) | 104 | ||||||||
Depreciation and amortization | 405 | 378 | 354 | ||||||||
Total operating expenses | 53,812 | 49,505 | 52,638 | ||||||||
Income from operations | 3,100 | 4,262 | 1,741 | ||||||||
Loss on sale of business | 786 | 0 | 0 | ||||||||
Interest expense | 218 | 242 | 189 | ||||||||
Other expense, net | 33 | 0 | 0 | ||||||||
Income (loss) before income taxes and equity in net earnings | 436 | 901 | 19 | 707 | 490 | 799 | 1,042 | 1,689 | 2,063 | 4,020 | 1,552 |
Provision for income taxes | 391 | 1,572 | 938 | ||||||||
Equity in net earnings of Kindred at Home | 11 | 0 | 0 | ||||||||
Net income | $ 355 | $ 644 | $ 193 | $ 491 | $ 184 | $ 499 | $ 650 | $ 1,115 | $ 1,683 | $ 2,448 | $ 614 |
Basic earnings per common share (in USD per share) | $ 2.60 | $ 4.68 | $ 1.40 | $ 3.56 | $ 1.30 | $ 3.46 | $ 4.49 | $ 7.54 | $ 12.24 | $ 16.94 | $ 4.11 |
Diluted earnings per common share (in USD per share) | $ 2.58 | $ 4.65 | $ 1.39 | $ 3.53 | $ 1.29 | $ 3.44 | $ 4.46 | $ 7.49 | $ 12.16 | $ 16.81 | $ 4.07 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - 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 | $ 355 | $ 644 | $ 193 | $ 491 | $ 184 | $ 499 | $ 650 | $ 1,115 | $ 1,683 | $ 2,448 | $ 614 |
Other comprehensive income (loss): | |||||||||||
Change in gross unrealized investment losses/gains | (189) | 149 | (101) | ||||||||
Effect of income taxes | 51 | (55) | 38 | ||||||||
Total change in unrealized investment gains/losses, net of tax | (138) | 94 | (63) | ||||||||
Reclassification adjustment for net realized gains included in investment income | (53) | (14) | (96) | ||||||||
Effect of income taxes | 17 | 5 | 35 | ||||||||
Total reclassification adjustment, net of tax | (36) | (9) | (61) | ||||||||
Other comprehensive (loss) income, net of tax | (174) | 85 | (124) | ||||||||
Comprehensive income attributable to our equity method investment in Kindred at Home | (4) | 0 | 0 | ||||||||
Comprehensive income | $ 1,505 | $ 2,533 | $ 490 |
Consolidated Statements Of Stoc
Consolidated Statements Of Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Capital In Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Balances at Dec. 31, 2015 | $ 10,346 | $ 33 | $ 2,530 | $ 11,017 | $ 58 | $ (3,292) |
Balances (in shares) at Dec. 31, 2015 | 198,372 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 614 | 614 | ||||
Other comprehensive income (loss) | (124) | (124) | ||||
Common stock repurchases | (104) | (104) | ||||
Dividends and dividend equivalents | (177) | (177) | ||||
Stock-based compensation | 115 | 115 | ||||
Restricted stock unit vesting | 0 | (98) | 98 | |||
Restricted stock unit vesting (in shares) | 13 | |||||
Stock option exercises | 13 | 13 | ||||
Stock option exercises (in shares) | 110 | |||||
Stock option and restricted stock tax benefit | 2 | 2 | ||||
Balances at Dec. 31, 2016 | 10,685 | $ 33 | 2,562 | 11,454 | (66) | (3,298) |
Balances (in shares) at Dec. 31, 2016 | 198,495 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 2,448 | 2,448 | ||||
Other comprehensive income (loss) | 85 | 85 | ||||
Common stock repurchases | (3,365) | (200) | (3,165) | |||
Dividends and dividend equivalents | (232) | (232) | ||||
Stock-based compensation | 157 | 157 | ||||
Restricted stock unit vesting | 0 | (138) | 138 | |||
Restricted stock unit vesting (in shares) | 0 | |||||
Stock option exercises | 64 | 64 | ||||
Stock option exercises (in shares) | 77 | |||||
Balances at Dec. 31, 2017 | 9,842 | $ 33 | 2,445 | 13,670 | 19 | (6,325) |
Balances (in shares) at Dec. 31, 2017 | 198,572 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 1,683 | 1,683 | ||||
Other comprehensive income (loss) | (174) | |||||
Other comprehensive loss | (182) | (4) | (178) | |||
Common stock repurchases | (1,090) | 50 | (1,140) | |||
Dividends and dividend equivalents | (277) | (277) | ||||
Stock-based compensation | 137 | 137 | ||||
Restricted stock unit vesting | 0 | (145) | 145 | |||
Stock option exercises | $ 48 | 48 | ||||
Stock option exercises (in shares) | 320 | 23 | ||||
Balances at Dec. 31, 2018 | $ 10,161 | $ 33 | $ 2,535 | $ 15,072 | $ (159) | $ (7,320) |
Balances (in shares) at Dec. 31, 2018 | 198,595 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||
Net income | $ 1,683 | $ 2,448 | $ 614 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Loss on sale of business | 786 | 0 | 0 |
Net realized capital gains | (90) | (14) | (96) |
Equity in net earnings of Kindred at Home | (11) | 0 | 0 |
Stock-based compensation | 137 | 157 | 115 |
Depreciation | 444 | 410 | 388 |
Amortization | 90 | 75 | 77 |
Provision (benefit) for deferred income taxes | 194 | 132 | (71) |
Provision for doubtful accounts | 36 | 20 | 39 |
Changes in operating assets and liabilities, net of effect of businesses acquired and dispositions: | |||
Receivables | (200) | 406 | (158) |
Other assets | (484) | (582) | 426 |
Benefits payable | 252 | 105 | (413) |
Other liabilities | (676) | 641 | 937 |
Unearned revenues | (95) | 98 | (84) |
Other | 107 | 155 | 162 |
Net cash provided by operating activities | 2,173 | 4,051 | 1,936 |
Cash flows from investing activities | |||
Acquisitions, net of cash acquired | (354) | (31) | (7) |
Acquisition, equity method investment in Kindred at Home | (1,095) | 0 | 0 |
Cash transferred in sale of business | (805) | 0 | 0 |
Purchases of property and equipment | (612) | (524) | (527) |
Purchases of investment securities | (4,687) | (6,265) | (6,566) |
Maturities of investment securities | 972 | 1,111 | 1,426 |
Proceeds from sales of investment securities | 3,494 | 2,768 | 4,312 |
Net cash used in investing activities | (3,087) | (2,941) | (1,362) |
Cash flows from financing activities | |||
(Withdrawals) receipts from contract deposits, net | (640) | 1,823 | 1,093 |
Proceeds from issuance of senior notes, net | 0 | 1,779 | 0 |
Proceeds from issuance (repayments) of commercial paper, net | 485 | (153) | (2) |
Proceeds from term loan | 1,000 | 0 | 0 |
Repayment of term loan | (350) | 0 | 0 |
Repayment of long-term debt | 0 | (800) | 0 |
Common stock repurchases | (1,090) | (3,365) | (104) |
Dividends paid | (265) | (220) | (177) |
Change in book overdraft | 30 | (71) | (89) |
Proceeds from stock option exercises and other, net | 45 | 62 | 11 |
Net cash (used in) provided by financing activities | (785) | (945) | 732 |
(Decrease) increase in cash and cash equivalents | (1,699) | 165 | 1,306 |
Cash and cash equivalents at beginning of year | 4,042 | 3,877 | 2,571 |
Cash and cash equivalents at end of year | 2,343 | 4,042 | 3,877 |
Supplemental cash flow disclosures: | |||
Interest payments | 195 | 216 | 185 |
Income tax payments, net | 631 | 1,498 | 916 |
Details of businesses acquired in purchase transactions: | |||
Fair value of assets acquired, net of cash acquired | 392 | 31 | 7 |
Less: Fair value of liabilities assumed | (38) | 0 | 0 |
Cash paid for acquired businesses, net of cash acquired | $ 354 | $ 31 | $ 7 |
REPORTING ENTITY
REPORTING ENTITY | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
REPORTING ENTITY | REPORTING ENTITY Nature of Operations Humana Inc., headquartered in Louisville, Kentucky, is a leading health and well-being company committed to helping our millions of medical and specialty members achieve their best health. Our successful history in care delivery and health plan administration is helping us create a new kind of integrated care with the power to improve health and well‐being and lower costs. Our efforts are leading to a better quality of life for people with Medicare, families, individuals, military service personnel, and communities at large. To accomplish that, we support physicians and other health care professionals as they work to deliver the right care in the right place for their patients, our members. Our range of clinical capabilities, resources and tools, such as in‐home care, behavioral health, pharmacy services, data analytics and wellness solutions, combine to produce a simplified experience that makes health care easier to navigate and more effective. References throughout these notes to consolidated financial statements to “we,” “us,” “our,” “Company,” and “Humana,” mean Humana Inc. and its subsidiaries. We derived approximately 81% of our total premiums and services revenue from contracts with the federal government in 2018 , including 15% related to our federal government contracts with the Centers for Medicare and Medicaid Services, or CMS, to provide health insurance coverage for individual Medicare Advantage members in Florida. CMS is the federal government’s agency responsible for administering the Medicare program. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Our consolidated financial statements include the accounts of Humana Inc. and subsidiaries that the Company controls, including variable interest entities associated with medical practices for which we are the primary beneficiary. We do not own many of our medical practices but instead enter into exclusive management agreements with the affiliated Professional Associations, or P.A.s, that operate these medical practices. Based upon the provisions of these agreements, these affiliated P.A.s are variable interest entities and we are the primary beneficiary, and accordingly we consolidate the affiliated P.A.s. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. Workforce Optimization During the third quarter of 2017, we initiated a voluntary early retirement program and an involuntary workforce reduction program. These programs impacted approximately 3,600 associates, or 7.8% of our workforce. As a result, in 2017 we recorded charges of $148 million , or $0.64 per diluted common share. At December 31, 2017, $ 140 million was classified as a current liability, included in our consolidated balance sheet in the trade accounts payable and accrued expenses line. Payments under these programs are being made upon termination during the early retirement or severance pay period. The remaining workforce optimization liability at December 31, 2018, was $12 million and is expected to be paid in 2019. Aetna Merger On February 16, 2017, under the terms of the Agreement and Plan of Merger, or Merger Agreement, with Aetna Inc., and certain wholly owned subsidiaries of Aetna Inc., which we collectively refer to as Aetna, we received a breakup fee of $1 billion from Aetna, which is included in our consolidated statement of income in the line captioned "Merger termination fee and related costs, net." Health Care Reform The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010 (which we collectively refer to as the Health Care Reform Law) enacted significant reforms to various aspects of the U.S. health insurance industry. Certain of these reforms became effective January 1, 2014, including an annual insurance industry premium-based fee and the establishment of federally-facilitated or state-based exchanges. Operating results for our individual commercial medical business compliant with the Health Care Reform Law were challenged primarily due to unanticipated modifications in the program subsequent to the passing of the Health Care Reform Law, resulting in higher covered population morbidity and the ensuing enrollment and claims issues causing volatility in claims experience. As a result of these and other factors, we exited our individual commercial medical business effective January 1, 2018. The annual premium-based fee on health insurers is not deductible for tax purposes. We estimate a liability for the health insurance industry fee and record it in full once qualifying insurance coverage is provided in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized ratably to expense over the same calendar year. We record the liability for the health insurance industry fee in trade accounts payable and accrued expenses and record the deferred cost in other current assets in our consolidated financial statements. We pay the health insurance industry fee in September or October of each year. The Consolidated Appropriations Act enacted on December 18, 2015, included a one-time one year suspension in 2017 of the health insurance industry fee. In 2018, we paid the federal government $1.04 billion for the annual health insurance industry fee attributed to calendar year 2018. In 2016, we paid the federal government $916 million for the annual health insurance industry fee attributed to calendar year 2016. The Continuing Resolution bill, H.R. 195, enacted on January 22, 2018, included a one year suspension in 2019 of the health insurance industry fee, but under current law, the fee is scheduled to resume in calendar year 2020. Cash and Cash Equivalents Cash and cash equivalents include cash, time deposits, money market funds, commercial paper, other money market instruments, and certain U.S. Government securities with an original maturity of three months or less. Carrying value approximates fair value due to the short-term maturity of the investments. Investment Securities Investment securities, which consist entirely of debt securities, have been categorized as available for sale and, as a result, are stated at fair value. Investment securities available for current operations are classified as current assets. Investment securities available for our long-term insurance products and professional liability funding requirements, as well as restricted statutory deposits, are classified as long-term assets. For the purpose of determining gross realized gains and losses, which are included as a component of investment income in the consolidated statements of income, the cost of investment securities sold is based upon specific identification. Unrealized holding gains and losses, net of applicable deferred taxes, are included as a component of stockholders’ equity and comprehensive income until realized from a sale or other-than-temporary impairment. Under the other-than-temporary impairment model for debt securities held, we recognize an impairment loss in income in an amount equal to the full difference between the amortized cost basis and the fair value when we have the intent to sell the debt security or it is more likely than not we will be required to sell the debt security before recovery of our amortized cost basis. However, if we do not intend to sell the debt security, we evaluate the expected cash flows to be received as compared to amortized cost and determine if a credit loss has occurred. In the event of a credit loss, only the amount of the impairment associated with the credit loss is recognized currently in income with the remainder of the loss recognized in other comprehensive income. When we do not intend to sell a security in an unrealized loss position, potential other-than-temporary impairment is considered using a variety of factors, including the length of time and extent to which the fair value has been less than cost; adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a security; payment structure of the security; changes in credit rating of the security by the rating agencies; the volatility of the fair value changes; and changes in fair value of the security after the balance sheet date. For debt securities, we take into account expectations of relevant market and economic data. For example, with respect to mortgage and asset-backed securities, such data includes underlying loan level data and structural features such as seniority and other forms of credit enhancements. A decline in fair value is considered other-than-temporary when we do not expect to recover the entire amortized cost basis of the security. We estimate the amount of the credit loss component of a debt security as the difference between the amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of future cash flows discounted at the implicit interest rate at the date of purchase. Receivables and Revenue Recognition We generally establish one-year commercial membership contracts with employer groups, subject to cancellation by the employer group on 30 -day written notice. Our Medicare contracts with CMS renew annually. Our military services contracts with the federal government and certain contracts with various state Medicaid programs generally are multi-year contracts subject to annual renewal provisions. Premiums Revenue We receive monthly premiums from the federal government and various states according to government specified payment rates and various contractual terms. We bill and collect premium from employer groups and members in our Medicare and other individual products monthly. Changes in premium revenues resulting from the periodic changes in risk-adjustment scores derived from medical diagnoses for our membership are estimated by projecting the ultimate annual premium and are recognized ratably during the year, with adjustments each period to reflect changes in the ultimate premium. Receivables or payables are classified as current or long-term in our consolidated balance sheet based on the timing of the expected settlement. Premiums revenue is estimated by multiplying the membership covered under the various contracts by the contractual rates. Premiums revenue is recognized as income in the period members are entitled to receive services, and is net of estimated uncollectible amounts, retroactive membership adjustments, and adjustments to recognize rebates under the minimum benefit ratios required under the Health Care Reform Law. We estimate policyholder rebates by projecting calendar year minimum benefit ratios for the small group and large group markets, as defined by the Health Care Reform Law using a methodology prescribed by HHS, separately by state and legal entity. Medicare Advantage products are also subject to minimum benefit ratio requirements under the Health Care Reform Law. Estimated calendar year rebates recognized ratably during the year are revised each period to reflect current experience. Retroactive membership adjustments result from enrollment changes not yet processed, or not yet reported by an employer group or the government. We routinely monitor the collectibility of specific accounts, the aging of receivables, historical retroactivity trends, estimated rebates, as well as prevailing and anticipated economic conditions, and reflect any required adjustments in current operations. Premiums received prior to the service period are recorded as unearned revenues. Medicare Part D We cover prescription drug benefits in accordance with Medicare Part D under multiple contracts with CMS. The payments we receive monthly from CMS and members, which are determined from our annual bid, represent amounts for providing prescription drug insurance coverage. We recognize premiums revenue for providing this insurance coverage ratably over the term of our annual contract. Our CMS payment is subject to risk sharing through the Medicare Part D risk corridor provisions. In addition, receipts for reinsurance and low-income cost subsidies as well as receipts for certain discounts on brand name prescription drugs in the coverage gap represent payments for prescription drug costs for which we are not at risk. The risk corridor provisions compare costs targeted in our bids to actual prescription drug costs, limited to actual costs that would have been incurred under the standard coverage as defined by CMS. Variances exceeding certain thresholds may result in CMS making additional payments to us or require us to refund to CMS a portion of the premiums we received. As risk corridor provisions are considered in our overall annual bid process, we estimate and recognize an adjustment to premiums revenue related to these provisions based upon pharmacy claims experience. We record a receivable or payable at the contract level and classify the amount as current or long-term in our consolidated balance sheets based on the timing of expected settlement. Reinsurance and low-income cost subsidies represent funding from CMS in connection with the Medicare Part D program for which we assume no risk. Reinsurance subsidies represent funding from CMS for its portion of prescription drug costs which exceed the member’s out-of-pocket threshold, or the catastrophic coverage level. Low-income cost subsidies represent funding from CMS for all or a portion of the deductible, the coinsurance and co-payment amounts above the out-of-pocket threshold for low-income beneficiaries. Monthly prospective payments from CMS for reinsurance and low-income cost subsidies are based on assumptions submitted with our annual bid. A reconciliation and related settlement of CMS’s prospective subsidies against actual prescription drug costs we paid is made after the end of the year. The Health Care Reform Law mandates consumer discounts of 50% on brand name prescription drugs for Part D plan participants in the coverage gap. These discounts are funded by CMS and pharmaceutical manufacturers while we administer the application of these funds. We account for these subsidies and discounts as a deposit in our consolidated balance sheets and as a financing activity under receipts (withdrawals) from contract deposits in our consolidated statements of cash flows. For 2018 , subsidy and discount payments of $10.3 billion exceeded reimbursements of $9.6 billion by $0.7 billion . For 2017 , subsidy and discount reimbursements of $12.1 billion exceeded payments of $10.2 billion by $1.9 billion . For 2016 , subsidy and discount reimbursements of $11.1 billion exceeded payments of $10.0 billion by $1.1 billion . We do not recognize premiums revenue or benefit expenses for these subsidies or discounts. Receipt and payment activity is accumulated at the contract level and recorded in our consolidated balance sheets in other current assets or trade accounts payable and accrued expenses depending on the contract balance at the end of the reporting period. Settlement of the reinsurance and low-income cost subsidies as well as the risk corridor payment is based on a reconciliation made approximately 9 months after the close of each calendar year. Settlement with CMS for brand name prescription drug discounts is based on a reconciliation made approximately 14 to 18 months after the close of each calendar year. We continue to revise our estimates with respect to the risk corridor provisions based on subsequent period pharmacy claims data. See Note 7 for detail regarding amounts recorded to our consolidated balance sheets related to the risk corridor settlement and subsidies from CMS with respect to the Medicare Part D program. Services Revenue Patient services revenue Patient services include injury and illness care and related services as well as other healthcare services related to customer needs or as required by law. Patient services revenues are recognized in the period services are provided to the customer and are net of contractual allowances. Administrative services fees Administrative services fees cover the processing of claims, offering access to our provider networks and clinical programs, and responding to customer service inquiries from members of self-funded groups. Revenues from providing administration services, also known as administrative services only, or ASO, are recognized in the period services are performed and are net of estimated uncollectible amounts. ASO fees are estimated by multiplying the membership covered under the various contracts by the contractual rates. Under ASO contracts, self-funded employers retain the risk of financing substantially all of the cost of health benefits. However, many ASO customers purchase stop loss insurance coverage from us to cover catastrophic claims or to limit aggregate annual costs. Accordingly, we have recorded premiums revenue and benefits expense related to these stop loss insurance contracts. We routinely monitor the collectibility of specific accounts, the aging of receivables, as well as prevailing and anticipated economic conditions, and reflect any required adjustments in current operations. ASO fees received prior to the service period are recorded as unearned revenues. Under our TRICARE contracts with the Department of Defense (DoD) we provide administrative services, including offering access to our provider networks and clinical programs, claim processing, customer service, enrollment, and other services, while the federal government retains all of the risk of the cost of health benefits. We account for revenues under our contracts net of estimated health care costs similar to an administrative services fee only agreement. Our contracts include fixed administrative services fees and incentive fees and penalties. Administrative services fees are recognized as services are performed. Our TRICARE members are served by both in-network and out-of-network providers in accordance with our contracts. We pay health care costs related to these services to the providers and are subsequently reimbursed by the DoD for such payments. We account for the payments of the federal government’s claims and the related reimbursements under deposit accounting in our consolidated balance sheets and as a financing activity under receipts (withdrawals) from contract deposits in our consolidated statements of cash flows. For 2018, health care cost reimbursements and payments were each approximately $5.6 billion , with reimbursements exceeding payments by $38 million for the year. For 2017, health care cost reimbursements and payments were each approximately $3.4 billion , with reimbursements exceeding payments by $11 million for the year. For 2016, health care cost reimbursements and payments were each approximately $3.3 billion with payments exceeding reimbursements by $25 million for the year. Receivables Receivables, including premium receivables, patient services revenue receivables, and ASO fee receivables, are shown net of allowances for estimated uncollectible accounts, retroactive membership adjustments, and contractual allowances. At December 31, 2018 and 2017, accounts receivable related to services were $123 million and $180 million , respectively. For the year ended December 31, 2018 , we had no material bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the consolidated balance sheet at December 31, 2018 . For the year ended December 31, 2018 , revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price), was not material. Further, revenue expected to be recognized in any future year related to remaining performance obligations was not material. Other Current Assets Other current assets includes amounts associated with Medicare Part D as discussed above and in Note 7, rebates due from pharmaceutical manufacturers and other amounts due within one year. We accrue pharmaceutical rebates as they are earned based on contractual terms and usage of the product. The balance of pharmaceutical rebates receivable was $1.3 billion at December 31, 2018 and $1.2 billion at December 31, 2017 . Policy Acquisition Costs Policy acquisition costs are those costs that relate directly to the successful acquisition of new and renewal insurance policies. Such costs include commissions, costs of policy issuance and underwriting, and other costs we incur to acquire new business or renew existing business. We expense policy acquisition costs related to our employer-group prepaid health services policies as incurred. These short-duration employer-group prepaid health services policies typically have a 1 -year term and may be canceled upon 30 days notice by the employer group. Life insurance, annuities, certain health and other supplemental, and, prior to the sale of our KMG subsidiary in 2018, long term care policies sold to individuals are accounted for as long-duration insurance products because they are expected to remain in force for an extended period beyond one year and premium received in the earlier years is intended to pay anticipated benefits to be incurred in future years . As a result, we defer policy acquisition costs, primarily consisting of commissions, and amortize them over the estimated life of the policies in proportion to premiums earned. Deferred acquisition costs are reviewed to determine if they are recoverable from future income. See Note 18. Long-Lived Assets Property and equipment is recorded at cost. Gains and losses on sales or disposals of property and equipment are included in operating costs. Certain costs related to the development or purchase of internal-use software are capitalized. Depreciation is computed using the straight-line method over estimated useful lives ranging from 3 to 10 years for equipment, 3 to 5 years for computer software, and 10 to 20 years for buildings. Improvements to leased facilities are depreciated over the shorter of the remaining lease term or the anticipated life of the improvement. We periodically review long-lived assets, including property and equipment and definite-lived intangible assets, for impairment whenever adverse events or changes in circumstances indicate the carrying value of the asset may not be recoverable. Losses are recognized for a long-lived asset to be held and used in our operations when the undiscounted future cash flows expected to result from the use of the asset are less than its carrying value. We recognize an impairment loss based on the excess of the carrying value over the fair value of the asset. A long-lived asset held for sale is reported at the lower of the carrying amount or fair value less costs to sell. Depreciation expense is not recognized on assets held for sale. Losses are recognized for a long-lived asset to be abandoned when the asset ceases to be used. In addition, we periodically review the estimated lives of all long-lived assets for reasonableness. Equity Method Investments We use the equity method of accounting for equity investments in companies where we are able to exercise significant influence, but not control, over operating and financial policies of the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, representation on the board of directors, organizational structure, participation in policy-making decisions and material intra-entity transactions. Generally, under the equity method, original investments in these entities are recorded at cost and subsequently adjusted by our share of equity in income or losses after the date of acquisition as well as capital contributions to and distributions from these companies. Our proportionate share of the net income or loss of these companies is included in consolidated net income. Investment amounts in excess of our share of an investee's net assets are amortized over the life of the related asset creating the excess. Excess goodwill is not amortized. We evaluate equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by us when reviewing an equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than carrying value, the investee’s financial condition and near-term prospects and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. See Note 4 for further information. Goodwill and Definite-Lived Intangible Assets Goodwill represents the unamortized excess of cost over the fair value of the net tangible and other intangible assets acquired. We are required to test at least annually for impairment at a level of reporting referred to as the reporting unit, and more frequently if adverse events or changes in circumstances indicate that the asset may be impaired. A reporting unit either is our operating segments or one level below the operating segments, referred to as a component, which comprise our reportable segments. A component is considered a reporting unit if the component constitutes a business for which discrete financial information is available that is regularly reviewed by management. We aggregate the components of an operating segment into one reporting unit if they have similar economic characteristics. Goodwill is assigned to the reporting units that are expected to benefit from the specific synergies of the business combination. We use the one-step process to review goodwill for impairment to determine both the existence and amount of goodwill impairment, if any. Impairment tests are performed, at a minimum, in the fourth quarter of each year supported by our long-range business plan and annual planning process. We rely on an evaluation of future discounted cash flows to determine fair value of our reporting units. The fair value of our reporting units with significant goodwill exceeded carrying amounts by a substantial margin. A 100 basis point increase in the discount rate would not have a significant impact on the amount of margin for any of our reporting units with significant goodwill, with the exception of our clinical and provider reporting units in our Healthcare Services segment. The margin on the clinical reporting unit would decline to less than 10% after factoring in a 100 basis point increase in the discount rate. The provider reporting unit, while not falling beneath this threshold, was closer than any of our other reporting units. The clinical and provider reporting units account for $524 million and $730 million , respectively, of goodwill. Impairment tests completed for 2018 , 2017 , and 2016 did not result in an impairment loss. Definite-lived intangible assets primarily relate to acquired customer contracts/relationships and are included with other long-term assets in the consolidated balance sheets. Definite-lived intangible assets are amortized over the useful life generally using the straight-line method. We review definite-lived intangible assets for impairment under our long-lived asset policy. Benefits Payable and Benefits Expense Recognition Benefits expense includes claim payments, capitation payments, pharmacy costs net of rebates, allocations of certain centralized expenses and various other costs incurred to provide health insurance coverage to members, as well as estimates of future payments to hospitals and others for medical care and other supplemental benefits provided on or prior to the balance sheet date. Capitation payments represent monthly contractual fees disbursed to primary care and other providers who are responsible for providing medical care to members. Pharmacy costs represent payments for members’ prescription drug benefits, net of rebates from drug manufacturers. Receivables for such pharmacy rebates are included in other current assets in our consolidated balance sheets. Other supplemental benefits include dental, vision, and other supplemental health and financial protection products. We estimate the costs of our benefits expense payments using actuarial methods and assumptions based upon claim payment patterns, medical cost inflation, historical developments such as claim inventory levels and claim receipt patterns, and other relevant factors, and record benefit reserves for future payments. We continually review estimates of future payments relating to claims costs for services incurred in the current and prior periods and make necessary adjustments to our reserves. Benefits expense is recognized in the period in which services are provided and includes an estimate of the cost of services which have been incurred but not yet reported, or IBNR. Our reserving practice is to consistently recognize the actuarial best point estimate within a level of confidence required by actuarial standards. Actuarial standards of practice generally require a level of confidence such that the liabilities established for IBNR have a greater probability of being adequate versus being insufficient, or such that the liabilities established for IBNR are sufficient to cover obligations under an assumption of moderately adverse conditions. Adverse conditions are situations in which the actual claims are expected to be higher than the otherwise estimated value of such claims at the time of the estimate. Therefore, in many situations, the claim amounts ultimately settled will be less than the estimate that satisfies the actuarial standards of practice. We develop our estimate for IBNR using actuarial methodologies and assumptions, primarily based upon historical claim experience. Depending on the period for which incurred claims are estimated, we apply a different method in determining our estimate. For periods prior to the most recent two months, the key assumption used in estimating our IBNR is that the completion factor pattern remains consistent over a rolling 12-month period after adjusting for known changes in claim inventory levels and known changes in claim payment processes. Completion factors result from the calculation of the percentage of claims incurred during a given period that have historically been adjudicated as of the reporting period. For the most recent two months, the incurred claims are estimated primarily from a trend analysis based upon per member per month claims trends developed from our historical experience in the preceding months, adjusted for known changes in estimates of recent hospital and drug utilization data, provider contracting changes, changes in benefit levels, changes in member cost sharing, changes in medical management processes, product mix, and weekday seasonality. The completion factor method is used for the months of incurred claims prior to the most recent two months because the historical percentage of claims processed for those months is at a level sufficient to produce a consistently reliable result. Conversely, for the most recent two months of incurred claims, the volume of claims processed historically is not at a level sufficient to produce a reliable result, which therefore requires us to examine historical trend patterns as the primary method of evaluation. Changes in claim processes, including recoveries of overpayments, receipt cycle times, claim inventory levels, outsourcing, system conversions, and processing disruptions due to weather or other events affect views regarding the reasonable choice of completion factors. Claim payments to providers for services rendered are often net of overpayment recoveries for claims paid previously, as contractually allowed. Claim overpayment recoveries can result from many different factors, including retroactive enrollment activity, audits of provider billings, and/or payment errors. Changes in patterns of claim overpayment recoveries can be unpredictable and result in completion factor volatility, as they often impact older dates of service. The receipt cycle time measures the average length of time between when a medical claim was initially incurred and when the claim form was received. Increases in electronic claim submissions from providers decrease the receipt cycle time. If claims are submitted or processed on a faster (slower) pace than prior periods, the actual claim may be more (less) complete than originally estimated using our completion factors, which may result in reserves that are higher (lower) than required. Medical cost trends potentially are more volatile than other segments of the economy. The drivers of medical cost trends include increases in the utilization of hospital facilities, physician services, new higher priced technologies and medical procedures, and new prescription drugs and therapies, as well as the inflationary effect on the cost per unit of each of these expense components. Other external factors such as government-mandated benefits or other regulatory changes, the tort liability |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Acquisition of a 40% Minority Interest in Kindred’s Homecare Business On July 2, 2018, we completed the acquisition of a 40% minority interest in the Kindred at Home Division, or Kindred at Home, of Kindred Healthcare, Inc., or Kindred , for cash consideration of approximately $850 million . TPG Capital, or TPG, and Welsh, Carson, Anderson & Stowe, or WCAS, collectively, the Sponsors, along with us jointly created a consortium to purchase all of the outstanding and issued securities of Kindred. Immediately following the closing of that transaction, Kindred at Home and the Specialty Hospital company were separated, with the result being that the Long Term Acute Care and Rehabilitation businesses (the Specialty Hospital Company) are owned by the Sponsors and Kindred at Home is owned by a joint venture owned by the Sponsors and us. On July 11, 2018, we, along with the same Kindred at Home Sponsors, TPG and WCAS completed the acquisition of privately-held Curo Health Services, or Curo, one of the nation's leading hospice operators providing care to patients at 245 locations in 22 states. The transaction was structured as a merger of Curo with the hospice business of Kindred at Home, and we thereby purchased a 40% minority interest in Curo for cash consideration of approximately $250 million . We account for our 40% investment in Kindred at Home using the equity method of accounting. This investment is reflected as "Equity method investment in Kindred at Home" in our consolidated balance sheets, with our share of income or loss reported as "Equity in net earnings of Kindred at Home" in our consolidated statements of income. We entered into a shareholders agreement with the Sponsors that provides for certain rights and obligations of each party. The shareholders agreement with the Sponsors includes a put option under which they have the right to require us to purchase their interest in the joint venture starting at the end of year three and ending at the end of year four following the closing. Likewise, we have a call option under which we have the right to require the Sponsors to sell their interest in the joint venture to Humana beginning at the end of 2022 and ending at the end of 2023 following the closing. The put and call options, which are exercisable at a fixed EBITDA multiple and provide a minimum return on the Sponsor's investment if exercised, are measured at fair value each period using a Monte Carlo simulation. The simulation relies on assumptions around Kindred at Home's equity value, risk free interest rates, volatility, and the details specific to the put and call options. The final purchase price allocation resulted in approximately $1 billion being allocated to the investment and $236 million and $291 million allocated to the put and call options, respectively. The fair values of the put option and call option were $224 million and $246 million , respectively, at December 31, 2018. The put option is included within other long-term liabilities and the call option is included within other long-term assets. The change in fair value of the put and call options is reflected as "Other expense, net" in our consolidated statements of income. Sale of Closed Block of Commercial Long-Term Care Insurance Business On August 9, 2018 , we completed the sale of our wholly-owned subsidiary, KMG America Corporation, or KMG, to Continental General Insurance Company, or CGIC, a Texas-based insurance company wholly owned by HC2 Holdings, Inc., a diversified holding company. KMG's subsidiary, Kanawha Insurance Company, or KIC, includes our closed block of non-strategic commercial long-term care policies. Upon closing, we funded the transaction with approximately $190 million of parent company cash contributed into KMG, subject to customary adjustments, in addition to the transfer of approximately $160 million of statutory capital with the sale. In connection with the sale of KMG, we recognized a pretax loss, including transaction costs, of $786 million and a corresponding $452 million tax benefit. Prior to the sale of KMG, we entered into reinsurance contracts to transfer the risk associated with certain voluntary benefit and financial protection products previously issued primarily by KIC to a third party. We transferred approximately $245 million of cash to the third party and recorded a commensurate reinsurance recoverable as a result of these transactions. The reinsurance recoverable was included as part of the net assets disposed. There was no material impact to operating results from these reinsurance transactions. KMG revenues and net income for the 2018 period prior to the date of sale was $182 million and $47 million , respectively. KMG revenues and net loss were $261 million and $117 million , respectively, for the year ended December 31, 2017 and $249 million and $336 million , respectively, for the year ended December 31, 2016. The assets and liabilities of KMG that were disposed of on August 9, 2018 were as follows: August 9, 2018 Assets (in millions) Cash and cash equivalents $ 805 Receivables, net 3 Investment securities 1,576 Other assets 1,085 Total assets disposed $ 3,469 Liabilities Benefits payable $ 58 Trade accounts payable and accrued expenses 70 Future policy benefits payable 2,573 Total liabilities disposed $ 2,701 Other Acquisitions and Divestitures On March 1, 2018, we acquired the remaining equity interest in MCCI Holdings, LLC, or MCCI, a privately held management service organization and healthcare provider headquartered in Miami, Florida, that primarily coordinates medical care for Medicare Advantage beneficiaries in Florida and Texas. The purchase price consisted primarily of $169 million cash, as well as our existing investment in MCCI and a note receivable and a revolving note with an aggregate balance of $383 million . This resulted in a preliminary purchase price allocation to goodwill of $483 million , definite-lived intangible assets of $80 million , and net tangible assets of $24 million . The goodwill was assigned to the Retail and Healthcare Services segments. The definite-lived intangible assets, which primarily consist of customer contracts, have an estimated weighted average useful life of 8 years . On April 10, 2018, we acquired Family Physicians Group, or FPG, for cash consideration of approximately $185 million , net of cash received. FPG serves Medicare Advantage and Managed Medicaid HMO patients in Greater Orlando, Florida with a footprint that includes clinics located in Lake, Orange, Osceola and Seminole counties. This resulted in a preliminary purchase price allocation to goodwill of $133 million , definite-lived intangible assets of $38 million and net tangible assets of $14 million . The goodwill was assigned to the Retail and Healthcare Services segments. The other intangible assets, which primarily consist of customer contracts, have an estimated weighted average useful life of 5 years . The purchase price allocations for MCCI and FPG are preliminary, subject to receipt and validation of certain tax related analyses. During 2017 and 2016, we acquired certain other health and wellness related businesses which, individually or in the aggregate, have not had a material impact on our results of operations, financial condition, or cash flows. The results of operations and financial condition of these businesses have been included in our consolidated statements of income and consolidated balance sheets from the respective acquisition dates. Acquisition-related costs recognized in each of 2018, 2017 and 2016 were not material to our results of operations. Goodwill and definite-lived intangible assets acquired are partially amortizable as deductible expenses for tax purposes. The pro forma financial information assuming the acquisitions had occurred as of the beginning of the calendar year prior to the year of acquisition, as well as the revenues and earnings generated during the year of acquisition, were not material for disclosure purposes. |
EQUITY METHOD INVESTMENT
EQUITY METHOD INVESTMENT | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENT | EQUITY METHOD INVESTMENT The summarized balance sheet at December 31, 2018 and income statement for the period beginning July 2, 2018 through December 31, 2018 of Kindred at Home in which we hold a 40% equity interest was as follows: Balance sheet December 31, 2018 (in millions) Current assets $ 536 Non-current assets 4,955 Current liabilities 351 Non-current liabilities 2,708 Shareholders' equity 2,432 Statement of income July 2, 2018 through December 31, 2018 (in millions) Revenues $ 1,587 Expenses 1,451 Net income 27 |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | INVESTMENT SECURITIES Investment securities classified as current and long-term were as follows at December 31, 2018 and 2017 , respectively: Amortized Gross Gross Fair (in millions) December 31, 2018 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 419 $ 1 $ (3 ) $ 417 Mortgage-backed securities 2,595 3 (54 ) 2,544 Tax-exempt municipal securities 2,805 3 (37 ) 2,771 Mortgage-backed securities: Residential 55 — — 55 Commercial 537 — (14 ) 523 Asset-backed securities 991 1 (7 ) 985 Corporate debt securities 3,239 1 (98 ) 3,142 Total debt securities $ 10,641 $ 9 $ (213 ) $ 10,437 December 31, 2017 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 532 $ 1 $ (2 ) $ 531 Mortgage-backed securities 1,625 4 (19 ) 1,610 Tax-exempt municipal securities 3,884 33 (28 ) 3,889 Mortgage-backed securities: Residential 26 — — 26 Commercial 455 3 (2 ) 456 Asset-backed securities 407 1 — 408 Corporate debt securities 5,175 244 (37 ) 5,382 Total debt securities $ 12,104 $ 286 $ (88 ) $ 12,302 Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at December 31, 2018 and 2017 , respectively: Less than 12 months 12 months or more Total Fair Gross Fair Gross Fair Gross (in millions) December 31, 2018 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 179 $ (1 ) $ 153 $ (2 ) $ 332 $ (3 ) Mortgage-backed securities 956 (16 ) 1,019 (38 ) 1,975 (54 ) Tax-exempt municipal securities 809 (9 ) 1,648 (28 ) 2,457 (37 ) Mortgage-backed securities: Residential — — 15 — 15 — Commercial 372 (8 ) 133 (6 ) 505 (14 ) Asset-backed securities 824 (7 ) 40 — 864 (7 ) Corporate debt securities 1,434 (35 ) 1,439 (63 ) 2,873 (98 ) Total debt securities $ 4,574 $ (76 ) $ 4,447 $ (137 ) $ 9,021 $ (213 ) December 31, 2017 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 273 $ (1 ) $ 130 $ (1 ) $ 403 $ (2 ) Mortgage-backed securities 581 (2 ) 672 (17 ) 1,253 (19 ) Tax-exempt municipal securities 1,590 (16 ) 661 (12 ) 2,251 (28 ) Mortgage-backed securities: Residential 20 — 3 — 23 — Commercial 131 (1 ) 28 (1 ) 159 (2 ) Asset-backed securities 107 — 10 — 117 — Corporate debt securities 1,297 (10 ) 804 (27 ) 2,101 (37 ) Total debt securities $ 3,999 $ (30 ) $ 2,308 $ (58 ) $ 6,307 $ (88 ) Approximately 97% of our debt securities were investment-grade quality, with a weighted average credit rating of AA by S&P at December 31, 2018 . Most of the debt securities that were below investment-grade were rated BB , the higher end of the below investment-grade rating scale. Tax-exempt municipal securities were diversified among general obligation bonds of states and local municipalities in the United States as well as special revenue bonds issued by municipalities to finance specific public works projects such as utilities, water and sewer, transportation, or education. Our general obligation bonds are diversified across the United States with no individual state exceeding 9% . Our investment policy limits investments in a single issuer and requires diversification among various asset types. Our unrealized loss from all securities was generated from approximately 1,210 positions out of a total of approximately 1,500 positions at December 31, 2018 . All issuers of securities we own that were trading at an unrealized loss at December 31, 2018 remain current on all contractual payments. After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets since the time the securities were purchased. At December 31, 2018 , we did not intend to sell the securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these securities before recovery of their amortized cost basis. As a result, we believe that the securities with an unrealized loss were not other-than-temporarily impaired at December 31, 2018 . The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the years ended December 31, 2018 , 2017 , and 2016 : 2018 2017 2016 (in millions) Gross realized gains $ 106 $ 35 $ 120 Gross realized losses (16 ) (21 ) (24 ) Net realized capital gains $ 90 $ 14 $ 96 There were no material other-than-temporary impairments in 2018 , 2017 , or 2016 . The contractual maturities of debt securities available for sale at December 31, 2018 , regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Fair (in millions) Due within one year $ 943 $ 941 Due after one year through five years 2,929 2,873 Due after five years through ten years 1,873 1,810 Due after ten years 718 706 Mortgage and asset-backed securities 4,178 4,107 Total debt securities $ 10,641 $ 10,437 |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Financial Assets The following table summarizes our fair value measurements at December 31, 2018 and 2017 , respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Value Quoted Prices Other Unobservable (in millions) December 31, 2018 Cash equivalents $ 2,024 $ 2,024 $ — $ — Debt securities: U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations 417 — 417 — Mortgage-backed securities 2,544 — 2,544 — Tax-exempt municipal securities 2,771 — 2,771 — Mortgage-backed securities: Residential 55 — 55 — Commercial 523 — 523 — Asset-backed securities 985 — 985 — Corporate debt securities 3,142 — 3,142 — Total debt securities 10,437 — 10,437 — Total invested assets $ 12,461 $ 2,024 $ 10,437 $ — December 31, 2017 Cash equivalents $ 4,564 $ 4,564 $ — $ — Debt securities: U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations 531 — 531 — Mortgage-backed securities 1,610 — 1,610 — Tax-exempt municipal securities 3,889 — 3,889 — Mortgage-backed securities: Residential 26 — 26 — Commercial 456 — 456 — Asset-backed securities 408 — 408 — Corporate debt securities 5,382 — 5,381 1 Total debt securities 12,302 — 12,301 1 Total invested assets $ 16,866 $ 4,564 $ 12,301 $ 1 The table above does not include the fair value of the put and call options associated with our equity investment in Kindred at Home. See Note 3 for further information. Financial Liabilities Our debt is recorded at carrying value in our consolidated balance sheets. The carrying value of our senior notes debt outstanding, net of unamortized debt issuance costs, was $4,774 million at December 31, 2018 and $4,770 million at December 31, 2017 . The fair value of our senior note debt was $4,885 million at December 31, 2018 and $5,191 million at December 31, 2017 . The fair value of our senior note debt is determined based on Level 2 inputs, including quoted market prices for the same or similar debt, or if no quoted market prices are available, on the current prices estimated to be available to us for debt with similar terms and remaining maturities. Due to the short-term nature, carrying value approximates fair value for our term note and commercial paper borrowings. The term loan outstanding and commercial paper borrowings were $1,295 million at December 31, 2018 , compared to $150 million at December 31, 2017 . Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis As disclosed in Note 3, we acquired MCCI, FPG, and other health and wellness related businesses during 2018 , 2017 , and 2016 . The values of net tangible assets acquired and the resulting goodwill and other intangible assets were recorded at fair value using Level 3 inputs. The majority of the tangible assets acquired and liabilities assumed were recorded at their carrying values as of the respective dates of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in these acquisitions were internally estimated primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. We developed internal estimates for the expected future cash flows and discount rates used in the present value calculations. Other than assets acquired and liabilities assumed in these acquisitions, there were no material assets or liabilities measured at fair value on a nonrecurring basis during 2018 , 2017 , or 2016 . |
MEDICARE PART D
MEDICARE PART D | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
MEDICARE PART D | MEDICARE PART D As discussed in Note 2, we cover prescription drug benefits in accordance with Medicare Part D under multiple contracts with CMS. The accompanying consolidated balance sheets include the following amounts associated with Medicare Part D as of December 31, 2018 and 2017 . CMS subsidies/discounts in the table below include the reinsurance and low-income cost subsidies funded by CMS for which we assume no risk as well as brand name prescription drug discounts for Part D plan participants in the coverage gap funded by CMS and pharmaceutical manufacturers. 2018 2017 Risk CMS Risk CMS (in millions) Other current assets $ 15 $ 172 $ 4 $ 101 Trade accounts payable and accrued expenses (103 ) (503 ) (255 ) (1,085 ) Net current liability (88 ) (331 ) (251 ) $ (984 ) Other long-term assets 7 — — — Other long-term liabilities (89 ) — (28 ) — Net long-term liability (82 ) — (28 ) — Total net liability $ (170 ) $ (331 ) $ (279 ) $ (984 ) |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment was comprised of the following at December 31, 2018 and 2017 . 2018 2017 (in millions) Land $ 20 $ 20 Buildings and leasehold improvements 766 713 Equipment 890 824 Computer software 2,372 2,003 4,048 3,560 Accumulated depreciation (2,313 ) (1,976 ) Property and equipment, net $ 1,735 $ 1,584 Depreciation expense was $444 million in 2018 , $410 million in 2017 , and $388 million in 2016 , including amortization expense for capitalized internally developed and purchased software of $298 million in 2018 , $287 million in 2017 , and $255 million in 2016 . |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill for our reportable segments for the years ended December 31, 2018 and 2017 were as follows: Retail Group and Specialty Healthcare Services Total (in millions) Balance at January 1, 2017 $ 1,059 $ 261 $ 1,952 $ 3,272 Acquisitions — — 9 9 Balance at December 31, 2017 1,059 261 1,961 3,281 Acquisitions 476 — 140 616 Balance at December 31, 2018 $ 1,535 $ 261 $ 2,101 $ 3,897 The following table presents details of our other intangible assets included in other long-term assets in the accompanying consolidated balance sheets at December 31, 2018 and 2017 . Weighted 2018 2017 Cost Accumulated Net Cost Accumulated Net (in millions) Other intangible assets: Customer contracts/relationships 8.7 years $ 646 $ 434 $ 212 $ 566 $ 401 $ 165 Trade names and technology 6.4 years 84 83 1 104 84 20 Provider contracts 11.8 years 68 37 31 68 30 38 Noncompetes and other 7.3 years 29 28 1 32 29 3 Total other intangible assets 8.7 years $ 827 $ 582 $ 245 $ 770 $ 544 $ 226 Amortization expense for other intangible assets was approximately $90 million in 2018 , $75 million in 2017 , and $77 million in 2016 . Amortization expense for 2018 included $12 million associated with the write-off of a trade name value reflecting the re-branding of certain provider assets. The following table presents our estimate of amortization expense for each of the five next succeeding fiscal years: (in millions) For the years ending December 31, 2019 $ 70 2020 67 2021 34 2022 31 2023 18 |
BENEFITS PAYABLE
BENEFITS PAYABLE | 12 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
BENEFITS PAYABLE | BENEFITS PAYABLE On a consolidated basis, activity in benefits payable, excluding military services, was as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Balances at January 1 $ 4,668 $ 4,563 $ 4,976 Less: Premium deficiency reserve — — (176 ) Less: Reinsurance recoverables (70 ) (76 ) (85 ) Balances at January 1, net 4,598 4,487 4,715 Incurred related to: Current year 46,385 44,001 45,318 Prior years (503 ) (483 ) (582 ) Total incurred 45,882 43,518 44,736 Paid related to: Current year (41,736 ) (39,496 ) (40,852 ) Prior years (3,977 ) (3,911 ) (4,112 ) Total paid (45,713 ) (43,407 ) (44,964 ) Reinsurance recoverable 95 70 76 Balances at December 31 $ 4,862 $ 4,668 $ 4,563 Amounts incurred related to prior years vary from previously estimated liabilities as the claims ultimately are settled. Negative amounts reported for incurred related to prior years result from claims being ultimately settled for amounts less than originally estimated (favorable development). As previously discussed, our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for claims. Actuarial standards require the use of assumptions based on moderately adverse experience, which generally results in favorable reserve development, or reserves that are considered redundant. We experienced favorable medical claims reserve development related to prior fiscal years of $503 million in 2018 , $483 million in 2017 , and $582 million in 2016 . The table below details our favorable medical claims reserve development related to prior fiscal years by segment for 2018 , 2017 , and 2016 . Favorable Medical Claims Reserve 2018 2017 2016 Retail Segment $ (398 ) $ (386 ) $ (429 ) Group and Specialty Segment (46 ) (40 ) (46 ) Individual Commercial Segment (57 ) (56 ) (106 ) Other Businesses (2 ) (1 ) (1 ) Total $ (503 ) $ (483 ) $ (582 ) The favorable medical claims reserve development for 2018 , 2017 , and 2016 primarily reflects the consistent application of trend and completion factors estimated using an assumption of moderately adverse conditions. Favorable prior period development primarily resulted from our Medicare Advantage and individual commercial medical businesses. Benefits expense excluded from the previous table was as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Premium deficiency reserve for short-duration policies $ — $ — $ (176 ) Military services — — 8 Future policy benefits — (22 ) 439 Total $ — $ (22 ) $ 271 Military services benefits expense for 2016 in the table above reflect expenses associated with our contracts with the Veterans Administration. The higher benefits expense associated with future policy benefits payable during 2016 primarily relates to reserve strengthening for our closed block of long-term care insurance policies, which were sold in 2018, as more fully described in Note 18. Incurred and Paid Claims Development The following discussion provides information about incurred and paid claims development for our segments as of December 31, 2018 , net of reinsurance, as well as cumulative claim frequency and the total of IBNR included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended December 31, 2016 and 2017 is presented as supplementary information. Claims frequency is measured as medical fee-for-service claims for each service encounter with a unique provider identification number. Our claims frequency measure includes claims covered by deductibles as well as claims under capitated arrangements. Claim counts may vary based on product mix and the percentage of delegated capitation arrangements. Retail Segment Activity in benefits payable for our Retail segment was as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Balances at January 1 $ 3,963 $ 3,506 $ 3,600 Less: Reinsurance recoverables (70 ) (76 ) (85 ) Balances at January 1, net 3,893 3,430 3,515 Incurred related to: Current year 41,323 38,604 37,212 Prior years (398 ) (386 ) (429 ) Total incurred 40,925 38,218 36,783 Paid related to: Current year (37,189 ) (34,781 ) (33,784 ) Prior years (3,386 ) (2,974 ) (3,084 ) Total paid (40,575 ) (37,755 ) (36,868 ) Reinsurance recoverable 95 70 76 Balances at December 31 $ 4,338 $ 3,963 $ 3,506 At December 31, 2018 , benefits payable for our Retail segment included IBNR of approximately $2.9 billion , primarily associated with claims incurred in 2018 . The cumulative number of reported claims as of December 31, 2018 was approximately 104.3 million for claims incurred in 2018 , 102.1 million for claims incurred in 2017 , and 96.2 million for claims incurred in 2016 . The following tables provide information about incurred and paid claims development for the Retail segment as of December 31, 2018 , net of reinsurance. Incurred Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2016 2017 2018 (in millions) 2016 $ 37,212 $ 36,891 $ 36,811 2017 38,604 38,341 2018 41,323 Total $ 116,475 Cumulative Paid Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2016 2017 2018 (in millions) 2016 $ 33,784 $ 36,841 $ 36,811 2017 34,781 38,232 2018 37,189 Total $ 112,232 All outstanding benefit liabilities before 2015, net of reinsurance N/A Benefits payable, net of reinsurance $ 4,243 Group and Specialty Segment Activity in benefits payable for our Group and Specialty segment, excluding military services, was as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Balances at January 1 $ 568 $ 579 $ 616 Less: Reinsurance recoverables — — — Balances at January 1, net 568 579 616 Incurred related to: Current year 5,466 5,403 5,271 Prior years (46 ) (40 ) (46 ) Total incurred 5,420 5,363 5,225 Paid related to: Current year (4,957 ) (4,843 ) (4,700 ) Prior years (514 ) (531 ) (562 ) Total paid (5,471 ) (5,374 ) (5,262 ) Balances at December 31 $ 517 $ 568 $ 579 At December 31, 2018 , benefits payable for our Group and Specialty segment included IBNR of approximately $448 million , primarily associated with claims incurred in 2018 . The cumulative number of reported claims as of December 31, 2018 was approximately 10.4 million for claims incurred in 2018 , 11.1 million for claims incurred in 2017 , and 12.9 million for claims incurred in 2016 . The following tables provide information about incurred and paid claims development for the Group and Specialty segment as of December 31, 2018 , net of reinsurance. Incurred Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2016 2017 2018 (in millions) 2016 $ 5,271 $ 5,234 $ 5,235 2017 5,403 5,358 2018 5,466 Total $ 16,059 Cumulative Paid Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2016 2017 2018 (in millions) 2016 $ 4,700 $ 5,226 $ 5,234 2017 4,843 5,351 2018 4,957 Total $ 15,542 All outstanding benefit liabilities before 2015, net of reinsurance N/A Benefits payable, net of reinsurance $ 517 Individual Commercial Segment Activity in benefits payable for our Individual Commercial segment, was as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Balances at January 1 $ 101 $ 454 $ 741 Less: Premium deficiency reserve — — (176 ) Balances at January 1, net 101 454 565 Incurred related to: Current year — 669 3,677 Prior years (56 ) (56 ) (106 ) Total incurred (56 ) 613 3,571 Paid related to: Current year — (583 ) (3,233 ) Prior years (38 ) (383 ) (449 ) Total paid (38 ) (966 ) (3,682 ) Balances at December 31 $ 7 $ 101 $ 454 At December 31, 2018 , benefits payable for our Individual Commercial segment included IBNR of approximately $1 million , associated with claims prior to 2018 . The cumulative number of reported claims as of December 31, 2017 was approximately 2.2 million for claims incurred in 2017 and 9.5 million for claims incurred in 2016 . The following tables provide information about incurred and paid claims development for the Individual Commercial segment as of December 31, 2018 , net of reinsurance. Incurred Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2016 2017 2018 (in millions) 2016 $ 3,677 $ 3,621 $ 3,609 2017 669 627 2018 — Total $ 4,236 Cumulative Paid Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2016 2017 2018 (in millions) 2016 $ 3,233 $ 3,606 $ 3,609 2017 583 620 2018 — Total $ 4,229 All outstanding benefit liabilities before 2015, net of reinsurance N/A Benefits payable, net of reinsurance $ 7 Reconciliation to Consolidated The reconciliation of the net incurred and paid claims development tables to benefits payable in the consolidated statement of financial position is as follows: December 31, Net outstanding liabilities Retail $ 4,243 Group and Specialty 517 Individual Commercial 7 Benefits payable, net of reinsurance 4,767 Reinsurance recoverable on unpaid claims Retail 95 Total benefits payable, gross $ 4,862 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The provision for income taxes consisted of the following for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Current provision: Federal $ 139 $ 1,324 $ 921 States and Puerto Rico 58 116 88 Total current provision 197 1,440 1,009 Deferred expense (benefit) 194 132 (71 ) Provision for income taxes $ 391 $ 1,572 $ 938 The provision for income taxes was different from the amount computed using the federal statutory rate for the years ended December 31, 2018 , 2017 and 2016 due to the following: 2018 2017 2016 (in millions) Income tax provision at federal statutory rate $ 436 $ 1,407 $ 543 States, net of federal benefit, and Puerto Rico 42 80 41 Tax exempt investment income (11 ) (22 ) (20 ) Health insurance industry fee 243 — 336 Nondeductible executive compensation 17 36 30 Tax reform (39 ) 133 — KMG sale (272 ) — — Other, net (25 ) (62 ) 8 Provision for income taxes $ 391 $ 1,572 $ 938 The tax reform law enacted on December 22, 2017 (the "Tax Reform Law") reduced the statutory federal corporate income tax rate to 21 percent from 35 percent, beginning in 2018, and required a mandatory deemed repatriation of undistributed foreign earnings. The rate reduction required a remeasurement of our net deferred tax asset . These items resulted in an estimated increase in our 2017 tax provision of approximately $133 million, including approximately $10 million for the deemed repatriation tax imposed on the undistributed earnings of our Puerto Rico operations. Revisions to our prior estimate for the income tax effects of the Tax Reform Law decreased our 2018 tax provision by approximately $39 million . The incremental tax benefit on the sale of KMG of $272 million resulted from a tax loss higher than the loss recorded in the statement of income for the year ended December 31, 2018 due to a higher tax basis in KMG than book basis. In addition, the amount reflects our ability to carryback the capital loss to tax years 2015, 2016 and 2017 at the historical tax rate of 35 percent instead of the current tax rate of 21 percent. Deferred income tax balances reflect the impact of temporary differences between the tax bases of assets or liabilities and their reported amounts in our consolidated financial statements, and are stated at enacted tax rates expected to be in effect when the reported amounts are actually recovered or settled. Principal components of our net deferred tax balances at December 31, 2018 and 2017 were as follows: Assets (Liabilities) 2018 2017 (in millions) Compensation and other accrued expense $ 89 $ 138 Benefits payable 79 113 Investment securities 44 — Net operating loss carryforward 38 53 Capital loss carryforward 15 — Deferred acquisition costs 17 48 Unearned revenues 9 12 Other 8 1 Future policy benefits payable — 231 Total deferred income tax assets 299 596 Valuation allowance (54 ) (49 ) Total deferred income tax assets, net of valuation allowance 245 547 Depreciable property and intangible assets (273 ) (237 ) Prepaid expenses (52 ) (44 ) Future policy benefits payable (5 ) — Investment securities — (49 ) Total deferred income tax liabilities (330 ) (330 ) Total net deferred income tax assets/(liabilities) $ (85 ) $ 217 All deferred tax liabilities and assets are classified as noncurrent in our consolidated balance sheets as other long-term liabilities at December 31, 2018 and as other long-term assets at December 31, 2017. At December 31, 2018 , we had approximately $104 million of net operating losses and $64 million of capital losses to carry forward. These loss carryforwards, if not used to offset future taxable income or capital gain, will expire from 2019 through 2037 . Due to limitations and uncertainty regarding our ability to use some of the loss carryforwards and certain other deferred tax assets, a valuation allowance of $54 million was established. For the remainder of the net operating loss carryforwards and other cumulative temporary differences, based on our historical record of producing taxable income and profitability, we have concluded that future operating income will be sufficient to give rise to tax expense to recover these deferred tax assets. We file income tax returns in the United States and Puerto Rico. The U.S. Internal Revenue Service, or IRS, has completed its examinations of our consolidated income tax returns for 2016 and prior years. Our 2017 tax return is in the post-filing review period under the Compliance Assurance Process, or CAP. Our 2018 tax return is under advance review by the IRS under CAP. With a few exceptions, which are immaterial in the aggregate, we no longer are subject to state, local and foreign tax examinations for years before 2015. We are not aware of any material adjustments that may be proposed as a result of any ongoing or future examinations. We do not have material uncertain tax positions reflected in our consolidated balance sheets. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The carrying value of debt outstanding was as follows at December 31, 2018 and 2017 : 2018 2017 (in millions) Short-term debt: Commercial paper $ 645 150 Term note 650 — Senior note: $400 million, 2.625% due October 1, 2019 399 — Total short-term debt $ 1,694 $ 150 Long-term debt: Senior notes: $400 million, 2.625% due October 1, 2019 $ — $ 399 $400 million, 2.50% due December 15, 2020 398 397 $400 million, 2.90% due December 15, 2022 396 396 $600 million, 3.15% due December 1, 2022 596 595 $600 million, 3.85% due October 1, 2024 597 595 $600 million, 3.95% due March 15, 2027 594 594 $250 million, 8.15% due June 15, 2038 263 263 $400 million, 4.625% due December 1, 2042 396 396 $750 million, 4.95% due October 1, 2044 739 739 $400 million, 4.80% due March 15, 2047 396 396 Total long-term debt $ 4,375 $ 4,770 Maturities of the short-term and long-term debt for the years ending December 31, are as follows: For the years ending December 31, (in millions) 2019 $ 1,697 2020 400 2021 — 2022 1,000 2023 — Thereafter 3,000 Senior Notes Our senior notes, which are unsecured, may be redeemed at our option at any time at 100% of the principal amount plus accrued interest and a specified make-whole amount. The 8.15% senior notes are subject to an interest rate adjustment if the debt ratings assigned to the notes are downgraded (or subsequently upgraded). In addition, our senior notes contain a change of control provision that may require us to purchase the notes under certain circumstances. We recognized a loss on extinguishment of debt of approximately $17 million in 2017 for the early redemption of senior notes, which is included in interest expense in the consolidated statements of income. Credit Agreement Our 5 -year, $2.0 billion unsecured revolving credit agreement expires May 2022. Under the credit agreement, at our option, we can borrow on either a competitive advance basis or a revolving credit basis. The revolving credit portion bears interest at either LIBOR plus a spread or the base rate plus a spread. The LIBOR spread, currently 110.0 basis points, varies depending on our credit ratings ranging from 91.0 to 150.0 basis points. We also pay an annual facility fee regardless of utilization. This facility fee, currently 15.0 basis points, may fluctuate between 9.0 and 25.0 basis points, depending upon our credit ratings. The competitive advance portion of any borrowings will bear interest at market rates prevailing at the time of borrowing on either a fixed rate or a floating rate based on LIBOR, at our option. The terms of the credit agreement include standard provisions related to conditions of borrowing which could limit our ability to borrow additional funds. In addition, the credit agreement contains customary restrictive covenants and a financial covenant regarding maximum debt to capitalization of 50% as well as customary events of default. We are in compliance with this financial covenant, with an actual debt to capitalization of 37% as measured in accordance with the credit agreement as of December 31, 2018 . Upon our agreement with one or more financial institutions, we may expand the aggregate commitments under the credit agreement to a maximum of $2.5 billion , through a $500 million incremental loan facility. At December 31, 2018 , we had no borrowings and no letters of credit outstanding under the credit agreement. Accordingly, as of December 31, 2018 , we had $2 billion of remaining borrowing capacity (which excludes the uncommitted $500 million incremental loan facility under the credit agreement), none of which would be restricted by our financial covenant compliance requirement. We have other customary, arms-length relationships, including financial advisory and banking, with some parties to the credit agreement. Commercial Paper Under our commercial paper program we may issue short-term, unsecured commercial paper notes privately placed on a discount basis through certain broker dealers at any time not to exceed $2 billion . Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The net proceeds of issuances have been and are expected to be used for general corporate purposes. The maximum principal amount outstanding at any one time during the year ended December 31, 2018 was $923 million , with $645 million outstanding at December 31, 2018 compared to $150 million outstanding at December 31, 2017 . The outstanding commercial paper at December 31, 2018 had a weighted average annual interest rate of 3.06% . Term Note In November 2018, we entered into a $1.0 billion term note agreement with a bank at a variable rate of interest due within one year. We may elect to incur interest at either the bank's base rate or LIBOR plus 115 basis points. The base rate is defined as the higher of the daily federal funds rate plus 50 basis points; or the bank's prime rate; or LIBOR plus 100 basis points. The interest rate in effect at December 31, 2018 was 3.67% . The note is prepayable without penalty. Proceeds were primarily used to fund the November 2018 accelerated stock repurchase agreement. We repaid $350 million prior to December 31, 2018. The term note shares the customary terms and provisions as well as financial covenants of our Credit Agreement, as discussed above. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Employee Savings Plan We have defined contribution retirement savings plans covering eligible employees which include matching contributions based on the amount of our employees’ contributions to the plans. The cost of these plans amounted to approximately $197 million in 2018 , $217 million in 2017 , and $196 million in 2016 . The Company’s cash match is invested pursuant to the participant’s contribution direction. Based on the closing price of our common stock of $286.48 on December 31, 2018 , approximately 12% of the retirement and savings plan’s assets were invested in our common stock, or approximately 1.8 million shares, representing approximately 1.3% of the shares outstanding as of December 31, 2018 . At December 31, 2018 , approximately 2.0 million shares of our common stock were reserved for issuance under our defined contribution retirement savings plans. Stock-Based Compensation We have plans under which options to purchase our common stock and restricted stock units have been granted to executive officers, directors and key employees. Awards generally require both a change in control and termination of employment within 2 years of the date of the change in control to accelerate the vesting, including those granted to retirement-eligible participants. The terms and vesting schedules for stock-based awards vary by type of grant. Generally, the awards vest upon time-based conditions. We have also granted awards to certain employees that vest upon a combination of time and performance-based conditions. The stock awards of retirement-eligible participants are generally earned ratably over the service period for each tranche. Accordingly, upon retirement the earned portion of the current tranche will continue to vest on the originally scheduled vest date and any remaining unearned portion of the award will be forfeited. Our equity award program includes a retirement provision that generally treats employees with a combination of age and years of services with the Company totaling 65 or greater, with a minimum required age of 55 and a minimum requirement of 5 years of service, as retirement-eligible. Upon exercise, stock-based compensation awards are settled with authorized but unissued company stock or treasury stock. The compensation expense that has been charged against income for these plans was as follows for the years ended December 31, 2018 , 2017 , and 2016 : 2018 2017 2016 (in millions) Stock-based compensation expense by type: Restricted stock $ 124 $ 145 $ 106 Stock options 13 12 9 Total stock-based compensation expense 137 157 115 Tax benefit recognized (21 ) (32 ) (20 ) Stock-based compensation expense, net of tax $ 116 $ 125 $ 95 Stock-based compensation expense for certain restricted stock in 2017 included a $29 million modification expense for certain awards. The tax benefit recognized in our consolidated financial statements is based on the amount of compensation expense recorded for book purposes, subject to limitations on the deductibility of annual compensation in excess of $500,000 per employee as mandated by the Health Care Reform Law. The actual tax benefit realized in our tax return is based on the intrinsic value, or the excess of the market value over the exercise or purchase price, of stock options exercised and restricted stock vested during the period, subject to limitations on the deductibility of annual compensation in excess of $500,000 per employee as mandated by the Health Care Reform Law. The actual tax benefit realized for the deductions taken on our tax returns from option exercises and restricted stock vesting totaled $49 million in 2018 , $68 million in 2017 , and $53 million in 2016 . There was no capitalized stock-based compensation expense during these years. At December 31, 2018 , there were 13.1 million shares reserved for stock award plans. These reserved shares included giving effect to, under the 2011 Plan, 4.7 million shares of common stock available for future grants assuming all stock options were granted or 2.0 million shares available for future grants assuming all restricted stock were granted. Shares may be issued from authorized but unissued company stock or treasury stock. Restricted Stock Restricted stock is granted with a fair value equal to the market price of our common stock on the date of grant and generally vests in equal annual tranches over a three year period from the date of grant. Certain of our restricted stock grants also include performance-based conditions generally associated with return on invested capital and strategic membership growth. Restricted stock units have forfeitable dividend equivalent rights equal to the dividend paid on common stock. The weighted-average grant date fair value of our restricted stock was $276.62 in 2018 , $222.35 in 2017 , and $168.12 in 2016 . Activity for our restricted stock was as follows for the year ended December 31, 2018 : Shares Weighted- (shares in thousands) Nonvested restricted stock at December 31, 2017 1,653 $ 171.68 Granted 576 276.62 Vested (1,045 ) 185.82 Forfeited (220 ) 180.83 Nonvested restricted stock at December 31, 2018 964 $ 213.99 Approximately 12% of the nonvested restricted stock at December 31, 2018 included performance-based conditions. The fair value of shares vested was $298 million during 2018 , $306 million during 2017 , and $253 million during 2016 . Total compensation expense not yet recognized related to nonvested restricted stock was $156 million at December 31, 2018 . We expect to recognize this compensation expense over a weighted-average period of approximately 1.8 years. There are no other contractual terms covering restricted stock once vested. Stock Options Stock options are granted with an exercise price equal to the fair market value of the underlying common stock on the date of grant. Our stock plans, as approved by the Board of Directors and stockholders, define fair market value as the average of the highest and lowest stock prices reported on the composite tape by the New York Stock Exchange on a given date. Exercise provisions vary, but most options vest in whole or in part 1 to 3 years after grant and expire 7 years after grant. The weighted-average fair value of each option granted during 2018 , 2017 , and 2016 is provided below. The fair value was estimated on the date of grant using the Black-Scholes pricing model with the weighted-average assumptions indicated below: 2018 2017 2016 Weighted-average fair value at grant date $ 63.67 $ 49.81 $ 37.12 Expected option life (years) 4.1 years 4.1 years 4.2 years Expected volatility 26.1 % 27.1 % 27.6 % Risk-free interest rate at grant date 2.5 % 2.0 % 1.1 % Dividend yield 0.7 % 0.7 % 0.7 % When valuing employee stock options, we stratify the employee population into three homogeneous groups that historically have exhibited similar exercise behaviors. These groups are executive officers, directors, and all other employees. We value the stock options based on the unique assumptions for each of these employee groups. We calculate the expected term for our employee stock options based on historical employee exercise behavior and base the risk-free interest rate on a traded zero-coupon U.S. Treasury bond with a term substantially equal to the option’s expected term. The volatility used to value employee stock options is based on historical volatility. We calculate historical volatility using a simple-average calculation methodology based on daily price intervals as measured over the expected term of the option. Activity for our option plans was as follows for the year ended December 31, 2018 : Shares Under Weighted-Average (shares in thousands) Options outstanding at December 31, 2017 863 $ 181.44 Granted 143 276.01 Exercised (320 ) 157.44 Forfeited (9 ) 150.59 Options outstanding at December 31, 2018 677 $ 213.17 Options exercisable at December 31, 2018 178 $ 180.76 As of December 31, 2018 , outstanding stock options, substantially all of which are expected to vest, had an aggregate intrinsic value of $48 million , and a weighted-average remaining contractual term of 5 years. As of December 31, 2018 , exercisable stock options had an aggregate intrinsic value of $19 million , and a weighted-average remaining contractual term of 4.1 years. The total intrinsic value of stock options exercised during 2018 was $43 million , compared with $44 million during 2017 and $18 million during 2016 . Cash received from stock option exercises totaled $50 million in 2018 , $63 million in 2017 , and $14 million in 2016 . Total compensation expense not yet recognized related to nonvested options was $14 million at December 31, 2018 . We expect to recognize this compensation expense over a weighted-average period of approximately 1.7 years. |
EARNINGS PER COMMON SHARE COMPU
EARNINGS PER COMMON SHARE COMPUTATION | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE COMPUTATION | EARNINGS PER COMMON SHARE COMPUTATION Detail supporting the computation of basic and diluted earnings per common share was as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (dollars in millions, except per Net income available for common stockholders $ 1,683 $ 2,448 $ 614 Weighted-average outstanding shares of common stock used to 137,486 144,493 149,375 Dilutive effect of: Employee stock options 194 172 219 Restricted stock 723 920 1,323 Shares used to compute diluted earnings per common share 138,403 145,585 150,917 Basic earnings per common share $ 12.24 $ 16.94 $ 4.11 Diluted earnings per common share $ 12.16 $ 16.81 $ 4.07 Number of antidilutive stock options and restricted stock awards 223 539 748 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Dividends The following table provides details of dividend payments, excluding dividend equivalent rights, in 2016 , 2017 , and 2018 under our Board approved quarterly cash dividend policy: Payment Amount Total (in millions) 2016 $1.16 $172 2017 $1.49 $216 2018 $1.90 $262 On November 2, 2018 , the Board declared a cash dividend of $0.50 per share that was paid on January 25, 2019 to stockholders of record on December 31, 2018 , for an aggregate amount of $68 million . Declaration and payment of future quarterly dividends is at the discretion of our Board and may be adjusted as business needs or market conditions change. In February 2019, the Board declared a cash dividend of $0.55 per share payable on April 26, 2019 to stockholders of record on March 29, 2019. Stock Repurchases Our Board of Directors may authorize the purchase of our common shares. Under our share repurchase authorization, shares may have been purchased from time to time at prevailing prices in the open market, by block purchases, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or in privately-negotiated transactions (including pursuant to accelerated share repurchase agreements with investment banks), subject to certain regulatory restrictions on volume, pricing, and timing. On February 14, 2017, our Board of Directors authorized the repurchase of up to $2.25 billion of our common shares expiring on December 31, 2017, exclusive of shares repurchased in connection with employee stock plans. On February 16, 2017, we entered into an accelerated share repurchase agreement, the February 2017 ASR, with Goldman, Sachs & Co. LLC, or Goldman Sachs, to repurchase $1.5 billion of our common stock as part of the $2.25 billion share repurchase authorized on February 14, 2017. On February 22, 2017, we made a payment of $1.5 billion to Goldman Sachs from available cash on hand and received an initial delivery of 5.83 million shares of our common stock from Goldman Sachs based on the then current market price of Humana common stock. The payment to Goldman Sachs was recorded as a reduction to stockholders’ equity, consisting of a $1.2 billion increase in treasury stock, which reflected the value of the initial 5.83 million shares received upon initial settlement, and a $300 million decrease in capital in excess of par value, which reflected the value of stock held back by Goldman Sachs pending final settlement of the February 2017 ASR. Upon settlement of the February 2017 ASR on August 28, 2017, we received an additional 0.84 million shares as determined by the average daily volume weighted-average share price of our common stock during the term of the agreement of $224.81 , less a discount and subject to adjustments pursuant to the terms and conditions of the February 2017 ASR, bringing the total shares received under this program to 6.67 million . In addition, upon settlement we reclassified the $300 million value of stock initially held back by Goldman Sachs from capital in excess of par value to treasury stock. Subsequent to settlement of the February 2017 ASR, we repurchased an additional 3.04 million shares in the open market, utilizing the remaining $750 million of the $2.25 billion authorization prior to expiration. On December 14, 2017, our Board of Directors authorized the repurchase of up to $3.0 billion of our common shares expiring on December 31, 2020, exclusive of shares repurchased in connection with employee stock plans. On December 21, 2017, we entered into an accelerated stock repurchase agreement, the December 2017 ASR, with Bank of America, N.A., or BofA, to repurchase $1.0 billion of our common stock as part of the $3.0 billion share repurchase program authorized on December 14, 2017. On December 22, 2017, we made a payment of $1.0 billion to BofA from available cash on hand and received an initial delivery of 3.28 million shares of our common stock from BofA based on the then current market price of Humana common stock. The payment to BofA was recorded as a reduction to stockholders’ equity, consisting of an $800 million increase in treasury stock, which reflected the value of the initial 3.28 million shares received upon initial settlement, and a $200 million decrease in capital in excess of par value, which reflected the value of stock held back by BofA pending final settlement of the December 2017 ASR. Upon settlement of the ASR on March 26, 2018, we received an additional 0.46 million shares as determined by the average daily volume weighted-average share price of our common stock during the term of the ASR Agreement of $267.55 , bringing the total shares received under this program to 3.74 million . In addition, upon settlement we reclassified the $200 million value of stock initially held back by BofA from capital in excess of par value to treasury stock. On November 28, 2018, we entered into an accelerated stock repurchase agreement, the November 2018 ASR, with Goldman Sachs to repurchase $750 million of our common stock as part of the $3.0 billion share repurchase program authorized by the Board of Directors on December 14, 2017. On November 29, 2018, we made a payment of $750 million to Goldman Sachs from available cash on hand and received an initial delivery of 1.94 million shares of our common stock from Goldman Sachs. The payment to Goldman Sachs was recorded as a reduction to stockholders’ equity, consisting of a $600 million increase in treasury stock, which reflects the value of the initial 1.94 million shares received upon initial settlement, and a $150 million decrease in capital in excess of par value, which reflected the value of stock held back by Goldman Sachs pending final settlement of the November 2018 ASR. The final number of shares that we may receive, or be required to remit, under the agreement will be determined based on the daily volume-weighted average share price of our common stock over the term of the agreement, less a discount and subject to adjustments pursuant to the terms and conditions of the agreement. Final settlement under the November 2018 ASR is expected to occur by the end of the first quarter of 2019. The agreement contains provisions customary for agreements of this type, including provisions for adjustments to the transaction terms upon certain specified events, the circumstances generally under which final settlement may be accelerated or extended or the agreement may be terminated early by Goldman Sachs or Humana, and various acknowledgments and representations made by the parties to each other. At final settlement, under certain circumstances, we may be entitled to receive additional shares of our common stock from Goldman Sachs or we may be required to make a payment. If we are obligated to make payment, we may elect to satisfy such obligation in cash or shares of our common stock. Our remaining repurchase authorization was approximately $1,176 million as of February 21, 2019, excluding the $150 million pending final settlement of our November 28, 2018 ASR. Excluding shares acquired in connection with employee stock plans, share repurchases were as follows during the years ended December 31, 2018 , 2017 and 2016 . 2018 2017 2016 Authorization Date Purchase Not to Exceed Shares Cost Shares Cost Shares Cost (in millions) February 2017 2,250 — — 9.71 2,250 — — December 2017 3,000 3.07 1,024 3.28 800 — — Total repurchases 3.07 $ 1,024 12.99 $ 3,050 — $ — In connection with employee stock plans, we acquired 0.4 million common shares for $116 million in 2018 , 0.5 million common shares for $115 million in 2017 , and 0.6 million common shares for $104 million in 2016 . Regulatory Requirements Certain of our subsidiaries operate in states that regulate the payment of dividends, loans, or other cash transfers to Humana Inc., our parent company, and require minimum levels of equity as well as limit investments to approved securities. The amount of dividends that may be paid to Humana Inc. by these subsidiaries, without prior approval by state regulatory authorities, or ordinary dividends, is limited based on the entity’s level of statutory income and statutory capital and surplus. If the dividend, together with other dividends paid within the preceding twelve months, exceeds a specified statutory limit or is paid from sources other than earned surplus, it is generally considered an extraordinary dividend requiring prior regulatory approval. In most states, prior notification is provided before paying a dividend even if approval is not required. Although minimum required levels of equity are largely based on premium volume, product mix, and the quality of assets held, minimum requirements vary significantly at the state level. Our state regulated insurances subsidiaries had aggregate statutory capital and surplus of approximately $7.6 billion and $8.0 billion as of December 31, 2018 and 2017 , respectively, which exceeded aggregate minimum regulatory requirements of $5.2 billion and $4.8 billion , respectively. The amount of ordinary dividends that may be paid to our parent company in 2019 is approximately $1 billion in the aggregate. The amount, timing and mix of ordinary and extraordinary dividend payments will vary due to state regulatory requirements, the level of excess statutory capital and surplus and expected future surplus requirements related to, for example, premium volume and product mix. Actual dividends that were paid to our parent company were approximately $2.3 billion in 2018 , $1.4 billion in 2017, and $0.8 billion in 2016. |
COMMITMENTS, GUARANTEES AND CON
COMMITMENTS, GUARANTEES AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, GUARANTEES AND CONTINGENCIES | COMMITMENTS, GUARANTEES AND CONTINGENCIES Leases We lease facilities, computer hardware, and other furniture and equipment under long-term operating leases that are noncancelable and expire on various dates through 2046 . We sublease facilities or partial facilities to third party tenants for space not used in our operations. Rent with scheduled escalation terms are accounted for on a straight-line basis over the lease term. Rent expense and sublease rental income, which are recorded net as an operating cost, for all operating leases were as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Rent expense $ 167 $ 204 $ 179 Sublease rental income (32 ) (33 ) (26 ) Net rent expense $ 135 $ 171 $ 153 Future annual minimum payments due subsequent to December 31, 2018 under all of our noncancelable operating leases with initial terms in excess of one year are as follows: Minimum Sublease Net Lease (in millions) For the years ending December 31,: 2019 $ 147 $ (13 ) $ 134 2020 113 (12 ) 101 2021 96 (10 ) 86 2022 79 (9 ) 70 2023 34 (9 ) 25 Thereafter 50 (23 ) 27 Total $ 519 $ (76 ) $ 443 Purchase Obligations We have agreements to purchase services, primarily information technology related services, or to make improvements to real estate, in each case that are enforceable and legally binding on us and that specify all significant terms, including: fixed or minimum levels of service to be purchased; fixed, minimum or variable price provisions; and the appropriate timing of the transaction. We have purchase obligation commitments of $240 million in 2019 , $201 million in 2020 , $136 million in 2021 , $98 million in 2022 , and $61 million in 2023. Purchase obligations exclude agreements that are cancelable without penalty. Off-Balance Sheet Arrangements As part of our ongoing business, we do not participate or knowingly seek to participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, or SPEs, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of December 31, 2018 , we were not involved in any SPE transactions. Guarantees and Indemnifications Through indemnity agreements approved by the state regulatory authorities, certain of our regulated subsidiaries generally are guaranteed by Humana Inc., our parent company, in the event of insolvency for (1) member coverage for which premium payment has been made prior to insolvency; (2) benefits for members then hospitalized until discharged; and (3) payment to providers for services rendered prior to insolvency. Our parent also has guaranteed the obligations of our military services subsidiaries and funding to maintain required statutory capital levels of certain regulated subsidiaries. In the ordinary course of business, we enter into contractual arrangements under which we may agree to indemnify a third party to such arrangement from any losses incurred relating to the services they perform on behalf of us, or for losses arising from certain events as defined within the particular contract, which may include, for example, litigation or claims relating to past performance. Such indemnification obligations may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial. Government Contracts Our Medicare products, which accounted for approximately 80% of our total premiums and services revenue for the year ended December 31, 2018 , primarily consisted of products covered under the Medicare Advantage and Medicare Part D Prescription Drug Plan contracts with the federal government. These contracts are renewed generally for a calendar year term unless CMS notifies us of its decision not to renew by May 1 of the calendar year in which the contract would end, or we notify CMS of our decision not to renew by the first Monday in June of the calendar year in which the contract would end. All material contracts between Humana and CMS relating to our Medicare products have been renewed for 2019 , and all of our product offerings filed with CMS for 2019 have been approved. CMS uses a risk-adjustment model which adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members. The risk-adjustment model, which CMS implemented pursuant to the Balanced Budget Act of 1997 (BBA) and the Benefits Improvement and Protection Act of 2000 (BIPA), generally pays more where a plan's membership has higher expected costs. Under this model, rates paid to MA plans are based on actuarially determined bids, which include a process whereby our prospective payments are based on our estimated cost of providing standard Medicare-covered benefits to an enrollee with a "national average risk profile." That baseline payment amount is adjusted to reflect the health status of our enrolled membership. Under the risk-adjustment methodology, all MA plans must collect and submit the necessary diagnosis code information from hospital inpatient, hospital outpatient, and physician providers to CMS within prescribed deadlines. The CMS risk-adjustment model uses the diagnosis data to calculate the risk-adjusted premium payment to MA plans, which CMS adjusts for coding pattern differences between the health plans and the government fee-for-service program. We generally rely on providers, including certain providers in our network who are our employees, to code their claim submissions with appropriate diagnoses, which we send to CMS as the basis for our payment received from CMS under the actuarial risk-adjustment model. We also rely on these providers to document appropriately all medical data, including the diagnosis data submitted with claims. In addition, we conduct medical record reviews as part of our data and payment accuracy compliance efforts, to more accurately reflect diagnosis conditions under the risk adjustment model. These compliance efforts include the internal contract level audits described in more detail below, as well as ordinary course reviews of our internal business processes. CMS is phasing-in the process of calculating risk scores using diagnoses data from the Risk Adjustment Processing System, or RAPS, to diagnoses data from the Encounter Data System, or EDS. The RAPS process requires MA plans to apply a filter logic based on CMS guidelines and only submit diagnoses that satisfy those guidelines. For submissions through EDS, CMS requires MA plans to submit all the encounter data and CMS will apply the risk adjustment filtering logic to determine the risk scores. For 2018, 15% of the risk score was calculated from claims data submitted through EDS. In 2019 and 2020 CMS will increase that percentage to 25% and 50%, respectively. The phase-in from RAPS to EDS could result in different risk scores from each dataset as a result of plan processing issues, CMS processing issues, or filtering logic differences between RAPS and EDS, and could have a material adverse effect on our results of operations, financial position, or cash flows. CMS and the Office of the Inspector General of Health and Human Services, or HHS-OIG, are continuing to perform audits of various companies’ selected MA contracts related to this risk adjustment diagnosis data. We refer to these audits as Risk-Adjustment Data Validation Audits, or RADV audits. RADV audits review medical records in an attempt to validate provider medical record documentation and coding practices which influence the calculation of premium payments to MA plans. In 2012, CMS released a “Notice of Final Payment Error Calculation Methodology for Part C Medicare Advantage Risk Adjustment Data Validation (RADV) Contract-Level Audits.” The payment error calculation methodology provided that, in calculating the economic impact of audit results for an MA contract, if any, the results of the RADV audit sample would be extrapolated to the entire MA contract after a comparison of the audit results to a similar audit of Medicare FFS (we refer to the process of accounting for errors in FFS claims as the "FFS Adjuster"). This comparison of RADV audit results to the FFS error rate is necessary to determine the economic impact, if any, of RADV audit results because the government used the Medicare FFS program data set, including any attendant errors that are present in that data set, to estimate the costs of various health status conditions and to set the resulting adjustments to MA plans’ payment rates in order to establish actuarial equivalence in payment rates as required under the Medicare statute. CMS already makes other adjustments to payment rates based on a comparison of coding pattern differences between MA plans and Medicare FFS data (such as for frequency of coding for certain diagnoses in MA plan data versus the Medicare FFS program dataset). The final RADV extrapolation methodology, including the first application of extrapolated audit results to determine audit settlements, is expected to be applied to CMS RADV contract level audits conducted for contract year 2011 and subsequent years. CMS is currently conducting RADV contract level audits for certain of our Medicare Advantage plans. Estimated audit settlements are recorded as a reduction of premiums revenue in our consolidated statements of income, based upon available information. We perform internal contract level audits based on the RADV audit methodology prescribed by CMS. Included in these internal contract level audits is an audit of our Private Fee-For Service business which we used to represent a proxy of the FFS Adjuster which has not yet been finalized. We based our accrual of estimated audit settlements for each contract year on the results of these internal contract level audits and update our estimates as each audit is completed. Estimates derived from these results were not material to our results of operations, financial position, or cash flows. We report the results of these internal contract level audits to CMS, including identified overpayments, if any. On October 26, 2018, CMS issued a proposed rule and accompanying materials (which we refer to as the “Proposed Rule”) related to, among other things, the RADV audit methodology described above. If implemented, the Proposed Rule would use extrapolation in RADV audits applicable to payment year 2011 contract-level audits and all subsequent audits, without the application of a FFS Adjuster to audit findings. We are studying the Proposed Rule and CMS’ underlying analysis contained therein. We believe, however, that the Proposed Rule fails to address adequately the statutory requirement of actuarial equivalence, and we expect to provide substantive comments to CMS on the Proposed Rule as part of the notice-and-comment rulemaking process. We are also evaluating the potential impact of the Proposed Rule, and any related regulatory, industry or company reactions, all or any of which could have a material adverse effect on our results of operations, financial position, or cash flows. In addition, as part of our internal compliance efforts, we routinely perform ordinary course reviews of our internal business processes related to, among other things, our risk coding and data submissions in connection with the risk- adjustment model. These reviews may also result in the identification of errors and the submission of corrections to CMS, that may, either individually or in the aggregate, be material. As such, the result of these reviews may have a material adverse effect on our results of operations, financial position, or cash flows. We believe that CMS' statements and policies regarding the requirement to report and return identified overpayments received by MA plans are inconsistent with CMS' 2012 RADV audit methodology, and the Medicare statute's requirements. These statements and policies, such as certain statements contained in the preamble to CMS’ final rule release regarding Medicare Advantage and Part D prescription drug benefit program regulations for Contract Year 2015 (which we refer to as the "Overpayment Rule"), and the Proposed Rule, appear to equate each Medicare Advantage risk adjustment data error with an “overpayment” without addressing the principles underlying the FFS Adjuster referenced above. On September 7, 2018, the Federal District Court for the District of Columbia vacated CMS's Overpayment Rule, concluding that it violated the Medicare statute, including the requirement for actuarial equivalence, and that the Overpayment Rule was also arbitrary and capricious in departing from CMS's RADV methodology without adequate explanation (among other reasons). CMS has filed a motion for reconsideration related to certain aspects of the Federal District Court's opinion and has simultaneously filed a notice to appeal the decision to the Circuit Court of Appeals. We will continue to work with CMS to ensure that MA plans are paid accurately and that payment model principles are in accordance with the requirements of the Social Security Act, which, if not implemented correctly could have a material adverse effect on our results of operations, financial position, or cash flows. At December 31, 2018, our military services business, which accounted for approximately 1% of our total premiums and services revenue for the year ended December 31, 2018 , primarily consisted of the TRICARE T2017 East Region contract replacing the 5-year T3 South Region contract that expired on December 31, 2017. The T2017 East Region contract is a consolidation of the former T3 North and South Regions, comprising thirty-two states and approximately 6 million TRICARE beneficiaries, under which delivery of health care services commenced on January 1, 2018. The T2017 East Region contract is a 5 -year contract set to expire on December 31, 2022 and is subject to renewals on January 1 of each year during its term at the government's option. Our state-based Medicaid business accounted for approximately 4% of our total premiums and services revenue for the year ended December 31, 2018 . In addition to our state-based Temporary Assistance for Needy Families, or TANF, Medicaid contracts in Florida and Kentucky, we have contracts in Florida for Long Term Support Services (LTSS), and in Illinois for stand-alone dual eligible demonstration programs serving individuals dually eligible for both the federal Medicare program and the applicable state-based Medicaid program. The loss of any of the contracts above or significant changes in these programs as a result of legislative or regulatory action, including reductions in premium payments to us, regulatory restrictions on profitability, including reviews by regulatory bodies that may compare our Medicare Advantage profitability to our non-Medicare Advantage business profitability, or compare the profitability of various products within our Medicare Advantage business, and require that they remain within certain ranges of each other, or increases in member benefits without corresponding increases in premium payments to us, may have a material adverse effect on our results of operations, financial position, and cash flows. Legal Proceedings and Certain Regulatory Matters As previously disclosed, the Civil Division of the United States Department of Justice provided us with an information request in December 2014, concerning our Medicare Part C risk adjustment practices. The request relates to our oversight and submission of risk adjustment data generated by providers in our Medicare Advantage network, as well as to our business and compliance practices related to risk adjustment data generated by our providers and by us, including medical record reviews conducted as part of our data and payment accuracy compliance efforts, the use of health and well-being assessments, and our fraud detection efforts. We believe that this request for information is in connection with a wider review of Medicare Risk Adjustment generally that includes a number of Medicare Advantage plans, providers and vendors. We continue to cooperate with and voluntarily respond to the information requests from the Department of Justice. These matters are expected to result in additional qui tam litigation. As previously disclosed, on January 19, 2016, an individual filed a qui tam suit captioned United States of America ex rel. Steven Scott v. Humana, Inc., in United States District Court, Central District of California, Western Division. The complaint alleges certain civil violations by us in connection with the actuarial equivalence of the plan benefits under Humana’s Basic PDP plan, a prescription drug plan offered by us under Medicare Part D. The action seeks damages and penalties on behalf of the United States under the False Claims Act. The court ordered the qui tam action unsealed on September 13, 2017, so that the relator could proceed, following notice from the U.S. Government that it was not intervening at that time. On January 29, 2018, the suit was transferred to the United States District Court, Western District of Kentucky, Louisville Division. We take seriously our obligations to comply with applicable CMS requirements and actuarial standards of practice, and continue to vigorously defend against these allegations since the transfer to the Western District of Kentucky. We have engaged in active discovery with the relator who has pursed the matter on behalf of the United States for the past year, and expect that discovery process to conclude in the near future and for the Court to consider our motion for summary judgment. On November 2, 2017, we filed suit against the United States of America in the United States Court of Federal Claims, on behalf of our health plans seeking recovery from the federal government of approximately $611 million in payments under the risk corridor premium stabilization program established under Health Care Reform , for years 2014, 2015 and 2016. Our case has been stayed by the Court, pending resolution of similar cases filed by other insurers. We have not recognized revenue, nor have we recorded a receivable, for any amount due from the federal government for unpaid risk corridor payments as of December 31, 2018. We have fully recognized all liabilities due to the federal government that we have incurred under the risk corridor program, and have paid all amounts due to the federal government as required. There is no assurance that we will prevail in the lawsuit. Other Lawsuits and Regulatory Matters Our current and past business practices are subject to review or other investigations by various state insurance and health care regulatory authorities and other state and federal regulatory authorities. These authorities regularly scrutinize the business practices of health insurance, health care delivery and benefits companies. These reviews focus on numerous facets of our business, including claims payment practices, statutory capital requirements, provider contracting, risk adjustment, competitive practices, commission payments, privacy issues, utilization management practices, pharmacy benefits, access to care, and sales practices, among others. Some of these reviews have historically resulted in fines imposed on us and some have required changes to some of our practices. We continue to be subject to these reviews, which could result in additional fines or other sanctions being imposed on us or additional changes in some of our practices. We also are involved in various other lawsuits that arise, for the most part, in the ordinary course of our business operations, certain of which may be styled as class-action lawsuits. Among other matters, this litigation may include employment matters, claims of medical malpractice, bad faith, nonacceptance or termination of providers, anticompetitive practices, improper rate setting, provider contract rate and payment disputes, including disputes over reimbursement rates required by statute, general contractual matters, intellectual property matters, and challenges to subrogation practices. Under state guaranty assessment laws, including those related to state cooperative failures in the industry, we may be assessed (up to prescribed limits) for certain obligations to the policyholders and claimants of insolvent insurance companies that write the same line or lines of business as we do. As a government contractor, we may also be subject to qui tam litigation brought by individuals who seek to sue on behalf of the government, alleging that the government contractor submitted false claims to the government including, among other allegations, those resulting from coding and review practices under the Medicare risk adjustment model. Qui tam litigation is filed under seal to allow the government an opportunity to investigate and to decide if it wishes to intervene and assume control of the litigation. If the government does not intervene, the individual may continue to prosecute the action on his or her own, on behalf of the government. We also are subject to other allegations of non-performance of contractual obligations to providers, members, and others, including failure to properly pay claims, improper policy terminations, challenges to our implementation of the Medicare Part D prescription drug program and other litigation. A limited number of the claims asserted against us are subject to insurance coverage. Personal injury claims, claims for extra contractual damages, care delivery malpractice, and claims arising from medical benefit denials are covered by insurance from our wholly owned captive insurance subsidiary and excess carriers, except to the extent that claimants seek punitive damages, which may not be covered by insurance in certain states in which insurance coverage for punitive damages is not permitted. In addition, insurance coverage for all or certain forms of liability has become increasingly costly and may become unavailable or prohibitively expensive in the future. We record accruals for the contingencies discussed in the sections above to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made at this time regarding the matters specifically described above because of the inherently unpredictable nature of legal proceedings, which also may be exacerbated by various factors, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; (vi) there are a large number of parties (including where it is uncertain how liability, if any, will be shared among multiple defendants); or (vii) there is a wide range of potential outcomes. The outcome of any current or future litigation or governmental or internal investigations, including the matters described above, cannot be accurately predicted, nor can we predict any resulting judgments, penalties, fines or other sanctions that may be imposed at the discretion of federal or state regulatory authorities or as a result of actions by third parties. Nevertheless, it is reasonably possible that any such outcome of litigation, judgments, penalties, fines or other sanctions could be substantial, and the outcome of these matters may have a material adverse effect on our results of operations, financial position, and cash flows, and may also affect our reputation. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We manage our business with four reportable segments: Retail, Group and Specialty, Healthcare Services, and Individual Commercial. In addition, the Other Businesses category includes businesses that are not individually reportable because they do not meet the quantitative thresholds required by generally accepted accounting principles. These segments are based on a combination of the type of health plan customer and adjacent businesses centered on well-being solutions for our health plans and other customers, as described below. These segment groupings are consistent with information used by our Chief Executive Officer to assess performance and allocate resources. The Retail segment consists of Medicare benefits, marketed to individuals or directly via group Medicare accounts. In addition, the Retail segment also includes our contract with CMS to administer the Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program and contracts with various states to provide Medicaid, dual eligible, and Long-Term Support Services benefits, which we refer to collectively as our state-based contracts. The Group and Specialty segment consists of employer group commercial fully-insured medical and specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health benefits, as well as administrative services only, or ASO products. In addition, our Group and Specialty segment includes military services business, primarily our TRICARE T2017 East Region contract. The Healthcare Services segment includes our services offered to our health plan members as well as to third parties, including pharmacy solutions, provider services, and clinical care service, such as home health and other services and capabilities to promote wellness and advance population health, including our investment in Kindred at Home. The Individual Commercial segment consisted of our individual commercial fully-insured medical health insurance business, which we exited beginning January 1, 2018. We report under the category of Other Businesses those businesses that do not align with the reportable segments described above, primarily our closed-block long-term care insurance policies, which were sold in 2018. Our Healthcare Services intersegment revenues primarily relate to managing prescription drug coverage for members of our other segments through Humana Pharmacy Solutions®, or HPS, and includes the operations of Humana Pharmacy, Inc., our mail order pharmacy business. These revenues consist of the prescription price (ingredient cost plus dispensing fee), including the portion to be settled with the member (co-share) or with the government (subsidies), plus any associated administrative fees. Services revenues related to the distribution of prescriptions by third party retail pharmacies in our networks are recognized when the claim is processed and product revenues from dispensing prescriptions from our mail order pharmacies are recorded when the prescription or product is shipped. Our pharmacy operations, which are responsible for designing pharmacy benefits, including defining member co-share responsibilities, determining formulary listings, contracting with retail pharmacies, confirming member eligibility, reviewing drug utilization, and processing claims, act as a principal in the arrangement on behalf of members in our other segments. As principal, our Healthcare Services segment reports revenues on a gross basis, including co-share amounts from members collected by third party retail pharmacies at the point of service. In addition, our Healthcare Services intersegment revenues include revenues earned by certain owned providers derived from risk-based and non-risk-based managed care agreements with our health plans. Under risk based agreements, the provider receives a monthly capitated fee that varies depending on the demographics and health status of the member, for each member assigned to these owned providers by our health plans. The owned provider assumes the economic risk of funding the assigned members’ healthcare services. Under non risk-based agreements, our health plans retain the economic risk of funding the assigned members' healthcare services. Our Healthcare Services segment reports provider services revenues associated with risk-based agreements on a gross basis, whereby capitation fee revenue is recognized in the period in which the assigned members are entitled to receive healthcare services. Provider services revenues associated with non-risk-based agreements are presented net of associated healthcare costs. We present our consolidated results of operations from the perspective of the health plans. As a result, the cost of providing benefits to our members, whether provided via a third party provider or internally through a stand-alone subsidiary, is classified as benefits expense and excludes the portion of the cost for which the health plans do not bear responsibility, including member co-share amounts and government subsidies of $13.4 billion in 2018 , $13.5 billion in 2017 , and $13.4 billion in 2016 . In addition, depreciation and amortization expense associated with certain businesses in our Healthcare Services segment delivering benefits to our members, primarily associated with our provider services and pharmacy operations, are included with benefits expense. The amount of this expense was $129 million in 2018 , $107 million in 2017 , and $111 million in 2016 . Other than those described previously, the accounting policies of each segment are the same and are described in Note 2. Transactions between reportable segments primarily consist of sales of services rendered by our Healthcare Services segment, primarily pharmacy, provider, and clinical care services, to our Retail and Group and Specialty segment customers . Intersegment sales and expenses are recorded at fair value and eliminated in consolidation. Members served by our segments often use the same provider networks, enabling us in some instances to obtain more favorable contract terms with providers. Our segments also share indirect costs and assets. As a result, the profitability of each segment is interdependent. We allocate most operating expenses to our segments. Assets and certain corporate income and expenses are not allocated to the segments, including the portion of investment income not supporting segment operations, interest expense on corporate debt, and certain other corporate expenses. These items are managed at a corporate level. These corporate amounts are reported separately from our reportable segments and are included with intersegment eliminations in the tables presenting segment results below. Retail Group and Specialty Healthcare Services Individual Commercial Other Businesses Eliminations/ Consolidated (in millions) 2018 External revenues Premiums: Individual Medicare Advantage $ 35,656 $ — $ — $ — $ — $ — $ 35,656 Group Medicare Advantage 6,103 — — — — — 6,103 Medicare stand-alone PDP 3,584 — — — — — 3,584 Total Medicare 45,343 — — — — — 45,343 Fully-insured 510 5,444 — 8 — — 5,962 Specialty — 1,359 — — — — 1,359 Medicaid and other 2,255 — — — 22 — 2,277 Total premiums 48,108 6,803 — 8 22 — 54,941 Services revenue: Provider — — 404 — — — 404 ASO and other 11 835 — — 4 — 850 Pharmacy — — 203 — — — 203 Total services revenue 11 835 607 — 4 — 1,457 Total external revenues 48,119 7,638 607 8 26 — 56,398 Intersegment revenues Services — 18 16,840 — — (16,858 ) — Products — — 6,330 — — (6,330 ) — Total intersegment revenues — 18 23,170 — — (23,188 ) — Investment income 136 23 34 — 110 211 514 Total revenues 48,255 7,679 23,811 8 136 (22,977 ) 56,912 Operating expenses: Benefits 40,925 5,420 — (70 ) 77 (470 ) 45,882 Operating costs 5,327 1,810 22,905 4 6 (22,527 ) 7,525 Depreciation and amortization 270 88 163 — — (116 ) 405 Total operating expenses 46,522 7,318 23,068 (66 ) 83 (23,113 ) 53,812 Income from operations 1,733 361 743 74 53 136 3,100 Loss on sale of business — — — — — 786 786 Interest expense — — — — — 218 218 Other expense, net — — — — — 33 33 Income (loss) before income taxes and equity in earnings 1,733 361 743 74 53 (901 ) 2,063 Equity in net earnings of Kindred at Home — — 11 — — — 11 Segment earnings (losses) $ 1,733 $ 361 $ 754 $ 74 $ 53 $ (901 ) $ 2,074 Premium and services revenues derived from our contracts with the federal government, as a percentage of our total premium and services revenues, was approximately 81% for 2018 , compared to 79% for 2017 , and 75% for 2016 . Retail Group and Specialty Healthcare Services Individual Commercial Other Businesses Eliminations/ Consolidated (in millions) 2017 Revenues—external customers Premiums: Individual Medicare Advantage $ 32,720 $ — $ — $ — $ — $ — $ 32,720 Group Medicare Advantage 5,155 — — — — — 5,155 Medicare stand-alone PDP 3,702 — — — — — 3,702 Total Medicare 41,577 — — — — — 41,577 Fully-insured 478 5,462 — 947 — — 6,887 Specialty — 1,310 — — — — 1,310 Medicaid and other 2,571 — — — 35 — 2,606 Total premiums 44,626 6,772 — 947 35 — 52,380 Services revenue: Provider — — 258 — — — 258 ASO and other 10 626 — — 8 — 644 Pharmacy — — 80 — — — 80 Total services revenue 10 626 338 — 8 — 982 Total revenues—external customers 44,636 7,398 338 947 43 — 53,362 Intersegment revenues Services — 20 17,293 — — (17,313 ) — Products — — 6,292 — — (6,292 ) — Total intersegment revenues — 20 23,585 — — (23,605 ) — Investment income 90 31 35 4 87 158 405 Total revenues 44,726 7,449 23,958 951 130 (23,447 ) 53,767 Operating expenses: Benefits 38,218 5,363 — 544 131 (760 ) 43,496 Operating costs 4,292 1,590 22,848 201 12 (22,376 ) 6,567 Merger termination fee and related costs, net — — — — — (936 ) (936 ) Depreciation and amortization 238 84 143 13 — (100 ) 378 Total operating expenses 42,748 7,037 22,991 758 143 (24,172 ) 49,505 Income (loss) from operations 1,978 412 967 193 (13 ) 725 4,262 Interest expense — — — — — 242 242 Income (loss) before income taxes and equity in earnings 1,978 412 967 193 (13 ) 483 4,020 Equity in net earnings of Kindred at Home — — — — — — — Segment earnings (losses) $ 1,978 $ 412 $ 967 $ 193 $ (13 ) $ 483 $ 4,020 Retail Group and Specialty Healthcare Services Individual Commercial Other Businesses Eliminations/ Consolidated (in millions) 2016 Revenues—external customers Premiums: Individual Medicare Advantage $ 31,863 $ — $ — $ — $ — $ — $ 31,863 Group Medicare Advantage 4,283 — — — — — 4,283 Medicare stand-alone PDP 4,009 — — — — — 4,009 Total Medicare 40,155 — — — — — 40,155 Fully-insured 428 5,405 — 3,064 — — 8,897 Specialty — 1,279 — — — — 1,279 Medicaid and other 2,640 12 — — 38 — 2,690 Total premiums 43,223 6,696 — 3,064 38 — 53,021 Services revenue: Provider — — 278 — — — 278 ASO and other 6 643 1 — 10 — 660 Pharmacy — — 31 — — — 31 Total services revenue 6 643 310 — 10 — 969 Total revenues—external customers 43,229 7,339 310 3,064 48 — 53,990 Intersegment revenues Services — 22 18,979 — — (19,001 ) — Products — — 5,993 — — (5,993 ) — Total intersegment revenues — 22 24,972 — — (24,994 ) — Investment income 90 25 30 5 66 173 389 Total revenues 43,319 7,386 25,312 3,069 114 (24,821 ) 54,379 Operating expenses: Benefits 36,783 5,233 — 3,301 617 (927 ) 45,007 Operating costs 4,650 1,727 24,073 601 16 (23,894 ) 7,173 Merger termination fee and related costs, net — — — — — 104 104 Depreciation and amortization 196 82 143 36 1 (104 ) 354 Total operating expenses 41,629 7,042 24,216 3,938 634 (24,821 ) 52,638 Income (loss) from operations 1,690 344 1,096 (869 ) (520 ) — 1,741 Gain on sale of business — — — — — — — Interest expense — — — — — 189 189 Income (loss) before income taxes and equity in earnings 1,690 344 1,096 (869 ) (520 ) (189 ) 1,552 Equity in net earnings of Kindred at Home — — — — — — — Segment earnings (losses) $ 1,690 $ 344 $ 1,096 $ (869 ) $ (520 ) $ (189 ) $ 1,552 Premiums revenue for our Individual Commercial segment for 2016 includes a reduction of $583 million associated with the write-off of commercial risk corridor receivables. Benefits expense for Other Businesses for 2016 includes $505 million for reserve strengthening associated with our closed block of long-term care insurance policies as discussed more fully in Note 18. |
EXPENSES ASSOCIATED WITH LONG-D
EXPENSES ASSOCIATED WITH LONG-DURATION INSURANCE PRODUCTS | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
EXPENSES ASSOCIATED WITH LONG-DURATION INSURANCE PRODUCTS | EXPENSES ASSOCIATED WITH LONG-DURATION INSURANCE PRODUCTS Premiums associated with our long-duration insurance products accounted for less than 1% of our consolidated premiums and services revenue for the year ended December 31, 2018 and 2017. We use long-duration accounting for life insurance, annuities, certain health and other supplemental products and, prior to its sale in 2018, long-term care policies sold to individuals because they are expected to remain in force for an extended period beyond one year and because premium received in the earlier years is intended to pay anticipated benefits to be incurred in future years . As a result, we defer policy acquisition costs, primarily consisting of commissions, and amortize them over the estimated life of the policies in proportion to premiums earned. In addition, we establish reserves for future policy benefits in recognition of the fact that some of the premium received in the earlier years is intended to pay anticipated benefits to be incurred in future years. At policy issuance, these reserves are recognized on a net level premium method based on premium rate increase, interest rate, mortality, morbidity, persistency (the percentage of policies remaining in-force), and maintenance expense assumptions. The assumptions used to determine the liability for future policy benefits are established and locked in at the time each contract is issued and only change if our expected future experience deteriorates to the point that the level of the liability, together with the present value of future gross premiums, are not adequate to provide for future expected policy benefits and maintenance costs (i.e. the loss recognition date). As discussed in Note 2, beginning in 2014, health policies sold to individuals that conform to the Health Care Reform Law are accounted for under a short-duration model because premiums received in the current year are intended to pay anticipated benefits in that year . The table below presents deferred acquisition costs and future policy benefits payable associated with our long-duration insurance products for the years ended December 31, 2018 and 2017 . 2018 2017 Deferred Future policy Deferred Future policy (in millions) Other long-term assets $ 36 $ — $ 103 $ — Trade accounts payable and accrued expenses — — — (56 ) Long-term liabilities — (219 ) — (2,923 ) Total asset (liability) $ 36 $ (219 ) $ 103 $ (2,979 ) The decline in the balances of the deferred acquisition costs and future benefits payable reflects the sale of KMG on August 9, 2018. In addition, future policy benefits payable include amounts of $217 million at December 31, 2018 and $199 million at December 31, 2017 which are subject to 100% coinsurance agreements as more fully described in Note 19. Benefit expense reflects no net increase in future policy benefit payable in 2018, a net reduction of $22 million in 2017 and a net increase of $439 million in 2016. The 2016 amount reflects the net change of $505 million associated with our closed block of long-term care insurance policies, which were sold in 2018 as discussed further below. Amortization of deferred acquisition costs included in operating costs was $48 million in 2018 , $71 million in 2017 , and $67 million in 2016 . All three years include the effect of the release of reserves and accelerating deferred acquisition amortization costs of existing previously underwritten individual commercial medical members transitioning to policies compliant with the Health Care Reform Law. Deferred acquisition costs included $3 million associated with our individual commercial medical policies at December 31, 2017 . Future policy benefits payable associated with our individual commercial medical policies were $19 million at December 31, 2017. There were no remaining balances at December 31, 2018. We have exited our individual commercial medical business effective January 1, 2018. Future policy benefits payable included $2.3 billion at December 31, 2017 associated with a non-strategic closed block of long-term care insurance policies acquired in connection with the 2007 acquisition of KMG. As described in Note 3, on August 9, 2018 , we completed the sale of KMG. Future policy benefits payable included amounts charged to accumulated other comprehensive income for an additional liability that would exist on our closed-block of long-term care insurance policies if unrealized gains on the sale of the investments backing such products had been realized and the proceeds reinvested at then current yields. There was additional liability of $168 million at December 31, 2017 . Amounts charged to accumulated other comprehensive income are net of applicable deferred taxes. Long-term care insurance policies provided nursing home and home health coverage for which premiums are collected many years in advance of benefits paid, if any. Therefore, our actual claims experience will emerge many years after assumptions have been established. The risk of a deviation of the actual premium rate increase, interest, morbidity, mortality, persistency, and maintenance expense assumptions from those assumed in our reserves were particularly significant to our closed block of long-term care insurance policies. We monitored the loss experience of these long-term care insurance policies and, when necessary, applied for premium rate increases through a regulatory filing and approval process in the jurisdictions in which such products were sold. To the extent premium rate increases, interest rates, and/or loss experience varied from our loss recognition date assumptions, material adjustments to reserves were required. During 2016, we recorded a loss for a premium deficiency. The premium deficiency was based on current and anticipated experience that had deteriorated from our locked-in assumptions from the previous December 31, 2013 loss recognition date, particularly as they related to emerging experience indicating longer claims duration, a prolonged lower interest rate environment, and an increase in policyholder life expectancies. Based on this deterioration, we determined that our existing future policy benefits payable, together with the present value of future gross premiums, associated with our closed block of long-term care insurance policies were not adequate to provide for future policy benefits and maintenance costs under these policies; therefore we unlocked and modified our assumptions based on current expectations. Accordingly, during 2016 we recorded $505 million of additional benefits expense, with a corresponding increase in future policy benefits payable of $659 million partially offset by a related reinsurance recoverable of $154 million included in other long-term assets. During 2017, we performed loss recognition testing comparing our existing future policy benefits payable with the present value of future gross premiums associated with our closed block of long-term care insurance policies and determined that no premium deficiency existed at December 31, 2017. |
REINSURANCE
REINSURANCE | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
REINSURANCE | REINSURANCE Certain blocks of insurance assumed in acquisitions, primarily life, annuities in run-off status and, prior to its sale in 2018, long-term care, are subject to reinsurance where some or all of the underwriting risk related to these policies has been ceded to a third party. In addition, a large portion of our reinsurance takes the form of 100% coinsurance agreements where, in addition to all of the underwriting risk, all administrative responsibilities, including premium collections and claim payment, have also been ceded to a third party. We acquired these policies and related reinsurance agreements with the purchase of stock of companies in which the policies were originally written. We acquired these companies for business reasons unrelated to these particular policies, including the companies’ other products and licenses necessary to fulfill strategic plans. A reinsurance agreement between two entities transfers the underwriting risk of policyholder liabilities to a reinsurer while the primary insurer retains the contractual relationship with the ultimate insured. As such, these reinsurance agreements do not completely relieve us of our potential liability to the ultimate insured. However, given the transfer of underwriting risk, our potential liability is limited to the credit exposure which exists should the reinsurer be unable to meet its obligations assumed under these reinsurance agreements. Reinsurance recoverables represent the portion of future policy benefits payable and benefits payable that are covered by reinsurance. Amounts recoverable from reinsurers are estimated in a manner consistent with the methods used to determine future policy benefits payable as detailed in Note 2. Reinsurance recoverables, included in other current and long-term assets, were $314 million at December 31, 2018 and $824 million at December 31, 2017 . The decline in the balances reflects the sale of KMG on August 9, 2018. The percentage of these reinsurance recoverables resulting from 100% coinsurance agreements was approximately 99% at December 31, 2018 and approximately 33% at December 31, 2017 . Premiums ceded were $976 million in 2018 , $969 million in 2017 and $842 million in 2016 . Benefits ceded were $980 million in 2018 , $844 million in 2017 , and $767 million in 2016 . Ceded premium and benefits reflect the activity associated with ceding all risk under a Medicaid contract to a third party reinsurer. We evaluate the financial condition of our reinsurers on a regular basis. Protective Life Insurance Company with $177 million in reinsurance recoverables is well-known and well-established with a AM Best rating of A+ (superior) at December 31, 2018 . The remaining reinsurance recoverables of $137 million are divided between 10 other reinsurers, with $110 million subject to funds withheld accounts or other financial guarantees supporting the repayment of these amounts. |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) | QUARTERLY FINANCIAL INFORMATION (Unaudited) A summary of our quarterly unaudited results of operations for the years ended December 31, 2018 and 2017 follows: 2018 First Second Third Fourth (in millions, except per share results) Total revenues $ 14,279 $ 14,259 $ 14,206 $ 14,168 Income before income taxes and equity in net earnings 707 19 901 436 Net income 491 193 644 355 Basic earnings per common share $ 3.56 $ 1.40 $ 4.68 $ 2.60 Diluted earnings per common share (1) $ 3.53 $ 1.39 $ 4.65 $ 2.58 2017 First Second Third Fourth (in millions, except per share results) Total revenues $ 13,762 $ 13,534 $ 13,282 $ 13,189 Income before income taxes 1,689 1,042 799 490 Net income 1,115 650 499 184 Basic earnings per common share (1) $ 7.54 $ 4.49 $ 3.46 $ 1.30 Diluted earnings per common share (1) $ 7.49 $ 4.46 $ 3.44 $ 1.29 (1) The calculation of earnings per common share is based on the weighted average shares outstanding during each quarter and, accordingly, the sum may not equal the total for the year. |
SCHEDULE I-PARENT COMPANY FINAN
SCHEDULE I-PARENT COMPANY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
SCHEDULE I-PARENT COMPANY FINANCIAL INFORMATION | SCHEDULE I—PARENT COMPANY FINANCIAL INFORMATION CONDENSED BALANCE SHEETS December 31, 2018 2017 (in millions, except share ASSETS Current assets: Cash and cash equivalents $ 265 $ 383 Investment securities 313 305 Receivable from operating subsidiaries 1,306 1,042 Other current assets 628 245 Total current assets 2,512 1,975 Property and equipment, net 1,209 1,091 Investments in subsidiaries 16,951 16,810 Equity method investment in Kindred at Home 1,047 — Other long-term assets 359 426 Total assets $ 22,078 $ 20,302 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Payable to operating subsidiaries $ 4,487 $ 4,311 Current portion of notes payable to operating subsidiaries 28 28 Book overdraft 38 41 Short-term debt 1,694 150 Other current liabilities 791 896 Total current liabilities 7,038 5,426 Long-term debt 4,375 4,770 Other long-term liabilities 504 264 Total liabilities 11,917 10,460 Commitments and contingencies Stockholders’ equity: Preferred stock, $1 par; 10,000,000 shares authorized; none issued — — Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 33 33 Capital in excess of par value 2,535 2,445 Retained earnings 15,072 13,670 Accumulated other comprehensive income (loss) (159 ) 19 Treasury stock, at cost, 63,028,169 shares at December 31, 2018 (7,320 ) (6,325 ) Total stockholders’ equity 10,161 9,842 Total liabilities and stockholders’ equity $ 22,078 $ 20,302 See accompanying notes to the parent company financial statements. SCHEDULE I—PARENT COMPANY FINANCIAL INFORMATION CONDENSED STATEMENTS OF INCOME For the year ended December 31, 2018 2017 2016 (in millions) Revenues: Management fees charged to operating subsidiaries $ 1,666 $ 1,864 $ 1,683 Investment and other income, net 30 57 42 1,696 1,921 1,725 Expenses: Operating costs 1,468 1,801 1,519 Merger termination fee and related costs, net — (936 ) 104 Depreciation 342 332 302 Interest 218 243 189 2,028 1,440 2,114 Other expense, net 33 — — Loss on sale of business 782 — — (Loss) income before income taxes and equity in net earnings of subsidiaries (1,147 ) 481 (389 ) (Benefit) provision for income taxes (542 ) 61 (107 ) (Loss) income before equity in net earnings of subsidiaries (605 ) 420 (282 ) Equity in net earnings of subsidiaries 2,277 2,028 896 Equity in net earnings of Kindred at Home 11 — — Net income $ 1,683 $ 2,448 $ 614 See accompanying notes to the parent company financial statements. SCHEDULE I—PARENT COMPANY FINANCIAL INFORMATION CONDENSED STATEMENTS OF COMPREHENSIVE INCOME For the year ended December 31, 2018 2017 2016 (in millions) Net income $ 1,683 $ 2,448 $ 614 Other comprehensive income (loss): Change in gross unrealized investment losses/gains (189 ) 149 (101 ) Effect of income taxes 51 (55 ) 38 Total change in unrealized investment (138 ) 94 (63 ) Reclassification adjustment for net realized (53 ) (14 ) (96 ) Effect of income taxes 17 5 35 Total reclassification adjustment, net of tax (36 ) (9 ) (61 ) Other comprehensive (loss) income, net of tax (174 ) 85 (124 ) Comprehensive income attributable to our equity method (4 ) — — Comprehensive income $ 1,505 $ 2,533 $ 490 See accompanying notes to the parent company financial statements. SCHEDULE I—PARENT COMPANY FINANCIAL INFORMATION CONDENSED STATEMENTS OF CASH FLOWS For the year ended December 31, 2018 2017 2016 (in millions) Net cash provided by operating activities $ 2,719 $ 2,423 $ 1,848 Cash flows from investing activities: Acquisitions, net of cash acquired (354 ) — — Acquisitions, equity method investment in Kindred at Home (1,095 ) — — Capital contributions to operating subsidiaries (697 ) (695 ) (895 ) Purchases of investment securities (145 ) (53 ) (151 ) Proceeds from sale of investment securities 35 — 25 Maturities of investment securities 59 51 143 Purchases of property and equipment, net (465 ) (359 ) (382 ) Net cash used in investing activities (2,662 ) (1,056 ) (1,260 ) Cash flows from financing activities: Proceeds from issuance of senior notes, net — 1,779 — Proceeds from issuance (repayments) of commercial paper, net 485 (153 ) (2 ) Proceeds from term loan 1,000 — — Repayment of term loan (350 ) — — Repayment of long-term debt — (800 ) — Change in book overdraft (3 ) 3 5 Common stock repurchases (1,090 ) (3,365 ) (104 ) Dividends paid (265 ) (220 ) (177 ) Proceeds from stock option exercises and other 48 62 11 Net cash used in financing activities (175 ) (2,694 ) (267 ) (Decrease) increase in cash and cash equivalents (118 ) (1,327 ) 321 Cash and cash equivalents at beginning of year 383 1,710 1,389 Cash and cash equivalents at end of year $ 265 $ 383 $ 1,710 See accompanying notes to the parent company financial statements. SCHEDULE I—PARENT COMPANY FINANCIAL INFORMATION NOTES TO CONDENSED FINANCIAL STATEMENTS BASIS OF PRESENTATION Parent company financial information has been derived from our consolidated financial statements and excludes the accounts of all operating subsidiaries. This information should be read in conjunction with our consolidated financial statements. TRANSACTIONS WITH SUBSIDIARIES Management Fee Through intercompany service agreements approved, if required, by state regulatory authorities, Humana Inc., our parent company, charges a management fee for reimbursement of certain centralized services provided to its subsidiaries including information systems, disbursement, investment and cash administration, marketing, legal, finance, and medical and executive management oversight. Dividends Cash dividends received from subsidiaries and included as a component of net cash provided by operating activities were $2.3 billion in 2018 , $1.4 billion in 2017 , and $0.8 billion in 2016 . Guarantee Through indemnity agreements approved by state regulatory authorities, certain of our regulated subsidiaries generally are guaranteed by our parent company in the event of insolvency for: (1) member coverage for which premium payment has been made prior to insolvency; (2) benefits for members then hospitalized until discharged; and (3) payment to providers for services rendered prior to insolvency. Our parent has also guaranteed the obligations of our military services subsidiaries and funding to maintain required statutory capital levels of certain other regulated subsidiaries. REGULATORY REQUIREMENTS Certain of our subsidiaries operate in states that regulate the payment of dividends, loans, or other cash transfers to Humana Inc., our parent company, and require minimum levels of equity as well as limit investments to approved securities. The amount of dividends that may be paid to Humana Inc. by these subsidiaries, without prior approval by state regulatory authorities, or ordinary dividends, is limited based on the entity’s level of statutory income and statutory capital and surplus. If the dividend, together with other dividends paid within the preceding twelve months, exceeds a specified statutory limit or is paid from sources other than earned surplus, it is generally considered an extraordinary dividend requiring prior regulatory approval. In most states, prior notification is provided before paying a dividend even if approval is not required. Although minimum required levels of equity are largely based on premium volume, product mix, and the quality of assets held, minimum requirements vary significantly at the state level. Our state regulated insurances subsidiaries had aggregate statutory capital and surplus of approximately $7.6 billion and $8.0 billion as of December 31, 2018 and 2017 , respectively, which exceeded aggregate minimum regulatory requirements of $5.2 billion and $4.8 billion , respectively. The amount of ordinary dividends that may be paid to our parent company in 2019 is approximately $1 billion in the aggregate. The amount, timing and mix of ordinary and extraordinary dividend payments will vary due to state regulatory requirements, the level of excess statutory capital and surplus and expected future surplus requirements related to, for example, premium volume and product mix. Actual dividends that were paid to our parent company were approximately $2.3 billion in 2018 , $1.4 billion in 2017, and $0.8 billion in 2016. Our use of operating cash flows derived from our non-insurance subsidiaries, such as in our Healthcare Services segment, is generally not restricted by state departments of insurance (or comparable state regulators). ACQUISITIONS AND DIVESTITURES Refer to Note 3 of the notes to consolidated financial statements in this Annual Report on Form 10-K for a description of certain acquisitions and divestitures. During 2018 , 2017 and 2016 , we funded certain non-regulated subsidiary acquisitions with contributions from Humana Inc., our parent company, included in capital contributions in the condensed statement of cash flows. INCOME TAXES Refer to Note 11 of the notes to consolidated financial statements included in this Annual Report on Form 10-K for a description of income taxes. DEBT Refer to Note 12 of the notes to consolidated financial statements included in this Annual Report on Form 10-K for a description of debt. STOCKHOLDER’S EQUITY Refer to Note 15 of the notes to consolidated financial statements included in this Annual Report on Form 10-K for a description of stockholders’ equity, including stock repurchases and stockholder dividends. |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS For the Years Ended December 31, 2018 , 2017 , and 2016 (in millions) Additions Balance at Acquired/(Disposed) Charged Charged to Deductions Balance at Allowance for loss on receivables: 2018 $ 96 $ — $ 36 $ (29 ) $ (24 ) $ 79 2017 118 — 20 (10 ) (32 ) 96 2016 101 — 39 19 (41 ) 118 Deferred tax asset valuation allowance: 2018 (49 ) — (5 ) — — (54 ) 2017 (49 ) — — — — (49 ) 2016 (42 ) — (7 ) — — (49 ) (1) Represents changes in retroactive membership adjustments to premiums revenue and contractual allowances adjustments to services revenue as more fully described in Note 2 to the consolidated financial statements included in this annual report on Form 10-K. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Our consolidated financial statements include the accounts of Humana Inc. and subsidiaries that the Company controls, including variable interest entities associated with medical practices for which we are the primary beneficiary. We do not own many of our medical practices but instead enter into exclusive management agreements with the affiliated Professional Associations, or P.A.s, that operate these medical practices. Based upon the provisions of these agreements, these affiliated P.A.s are variable interest entities and we are the primary beneficiary, and accordingly we consolidate the affiliated P.A.s. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. |
Health Care Reform | Health Care Reform The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010 (which we collectively refer to as the Health Care Reform Law) enacted significant reforms to various aspects of the U.S. health insurance industry. Certain of these reforms became effective January 1, 2014, including an annual insurance industry premium-based fee and the establishment of federally-facilitated or state-based exchanges. Operating results for our individual commercial medical business compliant with the Health Care Reform Law were challenged primarily due to unanticipated modifications in the program subsequent to the passing of the Health Care Reform Law, resulting in higher covered population morbidity and the ensuing enrollment and claims issues causing volatility in claims experience. As a result of these and other factors, we exited our individual commercial medical business effective January 1, 2018. The annual premium-based fee on health insurers is not deductible for tax purposes. We estimate a liability for the health insurance industry fee and record it in full once qualifying insurance coverage is provided in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized ratably to expense over the same calendar year. We record the liability for the health insurance industry fee in trade accounts payable and accrued expenses and record the deferred cost in other current assets in our consolidated financial statements. We pay the health insurance industry fee in September or October of each year. The Consolidated Appropriations Act enacted on December 18, 2015, included a one-time one year suspension in 2017 of the health insurance industry fee. In 2018, we paid the federal government $1.04 billion for the annual health insurance industry fee attributed to calendar year 2018. In 2016, we paid the federal government $916 million for the annual health insurance industry fee attributed to calendar year 2016. The Continuing Resolution bill, H.R. 195, enacted on January 22, 2018, included a one year suspension in 2019 of the health insurance industry fee, but under current law, the fee is scheduled to resume in calendar year 2020. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash, time deposits, money market funds, commercial paper, other money market instruments, and certain U.S. Government securities with an original maturity of three months or less. Carrying value approximates fair value due to the short-term maturity of the investments. |
Investment Securities | Investment Securities Investment securities, which consist entirely of debt securities, have been categorized as available for sale and, as a result, are stated at fair value. Investment securities available for current operations are classified as current assets. Investment securities available for our long-term insurance products and professional liability funding requirements, as well as restricted statutory deposits, are classified as long-term assets. For the purpose of determining gross realized gains and losses, which are included as a component of investment income in the consolidated statements of income, the cost of investment securities sold is based upon specific identification. Unrealized holding gains and losses, net of applicable deferred taxes, are included as a component of stockholders’ equity and comprehensive income until realized from a sale or other-than-temporary impairment. Under the other-than-temporary impairment model for debt securities held, we recognize an impairment loss in income in an amount equal to the full difference between the amortized cost basis and the fair value when we have the intent to sell the debt security or it is more likely than not we will be required to sell the debt security before recovery of our amortized cost basis. However, if we do not intend to sell the debt security, we evaluate the expected cash flows to be received as compared to amortized cost and determine if a credit loss has occurred. In the event of a credit loss, only the amount of the impairment associated with the credit loss is recognized currently in income with the remainder of the loss recognized in other comprehensive income. When we do not intend to sell a security in an unrealized loss position, potential other-than-temporary impairment is considered using a variety of factors, including the length of time and extent to which the fair value has been less than cost; adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a security; payment structure of the security; changes in credit rating of the security by the rating agencies; the volatility of the fair value changes; and changes in fair value of the security after the balance sheet date. For debt securities, we take into account expectations of relevant market and economic data. For example, with respect to mortgage and asset-backed securities, such data includes underlying loan level data and structural features such as seniority and other forms of credit enhancements. A decline in fair value is considered other-than-temporary when we do not expect to recover the entire amortized cost basis of the security. We estimate the amount of the credit loss component of a debt security as the difference between the amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of future cash flows discounted at the implicit interest rate at the date of purchase. |
Receivables and Revenue Recognition | Receivables and Revenue Recognition We generally establish one-year commercial membership contracts with employer groups, subject to cancellation by the employer group on 30 -day written notice. Our Medicare contracts with CMS renew annually. Our military services contracts with the federal government and certain contracts with various state Medicaid programs generally are multi-year contracts subject to annual renewal provisions. Premiums Revenue We receive monthly premiums from the federal government and various states according to government specified payment rates and various contractual terms. We bill and collect premium from employer groups and members in our Medicare and other individual products monthly. Changes in premium revenues resulting from the periodic changes in risk-adjustment scores derived from medical diagnoses for our membership are estimated by projecting the ultimate annual premium and are recognized ratably during the year, with adjustments each period to reflect changes in the ultimate premium. Receivables or payables are classified as current or long-term in our consolidated balance sheet based on the timing of the expected settlement. Premiums revenue is estimated by multiplying the membership covered under the various contracts by the contractual rates. Premiums revenue is recognized as income in the period members are entitled to receive services, and is net of estimated uncollectible amounts, retroactive membership adjustments, and adjustments to recognize rebates under the minimum benefit ratios required under the Health Care Reform Law. We estimate policyholder rebates by projecting calendar year minimum benefit ratios for the small group and large group markets, as defined by the Health Care Reform Law using a methodology prescribed by HHS, separately by state and legal entity. Medicare Advantage products are also subject to minimum benefit ratio requirements under the Health Care Reform Law. Estimated calendar year rebates recognized ratably during the year are revised each period to reflect current experience. Retroactive membership adjustments result from enrollment changes not yet processed, or not yet reported by an employer group or the government. We routinely monitor the collectibility of specific accounts, the aging of receivables, historical retroactivity trends, estimated rebates, as well as prevailing and anticipated economic conditions, and reflect any required adjustments in current operations. Premiums received prior to the service period are recorded as unearned revenues. Medicare Part D We cover prescription drug benefits in accordance with Medicare Part D under multiple contracts with CMS. The payments we receive monthly from CMS and members, which are determined from our annual bid, represent amounts for providing prescription drug insurance coverage. We recognize premiums revenue for providing this insurance coverage ratably over the term of our annual contract. Our CMS payment is subject to risk sharing through the Medicare Part D risk corridor provisions. In addition, receipts for reinsurance and low-income cost subsidies as well as receipts for certain discounts on brand name prescription drugs in the coverage gap represent payments for prescription drug costs for which we are not at risk. The risk corridor provisions compare costs targeted in our bids to actual prescription drug costs, limited to actual costs that would have been incurred under the standard coverage as defined by CMS. Variances exceeding certain thresholds may result in CMS making additional payments to us or require us to refund to CMS a portion of the premiums we received. As risk corridor provisions are considered in our overall annual bid process, we estimate and recognize an adjustment to premiums revenue related to these provisions based upon pharmacy claims experience. We record a receivable or payable at the contract level and classify the amount as current or long-term in our consolidated balance sheets based on the timing of expected settlement. Reinsurance and low-income cost subsidies represent funding from CMS in connection with the Medicare Part D program for which we assume no risk. Reinsurance subsidies represent funding from CMS for its portion of prescription drug costs which exceed the member’s out-of-pocket threshold, or the catastrophic coverage level. Low-income cost subsidies represent funding from CMS for all or a portion of the deductible, the coinsurance and co-payment amounts above the out-of-pocket threshold for low-income beneficiaries. Monthly prospective payments from CMS for reinsurance and low-income cost subsidies are based on assumptions submitted with our annual bid. A reconciliation and related settlement of CMS’s prospective subsidies against actual prescription drug costs we paid is made after the end of the year. The Health Care Reform Law mandates consumer discounts of 50% on brand name prescription drugs for Part D plan participants in the coverage gap. These discounts are funded by CMS and pharmaceutical manufacturers while we administer the application of these funds. We account for these subsidies and discounts as a deposit in our consolidated balance sheets and as a financing activity under receipts (withdrawals) from contract deposits in our consolidated statements of cash flows. For 2018 , subsidy and discount payments of $10.3 billion exceeded reimbursements of $9.6 billion by $0.7 billion . For 2017 , subsidy and discount reimbursements of $12.1 billion exceeded payments of $10.2 billion by $1.9 billion . For 2016 , subsidy and discount reimbursements of $11.1 billion exceeded payments of $10.0 billion by $1.1 billion . We do not recognize premiums revenue or benefit expenses for these subsidies or discounts. Receipt and payment activity is accumulated at the contract level and recorded in our consolidated balance sheets in other current assets or trade accounts payable and accrued expenses depending on the contract balance at the end of the reporting period. Settlement of the reinsurance and low-income cost subsidies as well as the risk corridor payment is based on a reconciliation made approximately 9 months after the close of each calendar year. Settlement with CMS for brand name prescription drug discounts is based on a reconciliation made approximately 14 to 18 months after the close of each calendar year. We continue to revise our estimates with respect to the risk corridor provisions based on subsequent period pharmacy claims data. See Note 7 for detail regarding amounts recorded to our consolidated balance sheets related to the risk corridor settlement and subsidies from CMS with respect to the Medicare Part D program. Services Revenue Patient services revenue Patient services include injury and illness care and related services as well as other healthcare services related to customer needs or as required by law. Patient services revenues are recognized in the period services are provided to the customer and are net of contractual allowances. Administrative services fees Administrative services fees cover the processing of claims, offering access to our provider networks and clinical programs, and responding to customer service inquiries from members of self-funded groups. Revenues from providing administration services, also known as administrative services only, or ASO, are recognized in the period services are performed and are net of estimated uncollectible amounts. ASO fees are estimated by multiplying the membership covered under the various contracts by the contractual rates. Under ASO contracts, self-funded employers retain the risk of financing substantially all of the cost of health benefits. However, many ASO customers purchase stop loss insurance coverage from us to cover catastrophic claims or to limit aggregate annual costs. Accordingly, we have recorded premiums revenue and benefits expense related to these stop loss insurance contracts. We routinely monitor the collectibility of specific accounts, the aging of receivables, as well as prevailing and anticipated economic conditions, and reflect any required adjustments in current operations. ASO fees received prior to the service period are recorded as unearned revenues. Under our TRICARE contracts with the Department of Defense (DoD) we provide administrative services, including offering access to our provider networks and clinical programs, claim processing, customer service, enrollment, and other services, while the federal government retains all of the risk of the cost of health benefits. We account for revenues under our contracts net of estimated health care costs similar to an administrative services fee only agreement. Our contracts include fixed administrative services fees and incentive fees and penalties. Administrative services fees are recognized as services are performed. Our TRICARE members are served by both in-network and out-of-network providers in accordance with our contracts. We pay health care costs related to these services to the providers and are subsequently reimbursed by the DoD for such payments. We account for the payments of the federal government’s claims and the related reimbursements under deposit accounting in our consolidated balance sheets and as a financing activity under receipts (withdrawals) from contract deposits in our consolidated statements of cash flows. For 2018, health care cost reimbursements and payments were each approximately $5.6 billion , with reimbursements exceeding payments by $38 million for the year. For 2017, health care cost reimbursements and payments were each approximately $3.4 billion , with reimbursements exceeding payments by $11 million for the year. For 2016, health care cost reimbursements and payments were each approximately $3.3 billion with payments exceeding reimbursements by $25 million for the year. Receivables Receivables, including premium receivables, patient services revenue receivables, and ASO fee receivables, are shown net of allowances for estimated uncollectible accounts, retroactive membership adjustments, and contractual allowances. |
Other Current Assets | Other Current Assets Other current assets includes amounts associated with Medicare Part D as discussed above and in Note 7, rebates due from pharmaceutical manufacturers and other amounts due within one year. We accrue pharmaceutical rebates as they are earned based on contractual terms and usage of the product. |
Policy Acquisition Costs | Policy Acquisition Costs Policy acquisition costs are those costs that relate directly to the successful acquisition of new and renewal insurance policies. Such costs include commissions, costs of policy issuance and underwriting, and other costs we incur to acquire new business or renew existing business. We expense policy acquisition costs related to our employer-group prepaid health services policies as incurred. These short-duration employer-group prepaid health services policies typically have a 1 -year term and may be canceled upon 30 days notice by the employer group. Life insurance, annuities, certain health and other supplemental, and, prior to the sale of our KMG subsidiary in 2018, long term care policies sold to individuals are accounted for as long-duration insurance products because they are expected to remain in force for an extended period beyond one year and premium received in the earlier years is intended to pay anticipated benefits to be incurred in future years . As a result, we defer policy acquisition costs, primarily consisting of commissions, and amortize them over the estimated life of the policies in proportion to premiums earned. Deferred acquisition costs are reviewed to determine if they are recoverable from future income. |
Long-Lived Assets | Long-Lived Assets Property and equipment is recorded at cost. Gains and losses on sales or disposals of property and equipment are included in operating costs. Certain costs related to the development or purchase of internal-use software are capitalized. Depreciation is computed using the straight-line method over estimated useful lives ranging from 3 to 10 years for equipment, 3 to 5 years for computer software, and 10 to 20 years for buildings. Improvements to leased facilities are depreciated over the shorter of the remaining lease term or the anticipated life of the improvement. We periodically review long-lived assets, including property and equipment and definite-lived intangible assets, for impairment whenever adverse events or changes in circumstances indicate the carrying value of the asset may not be recoverable. Losses are recognized for a long-lived asset to be held and used in our operations when the undiscounted future cash flows expected to result from the use of the asset are less than its carrying value. We recognize an impairment loss based on the excess of the carrying value over the fair value of the asset. A long-lived asset held for sale is reported at the lower of the carrying amount or fair value less costs to sell. Depreciation expense is not recognized on assets held for sale. Losses are recognized for a long-lived asset to be abandoned when the asset ceases to be used. In addition, we periodically review the estimated lives of all long-lived assets for reasonableness. |
Equity Method Investments | Equity Method Investments We use the equity method of accounting for equity investments in companies where we are able to exercise significant influence, but not control, over operating and financial policies of the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, representation on the board of directors, organizational structure, participation in policy-making decisions and material intra-entity transactions. Generally, under the equity method, original investments in these entities are recorded at cost and subsequently adjusted by our share of equity in income or losses after the date of acquisition as well as capital contributions to and distributions from these companies. Our proportionate share of the net income or loss of these companies is included in consolidated net income. Investment amounts in excess of our share of an investee's net assets are amortized over the life of the related asset creating the excess. Excess goodwill is not amortized. We evaluate equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by us when reviewing an equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than carrying value, the investee’s financial condition and near-term prospects and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. |
Goodwill and Definite-Lived Intangible Assets | Goodwill and Definite-Lived Intangible Assets Goodwill represents the unamortized excess of cost over the fair value of the net tangible and other intangible assets acquired. We are required to test at least annually for impairment at a level of reporting referred to as the reporting unit, and more frequently if adverse events or changes in circumstances indicate that the asset may be impaired. A reporting unit either is our operating segments or one level below the operating segments, referred to as a component, which comprise our reportable segments. A component is considered a reporting unit if the component constitutes a business for which discrete financial information is available that is regularly reviewed by management. We aggregate the components of an operating segment into one reporting unit if they have similar economic characteristics. Goodwill is assigned to the reporting units that are expected to benefit from the specific synergies of the business combination. We use the one-step process to review goodwill for impairment to determine both the existence and amount of goodwill impairment, if any. Impairment tests are performed, at a minimum, in the fourth quarter of each year supported by our long-range business plan and annual planning process. We rely on an evaluation of future discounted cash flows to determine fair value of our reporting units. The fair value of our reporting units with significant goodwill exceeded carrying amounts by a substantial margin. A 100 basis point increase in the discount rate would not have a significant impact on the amount of margin for any of our reporting units with significant goodwill, with the exception of our clinical and provider reporting units in our Healthcare Services segment. The margin on the clinical reporting unit would decline to less than 10% after factoring in a 100 basis point increase in the discount rate. The provider reporting unit, while not falling beneath this threshold, was closer than any of our other reporting units. The clinical and provider reporting units account for $524 million and $730 million , respectively, of goodwill. Impairment tests completed for 2018 , 2017 , and 2016 did not result in an impairment loss. Definite-lived intangible assets primarily relate to acquired customer contracts/relationships and are included with other long-term assets in the consolidated balance sheets. Definite-lived intangible assets are amortized over the useful life generally using the straight-line method. We review definite-lived intangible assets for impairment under our long-lived asset policy. |
Benefits Payable and Benefits Expense Recognition | Benefits Payable and Benefits Expense Recognition Benefits expense includes claim payments, capitation payments, pharmacy costs net of rebates, allocations of certain centralized expenses and various other costs incurred to provide health insurance coverage to members, as well as estimates of future payments to hospitals and others for medical care and other supplemental benefits provided on or prior to the balance sheet date. Capitation payments represent monthly contractual fees disbursed to primary care and other providers who are responsible for providing medical care to members. Pharmacy costs represent payments for members’ prescription drug benefits, net of rebates from drug manufacturers. Receivables for such pharmacy rebates are included in other current assets in our consolidated balance sheets. Other supplemental benefits include dental, vision, and other supplemental health and financial protection products. We estimate the costs of our benefits expense payments using actuarial methods and assumptions based upon claim payment patterns, medical cost inflation, historical developments such as claim inventory levels and claim receipt patterns, and other relevant factors, and record benefit reserves for future payments. We continually review estimates of future payments relating to claims costs for services incurred in the current and prior periods and make necessary adjustments to our reserves. Benefits expense is recognized in the period in which services are provided and includes an estimate of the cost of services which have been incurred but not yet reported, or IBNR. Our reserving practice is to consistently recognize the actuarial best point estimate within a level of confidence required by actuarial standards. Actuarial standards of practice generally require a level of confidence such that the liabilities established for IBNR have a greater probability of being adequate versus being insufficient, or such that the liabilities established for IBNR are sufficient to cover obligations under an assumption of moderately adverse conditions. Adverse conditions are situations in which the actual claims are expected to be higher than the otherwise estimated value of such claims at the time of the estimate. Therefore, in many situations, the claim amounts ultimately settled will be less than the estimate that satisfies the actuarial standards of practice. We develop our estimate for IBNR using actuarial methodologies and assumptions, primarily based upon historical claim experience. Depending on the period for which incurred claims are estimated, we apply a different method in determining our estimate. For periods prior to the most recent two months, the key assumption used in estimating our IBNR is that the completion factor pattern remains consistent over a rolling 12-month period after adjusting for known changes in claim inventory levels and known changes in claim payment processes. Completion factors result from the calculation of the percentage of claims incurred during a given period that have historically been adjudicated as of the reporting period. For the most recent two months, the incurred claims are estimated primarily from a trend analysis based upon per member per month claims trends developed from our historical experience in the preceding months, adjusted for known changes in estimates of recent hospital and drug utilization data, provider contracting changes, changes in benefit levels, changes in member cost sharing, changes in medical management processes, product mix, and weekday seasonality. The completion factor method is used for the months of incurred claims prior to the most recent two months because the historical percentage of claims processed for those months is at a level sufficient to produce a consistently reliable result. Conversely, for the most recent two months of incurred claims, the volume of claims processed historically is not at a level sufficient to produce a reliable result, which therefore requires us to examine historical trend patterns as the primary method of evaluation. Changes in claim processes, including recoveries of overpayments, receipt cycle times, claim inventory levels, outsourcing, system conversions, and processing disruptions due to weather or other events affect views regarding the reasonable choice of completion factors. Claim payments to providers for services rendered are often net of overpayment recoveries for claims paid previously, as contractually allowed. Claim overpayment recoveries can result from many different factors, including retroactive enrollment activity, audits of provider billings, and/or payment errors. Changes in patterns of claim overpayment recoveries can be unpredictable and result in completion factor volatility, as they often impact older dates of service. The receipt cycle time measures the average length of time between when a medical claim was initially incurred and when the claim form was received. Increases in electronic claim submissions from providers decrease the receipt cycle time. If claims are submitted or processed on a faster (slower) pace than prior periods, the actual claim may be more (less) complete than originally estimated using our completion factors, which may result in reserves that are higher (lower) than required. Medical cost trends potentially are more volatile than other segments of the economy. The drivers of medical cost trends include increases in the utilization of hospital facilities, physician services, new higher priced technologies and medical procedures, and new prescription drugs and therapies, as well as the inflationary effect on the cost per unit of each of these expense components. Other external factors such as government-mandated benefits or other regulatory changes, the tort liability system, increases in medical services capacity, direct to consumer advertising for prescription drugs and medical services, an aging population, lifestyle changes including diet and smoking, catastrophes, and epidemics also may impact medical cost trends. Internal factors such as system conversions, claims processing cycle times, changes in medical management practices and changes in provider contracts also may impact our ability to accurately predict estimates of historical completion factors or medical cost trends. All of these factors are considered in estimating IBNR and in estimating the per member per month claims trend for purposes of determining the reserve for the most recent two months. Additionally, we continually prepare and review follow-up studies to assess the reasonableness of the estimates generated by our process and methods over time. The results of these studies are also considered in determining the reserve for the most recent two months. Each of these factors requires significant judgment by management. We reassess the profitability of our contracts for providing insurance coverage to our members when current operating results or forecasts indicate probable future losses. We establish a premium deficiency reserve in current operations to the extent that the sum of expected future costs, claim adjustment expenses, and maintenance costs exceeds related future premiums under contracts without consideration of investment income. For purposes of determining premium deficiencies, contracts are grouped in a manner consistent with our method of acquiring, servicing, and measuring the profitability of such contracts. Losses recognized as a premium deficiency result in a beneficial effect in subsequent periods as operating losses under these contracts are charged to the liability previously established. Because the majority of our member contracts renew annually, we would not record a material premium deficiency reserve, except when unanticipated adverse events or changes in circumstances indicate otherwise. In 2016, we increased our existing $176 million premium deficiency reserve for our individual commercial medical business compliant with the Health Care Reform Law associated with the 2016 coverage year by $208 million . During 2016, the $384 million current period losses were applied to the premium deficiency liability for the 2016 coverage year. We believe our benefits payable are adequate to cover future claims payments required. However, such estimates are based on knowledge of current events and anticipated future events. Therefore, the actual liability could differ materially from the amounts provided. |
Future policy benefits payable | Future policy benefits payable Future policy benefits payable include liabilities for long-duration insurance policies including life insurance, annuities, certain health and other supplemental, and prior to its sale in 2018, long-term care policies sold to individuals for which some of the premium received in the earlier years is intended to pay anticipated benefits to be incurred in future years. At policy issuance, these reserves are recognized on a net level premium method based on interest rates, mortality, morbidity, and maintenance expense assumptions. Interest rates are based on our expected net investment returns on the investment portfolio supporting the reserves for these blocks of business. Mortality, a measure of expected death, and morbidity, a measure of health status, assumptions are based on industry actuarial tables, modified based upon actual experience. Changes in estimates of these reserves are recognized as an adjustment to benefits expense in the period the changes occur. We perform loss recognition tests at least annually in the fourth quarter, and more frequently if adverse events or changes in circumstances indicate that the level of the liability, together with the present value of future gross premiums, may not be adequate to provide for future expected policy benefits and maintenance costs. During 2016, we recorded a loss for a premium deficiency as discussed further in Note 18. We adjust future policy benefits payable for the additional liability that would have been recorded if investment securities backing the liability had been sold at their stated aggregate fair value and the proceeds reinvested at current yields. We include the impact of this adjustment, if any, net of applicable deferred taxes, with the change in unrealized investment gain (loss) in accumulated other comprehensive income in stockholders’ equity. Health policies sold to individuals that conform to the Health Care Reform Law are accounted for under a short-duration model under which policy reserves are not established because premiums received in the current year are intended to pay anticipated benefits in that year . In addition, as previously underwritten members transition to plans compliant with the Health Care Reform Law, it results in policy lapses and the release of reserves for future policy benefits. |
Book Overdraft | Book Overdraft Under our cash management system, checks issued but not yet presented to banks that would result in negative bank balances when presented are classified as a current liability in the consolidated balance sheets. Changes in book overdrafts from period to period are reported in the consolidated statement of cash flows as a financing activity. |
Income Taxes | Income Taxes We recognize an asset or liability for the deferred tax consequences of temporary differences between the tax bases of assets or liabilities and their reported amounts in the consolidated financial statements. These temporary differences will result in taxable or deductible amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. We also recognize the future tax benefits such as net operating and capital loss carryforwards as deferred tax assets. A valuation allowance is provided against these deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized. Future years’ tax expense may be increased or decreased by adjustments to the valuation allowance or to the estimated accrual for income taxes. Deferred tax assets and deferred tax liabilities are further adjusted for changes in the enacted tax rates. We record tax benefits when it is more likely than not that the tax return position taken with respect to a particular transaction will be sustained. A liability, if recorded, is not considered resolved until the statute of limitations for the relevant taxing authority to examine and challenge the tax position has expired, or the tax position is ultimately settled through examination, negotiation, or litigation. We classify interest and penalties associated with uncertain tax positions in our provision for income taxes. |
Stock-Based Compensation | Stock-Based Compensation We generally recognize stock-based compensation expense, as determined on the date of grant at fair value, on a straight-line basis over the period during which an employee is required to provide service in exchange for the award (the vesting period). In addition, for awards with both time and performance-based conditions, we generally recognize compensation expense on a straight line basis over the vesting period when it is probable that the performance condition will be achieved. We estimate expected forfeitures and recognize compensation expense only for those awards which are expected to vest. We estimate the grant-date fair value of stock options using the Black-Scholes option-pricing model. |
Earnings Per Common Share | Earnings Per Common Share We compute basic earnings per common share on the basis of the weighted-average number of unrestricted common shares outstanding. Diluted earnings per common share is computed on the basis of the weighted-average number of unrestricted common shares outstanding plus the dilutive effect of outstanding employee stock options and restricted shares, or units, using the treasury stock method. |
Fair Value | Fair Value Assets and liabilities measured at fair value are categorized into a fair value hierarchy based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our own assumptions about the assumptions market participants would use. The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below. Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt securities that are traded in an active exchange market. Level 2 – Observable inputs other than Level 1 prices such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments as well as debt securities whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Level 3 – Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Level 3 includes assets and liabilities whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques reflecting our own assumptions about the assumptions market participants would use as well as those requiring significant management judgment. Fair value of actively traded debt securities are based on quoted market prices. Fair value of other debt securities are based on quoted market prices of identical or similar securities or based on observable inputs like interest rates generally using a market valuation approach, or, less frequently, an income valuation approach and are generally classified as Level 2. We obtain at least one price for each security from a third party pricing service. These prices are generally derived from recently reported trades for identical or similar securities, including adjustments through the reporting date based upon observable market information. When quoted prices are not available, the third party pricing service may use quoted market prices of comparable securities or discounted cash flow analysis, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include benchmark yields, reported trades, credit spreads, broker quotes, default rates, and prepayment speeds. We are responsible for the determination of fair value and as such we perform analysis on the prices received from the third party pricing service to determine whether the prices are reasonable estimates of fair value. Our analysis includes a review of monthly price fluctuations as well as a quarterly comparison of the prices received from the pricing service to prices reported by our third party investment adviser. In addition, on a quarterly basis we examine the underlying inputs and assumptions for a sample of individual securities across asset classes, credit rating levels, and various durations. Fair value of privately held debt securities are estimated using a variety of valuation methodologies, including both market and income approaches, where an observable quoted market does not exist and are generally classified as Level 3. For privately-held debt securities, such methodologies include reviewing the value ascribed to the most recent financing, comparing the security with securities of publicly-traded companies in similar lines of business, and reviewing the underlying financial performance including estimating discounted cash flows. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued new guidance that amends the accounting for revenue recognition. The amendments are intended to provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices, and improve disclosure requirements. Insurance contracts are not included in the scope of this new guidance. Accordingly, our premiums revenue and investment income, collectively representing approximately 97% of our consolidated external revenues for the year ended December 31, 2018, are not included in the scope of the new guidance. We adopted the new standard effective January 1, 2018, using the modified retrospective approach. As the majority of our revenues are not subject to the new guidance and the remaining revenues’ accounting treatment did not materially differ from pre-existing accounting treatment, the adoption of the new standard did not have a material impact on our consolidated results of operations, financial condition, cash flows, or related disclosures. Accounting Pronouncements Effective in Future Periods In February 2016, the FASB issued new guidance related to accounting for leases which requires lessees to record assets and liabilities reflecting the leased assets and lease obligations, respectively, while following the dual model for recognition in statements of income requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). We adopted the new standard effective January 1, 2019, as allowed, using the modified retrospective approach. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification without restating comparative prior periods. We made a permitted accounting policy election to not apply the new guidance to leases with an initial term of 12 months or less. We will recognize those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. The adoption of the standard resulted in recognition of additional lease assets and lease liabilities of approximately $470 million as of January 1, 2019. We believe the standard will not materially affect our consolidated net earnings, cash flows and liquidity. In June 2016, the FASB issued guidance introducing a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The guidance is effective for us beginning January 1, 2020. The new current expected credit losses (CECL) model generally calls for the immediate recognition of all expected credit losses and applies to loans, accounts and trade receivables as well as other financial assets measured at amortized cost, loan commitments and off-balance sheet credit exposures, debt securities and other financial assets measured at fair value through other comprehensive income, and beneficial interests in securitized financial assets. The new guidance replaces the current incurred loss model for measuring expected credit losses, requires expected losses on available for sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities, and provides for additional disclosure requirements. Our investment portfolio consists of available for sale debt securities. We are currently evaluating the impact on our results of operations, financial condition, and cash flows. In March 2017, the FASB issued new guidance that amends the accounting for premium amortization on purchased callable debt securities by shortening the amortization period. This amended guidance requires the premium to be amortized to the earliest call date instead of maturity date. The new guidance is effective for us beginning with annual and interim periods in 2019. This guidance will not have a material impact on our results of operations, financial condition or cash flows. In February 2018, the FASB issued guidance which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the December 22, 2017 enactment of the Tax Cuts and Jobs Act. The new guidance is effective for us beginning January 1, 2019, with early adoption permitted. We early adopted this guidance in the first quarter of 2018 and it did not have a material impact on our results of operations, financial condition or cash flows. In September 2018, the FASB issued new guidance related to accounting for long-duration contracts of insurers which revises key elements of the measurement models and disclosure requirements for long-duration contracts issued by insurers and reinsurers. The new guidance is effective for us beginning with annual and interim periods in 2021, with earlier adoption permitted, and requires retrospective application to previously issued annual and interim financial statements. We are currently evaluating the impact on our results of operations, financial position and cash flows. There are no other recently issued accounting standards that apply to us or that are expected to have a material impact on our results of operations, financial condition, or cash flows. |
ACQUISITIONS AND DIVESTITURES A
ACQUISITIONS AND DIVESTITURES ACQUISITIONS AND DIVESTITURES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Disposal Groups, Including Discontinued Operations | The assets and liabilities of KMG that were disposed of on August 9, 2018 were as follows: August 9, 2018 Assets (in millions) Cash and cash equivalents $ 805 Receivables, net 3 Investment securities 1,576 Other assets 1,085 Total assets disposed $ 3,469 Liabilities Benefits payable $ 58 Trade accounts payable and accrued expenses 70 Future policy benefits payable 2,573 Total liabilities disposed $ 2,701 |
EQUITY METHOD INVESTMENT (Table
EQUITY METHOD INVESTMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | The summarized balance sheet at December 31, 2018 and income statement for the period beginning July 2, 2018 through December 31, 2018 of Kindred at Home in which we hold a 40% equity interest was as follows: Balance sheet December 31, 2018 (in millions) Current assets $ 536 Non-current assets 4,955 Current liabilities 351 Non-current liabilities 2,708 Shareholders' equity 2,432 Statement of income July 2, 2018 through December 31, 2018 (in millions) Revenues $ 1,587 Expenses 1,451 Net income 27 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investment Securities Classified as Current and Long-Term | Investment securities classified as current and long-term were as follows at December 31, 2018 and 2017 , respectively: Amortized Gross Gross Fair (in millions) December 31, 2018 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 419 $ 1 $ (3 ) $ 417 Mortgage-backed securities 2,595 3 (54 ) 2,544 Tax-exempt municipal securities 2,805 3 (37 ) 2,771 Mortgage-backed securities: Residential 55 — — 55 Commercial 537 — (14 ) 523 Asset-backed securities 991 1 (7 ) 985 Corporate debt securities 3,239 1 (98 ) 3,142 Total debt securities $ 10,641 $ 9 $ (213 ) $ 10,437 December 31, 2017 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 532 $ 1 $ (2 ) $ 531 Mortgage-backed securities 1,625 4 (19 ) 1,610 Tax-exempt municipal securities 3,884 33 (28 ) 3,889 Mortgage-backed securities: Residential 26 — — 26 Commercial 455 3 (2 ) 456 Asset-backed securities 407 1 — 408 Corporate debt securities 5,175 244 (37 ) 5,382 Total debt securities $ 12,104 $ 286 $ (88 ) $ 12,302 |
Schedule of Gross Unrealized Losses and Fair Value of Securities | Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at December 31, 2018 and 2017 , respectively: Less than 12 months 12 months or more Total Fair Gross Fair Gross Fair Gross (in millions) December 31, 2018 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 179 $ (1 ) $ 153 $ (2 ) $ 332 $ (3 ) Mortgage-backed securities 956 (16 ) 1,019 (38 ) 1,975 (54 ) Tax-exempt municipal securities 809 (9 ) 1,648 (28 ) 2,457 (37 ) Mortgage-backed securities: Residential — — 15 — 15 — Commercial 372 (8 ) 133 (6 ) 505 (14 ) Asset-backed securities 824 (7 ) 40 — 864 (7 ) Corporate debt securities 1,434 (35 ) 1,439 (63 ) 2,873 (98 ) Total debt securities $ 4,574 $ (76 ) $ 4,447 $ (137 ) $ 9,021 $ (213 ) December 31, 2017 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 273 $ (1 ) $ 130 $ (1 ) $ 403 $ (2 ) Mortgage-backed securities 581 (2 ) 672 (17 ) 1,253 (19 ) Tax-exempt municipal securities 1,590 (16 ) 661 (12 ) 2,251 (28 ) Mortgage-backed securities: Residential 20 — 3 — 23 — Commercial 131 (1 ) 28 (1 ) 159 (2 ) Asset-backed securities 107 — 10 — 117 — Corporate debt securities 1,297 (10 ) 804 (27 ) 2,101 (37 ) Total debt securities $ 3,999 $ (30 ) $ 2,308 $ (58 ) $ 6,307 $ (88 ) |
Schedule of Realized Gains (Losses) Related to Investment Securities Included Within Investment Income | The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the years ended December 31, 2018 , 2017 , and 2016 : 2018 2017 2016 (in millions) Gross realized gains $ 106 $ 35 $ 120 Gross realized losses (16 ) (21 ) (24 ) Net realized capital gains $ 90 $ 14 $ 96 |
Schedule of Contractual Maturity of Debt Securities Available for Sale | The contractual maturities of debt securities available for sale at December 31, 2018 , regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Fair (in millions) Due within one year $ 943 $ 941 Due after one year through five years 2,929 2,873 Due after five years through ten years 1,873 1,810 Due after ten years 718 706 Mortgage and asset-backed securities 4,178 4,107 Total debt securities $ 10,641 $ 10,437 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets Measured at Fair Value on Recurring Basis | The following table summarizes our fair value measurements at December 31, 2018 and 2017 , respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Value Quoted Prices Other Unobservable (in millions) December 31, 2018 Cash equivalents $ 2,024 $ 2,024 $ — $ — Debt securities: U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations 417 — 417 — Mortgage-backed securities 2,544 — 2,544 — Tax-exempt municipal securities 2,771 — 2,771 — Mortgage-backed securities: Residential 55 — 55 — Commercial 523 — 523 — Asset-backed securities 985 — 985 — Corporate debt securities 3,142 — 3,142 — Total debt securities 10,437 — 10,437 — Total invested assets $ 12,461 $ 2,024 $ 10,437 $ — December 31, 2017 Cash equivalents $ 4,564 $ 4,564 $ — $ — Debt securities: U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations 531 — 531 — Mortgage-backed securities 1,610 — 1,610 — Tax-exempt municipal securities 3,889 — 3,889 — Mortgage-backed securities: Residential 26 — 26 — Commercial 456 — 456 — Asset-backed securities 408 — 408 — Corporate debt securities 5,382 — 5,381 1 Total debt securities 12,302 — 12,301 1 Total invested assets $ 16,866 $ 4,564 $ 12,301 $ 1 |
MEDICARE PART D (Tables)
MEDICARE PART D (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Balance Sheet Amounts Associated With Medicare Part D | The accompanying consolidated balance sheets include the following amounts associated with Medicare Part D as of December 31, 2018 and 2017 . CMS subsidies/discounts in the table below include the reinsurance and low-income cost subsidies funded by CMS for which we assume no risk as well as brand name prescription drug discounts for Part D plan participants in the coverage gap funded by CMS and pharmaceutical manufacturers. 2018 2017 Risk CMS Risk CMS (in millions) Other current assets $ 15 $ 172 $ 4 $ 101 Trade accounts payable and accrued expenses (103 ) (503 ) (255 ) (1,085 ) Net current liability (88 ) (331 ) (251 ) $ (984 ) Other long-term assets 7 — — — Other long-term liabilities (89 ) — (28 ) — Net long-term liability (82 ) — (28 ) — Total net liability $ (170 ) $ (331 ) $ (279 ) $ (984 ) |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | Property and equipment was comprised of the following at December 31, 2018 and 2017 . 2018 2017 (in millions) Land $ 20 $ 20 Buildings and leasehold improvements 766 713 Equipment 890 824 Computer software 2,372 2,003 4,048 3,560 Accumulated depreciation (2,313 ) (1,976 ) Property and equipment, net $ 1,735 $ 1,584 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill By Reportable Segments | Changes in the carrying amount of goodwill for our reportable segments for the years ended December 31, 2018 and 2017 were as follows: Retail Group and Specialty Healthcare Services Total (in millions) Balance at January 1, 2017 $ 1,059 $ 261 $ 1,952 $ 3,272 Acquisitions — — 9 9 Balance at December 31, 2017 1,059 261 1,961 3,281 Acquisitions 476 — 140 616 Balance at December 31, 2018 $ 1,535 $ 261 $ 2,101 $ 3,897 |
Details of Intangible Assets Included in Other Long-Term Assets | The following table presents details of our other intangible assets included in other long-term assets in the accompanying consolidated balance sheets at December 31, 2018 and 2017 . Weighted 2018 2017 Cost Accumulated Net Cost Accumulated Net (in millions) Other intangible assets: Customer contracts/relationships 8.7 years $ 646 $ 434 $ 212 $ 566 $ 401 $ 165 Trade names and technology 6.4 years 84 83 1 104 84 20 Provider contracts 11.8 years 68 37 31 68 30 38 Noncompetes and other 7.3 years 29 28 1 32 29 3 Total other intangible assets 8.7 years $ 827 $ 582 $ 245 $ 770 $ 544 $ 226 |
Schedule of Estimated Amortization Expense | The following table presents our estimate of amortization expense for each of the five next succeeding fiscal years: (in millions) For the years ending December 31, 2019 $ 70 2020 67 2021 34 2022 31 2023 18 |
BENEFITS PAYABLE (Tables)
BENEFITS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Activity in Benefits Payable | On a consolidated basis, activity in benefits payable, excluding military services, was as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Balances at January 1 $ 4,668 $ 4,563 $ 4,976 Less: Premium deficiency reserve — — (176 ) Less: Reinsurance recoverables (70 ) (76 ) (85 ) Balances at January 1, net 4,598 4,487 4,715 Incurred related to: Current year 46,385 44,001 45,318 Prior years (503 ) (483 ) (582 ) Total incurred 45,882 43,518 44,736 Paid related to: Current year (41,736 ) (39,496 ) (40,852 ) Prior years (3,977 ) (3,911 ) (4,112 ) Total paid (45,713 ) (43,407 ) (44,964 ) Reinsurance recoverable 95 70 76 Balances at December 31 $ 4,862 $ 4,668 $ 4,563 |
Schedule Of Favorable Medical Claims Reserve Development Related To Prior Fiscal Years By Segment | The table below details our favorable medical claims reserve development related to prior fiscal years by segment for 2018 , 2017 , and 2016 . Favorable Medical Claims Reserve 2018 2017 2016 Retail Segment $ (398 ) $ (386 ) $ (429 ) Group and Specialty Segment (46 ) (40 ) (46 ) Individual Commercial Segment (57 ) (56 ) (106 ) Other Businesses (2 ) (1 ) (1 ) Total $ (503 ) $ (483 ) $ (582 ) |
Benefit Expenses Excluded From Activity in Benefits Payable | Benefits expense excluded from the previous table was as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Premium deficiency reserve for short-duration policies $ — $ — $ (176 ) Military services — — 8 Future policy benefits — (22 ) 439 Total $ — $ (22 ) $ 271 |
Schedule Of Benefits Expense | Activity in benefits payable for our Group and Specialty segment, excluding military services, was as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Balances at January 1 $ 568 $ 579 $ 616 Less: Reinsurance recoverables — — — Balances at January 1, net 568 579 616 Incurred related to: Current year 5,466 5,403 5,271 Prior years (46 ) (40 ) (46 ) Total incurred 5,420 5,363 5,225 Paid related to: Current year (4,957 ) (4,843 ) (4,700 ) Prior years (514 ) (531 ) (562 ) Total paid (5,471 ) (5,374 ) (5,262 ) Balances at December 31 $ 517 $ 568 $ 579 Activity in benefits payable for our Individual Commercial segment, was as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Balances at January 1 $ 101 $ 454 $ 741 Less: Premium deficiency reserve — — (176 ) Balances at January 1, net 101 454 565 Incurred related to: Current year — 669 3,677 Prior years (56 ) (56 ) (106 ) Total incurred (56 ) 613 3,571 Paid related to: Current year — (583 ) (3,233 ) Prior years (38 ) (383 ) (449 ) Total paid (38 ) (966 ) (3,682 ) Balances at December 31 $ 7 $ 101 $ 454 Activity in benefits payable for our Retail segment was as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Balances at January 1 $ 3,963 $ 3,506 $ 3,600 Less: Reinsurance recoverables (70 ) (76 ) (85 ) Balances at January 1, net 3,893 3,430 3,515 Incurred related to: Current year 41,323 38,604 37,212 Prior years (398 ) (386 ) (429 ) Total incurred 40,925 38,218 36,783 Paid related to: Current year (37,189 ) (34,781 ) (33,784 ) Prior years (3,386 ) (2,974 ) (3,084 ) Total paid (40,575 ) (37,755 ) (36,868 ) Reinsurance recoverable 95 70 76 Balances at December 31 $ 4,338 $ 3,963 $ 3,506 The reconciliation of the net incurred and paid claims development tables to benefits payable in the consolidated statement of financial position is as follows: December 31, Net outstanding liabilities Retail $ 4,243 Group and Specialty 517 Individual Commercial 7 Benefits payable, net of reinsurance 4,767 Reinsurance recoverable on unpaid claims Retail 95 Total benefits payable, gross $ 4,862 The following tables provide information about incurred and paid claims development for the Individual Commercial segment as of December 31, 2018 , net of reinsurance. Incurred Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2016 2017 2018 (in millions) 2016 $ 3,677 $ 3,621 $ 3,609 2017 669 627 2018 — Total $ 4,236 Cumulative Paid Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2016 2017 2018 (in millions) 2016 $ 3,233 $ 3,606 $ 3,609 2017 583 620 2018 — Total $ 4,229 All outstanding benefit liabilities before 2015, net of reinsurance N/A Benefits payable, net of reinsurance $ 7 The following tables provide information about incurred and paid claims development for the Group and Specialty segment as of December 31, 2018 , net of reinsurance. Incurred Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2016 2017 2018 (in millions) 2016 $ 5,271 $ 5,234 $ 5,235 2017 5,403 5,358 2018 5,466 Total $ 16,059 Cumulative Paid Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2016 2017 2018 (in millions) 2016 $ 4,700 $ 5,226 $ 5,234 2017 4,843 5,351 2018 4,957 Total $ 15,542 All outstanding benefit liabilities before 2015, net of reinsurance N/A Benefits payable, net of reinsurance $ 517 The following tables provide information about incurred and paid claims development for the Retail segment as of December 31, 2018 , net of reinsurance. Incurred Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2016 2017 2018 (in millions) 2016 $ 37,212 $ 36,891 $ 36,811 2017 38,604 38,341 2018 41,323 Total $ 116,475 Cumulative Paid Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2016 2017 2018 (in millions) 2016 $ 33,784 $ 36,841 $ 36,811 2017 34,781 38,232 2018 37,189 Total $ 112,232 All outstanding benefit liabilities before 2015, net of reinsurance N/A Benefits payable, net of reinsurance $ 4,243 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | The provision for income taxes consisted of the following for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Current provision: Federal $ 139 $ 1,324 $ 921 States and Puerto Rico 58 116 88 Total current provision 197 1,440 1,009 Deferred expense (benefit) 194 132 (71 ) Provision for income taxes $ 391 $ 1,572 $ 938 |
Provision for Income Taxes Using Federal Statutory Rate | The provision for income taxes was different from the amount computed using the federal statutory rate for the years ended December 31, 2018 , 2017 and 2016 due to the following: 2018 2017 2016 (in millions) Income tax provision at federal statutory rate $ 436 $ 1,407 $ 543 States, net of federal benefit, and Puerto Rico 42 80 41 Tax exempt investment income (11 ) (22 ) (20 ) Health insurance industry fee 243 — 336 Nondeductible executive compensation 17 36 30 Tax reform (39 ) 133 — KMG sale (272 ) — — Other, net (25 ) (62 ) 8 Provision for income taxes $ 391 $ 1,572 $ 938 |
Principal Components of Net Deferred Tax Balances | Principal components of our net deferred tax balances at December 31, 2018 and 2017 were as follows: Assets (Liabilities) 2018 2017 (in millions) Compensation and other accrued expense $ 89 $ 138 Benefits payable 79 113 Investment securities 44 — Net operating loss carryforward 38 53 Capital loss carryforward 15 — Deferred acquisition costs 17 48 Unearned revenues 9 12 Other 8 1 Future policy benefits payable — 231 Total deferred income tax assets 299 596 Valuation allowance (54 ) (49 ) Total deferred income tax assets, net of valuation allowance 245 547 Depreciable property and intangible assets (273 ) (237 ) Prepaid expenses (52 ) (44 ) Future policy benefits payable (5 ) — Investment securities — (49 ) Total deferred income tax liabilities (330 ) (330 ) Total net deferred income tax assets/(liabilities) $ (85 ) $ 217 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Carrying Value of Long-Term Debt Outstanding | The carrying value of debt outstanding was as follows at December 31, 2018 and 2017 : 2018 2017 (in millions) Short-term debt: Commercial paper $ 645 150 Term note 650 — Senior note: $400 million, 2.625% due October 1, 2019 399 — Total short-term debt $ 1,694 $ 150 Long-term debt: Senior notes: $400 million, 2.625% due October 1, 2019 $ — $ 399 $400 million, 2.50% due December 15, 2020 398 397 $400 million, 2.90% due December 15, 2022 396 396 $600 million, 3.15% due December 1, 2022 596 595 $600 million, 3.85% due October 1, 2024 597 595 $600 million, 3.95% due March 15, 2027 594 594 $250 million, 8.15% due June 15, 2038 263 263 $400 million, 4.625% due December 1, 2042 396 396 $750 million, 4.95% due October 1, 2044 739 739 $400 million, 4.80% due March 15, 2047 396 396 Total long-term debt $ 4,375 $ 4,770 |
Schedule of Maturities of Long-term Debt | Maturities of the short-term and long-term debt for the years ending December 31, are as follows: For the years ending December 31, (in millions) 2019 $ 1,697 2020 400 2021 — 2022 1,000 2023 — Thereafter 3,000 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Stock-Based Compensation Expense | The compensation expense that has been charged against income for these plans was as follows for the years ended December 31, 2018 , 2017 , and 2016 : 2018 2017 2016 (in millions) Stock-based compensation expense by type: Restricted stock $ 124 $ 145 $ 106 Stock options 13 12 9 Total stock-based compensation expense 137 157 115 Tax benefit recognized (21 ) (32 ) (20 ) Stock-based compensation expense, net of tax $ 116 $ 125 $ 95 |
Activity for Restricted Stock Awards | Activity for our restricted stock was as follows for the year ended December 31, 2018 : Shares Weighted- (shares in thousands) Nonvested restricted stock at December 31, 2017 1,653 $ 171.68 Granted 576 276.62 Vested (1,045 ) 185.82 Forfeited (220 ) 180.83 Nonvested restricted stock at December 31, 2018 964 $ 213.99 |
Weighted-Average Fair Value of Stock Options | The fair value was estimated on the date of grant using the Black-Scholes pricing model with the weighted-average assumptions indicated below: 2018 2017 2016 Weighted-average fair value at grant date $ 63.67 $ 49.81 $ 37.12 Expected option life (years) 4.1 years 4.1 years 4.2 years Expected volatility 26.1 % 27.1 % 27.6 % Risk-free interest rate at grant date 2.5 % 2.0 % 1.1 % Dividend yield 0.7 % 0.7 % 0.7 % |
Activity for Option Plans | Activity for our option plans was as follows for the year ended December 31, 2018 : Shares Under Weighted-Average (shares in thousands) Options outstanding at December 31, 2017 863 $ 181.44 Granted 143 276.01 Exercised (320 ) 157.44 Forfeited (9 ) 150.59 Options outstanding at December 31, 2018 677 $ 213.17 Options exercisable at December 31, 2018 178 $ 180.76 |
EARNINGS PER COMMON SHARE COM_2
EARNINGS PER COMMON SHARE COMPUTATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Details Supporting Computation of Earnings Per Share | Detail supporting the computation of basic and diluted earnings per common share was as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (dollars in millions, except per Net income available for common stockholders $ 1,683 $ 2,448 $ 614 Weighted-average outstanding shares of common stock used to 137,486 144,493 149,375 Dilutive effect of: Employee stock options 194 172 219 Restricted stock 723 920 1,323 Shares used to compute diluted earnings per common share 138,403 145,585 150,917 Basic earnings per common share $ 12.24 $ 16.94 $ 4.11 Diluted earnings per common share $ 12.16 $ 16.81 $ 4.07 Number of antidilutive stock options and restricted stock awards 223 539 748 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Details of Dividend Payments | The following table provides details of dividend payments, excluding dividend equivalent rights, in 2016 , 2017 , and 2018 under our Board approved quarterly cash dividend policy: Payment Amount Total (in millions) 2016 $1.16 $172 2017 $1.49 $216 2018 $1.90 $262 |
Class of Treasury Stock | ASR. Excluding shares acquired in connection with employee stock plans, share repurchases were as follows during the years ended December 31, 2018 , 2017 and 2016 . 2018 2017 2016 Authorization Date Purchase Not to Exceed Shares Cost Shares Cost Shares Cost (in millions) February 2017 2,250 — — 9.71 2,250 — — December 2017 3,000 3.07 1,024 3.28 800 — — Total repurchases 3.07 $ 1,024 12.99 $ 3,050 — $ — |
COMMITMENTS, GUARANTEES AND C_2
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Rent Expense and Sublease Rental Income Associated With Operating Leases | Rent expense and sublease rental income, which are recorded net as an operating cost, for all operating leases were as follows for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 (in millions) Rent expense $ 167 $ 204 $ 179 Sublease rental income (32 ) (33 ) (26 ) Net rent expense $ 135 $ 171 $ 153 |
Future Annual Minimum Payments Due | Future annual minimum payments due subsequent to December 31, 2018 under all of our noncancelable operating leases with initial terms in excess of one year are as follows: Minimum Sublease Net Lease (in millions) For the years ending December 31,: 2019 $ 147 $ (13 ) $ 134 2020 113 (12 ) 101 2021 96 (10 ) 86 2022 79 (9 ) 70 2023 34 (9 ) 25 Thereafter 50 (23 ) 27 Total $ 519 $ (76 ) $ 443 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, By Segment | Retail Group and Specialty Healthcare Services Individual Commercial Other Businesses Eliminations/ Consolidated (in millions) 2018 External revenues Premiums: Individual Medicare Advantage $ 35,656 $ — $ — $ — $ — $ — $ 35,656 Group Medicare Advantage 6,103 — — — — — 6,103 Medicare stand-alone PDP 3,584 — — — — — 3,584 Total Medicare 45,343 — — — — — 45,343 Fully-insured 510 5,444 — 8 — — 5,962 Specialty — 1,359 — — — — 1,359 Medicaid and other 2,255 — — — 22 — 2,277 Total premiums 48,108 6,803 — 8 22 — 54,941 Services revenue: Provider — — 404 — — — 404 ASO and other 11 835 — — 4 — 850 Pharmacy — — 203 — — — 203 Total services revenue 11 835 607 — 4 — 1,457 Total external revenues 48,119 7,638 607 8 26 — 56,398 Intersegment revenues Services — 18 16,840 — — (16,858 ) — Products — — 6,330 — — (6,330 ) — Total intersegment revenues — 18 23,170 — — (23,188 ) — Investment income 136 23 34 — 110 211 514 Total revenues 48,255 7,679 23,811 8 136 (22,977 ) 56,912 Operating expenses: Benefits 40,925 5,420 — (70 ) 77 (470 ) 45,882 Operating costs 5,327 1,810 22,905 4 6 (22,527 ) 7,525 Depreciation and amortization 270 88 163 — — (116 ) 405 Total operating expenses 46,522 7,318 23,068 (66 ) 83 (23,113 ) 53,812 Income from operations 1,733 361 743 74 53 136 3,100 Loss on sale of business — — — — — 786 786 Interest expense — — — — — 218 218 Other expense, net — — — — — 33 33 Income (loss) before income taxes and equity in earnings 1,733 361 743 74 53 (901 ) 2,063 Equity in net earnings of Kindred at Home — — 11 — — — 11 Segment earnings (losses) $ 1,733 $ 361 $ 754 $ 74 $ 53 $ (901 ) $ 2,074 Premium and services revenues derived from our contracts with the federal government, as a percentage of our total premium and services revenues, was approximately 81% for 2018 , compared to 79% for 2017 , and 75% for 2016 . Retail Group and Specialty Healthcare Services Individual Commercial Other Businesses Eliminations/ Consolidated (in millions) 2017 Revenues—external customers Premiums: Individual Medicare Advantage $ 32,720 $ — $ — $ — $ — $ — $ 32,720 Group Medicare Advantage 5,155 — — — — — 5,155 Medicare stand-alone PDP 3,702 — — — — — 3,702 Total Medicare 41,577 — — — — — 41,577 Fully-insured 478 5,462 — 947 — — 6,887 Specialty — 1,310 — — — — 1,310 Medicaid and other 2,571 — — — 35 — 2,606 Total premiums 44,626 6,772 — 947 35 — 52,380 Services revenue: Provider — — 258 — — — 258 ASO and other 10 626 — — 8 — 644 Pharmacy — — 80 — — — 80 Total services revenue 10 626 338 — 8 — 982 Total revenues—external customers 44,636 7,398 338 947 43 — 53,362 Intersegment revenues Services — 20 17,293 — — (17,313 ) — Products — — 6,292 — — (6,292 ) — Total intersegment revenues — 20 23,585 — — (23,605 ) — Investment income 90 31 35 4 87 158 405 Total revenues 44,726 7,449 23,958 951 130 (23,447 ) 53,767 Operating expenses: Benefits 38,218 5,363 — 544 131 (760 ) 43,496 Operating costs 4,292 1,590 22,848 201 12 (22,376 ) 6,567 Merger termination fee and related costs, net — — — — — (936 ) (936 ) Depreciation and amortization 238 84 143 13 — (100 ) 378 Total operating expenses 42,748 7,037 22,991 758 143 (24,172 ) 49,505 Income (loss) from operations 1,978 412 967 193 (13 ) 725 4,262 Interest expense — — — — — 242 242 Income (loss) before income taxes and equity in earnings 1,978 412 967 193 (13 ) 483 4,020 Equity in net earnings of Kindred at Home — — — — — — — Segment earnings (losses) $ 1,978 $ 412 $ 967 $ 193 $ (13 ) $ 483 $ 4,020 Retail Group and Specialty Healthcare Services Individual Commercial Other Businesses Eliminations/ Consolidated (in millions) 2016 Revenues—external customers Premiums: Individual Medicare Advantage $ 31,863 $ — $ — $ — $ — $ — $ 31,863 Group Medicare Advantage 4,283 — — — — — 4,283 Medicare stand-alone PDP 4,009 — — — — — 4,009 Total Medicare 40,155 — — — — — 40,155 Fully-insured 428 5,405 — 3,064 — — 8,897 Specialty — 1,279 — — — — 1,279 Medicaid and other 2,640 12 — — 38 — 2,690 Total premiums 43,223 6,696 — 3,064 38 — 53,021 Services revenue: Provider — — 278 — — — 278 ASO and other 6 643 1 — 10 — 660 Pharmacy — — 31 — — — 31 Total services revenue 6 643 310 — 10 — 969 Total revenues—external customers 43,229 7,339 310 3,064 48 — 53,990 Intersegment revenues Services — 22 18,979 — — (19,001 ) — Products — — 5,993 — — (5,993 ) — Total intersegment revenues — 22 24,972 — — (24,994 ) — Investment income 90 25 30 5 66 173 389 Total revenues 43,319 7,386 25,312 3,069 114 (24,821 ) 54,379 Operating expenses: Benefits 36,783 5,233 — 3,301 617 (927 ) 45,007 Operating costs 4,650 1,727 24,073 601 16 (23,894 ) 7,173 Merger termination fee and related costs, net — — — — — 104 104 Depreciation and amortization 196 82 143 36 1 (104 ) 354 Total operating expenses 41,629 7,042 24,216 3,938 634 (24,821 ) 52,638 Income (loss) from operations 1,690 344 1,096 (869 ) (520 ) — 1,741 Gain on sale of business — — — — — — — Interest expense — — — — — 189 189 Income (loss) before income taxes and equity in earnings 1,690 344 1,096 (869 ) (520 ) (189 ) 1,552 Equity in net earnings of Kindred at Home — — — — — — — Segment earnings (losses) $ 1,690 $ 344 $ 1,096 $ (869 ) $ (520 ) $ (189 ) $ 1,552 |
EXPENSES ASSOCIATED WITH LONG_2
EXPENSES ASSOCIATED WITH LONG-DURATION INSURANCE PRODUCTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Schedule of Deferred Acquisition Cost and Future Policy Benefits Payable With Our Long-Duration Insurance Products | The table below presents deferred acquisition costs and future policy benefits payable associated with our long-duration insurance products for the years ended December 31, 2018 and 2017 . 2018 2017 Deferred Future policy Deferred Future policy (in millions) Other long-term assets $ 36 $ — $ 103 $ — Trade accounts payable and accrued expenses — — — (56 ) Long-term liabilities — (219 ) — (2,923 ) Total asset (liability) $ 36 $ (219 ) $ 103 $ (2,979 ) |
QUARTERLY FINANCIAL INFORMATI_2
QUARTERLY FINANCIAL INFORMATION (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | A summary of our quarterly unaudited results of operations for the years ended December 31, 2018 and 2017 follows: 2018 First Second Third Fourth (in millions, except per share results) Total revenues $ 14,279 $ 14,259 $ 14,206 $ 14,168 Income before income taxes and equity in net earnings 707 19 901 436 Net income 491 193 644 355 Basic earnings per common share $ 3.56 $ 1.40 $ 4.68 $ 2.60 Diluted earnings per common share (1) $ 3.53 $ 1.39 $ 4.65 $ 2.58 2017 First Second Third Fourth (in millions, except per share results) Total revenues $ 13,762 $ 13,534 $ 13,282 $ 13,189 Income before income taxes 1,689 1,042 799 490 Net income 1,115 650 499 184 Basic earnings per common share (1) $ 7.54 $ 4.49 $ 3.46 $ 1.30 Diluted earnings per common share (1) $ 7.49 $ 4.46 $ 3.44 $ 1.29 (1) The calculation of earnings per common share is based on the weighted average shares outstanding during each quarter and, accordingly, the sum may not equal the total for the year. |
REPORTING ENTITY (Detail)
REPORTING ENTITY (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Entity Information [Line Items] | |||
Percentage of total premium and services revenues derived from contracts with the federal government | 81.00% | 79.00% | 75.00% |
Florida | |||
Entity Information [Line Items] | |||
Percentage of premiums and services revenue related to contracts with CMS for Medicare Advantage members in Florida | 15.00% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Workforce Optimization (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2017employee | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2018USD ($) | |
Accounting Policies [Abstract] | |||
Expected number of associates impacted | employee | 3,600 | ||
Expected percentage of workforce associates impacted | 7.80% | ||
Estimated charges | $ 148 | ||
Estimated charged per diluted share (in dollars per share) | $ / shares | $ 0.64 | ||
Workforce optimization liability | $ 140 | $ 12 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Details (Detail) - USD ($) | Feb. 16, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 |
Significant Accounting Policies [Line Items] | |||||
Transaction costs (break up fee received) | $ 0 | $ (936,000,000) | $ 104,000,000 | ||
Number of days notice for employer group to cancel short-duration prepaid health services policies | 30 days | ||||
Consumer discounts on brand name prescription drugs | 50.00% | ||||
TRICARE Health care cost payments | $ 5,600,000,000 | 3,400,000,000 | 3,300,000,000 | ||
Bad-debt expense | 36,000,000 | 20,000,000 | 39,000,000 | ||
Contract liabilities | 0 | ||||
Deferred costs | 0 | ||||
Pharmaceutical rebates | $ 1,300,000,000 | 1,200,000,000 | |||
Typical term (in years) of short-duration employer-group prepaid health services policies | 1 year | ||||
Goodwill | $ 3,897,000,000 | 3,281,000,000 | 3,272,000,000 | ||
Premium deficiency reserve | 176,000,000 | ||||
Health care reform, premium deficiency reserve, change in estimate | 208,000,000 | ||||
Health care reform, premium deficiency reserve, current period loss | 384,000,000 | ||||
Tricare South Region Contract | |||||
Significant Accounting Policies [Line Items] | |||||
TRICARE Health care cost reimbursements | 5,600,000,000 | 3,400,000,000 | 3,300,000,000 | ||
Difference between TRICARE health care costs payments and reimbursements | $ 38,000,000 | 11,000,000 | 25,000,000 | ||
Equipment | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Useful life | 3 years | ||||
Equipment | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Useful life | 10 years | ||||
Computer Software | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Useful life | 3 years | ||||
Computer Software | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Useful life | 5 years | ||||
Building | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Useful life | 10 years | ||||
Building | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Useful life | 20 years | ||||
Health Care Reform | |||||
Significant Accounting Policies [Line Items] | |||||
Payment of annual health insurance industry fee | $ 1,040,000,000 | 916,000,000 | |||
CMS Reinsurance Subsidies Or Discounts | |||||
Significant Accounting Policies [Line Items] | |||||
Subsidy and discount reimbursements | 9,600,000,000 | 12,100,000,000 | 11,100,000,000 | ||
Subsidy and discount payments | 10,300,000,000 | 10,200,000,000 | 10,000,000,000 | ||
Subsidy and discount payments in excess of reimbursements | $ 700,000,000 | 1,900,000,000 | $ 1,100,000,000 | ||
Settlement period after close | 9 months | ||||
CMS Brand Name Prescription Drug Discounts | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Settlement period after close | 14 months | ||||
CMS Brand Name Prescription Drug Discounts | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Settlement period after close | 18 months | ||||
Settled Litigation | U.S. Department Of Justice vs. Humana And Aetna | |||||
Significant Accounting Policies [Line Items] | |||||
Transaction costs (break up fee received) | $ 1,000,000,000 | ||||
Service | |||||
Significant Accounting Policies [Line Items] | |||||
Accounts receivable, net, current | $ 123,000,000 | $ 180,000,000 | |||
Bad-debt expense | 0 | ||||
Contract with customer, asset, net | 0 | ||||
Subsequent Event | Accounting Standards Update 2016-02 | |||||
Significant Accounting Policies [Line Items] | |||||
Operating lease, liability | $ 470,000,000 | ||||
Operating lease, right-of-use asset | $ 470,000,000 | ||||
Clinical | |||||
Significant Accounting Policies [Line Items] | |||||
Goodwill | 524,000,000 | ||||
Provider | |||||
Significant Accounting Policies [Line Items] | |||||
Goodwill | $ 730,000,000 |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Detail) $ in Millions | Aug. 09, 2018USD ($) | Aug. 08, 2018USD ($) | Jul. 11, 2018USD ($)locationState | Jul. 02, 2018USD ($) | Apr. 10, 2018USD ($) | Mar. 01, 2018USD ($) | Aug. 08, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Payments to acquire equity method investments | $ 1,095 | $ 0 | $ 0 | |||||||
Equity method investment in Kindred at Home | 1,047 | 0 | ||||||||
Disposal group, not discontinued operation, gain (loss) on disposal | 786 | 0 | 0 | |||||||
Acquisitions | 616 | 9 | ||||||||
MCCI Holdings LLC | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Payments to acquire businesses, gross | $ 169 | |||||||||
Acquisitions | 483 | |||||||||
Finite-lived intangible assets acquired | 80 | |||||||||
Business combination, recognized identifiable assets acquired and liabilities assumed, tangible assets | $ 24 | |||||||||
Acquired finite-lived intangible assets, weighted average useful life | 8 years | |||||||||
Family Physicians Group | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Payments to acquire businesses, gross | $ 185 | |||||||||
Acquisitions | 133 | |||||||||
Finite-lived intangible assets acquired | 38 | |||||||||
Business combination, recognized identifiable assets acquired and liabilities assumed, tangible assets | $ 14 | |||||||||
Acquired finite-lived intangible assets, weighted average useful life | 5 years | |||||||||
MCCI Holdings LLC | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Notes receivable, related parties | $ 383 | |||||||||
Put Option | Equity Option | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Equity method investment, purchase price allocation, financial asset | $ 236 | |||||||||
Call Option | Equity Option | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Equity method investment, purchase price allocation, financial liability | $ 291 | |||||||||
Other long-term assets | Put Option | Equity Option | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Financial assets, fair value disclosure | 224 | |||||||||
Other Noncurrent Liabilities | Call Option | Equity Option | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Financial liabilities fair value disclosure | $ 246 | |||||||||
Disposed of by Sale | KMG America Corporation | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Parent company cash contributed to sale of subsidiary | $ 805 | |||||||||
Disposal group, including discontinued operation, statutory capital | 160 | |||||||||
Disposal group, not discontinued operation, gain (loss) on disposal | 786 | |||||||||
Disposal group, not discontinued operation, tax expense (benefit) on disposal | (452) | |||||||||
Revenues | $ 182 | 261 | 249 | |||||||
Net income (loss) | $ 47 | $ (117) | $ (336) | |||||||
Disposed of by Sale | Other Noncurrent Liabilities | Call Option | Equity Option | KMG America Corporation | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Parent company cash contributed to sale of subsidiary | $ 190 | |||||||||
Kanawah Insurance Company | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Payments for reinsurance | $ 245 | |||||||||
Kindred At Home | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Equity method investment, ownership percentage | 40.00% | 40.00% | ||||||||
Payments to acquire equity method investments | $ 850 | |||||||||
Equity method investment in Kindred at Home | $ 1,000 | |||||||||
Curo Health Services | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Equity method investment, ownership percentage | 40.00% | 40.00% | ||||||||
Payments to acquire equity method investments | $ 250 | |||||||||
Equity method investment, number of locations | location | 245 | |||||||||
Equity method investment, number of states | State | 22 |
ACQUISITIONS AND DIVESTITURES -
ACQUISITIONS AND DIVESTITURES - Assets and Liabilities Held For Sale (Details) - Disposed of by Sale - KMG America Corporation $ in Millions | Aug. 09, 2018USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash and cash equivalents | $ 805 |
Receivables, net | 3 |
Investment securities | 1,576 |
Other assets | 1,085 |
Total assets disposed | 3,469 |
Benefits payable | 58 |
Trade accounts payable and accrued expenses | 70 |
Future policy benefits payable | 2,573 |
Total liabilities disposed | $ 2,701 |
EQUITY METHOD INVESTMENT - Narr
EQUITY METHOD INVESTMENT - Narrative (Details) | Dec. 31, 2018 | Jul. 11, 2018 |
Curo Health Services | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment, ownership percentage | 40.00% | 40.00% |
EQUITY METHOD INVESTMENT - Sche
EQUITY METHOD INVESTMENT - Schedule Of Equity Method Investments (Details) - Kindred At Home $ in Millions | 6 Months Ended |
Dec. 31, 2018USD ($) | |
Schedule of Equity Method Investments [Line Items] | |
Current assets | $ 536 |
Non-current assets | 4,955 |
Current liabilities | 351 |
Non-current liabilities | 2,708 |
Shareholders' equity | 2,432 |
Total revenues | 1,587 |
Expenses | 1,451 |
Net income | $ 27 |
INVESTMENT SECURITIES - Schedul
INVESTMENT SECURITIES - Schedule of Investment Securities Classified as Current and Long-Term (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Investment [Line Items] | ||
Amortized Cost | $ 10,641 | $ 12,104 |
Gross Unrealized Gains | 9 | 286 |
Gross Unrealized Losses | (213) | (88) |
Fair Value | 10,437 | 12,302 |
U.S. Treasury and agency obligations | U.S. Treasury and other U.S. government corporations and agencies | ||
Investment [Line Items] | ||
Amortized Cost | 419 | 532 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | (3) | (2) |
Fair Value | 417 | 531 |
Mortgage-backed securities | U.S. Treasury and other U.S. government corporations and agencies | ||
Investment [Line Items] | ||
Amortized Cost | 2,595 | 1,625 |
Gross Unrealized Gains | 3 | 4 |
Gross Unrealized Losses | (54) | (19) |
Fair Value | 2,544 | 1,610 |
Tax-exempt municipal securities | ||
Investment [Line Items] | ||
Amortized Cost | 2,805 | 3,884 |
Gross Unrealized Gains | 3 | 33 |
Gross Unrealized Losses | (37) | (28) |
Fair Value | 2,771 | 3,889 |
Residential Mortgage-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 55 | 26 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 55 | 26 |
Commercial Mortgage-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 537 | 455 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | (14) | (2) |
Fair Value | 523 | 456 |
Asset-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 991 | 407 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | (7) | 0 |
Fair Value | 985 | 408 |
Corporate debt securities | ||
Investment [Line Items] | ||
Amortized Cost | 3,239 | 5,175 |
Gross Unrealized Gains | 1 | 244 |
Gross Unrealized Losses | (98) | (37) |
Fair Value | $ 3,142 | $ 5,382 |
INVESTMENT SECURITIES - Sched_2
INVESTMENT SECURITIES - Schedule of Gross Unrealized Losses and Fair Values of Securities (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Investment [Line Items] | ||
Fair Value | $ 4,574 | $ 3,999 |
Gross Unrealized Losses | (76) | (30) |
Fair Value | 4,447 | 2,308 |
Gross Unrealized Losses | (137) | (58) |
Fair Value | 9,021 | 6,307 |
Gross Unrealized Losses | (213) | (88) |
U.S. Treasury and agency obligations | U.S. Treasury and other U.S. government corporations and agencies | ||
Investment [Line Items] | ||
Fair Value | 179 | 273 |
Gross Unrealized Losses | (1) | (1) |
Fair Value | 153 | 130 |
Gross Unrealized Losses | (2) | (1) |
Fair Value | 332 | 403 |
Gross Unrealized Losses | (3) | (2) |
Mortgage-backed securities | U.S. Treasury and other U.S. government corporations and agencies | ||
Investment [Line Items] | ||
Fair Value | 956 | 581 |
Gross Unrealized Losses | (16) | (2) |
Fair Value | 1,019 | 672 |
Gross Unrealized Losses | (38) | (17) |
Fair Value | 1,975 | 1,253 |
Gross Unrealized Losses | (54) | (19) |
Tax-exempt municipal securities | ||
Investment [Line Items] | ||
Fair Value | 809 | 1,590 |
Gross Unrealized Losses | (9) | (16) |
Fair Value | 1,648 | 661 |
Gross Unrealized Losses | (28) | (12) |
Fair Value | 2,457 | 2,251 |
Gross Unrealized Losses | (37) | (28) |
Residential Mortgage-backed securities | ||
Investment [Line Items] | ||
Fair Value | 0 | 20 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 15 | 3 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 15 | 23 |
Gross Unrealized Losses | 0 | 0 |
Commercial Mortgage-backed securities | ||
Investment [Line Items] | ||
Fair Value | 372 | 131 |
Gross Unrealized Losses | (8) | (1) |
Fair Value | 133 | 28 |
Gross Unrealized Losses | (6) | (1) |
Fair Value | 505 | 159 |
Gross Unrealized Losses | (14) | (2) |
Asset-backed securities | ||
Investment [Line Items] | ||
Fair Value | 824 | 107 |
Gross Unrealized Losses | (7) | 0 |
Fair Value | 40 | 10 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 864 | 117 |
Gross Unrealized Losses | (7) | 0 |
Corporate debt securities | ||
Investment [Line Items] | ||
Fair Value | 1,434 | 1,297 |
Gross Unrealized Losses | (35) | (10) |
Fair Value | 1,439 | 804 |
Gross Unrealized Losses | (63) | (27) |
Fair Value | 2,873 | 2,101 |
Gross Unrealized Losses | $ (98) | $ (37) |
INVESTMENT SECURITIES - Additio
INVESTMENT SECURITIES - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2018USD ($)position | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |||
Percentage of debt securities considered to be of investment-grade | 97.00% | ||
Maximum percentage of any general obligation bonds in one state | 9.00% | ||
Number of securities in loss position | 1,210 | ||
Number of positions | 1,500 | ||
Other-than-temporary impairments | $ | $ 0 | $ 0 | $ 0 |
INVESTMENT SECURITIES - Sched_3
INVESTMENT SECURITIES - Schedule of Realized Gains (Losses) Related to Investment Securities Included Within Investment Income (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |||
Gross realized gains | $ 106 | $ 35 | $ 120 |
Gross realized losses | (16) | (21) | (24) |
Net realized capital gains | $ 90 | $ 14 | $ 96 |
INVESTMENT SECURITIES - Sched_4
INVESTMENT SECURITIES - Schedule of Contractual Maturities of Debt Securities Available for Sale (Detail) $ in Millions | Dec. 31, 2018USD ($) |
Amortized Cost | |
Due within one year | $ 943 |
Due after one year through five years | 2,929 |
Due after five years through ten years | 1,873 |
Due after ten years | 718 |
Mortgage and asset-backed securities | 4,178 |
Total debt securities | 10,641 |
Fair Value | |
Due within one year | 941 |
Due after one year through five years | 2,873 |
Due after five years through ten years | 1,810 |
Due after ten years | 706 |
Mortgage and asset-backed securities | 4,107 |
Total debt securities | $ 10,437 |
FAIR VALUE - Financial Assets M
FAIR VALUE - Financial Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 10,437 | |
Measured on Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,024 | $ 4,564 |
Debt securities | 10,437 | 12,302 |
Total invested assets | 12,461 | 16,866 |
Measured on Recurring Basis | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,771 | 3,889 |
Measured on Recurring Basis | Residential Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 55 | 26 |
Measured on Recurring Basis | Commercial Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 523 | 456 |
Measured on Recurring Basis | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 985 | 408 |
Measured on Recurring Basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,142 | 5,382 |
Measured on Recurring Basis | U.S. Treasury and other U.S. government corporations and agencies | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 417 | 531 |
Measured on Recurring Basis | U.S. Treasury and other U.S. government corporations and agencies | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,544 | 1,610 |
Quoted Prices in Active Markets (Level 1) | Measured on Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,024 | 4,564 |
Debt securities | 0 | 0 |
Total invested assets | 2,024 | 4,564 |
Quoted Prices in Active Markets (Level 1) | Measured on Recurring Basis | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Measured on Recurring Basis | Residential Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Measured on Recurring Basis | Commercial Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Measured on Recurring Basis | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Measured on Recurring Basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Measured on Recurring Basis | U.S. Treasury and other U.S. government corporations and agencies | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Measured on Recurring Basis | U.S. Treasury and other U.S. government corporations and agencies | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Other Observable Inputs (Level 2) | Measured on Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Debt securities | 10,437 | 12,301 |
Total invested assets | 10,437 | 12,301 |
Other Observable Inputs (Level 2) | Measured on Recurring Basis | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,771 | 3,889 |
Other Observable Inputs (Level 2) | Measured on Recurring Basis | Residential Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 55 | 26 |
Other Observable Inputs (Level 2) | Measured on Recurring Basis | Commercial Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 523 | 456 |
Other Observable Inputs (Level 2) | Measured on Recurring Basis | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 985 | 408 |
Other Observable Inputs (Level 2) | Measured on Recurring Basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,142 | 5,381 |
Other Observable Inputs (Level 2) | Measured on Recurring Basis | U.S. Treasury and other U.S. government corporations and agencies | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 417 | 531 |
Other Observable Inputs (Level 2) | Measured on Recurring Basis | U.S. Treasury and other U.S. government corporations and agencies | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,544 | 1,610 |
Unobservable Inputs (Level 3) | Measured on Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Debt securities | 0 | 1 |
Total invested assets | 0 | 1 |
Unobservable Inputs (Level 3) | Measured on Recurring Basis | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Unobservable Inputs (Level 3) | Measured on Recurring Basis | Residential Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Unobservable Inputs (Level 3) | Measured on Recurring Basis | Commercial Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Unobservable Inputs (Level 3) | Measured on Recurring Basis | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Unobservable Inputs (Level 3) | Measured on Recurring Basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 1 |
Unobservable Inputs (Level 3) | Measured on Recurring Basis | U.S. Treasury and other U.S. government corporations and agencies | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Unobservable Inputs (Level 3) | Measured on Recurring Basis | U.S. Treasury and other U.S. government corporations and agencies | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 0 | $ 0 |
FAIR VALUE - Narrative (Detail)
FAIR VALUE - Narrative (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Senior notes | $ 4,774 | $ 4,770 |
Long-term debt, fair value | 4,885 | 5,191 |
Short-term debt | 1,694 | 150 |
Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Short-term debt | $ 1,295 | $ 150 |
MEDICARE PART D (Detail)
MEDICARE PART D (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Other current assets | $ 3,564 | $ 2,949 |
Trade accounts payable and accrued expenses | (3,067) | (4,069) |
Other long-term assets | 1,375 | 2,166 |
Other long-term liabilities | (581) | (237) |
Risk Corridor Settlement | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 15 | 4 |
Trade accounts payable and accrued expenses | (103) | (255) |
Net current liability | (88) | (251) |
Other long-term assets | 7 | 0 |
Other long-term liabilities | (89) | (28) |
Net long-term liability | (82) | (28) |
Total net liability | (170) | (279) |
CMS Subsidies/ Discounts | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 172 | 101 |
Trade accounts payable and accrued expenses | (503) | (1,085) |
Net current liability | (331) | (984) |
Other long-term assets | 0 | 0 |
Other long-term liabilities | 0 | 0 |
Net long-term liability | 0 | 0 |
Total net liability | $ (331) | $ (984) |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 20 | $ 20 |
Buildings and leasehold improvements | 766 | 713 |
Equipment | 890 | 824 |
Computer software | 2,372 | 2,003 |
Property and equipment, gross | 4,048 | 3,560 |
Accumulated depreciation | (2,313) | (1,976) |
Property and equipment, net | $ 1,735 | $ 1,584 |
PROPERTY AND EQUIPMENT, NET - A
PROPERTY AND EQUIPMENT, NET - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 444 | $ 410 | $ 388 |
Capitalized internally developed and purchased software amortization | $ 298 | $ 287 | $ 255 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Carrying Amount of Goodwill by Reportable Segments (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 3,281 | $ 3,272 |
Acquisitions | 616 | 9 |
Ending balance | 3,897 | 3,281 |
Retail | ||
Goodwill [Roll Forward] | ||
Beginning balance | 1,059 | 1,059 |
Acquisitions | 476 | 0 |
Ending balance | 1,535 | 1,059 |
Group and Specialty | ||
Goodwill [Roll Forward] | ||
Beginning balance | 261 | 261 |
Acquisitions | 0 | 0 |
Ending balance | 261 | 261 |
Healthcare Services | ||
Goodwill [Roll Forward] | ||
Beginning balance | 1,961 | 1,952 |
Acquisitions | 140 | 9 |
Ending balance | $ 2,101 | $ 1,961 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Details of Intangible Assets Included in Other Long-Term Assets (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 8 years 8 months 12 days | |
Cost | $ 827 | $ 770 |
Accumulated Amortization | 582 | 544 |
Net | $ 245 | 226 |
Customer contracts/relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 8 years 8 months 12 days | |
Cost | $ 646 | 566 |
Accumulated Amortization | 434 | 401 |
Net | $ 212 | 165 |
Trade names and technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 6 years 4 months 24 days | |
Cost | $ 84 | 104 |
Accumulated Amortization | 83 | 84 |
Net | $ 1 | 20 |
Provider contracts | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 11 years 9 months 18 days | |
Cost | $ 68 | 68 |
Accumulated Amortization | 37 | 30 |
Net | $ 31 | 38 |
Noncompetes and other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 7 years 3 months 18 days | |
Cost | $ 29 | 32 |
Accumulated Amortization | 28 | 29 |
Net | $ 1 | $ 3 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense for other intangible assets | $ 90 | $ 75 | $ 77 |
Impairment of intangible assets, finite-lived | $ 12 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Estimated Amortization Expense (Detail) $ in Millions | Dec. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,019 | $ 70 |
2,020 | 67 |
2,021 | 34 |
2,022 | 31 |
2,023 | $ 18 |
BENEFITS PAYABLE - Activity in
BENEFITS PAYABLE - Activity in Benefits Payable (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Balances at January 1 | $ 4,668 | $ 4,563 | $ 4,976 | |
Less: Premium deficiency reserve | 0 | 0 | (176) | |
Less: Reinsurance recoverables | (70) | (76) | (85) | |
Balances at January 1, net | 4,598 | 4,487 | $ 4,715 | |
Current year, Incurred | 46,385 | 44,001 | 45,318 | |
Prior years, Incurred | (503) | (483) | (582) | |
Total incurred | 45,882 | 43,518 | 44,736 | |
Current year, Paid | (41,736) | (39,496) | (40,852) | |
Prior years, Paid | (3,977) | (3,911) | (4,112) | |
Total paid | (45,713) | (43,407) | (44,964) | |
Reinsurance recoverable | 95 | 70 | 76 | |
Balances at December 31 | 4,862 | 4,668 | 4,563 | |
Retail | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Balances at January 1 | 3,963 | 3,506 | 3,600 | |
Less: Reinsurance recoverables | (70) | (76) | (85) | |
Balances at January 1, net | 3,893 | 3,430 | 3,515 | |
Current year, Incurred | 41,323 | 38,604 | 37,212 | |
Prior years, Incurred | (398) | (386) | (429) | |
Total incurred | 40,925 | 38,218 | 36,783 | |
Current year, Paid | (37,189) | (34,781) | (33,784) | |
Prior years, Paid | (3,386) | (2,974) | (3,084) | |
Total paid | (40,575) | (37,755) | (36,868) | |
Reinsurance recoverable | 95 | 70 | 76 | |
Balances at December 31 | 4,338 | 3,963 | 3,506 | |
Group and Specialty | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Balances at January 1 | 568 | 579 | 616 | |
Less: Reinsurance recoverables | 0 | 0 | 0 | |
Balances at January 1, net | 568 | 579 | 616 | |
Current year, Incurred | 5,466 | 5,403 | 5,271 | |
Prior years, Incurred | (46) | (40) | (46) | |
Total incurred | 5,420 | 5,363 | 5,225 | |
Current year, Paid | (4,957) | (4,843) | (4,700) | |
Prior years, Paid | (514) | (531) | (562) | |
Total paid | (5,471) | (5,374) | (5,262) | |
Reinsurance recoverable | 0 | 0 | ||
Balances at December 31 | 517 | 568 | 579 | |
Individual Commercial | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Balances at January 1 | 101 | 454 | 741 | |
Less: Premium deficiency reserve | 0 | 0 | (176) | |
Balances at January 1, net | 101 | 454 | $ 565 | |
Current year, Incurred | 0 | 669 | 3,677 | |
Prior years, Incurred | (56) | (56) | (106) | |
Total incurred | (56) | 613 | 3,571 | |
Current year, Paid | 0 | (583) | (3,233) | |
Prior years, Paid | (38) | (383) | (449) | |
Total paid | (38) | (966) | (3,682) | |
Balances at December 31 | $ 7 | $ 101 | $ 454 |
BENEFITS PAYABLE - Favorable Me
BENEFITS PAYABLE - Favorable Medical Claims Reserve Development (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Favorable Medical Claims Reserve | $ (503) | $ (483) | $ (582) |
Retail | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Favorable Medical Claims Reserve | (398) | (386) | (429) |
Group and Specialty | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Favorable Medical Claims Reserve | (46) | (40) | (46) |
Individual Commercial | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Favorable Medical Claims Reserve | (56) | (56) | (106) |
Operating Segments | Retail | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Favorable Medical Claims Reserve | (398) | (386) | (429) |
Operating Segments | Group and Specialty | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Favorable Medical Claims Reserve | (46) | (40) | (46) |
Operating Segments | Individual Commercial | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Favorable Medical Claims Reserve | (57) | (56) | (106) |
Other Businesses | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Favorable Medical Claims Reserve | $ (2) | $ (1) | $ (1) |
BENEFITS PAYABLE - Narrative (D
BENEFITS PAYABLE - Narrative (Detail) claim in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)claim | Dec. 31, 2017USD ($)claim | Dec. 31, 2016USD ($)claim | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Favorable Medical Claims Reserve Development | $ | $ 503 | $ 483 | $ 582 |
Retail | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total IBNR | $ | 2,900 | ||
Group and Specialty | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total IBNR | $ | 448 | ||
Individual Commercial | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total IBNR | $ | $ 1 | ||
2018 Claims Incurred Year | Retail | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cumulative Number of Reported Claims - Service Date | 104.3 | ||
2018 Claims Incurred Year | Group and Specialty | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cumulative Number of Reported Claims - Service Date | 10.4 | ||
2017 Claims Incurred Year | Retail | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cumulative Number of Reported Claims - Service Date | 102.1 | ||
2017 Claims Incurred Year | Group and Specialty | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cumulative Number of Reported Claims - Service Date | 11.1 | ||
2017 Claims Incurred Year | Individual Commercial | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cumulative Number of Reported Claims - Service Date | 2.2 | ||
2016 Claims Incurred Year | Retail | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cumulative Number of Reported Claims - Service Date | 96.2 | ||
2016 Claims Incurred Year | Group and Specialty | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cumulative Number of Reported Claims - Service Date | 12.9 | ||
2016 Claims Incurred Year | Individual Commercial | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Cumulative Number of Reported Claims - Service Date | 9.5 |
BENEFITS PAYABLE - Benefit Expe
BENEFITS PAYABLE - Benefit Expenses Excluded From Activity in Benefits Payable (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |||
Premium deficiency reserve for short-duration policies | $ 0 | $ 0 | $ (176) |
Military services | 0 | 0 | 8 |
Future policy benefits | 0 | (22) | 439 |
Total | $ 0 | $ (22) | $ 271 |
BENEFITS PAYABLE - Benefits Exp
BENEFITS PAYABLE - Benefits Expense (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | $ 4,767 | |||
Reinsurance recoverable on unpaid claims | 95 | $ 70 | $ 76 | $ 85 |
Total benefits payable, gross | 4,862 | 4,668 | 4,563 | 4,976 |
Retail | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Incurred Claims, Net of Reinsurance | 116,475 | |||
Cumulative Paid Claims, Net of Reinsurance | 112,232 | |||
Reinsurance recoverable on unpaid claims | 95 | 70 | 76 | 85 |
Total benefits payable, gross | 4,338 | 3,963 | 3,506 | 3,600 |
Group and Specialty | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Incurred Claims, Net of Reinsurance | 16,059 | |||
Cumulative Paid Claims, Net of Reinsurance | 15,542 | |||
Reinsurance recoverable on unpaid claims | 0 | 0 | 0 | |
Total benefits payable, gross | 517 | 568 | 579 | 616 |
Individual Commercial | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Incurred Claims, Net of Reinsurance | 4,236 | |||
Cumulative Paid Claims, Net of Reinsurance | 4,229 | |||
Total benefits payable, gross | 7 | 101 | 454 | $ 741 |
Operating Segments | Retail | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | 4,243 | |||
Reinsurance recoverable on unpaid claims | 95 | |||
Operating Segments | Group and Specialty | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | 517 | |||
Operating Segments | Individual Commercial | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | 7 | |||
2016 Claims Incurred Year | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Cumulative Paid Claims, Net of Reinsurance | 33,784 | |||
2016 Claims Incurred Year | Retail | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Incurred Claims, Net of Reinsurance | 36,811 | 36,891 | 37,212 | |
Cumulative Paid Claims, Net of Reinsurance | 36,811 | 36,841 | ||
2016 Claims Incurred Year | Group and Specialty | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Incurred Claims, Net of Reinsurance | 5,235 | 5,234 | 5,271 | |
Cumulative Paid Claims, Net of Reinsurance | 5,234 | 5,226 | 4,700 | |
2016 Claims Incurred Year | Individual Commercial | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Incurred Claims, Net of Reinsurance | 3,609 | 3,621 | 3,677 | |
Cumulative Paid Claims, Net of Reinsurance | 3,609 | 3,606 | $ 3,233 | |
2017 Claims Incurred Year | Retail | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Incurred Claims, Net of Reinsurance | 38,341 | 38,604 | ||
Cumulative Paid Claims, Net of Reinsurance | 38,232 | 34,781 | ||
2017 Claims Incurred Year | Group and Specialty | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Incurred Claims, Net of Reinsurance | 5,358 | 5,403 | ||
Cumulative Paid Claims, Net of Reinsurance | 5,351 | 4,843 | ||
2017 Claims Incurred Year | Individual Commercial | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Incurred Claims, Net of Reinsurance | 627 | 669 | ||
Cumulative Paid Claims, Net of Reinsurance | 620 | $ 583 | ||
2018 Claims Incurred Year | Retail | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Incurred Claims, Net of Reinsurance | 41,323 | |||
Cumulative Paid Claims, Net of Reinsurance | 37,189 | |||
2018 Claims Incurred Year | Group and Specialty | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Incurred Claims, Net of Reinsurance | 5,466 | |||
Cumulative Paid Claims, Net of Reinsurance | 4,957 | |||
2018 Claims Incurred Year | Individual Commercial | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Incurred Claims, Net of Reinsurance | 0 | |||
Cumulative Paid Claims, Net of Reinsurance | $ 0 |
INCOME TAXES - Provision for In
INCOME TAXES - Provision for Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal | $ 139 | $ 1,324 | $ 921 |
States and Puerto Rico | 58 | 116 | 88 |
Total current provision | 197 | 1,440 | 1,009 |
Deferred expense (benefit) | 194 | 132 | (71) |
Provision for income taxes | $ 391 | $ 1,572 | $ 938 |
INCOME TAXES - Provision for _2
INCOME TAXES - Provision for Income Taxes Using Federal Statutory Rate (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income tax provision at federal statutory rate | $ 436 | $ 1,407 | $ 543 |
States, net of federal benefit, and Puerto Rico | 42 | 80 | 41 |
Tax exempt investment income | (11) | (22) | (20) |
Health insurance industry fee | 243 | 0 | 336 |
Nondeductible executive compensation | 17 | 36 | 30 |
Tax reform | (39) | 133 | 0 |
KMG sale | (272) | 0 | 0 |
Other, net | (25) | (62) | 8 |
Provision for income taxes | $ 391 | $ 1,572 | $ 938 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
Tax reform rate re-measurement | $ 133 | ||
Tax Cuts and Jobs Act of 2017, measurement period adjustment, income tax expense (benefit) | $ (39) | ||
Benefit on sale of business | 272 | 0 | $ 0 |
Net operating losses to carryforward related to prior acquisitions | 104 | ||
Valuation allowances on net operating loss carryforwards related to prior acquisitions | 54 | 49 | |
Puerto Rico | |||
Operating Loss Carryforwards [Line Items] | |||
Repatriation tax for undistributed foreign earnings | $ 10 | ||
Capital Loss Carryforward | |||
Operating Loss Carryforwards [Line Items] | |||
Capital loss carryforward | $ 64 |
INCOME TAXES - Principal Compon
INCOME TAXES - Principal Components of Net Deferred Tax Balances (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Compensation and other accrued expense | $ 89 | $ 138 |
Benefits payable | 79 | 113 |
Investment securities | 44 | 0 |
Net operating loss carryforward | 38 | 53 |
Capital loss carryforward | 15 | 0 |
Deferred acquisition costs | 17 | 48 |
Unearned revenues | 9 | 12 |
Other | 8 | 1 |
Future policy benefits payable | 0 | 231 |
Total deferred income tax assets | 299 | 596 |
Valuation allowance | (54) | (49) |
Total deferred income tax assets, net of valuation allowance | 245 | 547 |
Depreciable property and intangible assets | (273) | (237) |
Prepaid expenses | (52) | (44) |
Future policy benefits payable | (5) | 0 |
Investment securities | 0 | (49) |
Total deferred income tax liabilities | (330) | (330) |
Total net deferred income tax assets/(liabilities) | $ (85) | |
Total net deferred income tax assets/(liabilities) | $ 217 |
DEBT - Senior Notes (Detail)
DEBT - Senior Notes (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Nov. 30, 2018 | |
Debt Instrument [Line Items] | |||
Short-term debt | $ 1,694,000,000 | $ 150,000,000 | |
Percentage of principal amount that may be redeemed | 100.00% | ||
Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 4,375,000,000 | 4,770,000,000 | |
Loss on extinguishment of debt | 17,000,000 | ||
Senior Notes | $400 million, 2.625% due October 1, 2019 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | 399,000,000 | |
Face amount | $ 400,000,000 | ||
Debt instrument, stated interest rate | 2.625% | ||
Senior Notes | $400 million, 2.50% due December 15, 2020 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 398,000,000 | 397,000,000 | |
Face amount | $ 400,000,000 | ||
Debt instrument, stated interest rate | 2.50% | ||
Senior Notes | $400 million, 2.90% due December 15, 2022 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 396,000,000 | 396,000,000 | |
Face amount | $ 400,000,000 | ||
Debt instrument, stated interest rate | 2.90% | ||
Senior Notes | $600 million, 3.15% due December 1, 2022 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 596,000,000 | 595,000,000 | |
Face amount | $ 600,000,000 | ||
Debt instrument, stated interest rate | 3.15% | ||
Senior Notes | $600 million, 3.85% due October 1, 2024 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 597,000,000 | 595,000,000 | |
Face amount | $ 600,000,000 | ||
Debt instrument, stated interest rate | 3.85% | ||
Senior Notes | $600 million, 3.95% due March 15, 2027 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 594,000,000 | 594,000,000 | |
Face amount | $ 600,000,000 | ||
Debt instrument, stated interest rate | 3.95% | ||
Senior Notes | $250 million, 8.15% due June 15, 2038 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 263,000,000 | 263,000,000 | |
Face amount | $ 250,000,000 | ||
Debt instrument, stated interest rate | 8.15% | ||
Short-term debt, weighted average interest rate, at point in time | 8.15% | ||
Senior Notes | $400 million, 4.625% due December 1, 2042 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 396,000,000 | 396,000,000 | |
Face amount | $ 400,000,000 | ||
Debt instrument, stated interest rate | 4.625% | ||
Senior Notes | $750 million, 4.95% due October 1, 2044 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 739,000,000 | 739,000,000 | |
Face amount | $ 750,000,000 | ||
Debt instrument, stated interest rate | 4.95% | ||
Senior Notes | $400 million, 4.80% due March 15, 2047 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 396,000,000 | 396,000,000 | |
Face amount | $ 400,000,000 | ||
Debt instrument, stated interest rate | 4.80% | ||
Commercial Paper | |||
Debt Instrument [Line Items] | |||
Short-term debt | $ 645,000,000 | 150,000,000 | |
Notes Payable to Banks | |||
Debt Instrument [Line Items] | |||
Short-term debt | 650,000,000 | 0 | |
Face amount | $ 1,000,000,000 | ||
Senior Notes | $400 million, 2.625% due October 1, 2019 | |||
Debt Instrument [Line Items] | |||
Short-term debt | 399,000,000 | $ 0 | |
Face amount | $ 400,000,000 | ||
Debt instrument, stated interest rate | 2.625% |
DEBT - Schedule of Debt Maturit
DEBT - Schedule of Debt Maturities (Details) $ in Millions | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,019 | $ 1,697 |
2,020 | 400 |
2,021 | 0 |
2,022 | 1,000 |
2,023 | 0 |
Thereafter | $ 3,000 |
DEBT - Credit Agreement (Detail
DEBT - Credit Agreement (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Short-term debt | $ 1,694,000,000 | $ 150,000,000 | |
Debt instrument, covenant, debt to capitalization percentage, maximum | 50.00% | ||
Debt instrument, covenant, debt to capitalization percentage | 37.00% | ||
Borrowings outstanding under credit agreement | $ 0 | ||
Outstanding letters of credit | 0 | ||
Remaining borrowing capacity | $ 2,000,000,000 | ||
Revolving Credit Facility | Line of Credit | Unsecured Revolving Credit Agreement Expires May 2022 | |||
Debt Instrument [Line Items] | |||
Term | 5 years | ||
Maximum borrowing capacity | $ 2,000,000,000 | ||
Revolving Credit Facility | Line of Credit | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 2,500,000,000 | ||
Facility fee that is dependent upon credit rating, basis points | 0.15% | ||
Uncommitted incremental loan facility | $ 500,000,000 | ||
Revolving Credit Facility | Line of Credit | Credit Agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Facility fee that is dependent upon credit rating, basis points | 0.09% | ||
Revolving Credit Facility | Line of Credit | Credit Agreement | Maximum | |||
Debt Instrument [Line Items] | |||
Facility fee that is dependent upon credit rating, basis points | 0.25% | ||
Revolving Credit Facility | Line of Credit | LIBOR | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Basis points spread over LIBOR | 1.10% | ||
Revolving Credit Facility | Line of Credit | LIBOR | Credit Agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Basis points spread over LIBOR | 0.91% | ||
Revolving Credit Facility | Line of Credit | LIBOR | Credit Agreement | Maximum | |||
Debt Instrument [Line Items] | |||
Basis points spread over LIBOR | 1.50% |
DEBT - Commercial Paper (Detail
DEBT - Commercial Paper (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Short-term Debt [Line Items] | ||
Short-term debt | $ 1,694,000,000 | $ 150,000,000 |
Commercial Paper | ||
Short-term Debt [Line Items] | ||
Maximum borrowing capacity | 2,000,000,000 | |
Maximum amount outstanding during period | 923,000,000 | |
Short-term debt | $ 1,295,000,000 | $ 150,000,000 |
Debt instrument, stated interest rate | 3.06% |
DEBT - Term Note (Details)
DEBT - Term Note (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2018 | |
Short-term Debt [Line Items] | ||||
Repayments of short-term debt | $ 350,000,000 | $ 0 | $ 0 | |
Notes Payable to Banks | ||||
Short-term Debt [Line Items] | ||||
Face amount | $ 1,000,000,000 | |||
Debt instrument, interest rate, effective percentage | 3.67% | |||
Repayments of short-term debt | $ 350,000,000 | |||
Base Rate | Notes Payable to Banks | ||||
Short-term Debt [Line Items] | ||||
Basis points spread over LIBOR | 1.15% | |||
Federal Funds Effective Swap Rate | Notes Payable to Banks | ||||
Short-term Debt [Line Items] | ||||
Basis points spread over LIBOR | 0.50% | |||
LIBOR | Notes Payable to Banks | ||||
Short-term Debt [Line Items] | ||||
Basis points spread over LIBOR | 1.15% | |||
Maximum | Prime Rate | Notes Payable to Banks | ||||
Short-term Debt [Line Items] | ||||
Basis points spread over LIBOR | 1.00% |
EMPLOYEE BENEFIT PLANS - Additi
EMPLOYEE BENEFIT PLANS - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Employee retirement and savings plan cost | $ 197,000,000 | $ 217,000,000 | $ 196,000,000 | |
Closing stock price (in dollars per share) | $ 286.48 | |||
Percentage of retirement and savings plan's assets invested in our company common stock | 12.00% | |||
Shares of retirement and savings plans invested in company's common stock (in shares) | 1.8 | 1.8 | ||
Percentage of the retirement and savings plan's assets invested in our common stock as compared to company's outstanding shares at year-end | 1.30% | |||
Number of shares of our common stock reserved for issuance (in shares) | 2 | 2 | ||
Combination of age and years necessary for retirement provision as related to our equity award program | 65 years | |||
Minimum age required for retirement eligibility as related to our equity award program | 55 years | |||
Minimum number of years of service for retirement eligibility as related to our equity award program | 5 years | |||
Limitations on deductibility of excess annual employee compensation as mandated by health insurance reforms | $ 500,000 | |||
Employee service share based compensation tax benefit realized from exercise of stock options and restricted stock vesting | $ 49,000,000 | 68,000,000 | 53,000,000 | |
Common stock shares reserved for stock award plans (in shares) | 13.1 | 13.1 | ||
Fair value of shares vested | $ 298,000,000 | 306,000,000 | 253,000,000 | |
Outstanding intrinsic value of stock options | $ 48,000,000 | $ 48,000,000 | ||
Weighted-average remaining contractual term, years | 5 years | |||
Exercisable stock options intrinsic value | $ 19,000,000 | $ 19,000,000 | ||
Exercisable stock options weighted-average remaining contractual term, years | 4 years 1 month 6 days | |||
Total intrinsic value of stock options exercised | $ 43,000,000 | 44,000,000 | 18,000,000 | |
Cash received from stock options exercises | $ 50,000,000 | 63,000,000 | $ 14,000,000 | |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation modification expense | $ 29,000,000 | |||
Weighted-average grant date fair value of restricted stock awards (in USD per share) | $ 276.62 | $ 222.35 | $ 168.12 | |
Percent of stock with performance-based conditions | 12.00% | 12.00% | ||
Total compensation expense not yet recognized related to nonvested restricted stock | $ 156,000,000 | $ 156,000,000 | ||
Compensation expense over a weighted-average period, years | 1 year 9 months 18 days | |||
Employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total compensation expense not yet recognized related to nonvested restricted stock | $ 14,000,000 | $ 14,000,000 | ||
Compensation expense over a weighted-average period, years | 1 year 8 months 12 days | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of year for stock options to vest | 1 year | |||
Number of years for stock options to expire | 7 years | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of year for stock options to vest | 3 years | |||
2011 Plan | Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock shares available for future grants if all grants are options (in shares) | 2 | 2 | ||
2011 Plan | Employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock shares available for future grants if all grants are options (in shares) | 4.7 | 4.7 |
EMPLOYEE BENEFIT PLANS - Stock-
EMPLOYEE BENEFIT PLANS - Stock-Based Compensation Expense (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock-based compensation expense by type: | |||
Restricted stock | $ 124 | $ 145 | $ 106 |
Stock options | 13 | 12 | 9 |
Total stock-based compensation expense | 137 | 157 | 115 |
Tax benefit recognized | (21) | (32) | (20) |
Stock-based compensation expense, net of tax | $ 116 | $ 125 | $ 95 |
EMPLOYEE BENEFIT PLANS - Weight
EMPLOYEE BENEFIT PLANS - Weighted-Average Grant Date Fair Value of Restricted Stock Awards (Detail) - Restricted Stock - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares | |||
Nonvested restricted stock, beginning balance (in shares) | 1,653 | ||
Granted (in shares) | 576 | ||
Vested (in shares) | (1,045) | ||
Forfeited (in shares) | (220) | ||
Nonvested restricted stock, ending balance (in shares) | 964 | 1,653 | |
Weighted- Average Grant-Date Fair Value | |||
Nonvested restricted stock, beginning balance (in USD per share) | $ 171.68 | ||
Granted (in USD per share) | 276.62 | $ 222.35 | $ 168.12 |
Vested (in USD per share) | 185.82 | ||
Forfeited (in USD per share) | 180.83 | ||
Nonvested restricted stock, ending balance (in USD per share) | $ 213.99 | $ 171.68 |
EMPLOYEE BENEFIT PLANS - Weig_2
EMPLOYEE BENEFIT PLANS - Weighted-Average Fair Value of Stock Options (Detail) - Employee Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value at grant date (in dollars per share) | $ 63.67 | $ 49.81 | $ 37.12 |
Expected option life (years) | 4 years 1 month | 4 years 1 month | 4 years 2 months 1 day |
Expected volatility | 26.10% | 27.10% | 27.60% |
Risk-free interest rate at grant date | 2.50% | 2.00% | 1.10% |
Dividend yield | 0.70% | 0.70% | 0.70% |
EMPLOYEE BENEFIT PLANS - Activi
EMPLOYEE BENEFIT PLANS - Activity for Option Plans (Detail) shares in Thousands | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Shares Under Option | |
Options outstanding, beginning balance (in shares) | shares | 863 |
Granted (in shares) | shares | 143 |
Exercised (in shares) | shares | (320) |
Forfeited (in shares) | shares | (9) |
Options outstanding, ending balance (in shares) | shares | 677 |
Options exercisable, ending balance (in shares) | shares | 178 |
Weighted-Average Exercise Price | |
Options outstanding, beginning balance (in dollars per share) | $ / shares | $ 181.44 |
Granted (in dollars per share) | $ / shares | 276.01 |
Exercised (in dollars per share) | $ / shares | 157.44 |
Forfeited (in dollars per share) | $ / shares | 150.59 |
Options outstanding, ending balance (in dollars per share) | $ / shares | 213.17 |
Options exercisable, ending balance (in dollars per share) | $ / shares | $ 180.76 |
EARNINGS PER COMMON SHARE COM_3
EARNINGS PER COMMON SHARE COMPUTATION - Schedule of Details Supporting Computation of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ 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 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Net income available for common stockholders | $ 355 | $ 644 | $ 193 | $ 491 | $ 184 | $ 499 | $ 650 | $ 1,115 | $ 1,683 | $ 2,448 | $ 614 |
Weighted-average outstanding shares of common stock used to compute basic earnings per common share (in shares) | 137,486 | 144,493 | 149,375 | ||||||||
Shares used to compute diluted earnings per common share (in shares) | 138,403 | 145,585 | 150,917 | ||||||||
Basic earnings per common share (in USD per share) | $ 2.60 | $ 4.68 | $ 1.40 | $ 3.56 | $ 1.30 | $ 3.46 | $ 4.49 | $ 7.54 | $ 12.24 | $ 16.94 | $ 4.11 |
Diluted earnings per common share (in USD per share) | $ 2.58 | $ 4.65 | $ 1.39 | $ 3.53 | $ 1.29 | $ 3.44 | $ 4.46 | $ 7.49 | $ 12.16 | $ 16.81 | $ 4.07 |
Number of antidilutive stock options and restricted stock awards excluded from computation (in shares) | 223 | 539 | 748 | ||||||||
Employee stock options | |||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Dilutive effect of employee stock options and restricted stock (in shares) | 194 | 172 | 219 | ||||||||
Restricted stock | |||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Dilutive effect of employee stock options and restricted stock (in shares) | 723 | 920 | 1,323 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of Details of Dividend Payments (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity [Abstract] | |||
Amount per Share (in USD per share) | $ 1.9 | $ 1.49 | $ 1.16 |
Total Amount | $ 262 | $ 216 | $ 172 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands | Nov. 29, 2018 | Nov. 28, 2018 | Nov. 02, 2018 | Mar. 26, 2018 | Dec. 22, 2017 | Aug. 28, 2017 | Feb. 22, 2017 | Feb. 28, 2019 | Mar. 26, 2018 | Dec. 31, 2017 | Aug. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 21, 2019 | Dec. 21, 2017 | Dec. 14, 2017 | Feb. 16, 2017 | Feb. 14, 2017 |
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||||||
Cash dividend declared (in USD per share) | $ 0.5 | ||||||||||||||||||
Total amount | $ 262,000,000 | $ 216,000,000 | $ 172,000,000 | ||||||||||||||||
Share repurchase authorization | $ 3,000,000,000 | $ 2,250,000,000 | |||||||||||||||||
Value of shares repurchased | $ 1,090,000,000 | $ 3,365,000,000 | $ 104,000,000 | ||||||||||||||||
Common shares acquired in connection with employee stock plans (in shares) | 400 | 500 | 600 | ||||||||||||||||
Common shares acquired in connection with employee stock plans, amount | $ 116,000,000 | $ 115,000,000 | $ 104,000,000 | ||||||||||||||||
Aggregate statutory capital and surplus in our state regulated insurance subsidiaries | $ 8,000,000,000 | 7,600,000,000 | 8,000,000,000 | ||||||||||||||||
Aggregate minimum regulatory requirements of statutory capital and surplus | $ 4,800,000,000 | 5,200,000,000 | 4,800,000,000 | ||||||||||||||||
Dividends that may be paid to the parent company without prior approval by state regulatory authorities in 2014 | 1,000,000,000 | ||||||||||||||||||
Dividends that were paid to the parent company without prior approval by state regulatory authorities | 2,300,000,000 | $ 1,400,000,000 | $ 800,000,000 | ||||||||||||||||
Dividend Declared | |||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||||||
Total amount | 68,000,000 | ||||||||||||||||||
February 2017 ASR | |||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||||||
Share repurchase authorization | $ 1,500,000,000 | ||||||||||||||||||
Share repurchase payment | $ 1,500,000,000 | ||||||||||||||||||
Shares repurchased in open market (in shares) | 840 | 5,830 | 3,040 | 6,670 | |||||||||||||||
Value of shares repurchased | $ 300,000,000 | $ 1,200,000,000 | $ 750,000,000 | ||||||||||||||||
Decrease in capital in excess of par value | $ 300,000,000 | ||||||||||||||||||
Average cost per share (in USD per share) | $ 224.81 | ||||||||||||||||||
December 2017 ASR | |||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||||||
Share repurchase authorization | $ 3,000,000,000 | $ 1,000,000,000 | |||||||||||||||||
Share repurchase payment | $ 1,000,000,000 | ||||||||||||||||||
Shares repurchased in open market (in shares) | 460 | 3,280 | 3,740 | ||||||||||||||||
Value of shares repurchased | $ 200,000,000 | $ 800,000,000 | |||||||||||||||||
Decrease in capital in excess of par value | 150,000,000 | $ 200,000,000 | |||||||||||||||||
Average cost per share (in USD per share) | $ 267.55 | ||||||||||||||||||
November 2018 Authorization | |||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||||||
Share repurchase authorization | $ 750,000,000 | ||||||||||||||||||
Share repurchase payment | $ 750,000,000 | ||||||||||||||||||
Shares repurchased in open market (in shares) | 1,940 | ||||||||||||||||||
Value of shares repurchased | $ 600,000,000 | ||||||||||||||||||
Decrease in capital in excess of par value | $ 150,000,000 | ||||||||||||||||||
February 2017 Authorization | |||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||||||
Share repurchase authorization | $ 2,250,000,000 | ||||||||||||||||||
Shares repurchased in open market (in shares) | 0 | 9,710 | 0 | ||||||||||||||||
Value of shares repurchased | $ 0 | $ 2,250,000,000 | $ 0 | ||||||||||||||||
December 2017 Authorization | |||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||||||
Share repurchase authorization | $ 3,000,000,000 | ||||||||||||||||||
Shares repurchased in open market (in shares) | 3,070 | 3,280 | 0 | ||||||||||||||||
Value of shares repurchased | $ 1,024,000,000 | $ 800,000,000 | $ 0 | ||||||||||||||||
Excluding Employee Stock Plans and ASR | |||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||||||
Shares repurchased in open market (in shares) | 3,070 | 12,990 | 0 | ||||||||||||||||
Value of shares repurchased | $ 1,024,000,000 | $ 3,050,000,000 | $ 0 | ||||||||||||||||
Subsequent Event | |||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||||||
Remaining authorized amount | $ 1,176,000,000 | ||||||||||||||||||
Subsequent Event | Dividend Declared | |||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||||||||
Cash dividend declared (in USD per share) | $ 0.55 |
STOCKHOLDERS' EQUITY - Treasury
STOCKHOLDERS' EQUITY - Treasury Stock Schedule (Details) - USD ($) shares in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 14, 2017 | Feb. 14, 2017 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Share repurchase authorization | $ 3,000,000,000 | $ 2,250,000,000 | |||
Value of shares repurchased | $ 1,090,000,000 | $ 3,365,000,000 | $ 104,000,000 | ||
February 2017 Authorization | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Share repurchase authorization | $ 2,250,000,000 | ||||
Shares repurchased in open market (in shares) | 0 | 9,710 | 0 | ||
Value of shares repurchased | $ 0 | $ 2,250,000,000 | $ 0 | ||
December 2017 Authorization | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Share repurchase authorization | $ 3,000,000,000 | ||||
Shares repurchased in open market (in shares) | 3,070 | 3,280 | 0 | ||
Value of shares repurchased | $ 1,024,000,000 | $ 800,000,000 | $ 0 | ||
Excluding Employee Stock Plans and ASR | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Shares repurchased in open market (in shares) | 3,070 | 12,990 | 0 | ||
Value of shares repurchased | $ 1,024,000,000 | $ 3,050,000,000 | $ 0 |
COMMITMENTS, GUARANTEES AND C_3
COMMITMENTS, GUARANTEES AND CONTINGENCIES - Rent Expense and Sublease Rental Income Associated With Operating Leases (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 167 | $ 204 | $ 179 |
Sublease rental income | (32) | (33) | (26) |
Net rent expense | $ 135 | $ 171 | $ 153 |
COMMITMENTS, GUARANTEES AND C_4
COMMITMENTS, GUARANTEES AND CONTINGENCIES - Future Annual Minimum Payments Due (Detail) $ in Millions | Dec. 31, 2018USD ($) |
Minimum Lease Payments | |
2,019 | $ 147 |
2,020 | 113 |
2,021 | 96 |
2,022 | 79 |
2,023 | 34 |
Thereafter | 50 |
Total | 519 |
Sublease Rental Receipts | |
2,019 | (13) |
2,020 | (12) |
2,021 | (10) |
2,022 | (9) |
2,023 | (9) |
Thereafter | (23) |
Total | (76) |
Net Lease Commitments | |
2,019 | 134 |
2,020 | 101 |
2,021 | 86 |
2,022 | 70 |
2,023 | 25 |
Thereafter | 27 |
Total | $ 443 |
COMMITMENTS, GUARANTEES AND C_5
COMMITMENTS, GUARANTEES AND CONTINGENCIES - Additional Information (Detail) beneficiary in Millions, $ in Millions | Jan. 01, 2018beneficiary | Dec. 31, 2018USD ($)State | Nov. 02, 2017USD ($) |
Loss Contingencies [Line Items] | |||
Purchase obligations in 2019 | $ 240 | ||
Purchase obligations in 2020 | 201 | ||
Purchase obligations in 2021 | 136 | ||
Purchase obligations in 2022 | 98 | ||
Purchase obligations in 2023 | $ 61 | ||
Number of states comprising TRICARE beneficiaries | State | 32 | ||
Number of TRICARE beneficiaries | beneficiary | 6 | ||
Litigation recoveries sought | $ 611 | ||
Tricare East Region Contract | |||
Loss Contingencies [Line Items] | |||
Contract term years | 5 years | ||
Total Medicare | |||
Loss Contingencies [Line Items] | |||
Percentage of premiums and services revenue | 80.00% | ||
Military services | |||
Loss Contingencies [Line Items] | |||
Percentage of premiums and services revenue | 1.00% | ||
Medicaid | |||
Loss Contingencies [Line Items] | |||
Percentage of premiums and services revenue | 4.00% |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Detail) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | Segment | 4 | |||
Member co-share amounts and government subsidies | $ 13,400 | $ 13,500 | $ 13,400 | |
Depreciation and amortization classified as benefit expense | $ 129 | $ 107 | $ 111 | |
Percentage of total premium and services revenues derived from contracts with the federal government | 81.00% | 79.00% | 75.00% | |
Premiums reduction, write off of risk corridor receivables | $ 583 | |||
Long-term insurance reserve strengthening expense | $ 505 |
SEGMENT INFORMATION - Informati
SEGMENT INFORMATION - Information by Segment (Detail) - 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] | |||||||||||
Premiums | $ 54,941 | $ 52,380 | $ 53,021 | ||||||||
Services | 1,457 | 982 | 969 | ||||||||
Investment income | 514 | 405 | 389 | ||||||||
Total revenues | $ 14,168 | $ 14,206 | $ 14,259 | $ 14,279 | $ 13,189 | $ 13,282 | $ 13,534 | $ 13,762 | 56,912 | 53,767 | 54,379 |
Benefits | 45,882 | 43,496 | 45,007 | ||||||||
Operating costs | 7,525 | 6,567 | 7,173 | ||||||||
Merger termination fee and related costs, net | 0 | (936) | 104 | ||||||||
Depreciation and amortization | 405 | 378 | 354 | ||||||||
Total operating expenses | 53,812 | 49,505 | 52,638 | ||||||||
Income from operations | 3,100 | 4,262 | 1,741 | ||||||||
Loss on sale of business | 786 | 0 | 0 | ||||||||
Interest expense | 218 | 242 | 189 | ||||||||
Other expense, net | 33 | 0 | 0 | ||||||||
Income (loss) before income taxes and equity in net earnings | $ 436 | $ 901 | $ 19 | $ 707 | $ 490 | $ 799 | $ 1,042 | $ 1,689 | 2,063 | 4,020 | 1,552 |
Equity in net earnings of Kindred at Home | 11 | 0 | 0 | ||||||||
Segment earnings (losses) | 2,074 | 4,020 | 1,552 | ||||||||
Individual Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 35,656 | 32,720 | 31,863 | ||||||||
Group Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 6,103 | 5,155 | 4,283 | ||||||||
Medicare stand-alone PDP | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 3,584 | 3,702 | 4,009 | ||||||||
Total Medicare | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 45,343 | 41,577 | 40,155 | ||||||||
Fully-insured | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 5,962 | 6,887 | 8,897 | ||||||||
Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 1,359 | 1,310 | 1,279 | ||||||||
Medicaid and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 2,277 | 2,606 | 2,690 | ||||||||
Provider | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 404 | 258 | 278 | ||||||||
ASO and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 850 | 644 | 660 | ||||||||
Pharmacy | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 203 | 80 | 31 | ||||||||
External Customers | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 56,398 | 53,362 | 53,990 | ||||||||
Operating Segments | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 48,108 | 44,626 | 43,223 | ||||||||
Services | 11 | 10 | 6 | ||||||||
Investment income | 136 | 90 | 90 | ||||||||
Total revenues | 48,255 | 44,726 | 43,319 | ||||||||
Benefits | 40,925 | 38,218 | 36,783 | ||||||||
Operating costs | 5,327 | 4,292 | 4,650 | ||||||||
Merger termination fee and related costs, net | 0 | 0 | |||||||||
Depreciation and amortization | 270 | 238 | 196 | ||||||||
Total operating expenses | 46,522 | 42,748 | 41,629 | ||||||||
Income from operations | 1,733 | 1,978 | 1,690 | ||||||||
Loss on sale of business | 0 | 0 | |||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Other expense, net | 0 | ||||||||||
Income (loss) before income taxes and equity in net earnings | 1,733 | 1,978 | 1,690 | ||||||||
Equity in net earnings of Kindred at Home | 0 | 0 | 0 | ||||||||
Segment earnings (losses) | 1,733 | 1,978 | 1,690 | ||||||||
Operating Segments | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 6,803 | 6,772 | 6,696 | ||||||||
Services | 835 | 626 | 643 | ||||||||
Investment income | 23 | 31 | 25 | ||||||||
Total revenues | 7,679 | 7,449 | 7,386 | ||||||||
Benefits | 5,420 | 5,363 | 5,233 | ||||||||
Operating costs | 1,810 | 1,590 | 1,727 | ||||||||
Merger termination fee and related costs, net | 0 | 0 | |||||||||
Depreciation and amortization | 88 | 84 | 82 | ||||||||
Total operating expenses | 7,318 | 7,037 | 7,042 | ||||||||
Income from operations | 361 | 412 | 344 | ||||||||
Loss on sale of business | 0 | 0 | |||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Other expense, net | 0 | ||||||||||
Income (loss) before income taxes and equity in net earnings | 361 | 412 | 344 | ||||||||
Equity in net earnings of Kindred at Home | 0 | 0 | 0 | ||||||||
Segment earnings (losses) | 361 | 412 | 344 | ||||||||
Operating Segments | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Services | 607 | 338 | 310 | ||||||||
Investment income | 34 | 35 | 30 | ||||||||
Total revenues | 23,811 | 23,958 | 25,312 | ||||||||
Benefits | 0 | 0 | 0 | ||||||||
Operating costs | 22,905 | 22,848 | 24,073 | ||||||||
Merger termination fee and related costs, net | 0 | 0 | |||||||||
Depreciation and amortization | 163 | 143 | 143 | ||||||||
Total operating expenses | 23,068 | 22,991 | 24,216 | ||||||||
Income from operations | 743 | 967 | 1,096 | ||||||||
Loss on sale of business | 0 | 0 | |||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Other expense, net | 0 | ||||||||||
Income (loss) before income taxes and equity in net earnings | 743 | 967 | 1,096 | ||||||||
Equity in net earnings of Kindred at Home | 11 | 0 | 0 | ||||||||
Segment earnings (losses) | 754 | 967 | 1,096 | ||||||||
Operating Segments | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 8 | 947 | 3,064 | ||||||||
Services | 0 | 0 | 0 | ||||||||
Investment income | 0 | 4 | 5 | ||||||||
Total revenues | 8 | 951 | 3,069 | ||||||||
Benefits | (70) | 544 | 3,301 | ||||||||
Operating costs | 4 | 201 | 601 | ||||||||
Merger termination fee and related costs, net | 0 | 0 | |||||||||
Depreciation and amortization | 0 | 13 | 36 | ||||||||
Total operating expenses | (66) | 758 | 3,938 | ||||||||
Income from operations | 74 | 193 | (869) | ||||||||
Loss on sale of business | 0 | 0 | |||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Other expense, net | 0 | ||||||||||
Income (loss) before income taxes and equity in net earnings | 74 | 193 | (869) | ||||||||
Equity in net earnings of Kindred at Home | 0 | 0 | 0 | ||||||||
Segment earnings (losses) | 74 | 193 | (869) | ||||||||
Operating Segments | Individual Medicare Advantage | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 35,656 | 32,720 | 31,863 | ||||||||
Operating Segments | Individual Medicare Advantage | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Individual Medicare Advantage | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Individual Medicare Advantage | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Group Medicare Advantage | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 6,103 | 5,155 | 4,283 | ||||||||
Operating Segments | Group Medicare Advantage | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Group Medicare Advantage | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Group Medicare Advantage | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Medicare stand-alone PDP | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 3,584 | 3,702 | 4,009 | ||||||||
Operating Segments | Medicare stand-alone PDP | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Medicare stand-alone PDP | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Medicare stand-alone PDP | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Total Medicare | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 45,343 | 41,577 | 40,155 | ||||||||
Operating Segments | Total Medicare | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Total Medicare | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Total Medicare | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Fully-insured | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 510 | 478 | 428 | ||||||||
Operating Segments | Fully-insured | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 5,444 | 5,462 | 5,405 | ||||||||
Operating Segments | Fully-insured | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Fully-insured | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 8 | 947 | 3,064 | ||||||||
Operating Segments | Specialty | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Specialty | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 1,359 | 1,310 | 1,279 | ||||||||
Operating Segments | Specialty | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Specialty | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Medicaid and other | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 2,255 | 2,571 | 2,640 | ||||||||
Operating Segments | Medicaid and other | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 12 | ||||||||
Operating Segments | Medicaid and other | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Medicaid and other | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Provider | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | 0 | 0 | ||||||||
Operating Segments | Provider | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | 0 | 0 | ||||||||
Operating Segments | Provider | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 404 | 258 | 278 | ||||||||
Operating Segments | Provider | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | 0 | 0 | ||||||||
Operating Segments | ASO and other | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 11 | 10 | 6 | ||||||||
Operating Segments | ASO and other | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 835 | 626 | 643 | ||||||||
Operating Segments | ASO and other | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | 0 | 1 | ||||||||
Operating Segments | ASO and other | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | 0 | 0 | ||||||||
Operating Segments | Pharmacy | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | 0 | 0 | ||||||||
Operating Segments | Pharmacy | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | 0 | 0 | ||||||||
Operating Segments | Pharmacy | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 203 | 80 | 31 | ||||||||
Operating Segments | Pharmacy | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | 0 | 0 | ||||||||
Operating Segments | External Customers | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 48,119 | 44,636 | 43,229 | ||||||||
Operating Segments | External Customers | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 7,638 | 7,398 | 7,339 | ||||||||
Operating Segments | External Customers | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 607 | 338 | 310 | ||||||||
Operating Segments | External Customers | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 8 | 947 | 3,064 | ||||||||
Other Businesses | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 22 | 35 | 38 | ||||||||
Services | 4 | 8 | 10 | ||||||||
Investment income | 110 | 87 | 66 | ||||||||
Total revenues | 136 | 130 | 114 | ||||||||
Benefits | 77 | 131 | 617 | ||||||||
Operating costs | 6 | 12 | 16 | ||||||||
Merger termination fee and related costs, net | 0 | 0 | |||||||||
Depreciation and amortization | 0 | 0 | 1 | ||||||||
Total operating expenses | 83 | 143 | 634 | ||||||||
Income from operations | 53 | (13) | (520) | ||||||||
Loss on sale of business | 0 | 0 | |||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Other expense, net | 0 | ||||||||||
Income (loss) before income taxes and equity in net earnings | 53 | (13) | (520) | ||||||||
Equity in net earnings of Kindred at Home | 0 | 0 | 0 | ||||||||
Segment earnings (losses) | 53 | (13) | (520) | ||||||||
Other Businesses | Individual Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Other Businesses | Group Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Other Businesses | Medicare stand-alone PDP | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Other Businesses | Total Medicare | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Other Businesses | Fully-insured | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Other Businesses | Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Other Businesses | Medicaid and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 22 | 35 | 38 | ||||||||
Other Businesses | Provider | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | 0 | 0 | ||||||||
Other Businesses | ASO and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 4 | 8 | 10 | ||||||||
Other Businesses | Pharmacy | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | 0 | 0 | ||||||||
Other Businesses | External Customers | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 26 | 43 | 48 | ||||||||
Corporate/Eliminations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | ||||||||||
Investment income | 211 | 158 | 173 | ||||||||
Total revenues | (22,977) | (23,447) | (24,821) | ||||||||
Benefits | (470) | (760) | (927) | ||||||||
Operating costs | (22,527) | (22,376) | (23,894) | ||||||||
Merger termination fee and related costs, net | (936) | 104 | |||||||||
Depreciation and amortization | (116) | (100) | (104) | ||||||||
Total operating expenses | (23,113) | (24,172) | (24,821) | ||||||||
Income from operations | 136 | 725 | 0 | ||||||||
Loss on sale of business | (786) | 0 | |||||||||
Interest expense | 218 | 242 | 189 | ||||||||
Other expense, net | (33) | ||||||||||
Income (loss) before income taxes and equity in net earnings | (901) | 483 | (189) | ||||||||
Equity in net earnings of Kindred at Home | 0 | 0 | 0 | ||||||||
Segment earnings (losses) | (901) | 483 | (189) | ||||||||
Corporate/Eliminations | Provider | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | ||||||||||
Corporate/Eliminations | ASO and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | ||||||||||
Corporate/Eliminations | Pharmacy | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services | 0 | ||||||||||
Corporate/Eliminations | External Customers | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 0 | ||||||||||
Intersegment revenues | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | (23,188) | (23,605) | (24,994) | ||||||||
Intersegment revenues | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Intersegment revenues | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 18 | 20 | 22 | ||||||||
Intersegment revenues | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 23,170 | 23,585 | 24,972 | ||||||||
Intersegment revenues | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Intersegment revenues | Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | (16,858) | (17,313) | (19,001) | ||||||||
Intersegment revenues | Services | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Intersegment revenues | Services | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 18 | 20 | 22 | ||||||||
Intersegment revenues | Services | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 16,840 | 17,293 | 18,979 | ||||||||
Intersegment revenues | Services | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Intersegment revenues | Products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | (6,330) | (6,292) | (5,993) | ||||||||
Intersegment revenues | Products | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Intersegment revenues | Products | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Intersegment revenues | Products | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 6,330 | 6,292 | 5,993 | ||||||||
Intersegment revenues | Products | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | $ 0 | $ 0 | $ 0 |
EXPENSES ASSOCIATED WITH LONG_3
EXPENSES ASSOCIATED WITH LONG-DURATION INSURANCE PRODUCTS - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Long Duration Insurance Products [Line Items] | ||||
Percent of consolidated premiums and services revenues related to long-duration insurance products | 1.00% | 1.00% | ||
Future policy benefits payable | $ 219,000,000 | $ 2,923,000,000 | ||
Benefit expense with future policy benefits payable | 0 | (22,000,000) | $ 439,000,000 | |
Long-term insurance reserve strengthening expense | 505,000,000 | |||
Amortization of deferred acquisition costs | 48,000,000 | 71,000,000 | 67,000,000 | |
Deferred acquisition costs associated with our individual major medical policies | 3,000,000 | |||
Adjustment to future policy benefits assuming unrealized gains on investments realized and reinvested at current yields | 168,000,000 | |||
Increase in future policy benefits payable | 659,000,000 | |||
Increase in reinsurance recoverable | 154,000,000 | |||
Premium deficiency reserve | 0 | 0 | $ 0 | $ 176,000,000 |
100% Coinsurance Agreements | ||||
Long Duration Insurance Products [Line Items] | ||||
Future policy benefits payable | $ 217,000,000 | 199,000,000 | ||
Percentage of coinsurance agreement | 100.00% | |||
Individual Major Medical Policies | ||||
Long Duration Insurance Products [Line Items] | ||||
Future policy benefits payable | 19,000,000 | |||
Closed Block Long Term Care Policies | ||||
Long Duration Insurance Products [Line Items] | ||||
Future policy benefits payable | $ 2,300,000,000 |
EXPENSES ASSOCIATED WITH LONG_4
EXPENSES ASSOCIATED WITH LONG-DURATION INSURANCE PRODUCTS - Schedule of Deferred Acquisition Cost and Future Policy Benefits Payable With Our Long-Duration Insurance Products (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Insurance [Abstract] | ||
Other long-term assets, Deferred acquisition costs | $ 36 | $ 103 |
Trade accounts payable and accrued expenses, Deferred acquisition cost | 0 | 0 |
Long-term liabilities, Deferred acquisition cost | 0 | 0 |
Total asset (liability), Deferred acquisition cost | 36 | 103 |
Other long-term assets, Future policy benefits payable | 0 | 0 |
Trade accounts payable and accrued expenses, Future policy benefits payable | 0 | (56) |
Long-term liabilities, Future policy benefits payable | (219) | (2,923) |
Total asset (liability), Future policy benefits payable | $ (219) | $ (2,979) |
REINSURANCE - Additional Inform
REINSURANCE - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)Reinsurer | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables included in other long-term assets | $ 314 | $ 824 | |
Premiums ceded | 976 | 969 | $ 842 |
Benefits ceded | $ 980 | $ 844 | $ 767 |
Number of reinsurers comprising other reinsurance recoverables balance | Reinsurer | 10 | ||
Cash and securities in trusts held by certain reinsurers | $ 110 | ||
100% Coinsurance Agreements | |||
Effects of Reinsurance [Line Items] | |||
Percentage of coinsurance agreement | 100.00% | ||
Reinsurance Recoverables | Reinsurer Concentration Risk | |||
Effects of Reinsurance [Line Items] | |||
Percentage of reinsurance recoverables resulting from 100% coinsurance agreements | 99.00% | 33.00% | |
Protective Life Insurance Company | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables included in other long-term assets | $ 177 | ||
All Others | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables included in other long-term assets | $ 137 |
QUARTERLY FINANCIAL INFORMATI_3
QUARTERLY FINANCIAL INFORMATION (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 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 14,168 | $ 14,206 | $ 14,259 | $ 14,279 | $ 13,189 | $ 13,282 | $ 13,534 | $ 13,762 | $ 56,912 | $ 53,767 | $ 54,379 |
Income (loss) before income taxes | 436 | 901 | 19 | 707 | 490 | 799 | 1,042 | 1,689 | 2,063 | 4,020 | 1,552 |
Net income | $ 355 | $ 644 | $ 193 | $ 491 | $ 184 | $ 499 | $ 650 | $ 1,115 | $ 1,683 | $ 2,448 | $ 614 |
Basic earnings per common share (in USD per share) | $ 2.60 | $ 4.68 | $ 1.40 | $ 3.56 | $ 1.30 | $ 3.46 | $ 4.49 | $ 7.54 | $ 12.24 | $ 16.94 | $ 4.11 |
Diluted earnings per common share (in USD per share) | $ 2.58 | $ 4.65 | $ 1.39 | $ 3.53 | $ 1.29 | $ 3.44 | $ 4.46 | $ 7.49 | $ 12.16 | $ 16.81 | $ 4.07 |
SCHEDULE I-PARENT COMPANY FIN_2
SCHEDULE I-PARENT COMPANY FINANCIAL INFORMATION (Condensed Balance Sheets) (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||||
Cash and cash equivalents | $ 2,343 | $ 4,042 | $ 3,877 | $ 2,571 |
Investment securities | 10,026 | 9,557 | ||
Other current assets | 3,564 | 2,949 | ||
Total current assets | 16,948 | 17,402 | ||
Property and equipment, net | 1,735 | 1,584 | ||
Equity method investment in Kindred at Home | 1,047 | 0 | ||
Other long-term assets | 1,375 | 2,166 | ||
Total assets | 25,413 | 27,178 | ||
Current liabilities: | ||||
Book overdraft | 171 | 141 | ||
Short-term debt | 1,694 | 150 | ||
Total current liabilities | 10,077 | 9,406 | ||
Long-term debt | 4,375 | 4,770 | ||
Other long-term liabilities | 581 | 237 | ||
Total liabilities | 15,252 | 17,336 | ||
Commitments and contingencies | ||||
Stockholders’ equity: | ||||
Preferred stock, $1 par; 10,000,000 shares authorized; none issued | 0 | 0 | ||
Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 198,594,841 shares issued at December 31, 2018 and 198,572,458 shares issued at December 31, 2017 | 33 | 33 | ||
Capital in excess of par value | 2,535 | 2,445 | ||
Retained earnings | 15,072 | 13,670 | ||
Accumulated other comprehensive (loss) income | (159) | 19 | ||
Treasury stock, at cost, 63,028,169 shares at December 31, 2018 and 60,893,762 shares at December 31, 2017 | (7,320) | (6,325) | ||
Total stockholders’ equity | 10,161 | 9,842 | 10,685 | 10,346 |
Total liabilities and stockholders’ equity | 25,413 | 27,178 | ||
Parent Company | ||||
Current assets: | ||||
Cash and cash equivalents | 265 | 383 | $ 1,710 | $ 1,389 |
Investment securities | 313 | 305 | ||
Receivable from operating subsidiaries | 1,306 | 1,042 | ||
Other current assets | 628 | 245 | ||
Total current assets | 2,512 | 1,975 | ||
Property and equipment, net | 1,209 | 1,091 | ||
Investments in subsidiaries | 16,951 | 16,810 | ||
Equity method investment in Kindred at Home | 1,047 | 0 | ||
Other long-term assets | 359 | 426 | ||
Total assets | 22,078 | 20,302 | ||
Current liabilities: | ||||
Payable to operating subsidiaries | 4,487 | 4,311 | ||
Current portion of notes payable to operating subsidiaries | 28 | 28 | ||
Book overdraft | 38 | 41 | ||
Short-term debt | 1,694 | 150 | ||
Other current liabilities | 791 | 896 | ||
Total current liabilities | 7,038 | 5,426 | ||
Long-term debt | 4,375 | 4,770 | ||
Other long-term liabilities | 504 | 264 | ||
Total liabilities | 11,917 | 10,460 | ||
Commitments and contingencies | ||||
Stockholders’ equity: | ||||
Preferred stock, $1 par; 10,000,000 shares authorized; none issued | 0 | 0 | ||
Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 198,594,841 shares issued at December 31, 2018 and 198,572,458 shares issued at December 31, 2017 | 33 | 33 | ||
Capital in excess of par value | 2,535 | 2,445 | ||
Retained earnings | 15,072 | 13,670 | ||
Accumulated other comprehensive (loss) income | (159) | 19 | ||
Treasury stock, at cost, 63,028,169 shares at December 31, 2018 and 60,893,762 shares at December 31, 2017 | (7,320) | (6,325) | ||
Total stockholders’ equity | 10,161 | 9,842 | ||
Total liabilities and stockholders’ equity | $ 22,078 | $ 20,302 |
SCHEDULE I-PARENT COMPANY FIN_3
SCHEDULE I-PARENT COMPANY FINANCIAL INFORMATION (Condensed Balance Sheets) Phantom (Detail) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Condensed Financial Statements, Captions [Line Items] | ||
Preferred stock, par (in USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par (in USD per share) | $ 0.1667 | $ 0.1667 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 198,594,841 | 198,572,458 |
Treasury stock (in shares) | 63,028,169 | 60,893,762 |
Parent Company | ||
Condensed Financial Statements, Captions [Line Items] | ||
Preferred stock, par (in USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par (in USD per share) | $ 0.1667 | $ 0.1667 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 198,594,841 | 198,572,458 |
Treasury stock (in shares) | 63,028,169 | 60,893,762 |
SCHEDULE I-PARENT COMPANY FIN_4
SCHEDULE I-PARENT COMPANY FINANCIAL INFORMATION (Condensed Statements of Income) (Detail) - 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 | |
Revenues: | |||||||||||
Total revenues | $ 14,168 | $ 14,206 | $ 14,259 | $ 14,279 | $ 13,189 | $ 13,282 | $ 13,534 | $ 13,762 | $ 56,912 | $ 53,767 | $ 54,379 |
Expenses: | |||||||||||
Operating costs | 7,525 | 6,567 | 7,173 | ||||||||
Merger termination fee and related costs, net | 0 | (936) | 104 | ||||||||
Depreciation | 444 | 410 | 388 | ||||||||
Interest | 218 | 242 | 189 | ||||||||
Total operating expenses | 53,812 | 49,505 | 52,638 | ||||||||
Other expense, net | 33 | 0 | 0 | ||||||||
Loss on sale of business | 786 | 0 | 0 | ||||||||
(Benefit) provision for income taxes | 391 | 1,572 | 938 | ||||||||
Equity in net earnings of Kindred at Home | 11 | 0 | 0 | ||||||||
Net income | $ 355 | $ 644 | $ 193 | $ 491 | $ 184 | $ 499 | $ 650 | $ 1,115 | 1,683 | 2,448 | 614 |
Parent Company | |||||||||||
Revenues: | |||||||||||
Management fees charged to operating subsidiaries | 1,666 | 1,864 | 1,683 | ||||||||
Investment and other income, net | 30 | 57 | 42 | ||||||||
Total revenues | 1,696 | 1,921 | 1,725 | ||||||||
Expenses: | |||||||||||
Operating costs | 1,468 | 1,801 | 1,519 | ||||||||
Merger termination fee and related costs, net | 0 | (936) | 104 | ||||||||
Depreciation | 342 | 332 | 302 | ||||||||
Interest | 218 | 243 | 189 | ||||||||
Total operating expenses | 2,028 | 1,440 | 2,114 | ||||||||
Other expense, net | 33 | 0 | 0 | ||||||||
Loss on sale of business | 782 | 0 | 0 | ||||||||
(Loss) income before income taxes and equity in net earnings of subsidiaries | (1,147) | 481 | (389) | ||||||||
(Benefit) provision for income taxes | (542) | 61 | (107) | ||||||||
(Loss) income before equity in net earnings of subsidiaries | (605) | 420 | (282) | ||||||||
Equity in net earnings of subsidiaries | 2,277 | 2,028 | 896 | ||||||||
Equity in net earnings of Kindred at Home | 11 | 0 | 0 | ||||||||
Net income | $ 1,683 | $ 2,448 | $ 614 |
SCHEDULE I-PARENT COMPANY FIN_5
SCHEDULE I-PARENT COMPANY FINANCIAL INFORMATION (Condensed Statements of Comprehensive Income) (Detail) - 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 | $ 355 | $ 644 | $ 193 | $ 491 | $ 184 | $ 499 | $ 650 | $ 1,115 | $ 1,683 | $ 2,448 | $ 614 |
Other comprehensive income (loss): | |||||||||||
Change in gross unrealized investment losses/gains | (189) | 149 | (101) | ||||||||
Effect of income taxes | 51 | (55) | 38 | ||||||||
Total change in unrealized investment gains/losses, net of tax | (138) | 94 | (63) | ||||||||
Reclassification adjustment for net realized gains included in investment income | (53) | (14) | (96) | ||||||||
Effect of income taxes | 17 | 5 | 35 | ||||||||
Total reclassification adjustment, net of tax | (36) | (9) | (61) | ||||||||
Other comprehensive (loss) income, net of tax | (174) | 85 | (124) | ||||||||
Comprehensive income attributable to our equity method investment in Kindred at Home | (4) | 0 | 0 | ||||||||
Comprehensive income | 1,505 | 2,533 | 490 | ||||||||
Parent Company | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | 1,683 | 2,448 | 614 | ||||||||
Other comprehensive income (loss): | |||||||||||
Change in gross unrealized investment losses/gains | (189) | 149 | (101) | ||||||||
Effect of income taxes | 51 | (55) | 38 | ||||||||
Total change in unrealized investment gains/losses, net of tax | (138) | 94 | (63) | ||||||||
Reclassification adjustment for net realized gains included in investment income | (53) | (14) | (96) | ||||||||
Effect of income taxes | 17 | 5 | 35 | ||||||||
Total reclassification adjustment, net of tax | (36) | (9) | (61) | ||||||||
Other comprehensive (loss) income, net of tax | (174) | 85 | (124) | ||||||||
Comprehensive income attributable to our equity method investment in Kindred at Home | (4) | 0 | 0 | ||||||||
Comprehensive income | $ 1,505 | $ 2,533 | $ 490 |
SCHEDULE I-PARENT COMPANY FIN_6
SCHEDULE I-PARENT COMPANY FINANCIAL INFORMATION (Condensed Statements of Cash Flows) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by operating activities | $ 2,173 | $ 4,051 | $ 1,936 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | (354) | (31) | (7) |
Acquisition, equity method investment in Kindred at Home | (1,095) | 0 | 0 |
Purchases of investment securities | (4,687) | (6,265) | (6,566) |
Proceeds from sale of investment securities | 3,494 | 2,768 | 4,312 |
Maturities of investment securities | 972 | 1,111 | 1,426 |
Purchases of property and equipment, net | (612) | (524) | (527) |
Net cash used in investing activities | (3,087) | (2,941) | (1,362) |
Cash flows from financing activities: | |||
Proceeds from issuance of senior notes, net | 0 | 1,779 | 0 |
Proceeds from issuance (repayments) of commercial paper, net | 485 | (153) | (2) |
Proceeds from term loan | 1,000 | 0 | 0 |
Repayment of term loan | (350) | 0 | 0 |
Repayment of long-term debt | 0 | (800) | 0 |
Change in book overdraft | 30 | (71) | (89) |
Common stock repurchases | (1,090) | (3,365) | (104) |
Dividends paid | (265) | (220) | (177) |
Proceeds from stock option exercises and other, net | 50 | 63 | 14 |
Net cash (used in) provided by financing activities | (785) | (945) | 732 |
(Decrease) increase in cash and cash equivalents | (1,699) | 165 | 1,306 |
Cash and cash equivalents at beginning of year | 4,042 | 3,877 | 2,571 |
Cash and cash equivalents at end of year | 2,343 | 4,042 | 3,877 |
Parent Company | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by operating activities | 2,719 | 2,423 | 1,848 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | (354) | 0 | 0 |
Acquisition, equity method investment in Kindred at Home | (1,095) | 0 | 0 |
Capital contributions to operating subsidiaries | (697) | (695) | (895) |
Purchases of investment securities | (145) | (53) | (151) |
Proceeds from sale of investment securities | 35 | 0 | 25 |
Maturities of investment securities | 59 | 51 | 143 |
Purchases of property and equipment, net | (465) | (359) | (382) |
Net cash used in investing activities | (2,662) | (1,056) | (1,260) |
Cash flows from financing activities: | |||
Proceeds from issuance of senior notes, net | 0 | 1,779 | 0 |
Proceeds from issuance (repayments) of commercial paper, net | 485 | (153) | (2) |
Proceeds from term loan | 1,000 | 0 | 0 |
Repayment of term loan | (350) | 0 | 0 |
Repayment of long-term debt | 0 | (800) | 0 |
Change in book overdraft | (3) | 3 | 5 |
Common stock repurchases | (1,090) | (3,365) | (104) |
Dividends paid | (265) | (220) | (177) |
Proceeds from stock option exercises and other, net | 48 | 62 | 11 |
Net cash (used in) provided by financing activities | (175) | (2,694) | (267) |
(Decrease) increase in cash and cash equivalents | (118) | (1,327) | 321 |
Cash and cash equivalents at beginning of year | 383 | 1,710 | 1,389 |
Cash and cash equivalents at end of year | $ 265 | $ 383 | $ 1,710 |
SCHEDULE I-PARENT COMPANY FIN_7
SCHEDULE I-PARENT COMPANY FINANCIAL INFORMATION (Additional Information) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | |||
Cash dividends received from subsidiary | $ 2,300 | $ 1,400 | $ 800 |
Aggregate statutory capital and surplus in our state regulated insurance subsidiaries | 7,600 | 8,000 | |
Aggregate minimum regulatory requirements of statutory capital and surplus | 5,200 | 4,800 | |
Dividends that may be paid to the parent company without prior approval by state regulatory authorities in 2014 | 1,000 | ||
Dividends that were paid to the parent company without prior approval by state regulatory authorities | $ 2,300 | 1,400 | 800 |
Majority-Owned Subsidiary, Unconsolidated | |||
Condensed Financial Statements, Captions [Line Items] | |||
Interest expense on subsidiary notes payable | $ 1 | $ 1 |
SCHEDULE II-VALUATION AND QUA_2
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for loss on receivables: | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ (96) | $ (118) | $ (101) |
Acquired/(Disposed) Balances | 0 | 0 | 0 |
Charged (Credited) to Costs and Expenses | 36 | 20 | 39 |
Charged to Other Accounts | (29) | (10) | 19 |
Deductions or Write-offs | (24) | (32) | (41) |
Balance at End of Period | (79) | (96) | (118) |
Deferred tax asset valuation allowance: | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | (49) | (49) | (42) |
Acquired/(Disposed) Balances | 0 | 0 | 0 |
Charged (Credited) to Costs and Expenses | (5) | 0 | (7) |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions or Write-offs | 0 | 0 | 0 |
Balance at End of Period | $ (54) | $ (49) | $ (49) |