Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2019shares | |
Cover page. | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2019 |
Document Transition Report | false |
Entity File Number | 1-5975 |
Entity Registrant Name | HUMANA INC |
Entity Central Index Key | 0000049071 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 61-0647538 |
Entity Address, Address Line One | 500 West Main Street |
Entity Address, City or Town | Louisville |
Entity Address, State or Province | KY |
Entity Address, Postal Zip Code | 40202 |
City Area Code | 502 |
Local Phone Number | 580-1000 |
Title of 12(b) Security | Common stock, $0.16 2/3 par value |
Trading Symbol | HUM |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 135,089,290 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 4,778 | $ 2,343 |
Investment securities | 9,991 | 10,026 |
Receivables, less allowance for doubtful accounts of $73 in 2019 and $79 in 2018 | 904 | 1,015 |
Other current assets | 4,487 | 3,564 |
Total current assets | 20,160 | 16,948 |
Property and equipment, net | 1,796 | 1,735 |
Long-term investment securities | 411 | 411 |
Equity method investment in Kindred at Home | 1,056 | 1,047 |
Goodwill | 3,922 | 3,897 |
Other long-term assets | 1,568 | 1,375 |
Total assets | 28,913 | 25,413 |
Current liabilities: | ||
Benefits payable | 5,842 | 4,862 |
Trade accounts payable and accrued expenses | 3,832 | 3,067 |
Book overdraft | 204 | 171 |
Unearned revenues | 312 | 283 |
Short-term debt | 1,349 | 1,694 |
Total current liabilities | 11,539 | 10,077 |
Long-term debt | 4,377 | 4,375 |
Future policy benefits payable | 214 | 219 |
Other long-term liabilities | 911 | 581 |
Total liabilities | 17,041 | 15,252 |
Commitments and contingencies (Note 14) | ||
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; 198,627,992 shares issued at June 30, 2019 and 198,594,841 shares issued at December 31, 2018 | 33 | 33 |
Capital in excess of par value | 2,763 | 2,535 |
Retained earnings | 16,429 | 15,072 |
Accumulated other comprehensive income (loss) | 112 | (159) |
Treasury stock, at cost, 63,538,702 shares at June 30, 2019 and 63,028,169 shares at December 31, 2018 | (7,465) | (7,320) |
Total stockholders’ equity | 11,872 | 10,161 |
Total liabilities and stockholders’ equity | $ 28,913 | $ 25,413 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 73 | $ 79 |
Preferred stock, par (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par (in dollars per share) | $ 0.1667 | $ 0.1667 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 198,627,992 | 198,594,841 |
Treasury stock, shares (in shares) | 63,538,702 | 63,028,169 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Premiums | $ 15,776 | $ 13,713 | $ 31,427 | $ 27,524 |
Services | 355 | 382 | 710 | 709 |
Investment income | 114 | 164 | 215 | 305 |
Total revenues | 16,245 | 14,259 | 32,352 | 28,538 |
Operating expenses: | ||||
Benefits | 13,318 | 11,536 | 26,811 | 23,206 |
Operating costs | 1,703 | 1,761 | 3,363 | 3,510 |
Depreciation and amortization | 109 | 100 | 216 | 200 |
Total operating expenses | 15,130 | 13,397 | 30,390 | 26,916 |
Income from operations | 1,115 | 862 | 1,962 | 1,622 |
Loss on sale of business | 0 | 790 | 0 | 790 |
Interest expense | 60 | 53 | 122 | 106 |
Other income, net | (174) | 0 | (135) | 0 |
Income before income taxes and equity in net earnings | 1,229 | 19 | 1,975 | 726 |
Provision (benefit) for income taxes | 301 | (174) | 484 | 42 |
Equity in net earnings of Kindred at Home | 12 | 0 | 15 | 0 |
Net income | $ 940 | $ 193 | $ 1,506 | $ 684 |
Basic earnings per common share (in dollars per share) | $ 6.96 | $ 1.40 | $ 11.14 | $ 4.96 |
Diluted earnings per common share (in dollars per share) | $ 6.94 | $ 1.39 | $ 11.10 | $ 4.93 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 940 | $ 193 | $ 1,506 | $ 684 |
Other comprehensive income: | ||||
Change in gross unrealized investment gains/losses | 169 | (9) | 365 | (212) |
Effect of income taxes | (40) | 2 | (85) | 54 |
Total change in unrealized investment gains/losses, net of tax | 129 | (7) | 280 | (158) |
Reclassification adjustment for net realized gains | (6) | (23) | (6) | (52) |
Effect of income taxes | 2 | 8 | 2 | 15 |
Total reclassification adjustment, net of tax | (4) | (15) | (4) | (37) |
Other comprehensive income (loss), net of tax | 125 | (22) | 276 | (195) |
Comprehensive loss attributable to equity method investment in Kindred at Home | (3) | 0 | (5) | 0 |
Comprehensive income | $ 1,062 | $ 171 | $ 1,777 | $ 489 |
Condensed Consolidated Statem_3
Condensed 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, 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 | 684 | 684 | ||||
Other comprehensive loss | (199) | (4) | (195) | |||
Common stock repurchases | (93) | 200 | (293) | |||
Dividends and dividend equivalents | (139) | (139) | ||||
Stock-based compensation | 69 | 69 | ||||
Restricted stock unit vesting | 0 | (60) | 60 | |||
Stock option exercises | 47 | $ 0 | 18 | 29 | ||
Stock option exercises (in shares) | 19 | |||||
Balances at Jun. 30, 2018 | 10,211 | $ 33 | 2,672 | 14,211 | (176) | (6,529) |
Balances (in shares) at Jun. 30, 2018 | 198,591 | |||||
Balances at Mar. 31, 2018 | 10,081 | $ 33 | 2,626 | 14,086 | (154) | (6,510) |
Balances (in shares) at Mar. 31, 2018 | 198,585 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 193 | 193 | ||||
Other comprehensive income (loss) | (22) | (22) | ||||
Common stock repurchases | (42) | 0 | (42) | |||
Dividends and dividend equivalents | (68) | (68) | ||||
Stock-based compensation | 34 | 34 | ||||
Restricted stock unit vesting | 22 | (1) | 23 | |||
Stock option exercises | 13 | $ 0 | 13 | |||
Stock option exercises (in shares) | 6 | |||||
Balances at Jun. 30, 2018 | 10,211 | $ 33 | 2,672 | 14,211 | (176) | (6,529) |
Balances (in shares) at Jun. 30, 2018 | 198,591 | |||||
Balances at Dec. 31, 2018 | 10,161 | $ 33 | 2,535 | 15,072 | (159) | (7,320) |
Balances (in shares) at Dec. 31, 2018 | 198,595 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 1,506 | 1,506 | ||||
Other comprehensive income (loss) | 271 | 271 | ||||
Common stock repurchases | (10) | 150 | (160) | |||
Dividends and dividend equivalents | (149) | (149) | ||||
Stock-based compensation | 76 | 76 | ||||
Restricted stock unit vesting | 0 | (3) | 3 | |||
Restricted stock unit vesting (in shares) | 32 | |||||
Stock option exercises | 17 | $ 0 | 5 | 12 | ||
Stock option exercises (in shares) | 1 | |||||
Balances at Jun. 30, 2019 | 11,872 | $ 33 | 2,763 | 16,429 | 112 | (7,465) |
Balances (in shares) at Jun. 30, 2019 | 198,628 | |||||
Balances at Mar. 31, 2019 | 10,841 | $ 33 | 2,722 | 15,563 | (10) | (7,467) |
Balances (in shares) at Mar. 31, 2019 | 198,595 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 940 | 940 | ||||
Other comprehensive income (loss) | 122 | 122 | ||||
Common stock repurchases | 0 | 0 | 0 | |||
Dividends and dividend equivalents | (74) | (74) | ||||
Stock-based compensation | 43 | 43 | ||||
Restricted stock unit vesting | (1) | (3) | 2 | |||
Restricted stock unit vesting (in shares) | 32 | |||||
Stock option exercises | 1 | $ 0 | 1 | |||
Stock option exercises (in shares) | 1 | |||||
Balances at Jun. 30, 2019 | $ 11,872 | $ 33 | $ 2,763 | $ 16,429 | $ 112 | $ (7,465) |
Balances (in shares) at Jun. 30, 2019 | 198,628 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities | ||
Net income | $ 1,506 | $ 684 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Loss on sale of business | 0 | 790 |
Net realized capital gains | (5) | (82) |
Equity in net earnings of Kindred at Home | (15) | 0 |
Stock-based compensation | 76 | 69 |
Depreciation | 240 | 218 |
Amortization | 36 | 51 |
Benefit for deferred income taxes | (21) | (304) |
Changes in operating assets and liabilities, net of effect of businesses acquired and dispositions: | ||
Receivables | 123 | (619) |
Other assets | (548) | (1,658) |
Benefits payable | 980 | 410 |
Other liabilities | (116) | 680 |
Unearned revenues | 29 | 3,252 |
Other | 45 | 70 |
Net cash provided by operating activities | 2,330 | 3,561 |
Cash flows from investing activities | ||
Acquisitions, net of cash acquired | 0 | (354) |
Purchases of property and equipment | (296) | (272) |
Purchases of investment securities | (3,135) | (2,624) |
Maturities of investment securities | 894 | 555 |
Proceeds from sales of investment securities | 2,626 | 2,408 |
Net cash provided by (used in) investing activities | 89 | (287) |
Cash flows from financing activities | ||
Receipts from contract deposits, net | 473 | 1,515 |
(Repayments) proceeds from issuance of commercial paper, net | (356) | 243 |
Change in book overdraft | 33 | (67) |
Common stock repurchases | (10) | (93) |
Dividends paid | (142) | (126) |
Proceeds from stock option exercises and other, net | 18 | 43 |
Net cash provided by financing activities | 16 | 1,515 |
Increase in cash and cash equivalents | 2,435 | 4,789 |
Cash and cash equivalents at beginning of period | 2,343 | 4,042 |
Cash and cash equivalents at end of period | 4,778 | 8,831 |
Supplemental cash flow disclosures: | ||
Interest payments | 110 | 98 |
Income tax payments, net | $ 346 | $ 405 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS | BASIS OF PRESENTATION AND SIGNIFICANT EVENTS The accompanying condensed consolidated financial statements are presented in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America, or GAAP, or those normally made in an Annual Report on Form 10-K. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. For further information, the reader of this Form 10-Q should refer to our Form 10-K for the year ended December 31, 2018 , that was filed with the Securities and Exchange Commission, or the SEC, on February 21, 2019 . We refer to the Form 10-K as the “ 2018 Form 10-K” in this document. References throughout this document to “we,” “us,” “our,” “Company,” and “Humana” mean Humana Inc. and its subsidiaries. The preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. Refer to Note 2 to the consolidated financial statements included in our 2018 Form 10-K for information on accounting policies that we consider in preparing our consolidated financial statements. The financial information has been prepared in accordance with our customary accounting practices and has not been audited. In our opinion, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature. Revenue Recognition Our revenues include premium and service revenues. Service revenues include administrative service fees that are recorded based upon established per member per month rates and the number of members for the month and are recognized as services are provided for the month. Additionally, service revenues include net patient service revenues that are recorded based upon established billing rates, less allowances for contractual adjustments, and are recognized as services are provided. For more information about our revenues, refer to Note 2 to the consolidated financial statements included in our 2018 Form 10-K for information on accounting policies that we consider in preparing our consolidated financial statements. See Note 15 for disaggregation of revenue by segment and type. At June 30, 2019 , accounts receivable related to services were $ 135 million . For the three and six months ended June 30, 2019 , we had no material bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the condensed consolidated balance sheet at June 30, 2019 . For the three and six months ended June 30, 2019 , services revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price), was not material. Further, services revenue expected to be recognized in any future year related to remaining performance obligations was not material. Equity Method Investment in Kindred at Home In the third quarter of 2018, we, along with TPG Capital, or TPG, and Welsh, Carson, Anderson & Stowe, or WCAS, completed the acquisitions of Kindred Healthcare, Inc., or Kindred, and privately-held Curo Health Services, or Curo, respectively, merging Curo with the hospice business of the Kindred at Home Division, or Kindred at Home. As part of these transactions, we acquired a 40% minority interest in Kindred at Home, a leading home health and hospice company, for total cash consideration of approximately $1.1 billion . 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 condensed consolidated balance sheets, with our share of income or loss reported as "Equity in net earnings of Kindred at Home" in our condensed consolidated statements of income. We entered into a shareholders agreement with TPG and WCAS, the Sponsors, that provides for certain rights and obligations of each party. The shareholders agreement with the Sponsors includes a put option under which they have the right to require us to purchase their interest in the joint venture beginning on July 2, 2021 and ending on July 1, 2022. Likewise, we have a call option under which we have the right to require the Sponsors to sell their interest in the joint venture to Humana beginning on July 2, 2022 and ending on July 1, 2023 . The put and call options, which are exercisable at a fixed EBITDA multiple and provide a minimum return on the Sponsor's investment if exercised, are measured at fair value each period using a Monte Carlo simulation. The 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 $128 million and $ 285 million , respectively, at June 30, 2019 . The put option is included within other long-term liabilities and the call option is included within other long-term assets. The change in fair value of the put and call options is reflected as "Other income, net" in our condensed consolidated statements of income. Health Care Reform The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010 (which we collectively refer to as the Health Care Reform Law) enacted significant reforms to various aspects of the U.S. health insurance industry. Certain of these reforms became effective January 1, 2014, including an annual insurance industry premium-based fee. The Continuing Resolution bill, H.R. 195, enacted on January 22, 2018, included a one year suspension in 2019 of the health insurance industry fee, but under current law, the fee is scheduled to resume in calendar year 2020. In October 2018, we paid the federal government $1.04 billion for the annual health insurance industry fee attributed to calendar year 2018. This fee, fixed in amount by law and apportioned to insurance carriers based on market share, was not deductible for tax purposes. Each year on January 1, except when suspended, we record a liability for this fee in trade accounts payable and accrued expenses which we carry until the fee is paid. We record a corresponding deferred cost in other current assets in our condensed consolidated financial statements which is amortized ratably to expense over the calendar year. Amortization of the deferred cost was recorded in operating cost expense of approximately $257 million and $520 million for the three and six months ended June 30, 2018 , respectively, |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS 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 practical expedients of not reassessing whether any expired or existing contracts are or contain leases, not reassessing the lease classification for any expired or existing leases and not reassessing any initial direct costs for existing leases. In addition, we elected the practical expedient to not separate lease and nonlease components for all of our asset classes. 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 recognize those lease payments in the condensed consolidated statement of income on a straight-line basis over the lease term. As of January 1, 2019, the adoption of the standard resulted in recognition of right-of-use, or ROU, liabilities of approximately $470 million and ROU assets of $436 million , which equals the ROU liabilities net of accrued rent and lease incentives. The standard does not materially affect our results of operations, cash flows and liquidity. See Note 8 for further information. 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 in the process of identifying and analyzing financial assets measured at amortized cost balances that are in scope of the new CECL model. 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 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
ACQUISITIONS AND DIVESTITURES | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Sale of Closed Block of Commercial Long-Term Care Insurance Business In the third quarter of 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, included 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 income tax benefit. Also, in the third quarter of 2018, 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 for the three and six months ended June 30, 2018 were $93 million and $172 million , respectively. KMG pretax income for the three and six months ended June 30, 2018 were $35 million and $53 million , respectively. Other Acquisitions and Divestitures In the first quarter of 2018, we acquired the remaining equity interest in MCCI Holdings, LLC, or MCCI, a privately held management service organization 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 purchase price allocation to goodwill of $483 million , other intangible assets of $80 million , and net tangible assets of $24 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 8 years. Goodwill and other intangible assets are amortizable as deductible expenses for tax purposes. In the second quarter of 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 purchase price allocation to goodwill of $133 million , other 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 4.9 years . The purchase price allocations for MCCI and FPG are final. During 2019 and 2018, we acquired other health and wellness related businesses which, individually or in the aggregate, have not had a material impact on our results of operations, financial condition, or cash flows. The results of operations and financial condition of these businesses have been included in our condensed consolidated statements of income and condensed consolidated balance sheets from the respective acquisition dates. Acquisition-related costs recognized in 2019 and 2018 were not material to our results of operations. The pro forma financial information assuming the acquisitions had occurred as of the beginning of the calendar year prior to the year of acquisition, as well as the revenues and earnings generated during the year of acquisition, were not material for disclosure purposes. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | INVESTMENT SECURITIES Investment securities classified as current and long-term were as follows at June 30, 2019 and December 31, 2018 , respectively: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in millions) June 30, 2019 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 370 $ 2 $ — $ 372 Mortgage-backed securities 3,459 69 (8 ) 3,520 Tax-exempt municipal securities 1,632 28 (1 ) 1,659 Mortgage-backed securities: Residential 1 — — 1 Commercial 621 17 — 638 Asset-backed securities 1,037 2 (3 ) 1,036 Corporate debt securities 3,125 56 (5 ) 3,176 Total debt securities $ 10,245 $ 174 $ (17 ) $ 10,402 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 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 June 30, 2019 and December 31, 2018 , respectively: Less than 12 months 12 months or more Total Fair Gross Fair Gross Fair Gross (in millions) June 30, 2019 U.S. Treasury and other U.S. U.S. Treasury and agency $ 34 $ — $ 71 $ — $ 105 $ — Mortgage-backed 38 — 546 (8 ) 584 (8 ) Tax-exempt municipal — — 294 (1 ) 294 (1 ) Mortgage-backed securities: Residential — — 1 — 1 — Commercial — — 70 — 70 — Asset-backed securities 308 (1 ) 452 (2 ) 760 (3 ) Corporate debt securities 9 (1 ) 552 (4 ) 561 (5 ) Total debt securities $ 389 $ (2 ) $ 1,986 $ (15 ) $ 2,375 $ (17 ) December 31, 2018 U.S. Treasury and other U.S. U.S. Treasury and agency $ 179 $ (1 ) $ 153 $ (2 ) $ 332 $ (3 ) Mortgage-backed 956 (16 ) 1,019 (38 ) 1,975 (54 ) Tax-exempt municipal 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 ) Approximately 96% of our debt securities were investment-grade quality, with a weighted average credit rating of AA by Standard & Poor's Rating Service, or S&P, at June 30, 2019 . 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 16% . Our investment policy limits investments in a single issuer and requires diversification among various asset types. Our unrealized losses from all securities were generated from approximately 330 positions out of a total of approximately 1,460 positions at June 30, 2019 . All issuers of securities we own that were trading at an unrealized loss at June 30, 2019 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 June 30, 2019 , 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 June 30, 2019 . The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the three and six months ended June 30, 2019 and 2018 : Three months ended Six months ended 2019 2018 2019 2018 (in millions) Gross realized gains $ 8 $ 63 $ 18 $ 94 Gross realized losses (1 ) (10 ) (13 ) (12 ) Net realized capital (losses) gains $ 7 $ 53 $ 5 $ 82 There were no material other-than-temporary impairments for the three and six months ended June 30, 2019 or 2018 . The contractual maturities of debt securities available for sale at June 30, 2019 , 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 $ 628 $ 628 Due after one year through five years 2,332 2,357 Due after five years through ten years 1,694 1,734 Due after ten years 473 488 Mortgage and asset-backed securities 5,118 5,195 Total debt securities $ 10,245 $ 10,402 |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Financial Assets The following table summarizes our fair value measurements at June 30, 2019 and December 31, 2018 , respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Quoted Prices Other Unobservable (in millions) June 30, 2019 Cash equivalents $ 4,553 $ 4,553 $ — $ — Debt securities: U.S. Treasury and other U.S. government U.S. Treasury and agency obligations 372 — 372 — Mortgage-backed securities 3,520 — 3,520 — Tax-exempt municipal securities 1,659 — 1,659 — Mortgage-backed securities: Residential 1 — 1 — Commercial 638 — 638 — Asset-backed securities 1,036 — 1,036 — Corporate debt securities 3,176 — 3,176 — Total debt securities 10,402 — 10,402 — Total invested assets $ 14,955 $ 4,553 $ 10,402 $ — December 31, 2018 Cash equivalents $ 2,024 $ 2,024 $ — $ — Debt securities: U.S. Treasury and other U.S. government 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 $ — 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 $4,776 million at June 30, 2019 and $4,774 million at December 31, 2018 . The fair value of our senior notes debt was $5,115 million at June 30, 2019 and $5,191 million at December 31, 2018 . The fair value of our long-term 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 $950 million as of June 30, 2019 and $1,295 million as of December 31, 2018 . Other Assets and Liabilities Measured at Fair Value As disclosed in Note 3, we acquired MCCI and FPG during 2018 . 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, and the put option liability and call option asset associated with our investment in Kindred at Home as detailed in Note 1, there were no other material assets or liabilities measured at fair value on a recurring or nonrecurring basis during 2019 or 2018 . |
MEDICARE PART D
MEDICARE PART D | 6 Months Ended |
Jun. 30, 2019 | |
Insurance [Abstract] | |
MEDICARE PART D | MEDICARE PART D We cover prescription drug benefits in accordance with Medicare Part D under multiple contracts with the Centers for Medicare and Medicaid Services, or CMS, as described further in Note 2 to the consolidated financial statements included in our 2018 Form 10-K. The accompanying condensed consolidated balance sheets include the following amounts associated with Medicare Part D at June 30, 2019 and December 31, 2018 . 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. June 30, 2019 December 31, 2018 Risk CMS Risk CMS (in millions) Other current assets $ 11 $ 388 $ 15 $ 172 Trade accounts payable and accrued expenses (48 ) (1,259 ) (103 ) (503 ) Net current liability (37 ) (871 ) (88 ) (331 ) Other long-term assets 26 — 7 — Other long-term liabilities (137 ) — (89 ) — Net long-term liability (111 ) — (82 ) — Total net liability $ (148 ) $ (871 ) $ (170 ) $ (331 ) |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 2019 were as follows: Retail Group and Specialty Healthcare Total (in millions) Balance at January 1, 2019 $ 1,535 $ 261 $ 2,101 $ 3,897 Acquisitions — — 25 25 Balance at June 30, 2019 $ 1,535 $ 261 $ 2,126 $ 3,922 The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at June 30, 2019 and December 31, 2018 . June 30, 2019 December 31, 2018 Weighted Cost Accumulated Net Cost Accumulated Net ($ in millions) Other intangible assets: Customer contracts/ 8.7 years $ 647 $ 465 $ 182 $ 646 $ 434 $ 212 Trade names and 6.4 years 84 84 — 84 83 1 Provider contracts 11.8 years 69 41 28 68 37 31 Noncompetes and 7.3 years 29 28 1 29 28 1 Total other intangible 8.7 years $ 829 $ 618 $ 211 $ 827 $ 582 $ 245 Amortization expense for other intangible assets was approximately $18 million for the three months ended June 30, 2019 and $21 million for the three months ended June 30, 2018 . For the six months ended June 30, 2019 and 2018 , amortization expense for other intangible assets was approximately $36 million and $51 million , respectively. Amortization expense for the six months ended June 30, 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 remaining for 2019 and each of the five next succeeding years: (in millions) For the years ending December 31, 2019 $ 34 2020 67 2021 34 2022 31 2023 18 2024 11 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
LEASES | LEASES 2019 We determine if a contract contains a lease by evaluating the nature and substance of the agreement. We lease facilities, computer hardware, and other furniture and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For new lease agreements, we combine lease and nonlease components for all of our asset classes. See Note 2 for further information. When portions of the lease payments are not fixed or depend on an index or rate, we consider those payments to be variable in nature. These include, but are not limited to, common area maintenance, taxes and insurance. Variable lease payments are recorded in the period in which the obligation for the payment is incurred. Most leases include options to renew, with renewal terms that can extend the lease term. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. At June 30, 2019 , $406 million of operating ROU assets are included within other long-term assets in our condensed consolidated balance sheet. Additionally, at June 30, 2019 , $121 million and $324 million of operating ROU lease liabilities are included within trade accounts payable and accrued expenses and other long-term liabilities, respectively, in our condensed consolidated balance sheet based on the remaining lease term. For the three and six months ended June 30, 2019, total fixed operating lease costs, excluding short-term lease costs, were $39 million and $78 million , respectively, and are included within operating costs in our condensed consolidated statement of income. Short-term lease costs were not material. In addition, for the three and six months ended June 30, 2019, total variable operating lease costs were $19 million and $35 million , respectively and are included within operating costs in our condensed consolidated statement of income. We sublease facilities or partial facilities to third party tenants for space not used in our operations. For the three and six months ended June 30, 2019, sublease rental income was $10 million and $19 million , respectively, and is included within operating costs in our condensed consolidated statement of income. The weighted average remaining lease term is 4.8 years with a weighted average discount rate of 4.3% at June 30, 2019 . For the six months ended June 30, 2019 , cash paid for amounts included in the measurement of lease liabilities included within our operating cash flows was $75 million . Maturity of Lease Liabilities June 30, 2019 (in millions) 2019 (excluding the six months ended June 30, 2019) $ 72 2020 122 2021 103 2022 84 2023 39 After 2023 74 Total lease payments 494 Less: Interest 49 Present value of ROU lease liabilities $ 445 As most of our leases do not provide an implicit rate, we use our incremental borrowing rate, as adjusted for collateralized borrowings, based on the information available at date of adoption or commencement date in determining the present value of lease payments. For the year ended 2018, under prior lease disclosure requirements We lease facilities, computer hardware, and other furniture and equipment under long-term operating leases that are non-cancelable 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 |
BENEFITS PAYABLE
BENEFITS PAYABLE | 6 Months Ended |
Jun. 30, 2019 | |
Insurance [Abstract] | |
BENEFITS PAYABLE | BENEFITS PAYABLE On a consolidated basis, activity in benefits payable, was as follows for the six months ended June 30, 2019 and 2018 : For the six months ended June 30, 2019 2018 (in millions) Balances, beginning of period $ 4,862 $ 4,668 Less: Reinsurance recoverables (95 ) (70 ) Balances, beginning of period, net 4,767 4,598 Incurred related to: Current year 27,086 23,543 Prior years (275 ) (338 ) Total incurred 26,811 23,205 Paid related to: Current year (21,700 ) (18,914 ) Prior years (4,108 ) (3,897 ) Total paid (25,808 ) (22,811 ) Reinsurance recoverable 72 86 Less: Held-for-sale — (58 ) Balances, end of period $ 5,842 $ 5,020 Amounts incurred related to prior periods vary from previously estimated liabilities as the claims ultimately are settled. Negative amounts reported for incurred related to prior years result from claims being ultimately settled for amounts less than originally estimated (favorable development). Our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for claims. Actuarial standards require the use of assumptions based on moderately adverse experience, which generally results in favorable reserve development, or reserves that are considered redundant. Benefits expense excluded from the previous table related to our long duration policies was as follows for the six months ended June 30, 2019 and 2018 . The Other Businesses category was related to our closed-block of commercial long-term care insurance policies, which were sold in 2018. We also exited our Individual Commercial business beginning January 1, 2018. For the six months ended June 30, 2019 2018 (in millions) Future policy benefits: Individual Commercial $ — $ (14 ) Other Businesses — 15 Total future policy benefits $ — $ 1 Incurred and Paid Claims Development The following discussion provides information about incurred and paid claims development for our Retail and Group and Specialty segments as of June 30, 2019 and 2018 , net of reinsurance, and the total estimate of benefits payable for claims incurred but not reported, or IBNR, included within the net incurred claims amounts. Our Individual Commercial segment incurred claims development was favorable by $55 million for the six months ended June 30, 2018 . Retail Segment Activity in benefits payable for our Retail segment was as follows for the six months ended June 30, 2019 and 2018 : For the six months ended June 30, 2019 2018 (in millions) Balances, beginning of period $ 4,338 $ 3,963 Less: Reinsurance recoverables (95 ) (70 ) Balances, beginning of period, net 4,243 3,893 Incurred related to: Current year 24,657 21,069 Prior years (311 ) (247 ) Total incurred 24,346 20,822 Paid related to: Current year (19,826 ) (17,061 ) Prior years (3,592 ) (3,327 ) Total paid (23,418 ) (20,388 ) Reinsurance recoverable 72 86 Balances, end of period $ 5,243 $ 4,413 At June 30, 2019 , benefits payable for our Retail segment included IBNR of approximately $3.2 billion , primarily associated with claims incurred in 2019. Group and Specialty Segment Activity in benefits payable for our Group and Specialty segment, was as follows for the six months ended June 30, 2019 and 2018 : For the six months ended June 30, 2019 2018 (in millions) Balances, beginning of period $ 517 $ 568 Incurred related to: Current year 2,693 2,665 Prior years 36 (34 ) Total incurred 2,729 2,631 Paid related to: Current year (2,131 ) (2,094 ) Prior years (516 ) (496 ) Total paid (2,647 ) (2,590 ) Balances, end of period $ 599 $ 609 At June 30, 2019 , benefits payable for our Group and Specialty segment included IBNR of approximately $505 million , primarily associated with claims incurred in 2019. Reconciliation to Consolidated The reconciliation of the net incurred and paid claims development tables to benefits payable in the consolidated statement of financial position is as follows: Reconciliation of the Disclosure of Incurred and Paid Claims Development to Benefits Payable, net of reinsurance June 30, 2019 Net outstanding liabilities (in millions) Retail $ 5,171 Group and Specialty 599 Benefits payable, net of reinsurance 5,770 Reinsurance recoverable on unpaid claims Retail 72 Total benefits payable, gross $ 5,842 |
EARNINGS PER COMMON SHARE COMPU
EARNINGS PER COMMON SHARE COMPUTATION | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE COMPUTATION | EARNINGS PER COMMON SHARE COMPUTATION Detail supporting the computation of basic and diluted earnings per common share was as follows for the three and six months ended June 30, 2019 and 2018 : Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (dollars in millions, except per common share results; number of shares in thousands) Net income available for common stockholders $ 940 $ 193 $ 1,506 $ 684 Weighted average outstanding shares of common stock 135,063 137,763 135,223 137,833 Dilutive effect of: Employee stock options 67 197 98 205 Restricted stock 449 616 449 665 Shares used to compute diluted earnings per common share 135,579 138,576 135,770 138,703 Basic earnings per common share $ 6.96 $ 1.40 $ 11.14 $ 4.96 Diluted earnings per common share $ 6.94 $ 1.39 $ 11.10 $ 4.93 Number of antidilutive stock options and restricted stock 761 171 732 408 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Dividends The following table provides details of dividend payments, excluding dividend equivalent rights for unvested stock awards, in 2018 and 2019 under our Board approved quarterly cash dividend policy: Record Payment Amount Total (in millions) 2018 payments 12/29/2017 1/26/2018 $ 0.40 $ 55 3/30/2018 4/27/2018 $ 0.50 $ 69 6/29/2018 7/27/2018 $ 0.50 $ 69 9/28/2018 10/26/2018 $ 0.50 $ 69 2019 payments 12/31/2018 1/25/2019 $ 0.50 $ 68 3/29/2019 4/26/2019 $ 0.55 $ 74 6/28/2019 7/26/2019 $ 0.55 $ 74 Stock Repurchases Our Board of Directors may authorize the purchase of our common stock shares. Under the share repurchase authorization, shares may be purchased from time to time at prevailing prices in the open market, by block purchases, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or in privately-negotiated transactions, including pursuant to accelerated share repurchase agreements with investment banks, subject to certain regulatory restrictions on volume, pricing, and timing. On 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 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. Upon final settlement of the November 2018 ASR on February 28, 2019, we received an additional 0.6 million shares as determined by the average daily volume weighted-averages share price of our common stock during the term of the agreement of $295.15 , bringing the total shares received under this program to 2.54 million . In addition, upon settlement we reclassified the $150 million value of stock initially held back by Goldman Sachs from capital in excess of par value to treasury stock. On July 30, 2019 , the Board of Directors replaced a previous share repurchase authorization of up to $3 billion (of which approximately $1.03 billion remained unused) with a new authorization for repurchases of up to $3 billion of our common shares exclusive of shares repurchased in connection with employee stock plans, expiring on June 30, 2022 . In connection with employee stock plans, we acquired 34 thousand common shares for $10 million and 0.3 million common shares for $69 million during the six months ended June 30, 2019 and 2018 , respectively. Treasury Stock Reissuance We reissued 0.13 million shares of treasury stock during the six months ended June 30, 2019 at a cost of $15 million associated with restricted stock unit vestings and option exercises. Accumulated Other Comprehensive Income Accumulated other comprehensive income included net unrealized gains, net of tax, on our investment securities of $112 million at June 30, 2019 and net unrealized losses, net of tax, on our investment securities of $159 million at December 31, 2018 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective income tax rate was 24.3% for the six months ended June 30, 2019 compared to 5.8% for the six months ended June 30, 2018 , primarily due to the impact of the suspension of the non-deductible health insurance industry fee in 2019 as well as the deferred tax benefit recognized in 2018 from the loss on sale of KMG. The effective income tax rate was 24.2% for the three months ended June 30, 2019. The effective income tax rate for the three months ended June 30, 2018 reflects a $430 million deferred tax benefit recorded during the three months ended June 30, 2018, resulting from the loss on the sale of KMG attributable to its original tax basis and subsequent capital contributions to fund accumulated losses. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The carrying value of debt outstanding, net of unamortized debt issuance costs, was as follows at June 30, 2019 and December 31, 2018 : June 30, 2019 December 31, 2018 (in millions) Short-term debt: Commercial paper $ 300 $ 645 Term note 650 650 Senior note: $400 million, 2.625% due October 1, 2019 399 399 Total short-term debt $ 1,349 $ 1,694 Long-term debt: Senior notes: $400 million, 2.50% due December 15, 2020 $ 399 $ 398 $400 million, 2.90% due December 15, 2022 397 396 $600 million, 3.15% due December 1, 2022 597 596 $600 million, 3.85% due October 1, 2024 597 597 $600 million, 3.95% due March 15, 2027 595 594 $250 million, 8.15% due June 15, 2038 262 263 $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 395 396 Total long-term debt $ 4,377 $ 4,375 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. 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 actual debt to capitalization of 32.5% as measured in accordance with the credit agreement as of June 30, 2019 . 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 June 30, 2019 , we had no borrowings and no letters of credit outstanding under the credit agreement . Accordingly, as of June 30, 2019 , we had $2.0 billion of remaining borrowing capacity (which excludes the uncommitted $500 million incremental loan facility under the credit agreement), none of which would be restricted by our financial covenant compliance requirement. We have other customary, arms-length relationships, including financial advisory and banking, with some parties to the credit agreement. Commercial Paper Under our commercial paper program we may issue short-term, unsecured commercial paper notes privately placed on a discount basis through certain broker dealers at any time not to exceed $2 billion . Amounts available under the program may be borrowed, repaid and re-borrowed from time to time . The net proceeds of issuances have been and are expected to be used for general corporate purposes. The maximum principal amount outstanding at any one time during the six months ended June 30, 2019 was $670 million , with $300 million outstanding at June 30, 2019 compared to $645 million outstanding at December 31, 2018 . The outstanding commercial paper at June 30, 2019 had a weighted average annual interest rate of 2.85% . 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 June 30, 2019 was 3.55% . The note is prepayable without penalty. 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. |
COMMITMENTS, GUARANTEES AND CON
COMMITMENTS, GUARANTEES AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, GUARANTEES AND CONTINGENCIES | COMMITMENTS, GUARANTEES AND CONTINGENCIES Government Contracts Our Medicare products, which accounted for approximately 82% of our total premiums and services revenue for the six months ended June 30, 2019 , 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 2020. Our product offerings under those contracts are subject to approval by CMS in the third quarter of 2019. 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 the government’s traditional fee-for-service Medicare program, or Medicare FFS. We refer to the process of accounting for errors in FFS claims as the "FFS Adjuster." This comparison of RADV audit results to the FFS error rate is necessary to determine the economic impact, if any, of RADV audit results because the government used the Medicare FFS program data set, including any attendant errors that are present in that data set, to estimate the costs of various health status conditions and to set the resulting adjustments to MA plans’ payment rates in order to establish actuarial equivalence in payment rates as required under the Medicare statute. CMS already makes other adjustments to payment rates based on a comparison of coding pattern differences between MA plans and Medicare FFS data (such as for frequency of coding for certain diagnoses in MA plan data versus the Medicare FFS program dataset). The final RADV extrapolation methodology, including the first application of extrapolated audit results to determine audit settlements, is expected to be applied to CMS RADV contract level audits conducted for contract year 2011 and subsequent years. CMS is currently conducting RADV contract level audits for certain of our Medicare Advantage plans. Estimated audit settlements are recorded as a reduction of premiums revenue in our consolidated statements of income, based upon available information. We perform internal contract level audits based on the RADV audit methodology prescribed by CMS. Included in these internal contract level audits is an audit of our Private Fee-For Service business which we used to represent a proxy of the FFS Adjuster which has not yet been finalized. We based our accrual of estimated audit settlements for each contract year on the results of these internal contract level audits and update our estimates as each audit is completed. Estimates derived from these results were not material to our results of operations, financial position, or cash flows. We report the results of these internal contract level audits to CMS, including identified overpayments, if any. On October 26, 2018, CMS issued a proposed rule and accompanying materials (which we refer to as the “Proposed Rule”) related to, among other things, the RADV audit methodology described above. If implemented, the Proposed Rule would use extrapolation in RADV audits applicable to payment year 2011 contract-level audits and all subsequent audits, without the application of a FFS Adjuster to audit findings. We 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 June 30, 2019 , our military services business, which accounted for approximately 1% of our total premiums and services revenue for the six months ended June 30, 2019 , primarily consisted of the TRICARE T2017 East Region contract. The T2017 East Region contract is a consolidation of the former T3 North and South Regions, comprising thirty-two states and approximately 6 million TRICARE beneficiaries, under which delivery of health care services commenced on January 1, 2018. The T2017 East Region contract is a 5-year contract set to expire on December 31, 2022 and is subject to renewals on January 1 of each year during its term at the government's option. Our state-based Medicaid business accounted for approximately 4% of our total premiums and services revenue for the six months ended June 30, 2019 . In addition to our state-based Temporary Assistance for Needy Families, or TANF, Medicaid contracts in Florida and Kentucky, we have contracts in Florida for Long Term Support Services (LTSS), and in Illinois for stand-alone dual eligible demonstration programs serving individuals dually eligible for both the federal Medicare program and the applicable state-based Medicaid program. The loss of any of the contracts above or significant changes in these programs as a result of legislative or regulatory action, including reductions in premium payments to us, regulatory restrictions on profitability, including reviews by regulatory bodies that may compare our Medicare Advantage profitability to our non-Medicare Advantage business profitability, or compare the profitability of various products within our Medicare Advantage business, and require that they remain within certain ranges of each other, or increases in member benefits or member eligibility criteria without corresponding increases in premium payments to us, may have a material adverse effect on our results of operations, financial position, and cash flows. 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 pursued the matter on behalf of the United States following its unsealing, 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 June 30, 2019. 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 | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We manage our business with three reportable segments: Retail, Group and Specialty, and Healthcare Services. Beginning January 1, 2018, we exited the individual commercial fully-insured medical health insurance business, as well as certain other business, and therefore no longer report separately the Individual Commercial segment and the Other Business category in the current year. Previously, the Other Business category included businesses that were not individually reportable because they did not meet the quantitative thresholds required by generally accepted accounting principles, primarily our closed-block of commercial long-term care insurance policies which were sold in 2018. 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, the Chief Operating Decision Maker, to assess performance and allocate resources. The Retail segment consists of Medicare benefits, marketed to individuals or directly via group Medicare accounts. In addition, the Retail segment also includes our contract with CMS to administer the Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program and contracts with various states to provide Medicaid, dual eligible, and Long-Term Support Services benefits, which we refer to collectively as our state-based contracts. The Group and Specialty segment consists of employer group commercial fully-insured medical and specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health benefits, as well as administrative services only, or ASO products. In addition, our Group and Specialty segment includes military services business, primarily our TRICARE T2017 East Region contract. The Healthcare Services segment includes our services offered to our health plan members as well as to third parties, including pharmacy solutions, provider services, and clinical care service, such as home health and other services and capabilities to promote wellness and advance population health, including our minority investment in Kindred at Home. We reported under the category of Other Businesses those businesses that did 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 condensed consolidated results of operations from the perspective of the health plans. As a result, the cost of providing benefits to our members, whether provided via a third party provider or internally through a stand-alone subsidiary, is classified as benefits expense and excludes the portion of the cost for which the health plans do not bear responsibility, including member co-share amounts and government subsidies of $3.6 billion and $3.3 billion for the three months ended June 30, 2019 and 2018 , respectively. For the six months ended June 30, 2019 and 2018 these amounts were $6.7 billion and $6.2 billion , respectively. In addition, depreciation and amortization expense associated with certain businesses in our Healthcare Services segment delivering benefits to our members, primarily associated with our provider services and pharmacy operations, are included with benefits expense. The amount of this expense was $31 million and $30 million for the three months ended June 30, 2019 and 2018 , respectively. For the six months ended June 30, 2019 and 2018 , the amount of this expense was $60 million and $69 million , respectively. Other than those described previously, the accounting policies of each segment are the same and are described in Note 2 to the consolidated financial statements included in our 2018 Form 10-K. Transactions between reportable segments primarily consist of sales of services rendered by our Healthcare Services segment, primarily pharmacy, provider, and clinical care services, to our Retail and Group and Specialty segment customers . Intersegment sales and expenses are recorded at fair value and eliminated in consolidation. Members served by our segments often use the same provider networks, enabling us in some instances to obtain more favorable contract terms with providers. Our segments also share indirect costs and assets. As a result, the profitability of each segment is interdependent. We allocate most operating expenses to our segments. Assets and certain corporate income and expenses are not allocated to the segments, including the portion of investment income not supporting segment operations, interest expense on corporate debt, and certain other corporate expenses. These items are managed at a corporate level. These corporate amounts are reported separately from our reportable segments and are included with intersegment eliminations in the tables presenting segment results below. Our segment results were as follows for the three and six months ended June 30, 2019 and 2018 : Retail Group and Specialty Healthcare Eliminations/ Consolidated (in millions) Three months ended June 30, 2019 External revenues Premiums: Individual Medicare Advantage $ 10,793 $ — $ — $ — $ 10,793 Group Medicare Advantage 1,626 — — — 1,626 Medicare stand-alone PDP 818 — — — 818 Total Medicare 13,237 — — — 13,237 Fully-insured 144 1,284 — — 1,428 Specialty — 387 — — 387 Medicaid and other 724 — — — 724 Total premiums 14,105 1,671 — — 15,776 Services revenue: Provider — — 111 — 111 ASO and other 5 193 — — 198 Pharmacy — — 46 — 46 Total services revenue 5 193 157 — 355 Total external revenues 14,110 1,864 157 — 16,131 Intersegment revenues Services — 5 4,496 (4,501 ) — Products — — 1,733 (1,733 ) — Total intersegment revenues — 5 6,229 (6,234 ) — Investment income 48 5 1 60 114 Total revenues 14,158 1,874 6,387 (6,174 ) 16,245 Operating expenses: Benefits 12,019 1,442 — (143 ) 13,318 Operating costs 1,206 406 6,135 (6,044 ) 1,703 Depreciation and amortization 77 21 40 (29 ) 109 Total operating expenses 13,302 1,869 6,175 (6,216 ) 15,130 Income from operations 856 5 212 42 1,115 Interest expense — — — 60 60 Other income, net — — — (174 ) (174 ) Income before income taxes and equity in net earnings 856 5 212 156 1,229 Equity in net earnings of Kindred at Home — — 12 — 12 Segment earnings $ 856 $ 5 $ 224 $ 156 $ 1,241 Retail Group and Specialty Healthcare Individual Commercial Other Eliminations/ Consolidated (in millions) Three months ended June 30, 2018 External revenues Premiums: Individual Medicare Advantage $ 8,908 $ — $ — $ — $ — $ — $ 8,908 Group Medicare Advantage 1,509 — — — — — 1,509 Medicare stand-alone PDP 914 — — — — — 914 Total Medicare 11,331 — — — — — 11,331 Fully-insured 125 1,346 — 10 — — 1,481 Specialty — 342 — — — — 342 Medicaid and other 550 — — — 9 — 559 Total premiums 12,006 1,688 — 10 9 — 13,713 Services revenue: Provider — — 112 — — — 112 ASO and other 3 208 — — 2 — 213 Pharmacy — — 57 — — — 57 Total services revenue 3 208 169 — 2 — 382 Total external revenues 12,009 1,896 169 10 11 — 14,095 Intersegment revenues Services — 4 4,194 — — (4,198 ) — Products — — 1,611 — — (1,611 ) — Total intersegment revenues — 4 5,805 — — (5,809 ) — Investment income 30 6 17 — 65 46 164 Total revenues 12,039 1,906 5,991 10 76 (5,763 ) 14,259 Operating expenses: Benefits 10,270 1,357 — (9 ) 39 (121 ) 11,536 Operating costs 1,210 447 5,749 1 2 (5,648 ) 1,761 Depreciation and amortization 66 22 36 — — (24 ) 100 Total operating expenses 11,546 1,826 5,785 (8 ) 41 (5,793 ) 13,397 Income from operations 493 80 206 18 35 30 862 Loss on sale of business — — — — — 790 790 Interest expense — — — — — 53 53 Income (loss) before income taxes and equity in net earnings 493 80 206 18 35 (813 ) 19 Equity in net earnings of Kindred at Home — — — — — — — Segment earnings (loss) $ 493 $ 80 $ 206 $ 18 $ 35 $ (813 ) $ 19 Retail Group and Specialty Healthcare Eliminations/ Consolidated (in millions) Six months ended June 30, 2019 External revenues Premiums: Individual Medicare Advantage $ 21,502 $ — $ — $ — $ 21,502 Group Medicare Advantage 3,258 — — — 3,258 Medicare stand-alone PDP 1,627 — — — 1,627 Total Medicare 26,387 — — — 26,387 Fully-insured 284 2,595 — — 2,879 Specialty — 760 — — 760 Medicaid and other 1,401 — — — 1,401 Total premiums 28,072 3,355 — — 31,427 Services revenue: Provider — — 231 — 231 ASO and other 10 387 — — 397 Pharmacy — — 82 — 82 Total services revenue 10 387 313 — 710 Total external revenues 28,082 3,742 313 — 32,137 Intersegment revenues Services — 9 8,802 (8,811 ) — Products — — 3,369 (3,369 ) — Total intersegment revenues — 9 12,171 (12,180 ) — Investment income 89 10 1 115 215 Total revenues 28,171 3,761 12,485 (12,065 ) 32,352 Operating expenses: Benefits 24,346 2,729 — (264 ) 26,811 Operating costs 2,354 819 12,023 (11,833 ) 3,363 Depreciation and amortization 150 43 78 (55 ) 216 Total operating expenses 26,850 3,591 12,101 (12,152 ) 30,390 Income from operations 1,321 170 384 87 1,962 Interest expense — — — 122 122 Other income, net — — — (135 ) (135 ) Income before income taxes and equity in net earnings 1,321 170 384 100 1,975 Equity in net earnings of Kindred at Home — — 15 — 15 Segment earnings $ 1,321 $ 170 $ 399 $ 100 $ 1,990 Retail Group and Specialty Healthcare Individual Commercial Other Eliminations/ Consolidated (in millions) Six months ended June 30, 2018 External Revenues Premiums: Individual Medicare Advantage $ 17,878 $ — $ — $ — $ — $ — $ 17,878 Group Medicare Advantage 3,033 — — — — — 3,033 Medicare stand-alone PDP 1,810 — — — — — 1,810 Total Medicare 22,721 — — — — — 22,721 Fully-insured 250 2,738 — 5 — — 2,993 Specialty — 689 — — — — 689 Medicaid and other 1,103 — — — 18 — 1,121 Total premiums 24,074 3,427 — 5 18 — 27,524 Services revenue: Provider — — 177 — — — 177 ASO and other 5 427 — — 4 — 436 Pharmacy — — 96 — — — 96 Total services revenue 5 427 273 — 4 — 709 Total external revenues 24,079 3,854 273 5 22 — 28,233 Intersegment revenues Services — 9 8,212 — — (8,221 ) — Products — — 3,146 — — (3,146 ) — Total intersegment revenues — 9 11,358 — — (11,367 ) — Investment income 67 13 23 — 100 102 305 Total revenues 24,146 3,876 11,654 5 122 (11,265 ) 28,538 Operating expenses: Benefits 20,822 2,630 — (69 ) 65 (242 ) 23,206 Operating costs 2,432 910 11,190 3 4 (11,029 ) 3,510 Depreciation and amortization 132 45 85 — — (62 ) 200 Total operating expenses 23,386 3,585 11,275 (66 ) 69 (11,333 ) 26,916 Income from operations 760 291 379 71 53 68 1,622 Loss on sale of business — — — — — 790 790 Interest expense — — — — — 106 106 Income (loss) before income taxes and equity in net earnings 760 291 379 71 53 (828 ) 726 Equity in net earnings of Kindred at Home — — — — — — — Segment earnings (loss) $ 760 $ 291 $ 379 $ 71 $ 53 $ (828 ) $ 726 |
RECENTLY ISSUED ACCOUNTING PR_2
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Revenue Recognition | Revenue Recognition |
Recently Issued Accounting Pronouncements | 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 practical expedients of not reassessing whether any expired or existing contracts are or contain leases, not reassessing the lease classification for any expired or existing leases and not reassessing any initial direct costs for existing leases. In addition, we elected the practical expedient to not separate lease and nonlease components for all of our asset classes. 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 recognize those lease payments in the condensed consolidated statement of income on a straight-line basis over the lease term. As of January 1, 2019, the adoption of the standard resulted in recognition of right-of-use, or ROU, liabilities of approximately $470 million and ROU assets of $436 million , which equals the ROU liabilities net of accrued rent and lease incentives. The standard does not materially affect our results of operations, cash flows and liquidity. See Note 8 for further information. 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 in the process of identifying and analyzing financial assets measured at amortized cost balances that are in scope of the new CECL model. 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 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. |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 and December 31, 2018 , respectively: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in millions) June 30, 2019 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 370 $ 2 $ — $ 372 Mortgage-backed securities 3,459 69 (8 ) 3,520 Tax-exempt municipal securities 1,632 28 (1 ) 1,659 Mortgage-backed securities: Residential 1 — — 1 Commercial 621 17 — 638 Asset-backed securities 1,037 2 (3 ) 1,036 Corporate debt securities 3,125 56 (5 ) 3,176 Total debt securities $ 10,245 $ 174 $ (17 ) $ 10,402 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 |
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 June 30, 2019 and December 31, 2018 , respectively: Less than 12 months 12 months or more Total Fair Gross Fair Gross Fair Gross (in millions) June 30, 2019 U.S. Treasury and other U.S. U.S. Treasury and agency $ 34 $ — $ 71 $ — $ 105 $ — Mortgage-backed 38 — 546 (8 ) 584 (8 ) Tax-exempt municipal — — 294 (1 ) 294 (1 ) Mortgage-backed securities: Residential — — 1 — 1 — Commercial — — 70 — 70 — Asset-backed securities 308 (1 ) 452 (2 ) 760 (3 ) Corporate debt securities 9 (1 ) 552 (4 ) 561 (5 ) Total debt securities $ 389 $ (2 ) $ 1,986 $ (15 ) $ 2,375 $ (17 ) December 31, 2018 U.S. Treasury and other U.S. U.S. Treasury and agency $ 179 $ (1 ) $ 153 $ (2 ) $ 332 $ (3 ) Mortgage-backed 956 (16 ) 1,019 (38 ) 1,975 (54 ) Tax-exempt municipal 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 ) |
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 three and six months ended June 30, 2019 and 2018 : Three months ended Six months ended 2019 2018 2019 2018 (in millions) Gross realized gains $ 8 $ 63 $ 18 $ 94 Gross realized losses (1 ) (10 ) (13 ) (12 ) Net realized capital (losses) gains $ 7 $ 53 $ 5 $ 82 |
Schedule of Contractual Maturity of Debt Securities Available for Sale | The contractual maturities of debt securities available for sale at June 30, 2019 , 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 $ 628 $ 628 Due after one year through five years 2,332 2,357 Due after five years through ten years 1,694 1,734 Due after ten years 473 488 Mortgage and asset-backed securities 5,118 5,195 Total debt securities $ 10,245 $ 10,402 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets Measured at Fair Value on Recurring Basis | The following table summarizes our fair value measurements at June 30, 2019 and December 31, 2018 , respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Quoted Prices Other Unobservable (in millions) June 30, 2019 Cash equivalents $ 4,553 $ 4,553 $ — $ — Debt securities: U.S. Treasury and other U.S. government U.S. Treasury and agency obligations 372 — 372 — Mortgage-backed securities 3,520 — 3,520 — Tax-exempt municipal securities 1,659 — 1,659 — Mortgage-backed securities: Residential 1 — 1 — Commercial 638 — 638 — Asset-backed securities 1,036 — 1,036 — Corporate debt securities 3,176 — 3,176 — Total debt securities 10,402 — 10,402 — Total invested assets $ 14,955 $ 4,553 $ 10,402 $ — December 31, 2018 Cash equivalents $ 2,024 $ 2,024 $ — $ — Debt securities: U.S. Treasury and other U.S. government 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 $ — |
MEDICARE PART D (Tables)
MEDICARE PART D (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Insurance [Abstract] | |
Schedule of Balance Sheet Amounts Associated With Medicare Part D | The accompanying condensed consolidated balance sheets include the following amounts associated with Medicare Part D at June 30, 2019 and December 31, 2018 . 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. June 30, 2019 December 31, 2018 Risk CMS Risk CMS (in millions) Other current assets $ 11 $ 388 $ 15 $ 172 Trade accounts payable and accrued expenses (48 ) (1,259 ) (103 ) (503 ) Net current liability (37 ) (871 ) (88 ) (331 ) Other long-term assets 26 — 7 — Other long-term liabilities (137 ) — (89 ) — Net long-term liability (111 ) — (82 ) — Total net liability $ (148 ) $ (871 ) $ (170 ) $ (331 ) |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill By Reportable Segments | Changes in the carrying amount of goodwill for our reportable segments for the six months ended June 30, 2019 were as follows: Retail Group and Specialty Healthcare Total (in millions) Balance at January 1, 2019 $ 1,535 $ 261 $ 2,101 $ 3,897 Acquisitions — — 25 25 Balance at June 30, 2019 $ 1,535 $ 261 $ 2,126 $ 3,922 |
Schedule of Intangible Assets Included in Other Long-Term Assets | The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at June 30, 2019 and December 31, 2018 . June 30, 2019 December 31, 2018 Weighted Cost Accumulated Net Cost Accumulated Net ($ in millions) Other intangible assets: Customer contracts/ 8.7 years $ 647 $ 465 $ 182 $ 646 $ 434 $ 212 Trade names and 6.4 years 84 84 — 84 83 1 Provider contracts 11.8 years 69 41 28 68 37 31 Noncompetes and 7.3 years 29 28 1 29 28 1 Total other intangible 8.7 years $ 829 $ 618 $ 211 $ 827 $ 582 $ 245 |
Schedule of Estimated Amortization Expense | The following table presents our estimate of amortization expense remaining for 2019 and each of the five next succeeding years: (in millions) For the years ending December 31, 2019 $ 34 2020 67 2021 34 2022 31 2023 18 2024 11 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Maturity of Lease Liabilities | For the six months ended June 30, 2019 , cash paid for amounts included in the measurement of lease liabilities included within our operating cash flows was $75 million . Maturity of Lease Liabilities June 30, 2019 (in millions) 2019 (excluding the six months ended June 30, 2019) $ 72 2020 122 2021 103 2022 84 2023 39 After 2023 74 Total lease payments 494 Less: Interest 49 Present value of ROU lease liabilities $ 445 |
Schedule of Rent Expense and Sublease Rental Income | 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 |
Schedule of 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 |
BENEFITS PAYABLE (Tables)
BENEFITS PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Insurance [Abstract] | |
Schedule of Activity in Benefits Payable | On a consolidated basis, activity in benefits payable, was as follows for the six months ended June 30, 2019 and 2018 : For the six months ended June 30, 2019 2018 (in millions) Balances, beginning of period $ 4,862 $ 4,668 Less: Reinsurance recoverables (95 ) (70 ) Balances, beginning of period, net 4,767 4,598 Incurred related to: Current year 27,086 23,543 Prior years (275 ) (338 ) Total incurred 26,811 23,205 Paid related to: Current year (21,700 ) (18,914 ) Prior years (4,108 ) (3,897 ) Total paid (25,808 ) (22,811 ) Reinsurance recoverable 72 86 Less: Held-for-sale — (58 ) Balances, end of period $ 5,842 $ 5,020 Activity in benefits payable for our Retail segment was as follows for the six months ended June 30, 2019 and 2018 : For the six months ended June 30, 2019 2018 (in millions) Balances, beginning of period $ 4,338 $ 3,963 Less: Reinsurance recoverables (95 ) (70 ) Balances, beginning of period, net 4,243 3,893 Incurred related to: Current year 24,657 21,069 Prior years (311 ) (247 ) Total incurred 24,346 20,822 Paid related to: Current year (19,826 ) (17,061 ) Prior years (3,592 ) (3,327 ) Total paid (23,418 ) (20,388 ) Reinsurance recoverable 72 86 Balances, end of period $ 5,243 $ 4,413 Activity in benefits payable for our Group and Specialty segment, was as follows for the six months ended June 30, 2019 and 2018 : For the six months ended June 30, 2019 2018 (in millions) Balances, beginning of period $ 517 $ 568 Incurred related to: Current year 2,693 2,665 Prior years 36 (34 ) Total incurred 2,729 2,631 Paid related to: Current year (2,131 ) (2,094 ) Prior years (516 ) (496 ) Total paid (2,647 ) (2,590 ) Balances, end of period $ 599 $ 609 |
Schedule of Benefit Expenses Excluded From Activity in Benefits Payable | Benefits expense excluded from the previous table related to our long duration policies was as follows for the six months ended June 30, 2019 and 2018 . The Other Businesses category was related to our closed-block of commercial long-term care insurance policies, which were sold in 2018. We also exited our Individual Commercial business beginning January 1, 2018. For the six months ended June 30, 2019 2018 (in millions) Future policy benefits: Individual Commercial $ — $ (14 ) Other Businesses — 15 Total future policy benefits $ — $ 1 |
Schedule of Benefits Payable | The reconciliation of the net incurred and paid claims development tables to benefits payable in the consolidated statement of financial position is as follows: Reconciliation of the Disclosure of Incurred and Paid Claims Development to Benefits Payable, net of reinsurance June 30, 2019 Net outstanding liabilities (in millions) Retail $ 5,171 Group and Specialty 599 Benefits payable, net of reinsurance 5,770 Reinsurance recoverable on unpaid claims Retail 72 Total benefits payable, gross $ 5,842 |
EARNINGS PER COMMON SHARE COM_2
EARNINGS PER COMMON SHARE COMPUTATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Details Supporting Computation of Earnings Per Share | Detail supporting the computation of basic and diluted earnings per common share was as follows for the three and six months ended June 30, 2019 and 2018 : Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (dollars in millions, except per common share results; number of shares in thousands) Net income available for common stockholders $ 940 $ 193 $ 1,506 $ 684 Weighted average outstanding shares of common stock 135,063 137,763 135,223 137,833 Dilutive effect of: Employee stock options 67 197 98 205 Restricted stock 449 616 449 665 Shares used to compute diluted earnings per common share 135,579 138,576 135,770 138,703 Basic earnings per common share $ 6.96 $ 1.40 $ 11.14 $ 4.96 Diluted earnings per common share $ 6.94 $ 1.39 $ 11.10 $ 4.93 Number of antidilutive stock options and restricted stock 761 171 732 408 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of Details of Dividend Payments | The following table provides details of dividend payments, excluding dividend equivalent rights for unvested stock awards, in 2018 and 2019 under our Board approved quarterly cash dividend policy: Record Payment Amount Total (in millions) 2018 payments 12/29/2017 1/26/2018 $ 0.40 $ 55 3/30/2018 4/27/2018 $ 0.50 $ 69 6/29/2018 7/27/2018 $ 0.50 $ 69 9/28/2018 10/26/2018 $ 0.50 $ 69 2019 payments 12/31/2018 1/25/2019 $ 0.50 $ 68 3/29/2019 4/26/2019 $ 0.55 $ 74 6/28/2019 7/26/2019 $ 0.55 $ 74 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Value of Debt Outstanding | The carrying value of debt outstanding, net of unamortized debt issuance costs, was as follows at June 30, 2019 and December 31, 2018 : June 30, 2019 December 31, 2018 (in millions) Short-term debt: Commercial paper $ 300 $ 645 Term note 650 650 Senior note: $400 million, 2.625% due October 1, 2019 399 399 Total short-term debt $ 1,349 $ 1,694 Long-term debt: Senior notes: $400 million, 2.50% due December 15, 2020 $ 399 $ 398 $400 million, 2.90% due December 15, 2022 397 396 $600 million, 3.15% due December 1, 2022 597 596 $600 million, 3.85% due October 1, 2024 597 597 $600 million, 3.95% due March 15, 2027 595 594 $250 million, 8.15% due June 15, 2038 262 263 $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 395 396 Total long-term debt $ 4,377 $ 4,375 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Results | Our segment results were as follows for the three and six months ended June 30, 2019 and 2018 : Retail Group and Specialty Healthcare Eliminations/ Consolidated (in millions) Three months ended June 30, 2019 External revenues Premiums: Individual Medicare Advantage $ 10,793 $ — $ — $ — $ 10,793 Group Medicare Advantage 1,626 — — — 1,626 Medicare stand-alone PDP 818 — — — 818 Total Medicare 13,237 — — — 13,237 Fully-insured 144 1,284 — — 1,428 Specialty — 387 — — 387 Medicaid and other 724 — — — 724 Total premiums 14,105 1,671 — — 15,776 Services revenue: Provider — — 111 — 111 ASO and other 5 193 — — 198 Pharmacy — — 46 — 46 Total services revenue 5 193 157 — 355 Total external revenues 14,110 1,864 157 — 16,131 Intersegment revenues Services — 5 4,496 (4,501 ) — Products — — 1,733 (1,733 ) — Total intersegment revenues — 5 6,229 (6,234 ) — Investment income 48 5 1 60 114 Total revenues 14,158 1,874 6,387 (6,174 ) 16,245 Operating expenses: Benefits 12,019 1,442 — (143 ) 13,318 Operating costs 1,206 406 6,135 (6,044 ) 1,703 Depreciation and amortization 77 21 40 (29 ) 109 Total operating expenses 13,302 1,869 6,175 (6,216 ) 15,130 Income from operations 856 5 212 42 1,115 Interest expense — — — 60 60 Other income, net — — — (174 ) (174 ) Income before income taxes and equity in net earnings 856 5 212 156 1,229 Equity in net earnings of Kindred at Home — — 12 — 12 Segment earnings $ 856 $ 5 $ 224 $ 156 $ 1,241 Retail Group and Specialty Healthcare Individual Commercial Other Eliminations/ Consolidated (in millions) Three months ended June 30, 2018 External revenues Premiums: Individual Medicare Advantage $ 8,908 $ — $ — $ — $ — $ — $ 8,908 Group Medicare Advantage 1,509 — — — — — 1,509 Medicare stand-alone PDP 914 — — — — — 914 Total Medicare 11,331 — — — — — 11,331 Fully-insured 125 1,346 — 10 — — 1,481 Specialty — 342 — — — — 342 Medicaid and other 550 — — — 9 — 559 Total premiums 12,006 1,688 — 10 9 — 13,713 Services revenue: Provider — — 112 — — — 112 ASO and other 3 208 — — 2 — 213 Pharmacy — — 57 — — — 57 Total services revenue 3 208 169 — 2 — 382 Total external revenues 12,009 1,896 169 10 11 — 14,095 Intersegment revenues Services — 4 4,194 — — (4,198 ) — Products — — 1,611 — — (1,611 ) — Total intersegment revenues — 4 5,805 — — (5,809 ) — Investment income 30 6 17 — 65 46 164 Total revenues 12,039 1,906 5,991 10 76 (5,763 ) 14,259 Operating expenses: Benefits 10,270 1,357 — (9 ) 39 (121 ) 11,536 Operating costs 1,210 447 5,749 1 2 (5,648 ) 1,761 Depreciation and amortization 66 22 36 — — (24 ) 100 Total operating expenses 11,546 1,826 5,785 (8 ) 41 (5,793 ) 13,397 Income from operations 493 80 206 18 35 30 862 Loss on sale of business — — — — — 790 790 Interest expense — — — — — 53 53 Income (loss) before income taxes and equity in net earnings 493 80 206 18 35 (813 ) 19 Equity in net earnings of Kindred at Home — — — — — — — Segment earnings (loss) $ 493 $ 80 $ 206 $ 18 $ 35 $ (813 ) $ 19 Retail Group and Specialty Healthcare Eliminations/ Consolidated (in millions) Six months ended June 30, 2019 External revenues Premiums: Individual Medicare Advantage $ 21,502 $ — $ — $ — $ 21,502 Group Medicare Advantage 3,258 — — — 3,258 Medicare stand-alone PDP 1,627 — — — 1,627 Total Medicare 26,387 — — — 26,387 Fully-insured 284 2,595 — — 2,879 Specialty — 760 — — 760 Medicaid and other 1,401 — — — 1,401 Total premiums 28,072 3,355 — — 31,427 Services revenue: Provider — — 231 — 231 ASO and other 10 387 — — 397 Pharmacy — — 82 — 82 Total services revenue 10 387 313 — 710 Total external revenues 28,082 3,742 313 — 32,137 Intersegment revenues Services — 9 8,802 (8,811 ) — Products — — 3,369 (3,369 ) — Total intersegment revenues — 9 12,171 (12,180 ) — Investment income 89 10 1 115 215 Total revenues 28,171 3,761 12,485 (12,065 ) 32,352 Operating expenses: Benefits 24,346 2,729 — (264 ) 26,811 Operating costs 2,354 819 12,023 (11,833 ) 3,363 Depreciation and amortization 150 43 78 (55 ) 216 Total operating expenses 26,850 3,591 12,101 (12,152 ) 30,390 Income from operations 1,321 170 384 87 1,962 Interest expense — — — 122 122 Other income, net — — — (135 ) (135 ) Income before income taxes and equity in net earnings 1,321 170 384 100 1,975 Equity in net earnings of Kindred at Home — — 15 — 15 Segment earnings $ 1,321 $ 170 $ 399 $ 100 $ 1,990 Retail Group and Specialty Healthcare Individual Commercial Other Eliminations/ Consolidated (in millions) Six months ended June 30, 2018 External Revenues Premiums: Individual Medicare Advantage $ 17,878 $ — $ — $ — $ — $ — $ 17,878 Group Medicare Advantage 3,033 — — — — — 3,033 Medicare stand-alone PDP 1,810 — — — — — 1,810 Total Medicare 22,721 — — — — — 22,721 Fully-insured 250 2,738 — 5 — — 2,993 Specialty — 689 — — — — 689 Medicaid and other 1,103 — — — 18 — 1,121 Total premiums 24,074 3,427 — 5 18 — 27,524 Services revenue: Provider — — 177 — — — 177 ASO and other 5 427 — — 4 — 436 Pharmacy — — 96 — — — 96 Total services revenue 5 427 273 — 4 — 709 Total external revenues 24,079 3,854 273 5 22 — 28,233 Intersegment revenues Services — 9 8,212 — — (8,221 ) — Products — — 3,146 — — (3,146 ) — Total intersegment revenues — 9 11,358 — — (11,367 ) — Investment income 67 13 23 — 100 102 305 Total revenues 24,146 3,876 11,654 5 122 (11,265 ) 28,538 Operating expenses: Benefits 20,822 2,630 — (69 ) 65 (242 ) 23,206 Operating costs 2,432 910 11,190 3 4 (11,029 ) 3,510 Depreciation and amortization 132 45 85 — — (62 ) 200 Total operating expenses 23,386 3,585 11,275 (66 ) 69 (11,333 ) 26,916 Income from operations 760 291 379 71 53 68 1,622 Loss on sale of business — — — — — 790 790 Interest expense — — — — — 106 106 Income (loss) before income taxes and equity in net earnings 760 291 379 71 53 (828 ) 726 Equity in net earnings of Kindred at Home — — — — — — — Segment earnings (loss) $ 760 $ 291 $ 379 $ 71 $ 53 $ (828 ) $ 726 |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | |
Receivables and Other [Line Items] | |||||
Accounts receivable | $ 904 | $ 1,015 | |||
Health Care Reform | |||||
Receivables and Other [Line Items] | |||||
Payment of annual health insurance industry fee | $ 1,040 | ||||
Amortization of deferred charges | $ 257 | $ 520 | |||
Services Accounts Receivable | |||||
Receivables and Other [Line Items] | |||||
Accounts receivable | $ 135 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS - Equity Method Investment in Kindred at Home (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||
Allocated to investment | $ 1,056 | $ 1,047 | |
Kindred at Home | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment, ownership percentage | 40.00% | 40.00% | |
Payments to acquire equity method investments | $ 1,100 | ||
Allocated to investment | 1,000 | ||
Equity Option | Put Option | |||
Schedule of Equity Method Investments [Line Items] | |||
Purchase price allocation, financial asset | 236 | ||
Equity Option | Put Option | Other long-term liabilities | |||
Schedule of Equity Method Investments [Line Items] | |||
Financial asset, fair value | $ 128 | ||
Equity Option | Call Option | |||
Schedule of Equity Method Investments [Line Items] | |||
Purchase price allocation, financial liability | $ 291 | ||
Equity Option | Call Option | Other long-term assets | |||
Schedule of Equity Method Investments [Line Items] | |||
Financial liability, fair value | $ 285 |
RECENTLY ISSUED ACCOUNTING PR_3
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use lease liabilities | $ 445 | |
Right-of-use lease assets | $ 406 | |
ASU No. 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use lease liabilities | $ 470 | |
Right-of-use lease assets | $ 436 |
ACQUISITIONS AND DIVESTITURES -
ACQUISITIONS AND DIVESTITURES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Business Acquisition [Line Items] | |||||
Goodwill, acquired during period | $ 25 | ||||
MCCI Holdings, LLC | |||||
Business Acquisition [Line Items] | |||||
Payments to acquire business | $ 169 | ||||
Goodwill, acquired during period | 483 | ||||
Other intangible assets acquired | 80 | ||||
Net tangible assets acquired | $ 24 | ||||
Other intangible assets, weighted average useful life | 8 years | ||||
Family Physicians Group | |||||
Business Acquisition [Line Items] | |||||
Payments to acquire business | $ 185 | ||||
Goodwill, acquired during period | 133 | ||||
Other intangible assets acquired | 38 | ||||
Net tangible assets acquired | $ 14 | $ 14 | |||
Other intangible assets, weighted average useful life | 4 years 10 months 24 days | ||||
MCCI Holdings, LLC | |||||
Business Acquisition [Line Items] | |||||
Notes receivable and revolving note, related party | $ 383 | ||||
Kanawah Insurance Company KIC | |||||
Business Acquisition [Line Items] | |||||
Payments for reinsurance | $ 245 | ||||
KMG America Corporation | Disposed of by Sale | |||||
Business Acquisition [Line Items] | |||||
Parent company cash contributed to sale of subsidiary | 190 | ||||
Transfer of statutory capital with sale of subsidiary | 160 | ||||
Pretax loss on sale of subsidiary | 786 | ||||
Tax benefit on sale of subsidiary | $ 452 | ||||
Disposal group, revenues | $ 93 | 172 | |||
Disposal group, pretax income | $ 35 | $ 53 |
INVESTMENT SECURITIES - Securit
INVESTMENT SECURITIES - Securities Classified as Current and Long-Term (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | $ 10,245 | $ 10,641 |
Gross Unrealized Gains | 174 | 9 |
Gross Unrealized Losses | (17) | (213) |
Fair Value | 10,402 | 10,437 |
U.S. Treasury and agency obligations | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 370 | 419 |
Gross Unrealized Gains | 2 | 1 |
Gross Unrealized Losses | 0 | (3) |
Fair Value | 372 | 417 |
Mortgage-backed securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 3,459 | 2,595 |
Gross Unrealized Gains | 69 | 3 |
Gross Unrealized Losses | (8) | (54) |
Fair Value | 3,520 | 2,544 |
Tax-exempt municipal securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 1,632 | 2,805 |
Gross Unrealized Gains | 28 | 3 |
Gross Unrealized Losses | (1) | (37) |
Fair Value | 1,659 | 2,771 |
Residential mortgage-backed securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 1 | 55 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 1 | 55 |
Commercial mortgage-backed securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 621 | 537 |
Gross Unrealized Gains | 17 | 0 |
Gross Unrealized Losses | 0 | (14) |
Fair Value | 638 | 523 |
Asset-backed securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 1,037 | 991 |
Gross Unrealized Gains | 2 | 1 |
Gross Unrealized Losses | (3) | (7) |
Fair Value | 1,036 | 985 |
Corporate debt securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 3,125 | 3,239 |
Gross Unrealized Gains | 56 | 1 |
Gross Unrealized Losses | (5) | (98) |
Fair Value | $ 3,176 | $ 3,142 |
INVESTMENT SECURITIES - Gross U
INVESTMENT SECURITIES - Gross Unrealized Losses and Fair Values of Securities (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value | ||
Less than 12 months | $ 389 | $ 4,574 |
12 months or more | 1,986 | 4,447 |
Total | 2,375 | 9,021 |
Gross Unrealized Losses | ||
Less than 12 months | (2) | (76) |
12 months or more | (15) | (137) |
Total | (17) | (213) |
U.S. Treasury and agency obligations | ||
Fair Value | ||
Less than 12 months | 34 | 179 |
12 months or more | 71 | 153 |
Total | 105 | 332 |
Gross Unrealized Losses | ||
Less than 12 months | 0 | (1) |
12 months or more | 0 | (2) |
Total | 0 | (3) |
Mortgage-backed securities | ||
Fair Value | ||
Less than 12 months | 38 | 956 |
12 months or more | 546 | 1,019 |
Total | 584 | 1,975 |
Gross Unrealized Losses | ||
Less than 12 months | 0 | (16) |
12 months or more | (8) | (38) |
Total | (8) | (54) |
Tax-exempt municipal securities | ||
Fair Value | ||
Less than 12 months | 0 | 809 |
12 months or more | 294 | 1,648 |
Total | 294 | 2,457 |
Gross Unrealized Losses | ||
Less than 12 months | 0 | (9) |
12 months or more | (1) | (28) |
Total | (1) | (37) |
Residential mortgage-backed securities | ||
Fair Value | ||
Less than 12 months | 0 | 0 |
12 months or more | 1 | 15 |
Total | 1 | 15 |
Gross Unrealized Losses | ||
Less than 12 months | 0 | 0 |
12 months or more | 0 | 0 |
Total | 0 | 0 |
Commercial mortgage-backed securities | ||
Fair Value | ||
Less than 12 months | 0 | 372 |
12 months or more | 70 | 133 |
Total | 70 | 505 |
Gross Unrealized Losses | ||
Less than 12 months | 0 | (8) |
12 months or more | 0 | (6) |
Total | 0 | (14) |
Asset-backed securities | ||
Fair Value | ||
Less than 12 months | 308 | 824 |
12 months or more | 452 | 40 |
Total | 760 | 864 |
Gross Unrealized Losses | ||
Less than 12 months | (1) | (7) |
12 months or more | (2) | 0 |
Total | (3) | (7) |
Corporate debt securities | ||
Fair Value | ||
Less than 12 months | 9 | 1,434 |
12 months or more | 552 | 1,439 |
Total | 561 | 2,873 |
Gross Unrealized Losses | ||
Less than 12 months | (1) | (35) |
12 months or more | (4) | (63) |
Total | $ (5) | $ (98) |
INVESTMENT SECURITIES - Narrati
INVESTMENT SECURITIES - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($)position | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)position | Jun. 30, 2018USD ($) | |
Investments, Debt and Equity Securities [Abstract] | ||||
Percentage of debt securities considered to be of investment-grade | 96.00% | 96.00% | ||
Maximum percentage of any general obligation bonds in one state | 16.00% | |||
Securities in unrealized loss positions, number of positions | 330 | 330 | ||
Securities, number of positions | 1,460 | 1,460 | ||
Other-than-temporary impairments | $ | $ 0 | $ 0 | $ 0 | $ 0 |
INVESTMENT SECURITIES - Realize
INVESTMENT SECURITIES - Realized Gains (Losses) Within Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gross realized gains | $ 8 | $ 63 | $ 18 | $ 94 |
Gross realized losses | (1) | (10) | (13) | (12) |
Net realized capital (losses) gains | $ 7 | $ 53 | $ 5 | $ 82 |
INVESTMENT SECURITIES - Contrac
INVESTMENT SECURITIES - Contractual Maturities of Debt Securities Available for Sale (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due within one year | $ 628 | |
Due after one year through five years | 2,332 | |
Due after five years through ten years | 1,694 | |
Due after ten years | 473 | |
Mortgage and asset-backed securities | 5,118 | |
Amortized Cost | 10,245 | $ 10,641 |
Fair Value | ||
Due within one year | 628 | |
Due after one year through five years | 2,357 | |
Due after five years through ten years | 1,734 | |
Due after ten years | 488 | |
Mortgage and asset-backed securities | 5,195 | |
Fair Value | $ 10,402 | $ 10,437 |
FAIR VALUE - Financial Assets M
FAIR VALUE - Financial Assets Measured on Recurring Basis (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 10,402 | $ 10,437 |
U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 372 | 417 |
Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,520 | 2,544 |
Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,659 | 2,771 |
Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1 | 55 |
Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 638 | 523 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,036 | 985 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,176 | 3,142 |
Measured On Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 4,553 | 2,024 |
Debt securities | 10,402 | 10,437 |
Total invested assets | 14,955 | 12,461 |
Measured On Recurring Basis | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 372 | 417 |
Measured On Recurring Basis | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,520 | 2,544 |
Measured On Recurring Basis | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,659 | 2,771 |
Measured On Recurring Basis | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1 | 55 |
Measured On Recurring Basis | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 638 | 523 |
Measured On Recurring Basis | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,036 | 985 |
Measured On Recurring Basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,176 | 3,142 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 4,553 | 2,024 |
Debt securities | 0 | 0 |
Total invested assets | 4,553 | 2,024 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Debt securities | 10,402 | 10,437 |
Total invested assets | 10,402 | 10,437 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 372 | 417 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,520 | 2,544 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,659 | 2,771 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1 | 55 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 638 | 523 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,036 | 985 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,176 | 3,142 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Debt securities | 0 | 0 |
Total invested assets | 0 | 0 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 0 | $ 0 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Term loan and commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt | $ 950 | $ 1,295 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt outstanding | 4,776 | 4,774 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt outstanding | $ 5,115 | $ 5,191 |
MEDICARE PART D (Details)
MEDICARE PART D (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Other current assets | $ 4,487 | $ 3,564 |
Trade accounts payable and accrued expenses | (3,832) | (3,067) |
Other long-term assets | 1,568 | 1,375 |
Other long-term liabilities | (911) | (581) |
Risk Corridor Settlement | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 11 | 15 |
Trade accounts payable and accrued expenses | (48) | (103) |
Net current liability | (37) | (88) |
Other long-term assets | 26 | 7 |
Other long-term liabilities | (137) | (89) |
Net long-term liability | (111) | (82) |
Total net liability | (148) | (170) |
CMS Subsidies/ Discounts | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 388 | 172 |
Trade accounts payable and accrued expenses | (1,259) | (503) |
Net current liability | (871) | (331) |
Other long-term assets | 0 | 0 |
Other long-term liabilities | 0 | 0 |
Net long-term liability | 0 | 0 |
Total net liability | $ (871) | $ (331) |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill by Segments (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 3,897 |
Acquisitions | 25 |
Goodwill, ending balance | 3,922 |
Retail | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 1,535 |
Acquisitions | 0 |
Goodwill, ending balance | 1,535 |
Group and Specialty | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 261 |
Acquisitions | 0 |
Goodwill, ending balance | 261 |
Healthcare Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 2,101 |
Acquisitions | 25 |
Goodwill, ending balance | $ 2,126 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible Assets Included in Other Long-Term Assets (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 8 years 8 months 12 days | |
Cost | $ 829 | $ 827 |
Accumulated Amortization | 618 | 582 |
Net | $ 211 | 245 |
Customer contracts/ relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 8 years 8 months 12 days | |
Cost | $ 647 | 646 |
Accumulated Amortization | 465 | 434 |
Net | $ 182 | 212 |
Trade names and technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 6 years 4 months 24 days | |
Cost | $ 84 | 84 |
Accumulated Amortization | 84 | 83 |
Net | $ 0 | 1 |
Provider contracts | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 11 years 9 months 18 days | |
Cost | $ 69 | 68 |
Accumulated Amortization | 41 | 37 |
Net | $ 28 | 31 |
Noncompetes and other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 7 years 3 months 18 days | |
Cost | $ 29 | 29 |
Accumulated Amortization | 28 | 28 |
Net | $ 1 | $ 1 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense for other intangible assets | $ 18 | $ 21 | $ 36 | $ 51 |
Impairment of Intangible Assets, Finite-lived | $ 12 | |||
For the years ending December 31, | ||||
2019 | 34 | 34 | ||
2020 | 67 | 67 | ||
2021 | 34 | 34 | ||
2022 | 31 | 31 | ||
2023 | 18 | 18 | ||
2024 | $ 11 | $ 11 |
LEASES - 2019 Narrative (Detail
LEASES - 2019 Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Leases [Abstract] | ||
Operating right-of-use lease assets included within other long-term assets | $ 406 | $ 406 |
Operating right-of-use lease liabilities included within trade accounts payable and accrued expenses | 121 | 121 |
Operating right-of-use lease liabilities included within other long-term liabilities | 324 | 324 |
Fixed operating lease costs | 39 | 78 |
Variable lease costs | 19 | 35 |
Sublease rental income | $ 10 | $ 19 |
Weighted average remaining lease term (in years) | 4 years 9 months 18 days | 4 years 9 months 18 days |
Weighted average discount rate (percent) | 4.30% | 4.30% |
Operating lease cash payments | $ 75 |
LEASES - 2019 Maturity of Lease
LEASES - 2019 Maturity of Lease Liabilities (Details) $ in Millions | Jun. 30, 2019USD ($) |
Maturity of Lease Liabilities | |
2019 (excluding the six months ended June 30, 2019) | $ 72 |
2020 | 122 |
2021 | 103 |
2022 | 84 |
2023 | 39 |
After 2023 | 74 |
Total lease payments | 494 |
Less: Interest | 49 |
Present value of ROU lease liabilities | $ 445 |
LEASES - 2018 Rent Expense and
LEASES - 2018 Rent Expense and Sublease Rental Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Rent Expense and Sublease Rental Income | |||
Rent expense | $ 167 | $ 204 | $ 179 |
Sublease rental income | (32) | (33) | (26) |
Net rent expense | $ 135 | $ 171 | $ 153 |
LEASES - 2018 Future Annual Min
LEASES - 2018 Future Annual Minimum Payments Due (Details) $ in Millions | Dec. 31, 2018USD ($) |
Minimum Lease Payments | |
2019 | $ 147 |
2020 | 113 |
2021 | 96 |
2022 | 79 |
2023 | 34 |
Thereafter | 50 |
Total | 519 |
Sublease Rental Receipts | |
2019 | (13) |
2020 | (12) |
2021 | (10) |
2022 | (9) |
2023 | (9) |
Thereafter | (23) |
Total | (76) |
Net Lease Commitments | |
2019 | 134 |
2020 | 101 |
2021 | 86 |
2022 | 70 |
2023 | 25 |
Thereafter | 27 |
Total | $ 443 |
BENEFITS PAYABLE - Activity in
BENEFITS PAYABLE - Activity in Benefits Payable (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances, beginning of period | $ 4,862 | $ 4,668 |
Less: Reinsurance recoverables | (95) | (70) |
Balances, beginning of period, net | 4,767 | 4,598 |
Incurred related to: | ||
Current year | 27,086 | 23,543 |
Prior years | (275) | (338) |
Total incurred | 26,811 | 23,205 |
Paid related to: | ||
Current year | (21,700) | (18,914) |
Prior years | (4,108) | (3,897) |
Total paid | (25,808) | (22,811) |
Reinsurance recoverable | 72 | 86 |
Less: Held-for-sale | 0 | (58) |
Balances, end of period | 5,842 | 5,020 |
Retail | ||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances, beginning of period | 4,338 | 3,963 |
Less: Reinsurance recoverables | (95) | (70) |
Balances, beginning of period, net | 4,243 | 3,893 |
Incurred related to: | ||
Current year | 24,657 | 21,069 |
Prior years | (311) | (247) |
Total incurred | 24,346 | 20,822 |
Paid related to: | ||
Current year | (19,826) | (17,061) |
Prior years | (3,592) | (3,327) |
Total paid | (23,418) | (20,388) |
Reinsurance recoverable | 72 | 86 |
Balances, end of period | 5,243 | 4,413 |
Total IBNR | 3,200 | |
Group and Specialty | ||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances, beginning of period | 517 | 568 |
Incurred related to: | ||
Current year | 2,693 | 2,665 |
Prior years | 36 | (34) |
Total incurred | 2,729 | 2,631 |
Paid related to: | ||
Current year | (2,131) | (2,094) |
Prior years | (516) | (496) |
Total paid | (2,647) | (2,590) |
Balances, end of period | 599 | 609 |
Total IBNR | $ 505 | |
Individual Commercial | ||
Incurred related to: | ||
Total incurred | $ 55 |
BENEFITS PAYABLE - Benefit Expe
BENEFITS PAYABLE - Benefit Expenses Excluded From Activity in Benefits Payable (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Total future policy benefits | $ 0 | $ 1 |
Operating Segments | Individual Commercial | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Total future policy benefits | 0 | (14) |
Other Businesses | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Total future policy benefits | $ 0 | $ 15 |
BENEFITS PAYABLE - Reconciliati
BENEFITS PAYABLE - Reconciliation to Consolidated (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | $ 5,770 | |||
Reinsurance recoverable on unpaid claims | 72 | $ 95 | $ 86 | $ 70 |
Benefits payable | 5,842 | 4,862 | 5,020 | 4,668 |
Retail | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Reinsurance recoverable on unpaid claims | 72 | 95 | 86 | 70 |
Benefits payable | 5,243 | 4,338 | 4,413 | 3,963 |
Group and Specialty | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable | 599 | $ 517 | $ 609 | $ 568 |
Operating Segments | Retail | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | 5,171 | |||
Reinsurance recoverable on unpaid claims | 72 | |||
Operating Segments | Group and Specialty | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | $ 599 |
EARNINGS PER COMMON SHARE COM_3
EARNINGS PER COMMON SHARE COMPUTATION (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income available for common stockholders | $ 940 | $ 193 | $ 1,506 | $ 684 |
Weighted average outstanding shares of common stock used to compute basic earnings per common share (in shares) | 135,063 | 137,763 | 135,223 | 137,833 |
Shares used to compute diluted earnings per common share (in shares) | 135,579 | 138,576 | 135,770 | 138,703 |
Basic earnings per common share (in dollars per share) | $ 6.96 | $ 1.40 | $ 11.14 | $ 4.96 |
Diluted earnings per common share (in dollars per share) | $ 6.94 | $ 1.39 | $ 11.10 | $ 4.93 |
Number of antidilutive stock options and restricted stock excluded from computation (in shares) | 761 | 171 | 732 | 408 |
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) | 67 | 197 | 98 | 205 |
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) | 449 | 616 | 449 | 665 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of Details of Dividend Payments (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 26, 2019 | Apr. 26, 2019 | Jan. 25, 2019 | Oct. 26, 2018 | Jul. 27, 2018 | Apr. 27, 2018 | Jan. 26, 2018 |
Dividend Payments | |||||||
Amount per Share (in dollars per share) | $ 0.55 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.40 | |
Total Amount | $ 74 | $ 68 | $ 69 | $ 69 | $ 69 | $ 55 | |
Subsequent Event | |||||||
Dividend Payments | |||||||
Amount per Share (in dollars per share) | $ 0.55 | ||||||
Total Amount | $ 74 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | Feb. 28, 2019 | Nov. 29, 2018 | Jun. 30, 2019 | Feb. 28, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jul. 30, 2019 | Dec. 31, 2018 | Nov. 28, 2018 | Dec. 14, 2017 |
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Common stock repurchases | $ 0 | $ 42 | $ 10 | $ 93 | |||||||
Reclassification from capital in excess of par value to treasury stock | $ 150 | ||||||||||
Common shares acquired in connection with employee stock plans (in shares) | 34 | 300 | |||||||||
Common shares acquired in connection with employee stock plans, amount | $ 10 | $ 69 | |||||||||
Treasury stock reissued (in shares) | 130 | ||||||||||
Treasury stock reissued | $ 15 | ||||||||||
Accumulated other comprehensive income (loss) | 112 | 112 | $ (159) | ||||||||
Net unrealized losses on investment securities | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Accumulated other comprehensive income (loss) | $ 112 | $ 112 | $ (159) | ||||||||
December 2017 | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchase program, authorized amount | $ 3,000 | ||||||||||
November 2018 ASR | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchase program, authorized amount | $ 750 | ||||||||||
Share repurchase payment | $ 750 | ||||||||||
Shares received | 600 | 1,940 | 2,540 | ||||||||
Common stock repurchases | $ 600 | ||||||||||
Decrease in capital in excess of par value | $ 150 | ||||||||||
Average daily volume weighted-average share price of common stock during term of agreement (in dollars per share) | $ 295.15 | ||||||||||
Subsequent Event | December 2017 | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchase program, remaining authorization | $ 1,030 | ||||||||||
Subsequent Event | July 2019 | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Stock repurchase program, authorized amount | $ 3,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (percent) | 24.20% | 24.30% | 5.80% | |
Deferred tax benefit resulting from loss on expected sale of KMG | $ 430 |
DEBT - Debt Outstanding (Detail
DEBT - Debt Outstanding (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | Nov. 30, 2018 | |
Debt Instrument [Line Items] | |||
Total short-term debt | $ 1,349,000,000 | $ 1,694,000,000 | |
Long-term debt | 4,377,000,000 | 4,375,000,000 | |
Commercial paper | |||
Debt Instrument [Line Items] | |||
Short-term debt | 300,000,000 | 645,000,000 | |
Term note | |||
Debt Instrument [Line Items] | |||
Short-term debt | $ 650,000,000 | 650,000,000 | |
Face amount | $ 1,000,000,000 | ||
Senior notes | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage | 100.00% | ||
Senior notes | $400 million, 2.625% due October 1, 2019 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current maturities | $ 399,000,000 | 399,000,000 | |
Stated interest rate | 2.625% | ||
Face amount | $ 400,000,000 | ||
Senior notes | $400 million, 2.50% due December 15, 2020 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 399,000,000 | 398,000,000 | |
Stated interest rate | 2.50% | ||
Face amount | $ 400,000,000 | ||
Senior notes | $400 million, 2.90% due December 15, 2022 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 397,000,000 | 396,000,000 | |
Stated interest rate | 2.90% | ||
Face amount | $ 400,000,000 | ||
Senior notes | $600 million, 3.15% due December 1, 2022 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 597,000,000 | 596,000,000 | |
Stated interest rate | 3.15% | ||
Face amount | $ 600,000,000 | ||
Senior notes | $600 million, 3.85% due October 1, 2024 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 597,000,000 | 597,000,000 | |
Stated interest rate | 3.85% | ||
Face amount | $ 600,000,000 | ||
Senior notes | $600 million, 3.95% due March 15, 2027 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 595,000,000 | 594,000,000 | |
Stated interest rate | 3.95% | ||
Face amount | $ 600,000,000 | ||
Senior notes | $250 million, 8.15% due June 15, 2038 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 262,000,000 | 263,000,000 | |
Stated interest rate | 8.15% | ||
Face amount | $ 250,000,000 | ||
Senior notes | $400 million, 4.625% due December 1, 2042 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 396,000,000 | 396,000,000 | |
Stated interest rate | 4.625% | ||
Face amount | $ 400,000,000 | ||
Senior notes | $750 million, 4.95% due October 1, 2044 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 739,000,000 | 739,000,000 | |
Stated interest rate | 4.95% | ||
Face amount | $ 750,000,000 | ||
Senior notes | $400 million, 4.80% due March 15, 2047 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 395,000,000 | $ 396,000,000 | |
Stated interest rate | 4.80% | ||
Face amount | $ 400,000,000 |
DEBT - Credit Agreement (Detail
DEBT - Credit Agreement (Details) - Line of Credit - Unsecured Revolving Credit Agreement | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Debt instrument term | 5 years |
Maximum borrowing capacity | $ 2,000,000,000 |
Facility fee (percent) | 0.15% |
Debt to capitalization percentage, maximum | 50.00% |
Actual debt to capitalization percentage | 32.50% |
Maximum borrowing capacity including uncommitted incremental loan facility | $ 2,500,000,000 |
Uncommitted incremental loan facility | 500,000,000 |
Line of credit, outstanding borrowings | 0 |
Remaining borrowing capacity | $ 2,000,000,000 |
Revolving Credit Facility | Minimum | |
Line of Credit Facility [Line Items] | |
Facility fee (percent) | 0.09% |
Revolving Credit Facility | Maximum | |
Line of Credit Facility [Line Items] | |
Facility fee (percent) | 0.25% |
Revolving Credit Facility | LIBOR | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.10% |
Revolving Credit Facility | LIBOR | Minimum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.91% |
Revolving Credit Facility | LIBOR | Maximum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.50% |
Letter of Credit | |
Line of Credit Facility [Line Items] | |
Line of credit, outstanding borrowings | $ 0 |
DEBT - Commercial Paper (Detail
DEBT - Commercial Paper (Details) - Commercial paper - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||
Maximum borrowing capacity | $ 2,000,000,000 | |
Maximum amount outstanding during period | 670,000,000 | |
Short-term debt outstanding | $ 300,000,000 | $ 645,000,000 |
Weighted average annual interest rate (percent) | 2.85% |
DEBT - Term Note (Details)
DEBT - Term Note (Details) - Term note - USD ($) | 1 Months Ended | 2 Months Ended | 6 Months Ended |
Nov. 30, 2018 | Dec. 31, 2018 | Jun. 30, 2019 | |
Short-term Debt [Line Items] | |||
Face amount | $ 1,000,000,000 | ||
Debt instrument term | 1 year | ||
Interest rate in effect (percent) | 3.55% | ||
Repayments of short-term debt | $ 350,000,000 | ||
LIBOR | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate | 1.15% | ||
LIBOR | Minimum | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Federal Funds Rate | Minimum | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate | 0.50% |
COMMITMENTS, GUARANTEES AND C_2
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Details) beneficiary in Millions, $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019beneficiary | Dec. 31, 2020 | Dec. 31, 2018State | Nov. 02, 2017USD ($) | |
Loss Contingencies [Line Items] | ||||
Percentage of risk score calculated from claims submitted through EDS | 25.00% | 15.00% | ||
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 | |||
Forecast | ||||
Loss Contingencies [Line Items] | ||||
Percentage of risk score calculated from claims submitted through EDS | 50.00% | |||
Medicare | ||||
Loss Contingencies [Line Items] | ||||
Percentage of premiums and services revenue | 82.00% | |||
Military services | ||||
Loss Contingencies [Line Items] | ||||
Percentage of premiums and services revenue | 1.00% | |||
Medicaid | ||||
Loss Contingencies [Line Items] | ||||
Percentage of premiums and services revenue | 4.00% |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)Segment | Jun. 30, 2018USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | Segment | 3 | |||
Member co-share amounts and government subsidies | $ 3,600 | $ 3,300 | $ 6,700 | $ 6,200 |
Depreciation and amortization classified as benefit expense | $ 31 | $ 30 | $ 60 | $ 69 |
SEGMENT INFORMATION - Segment R
SEGMENT INFORMATION - Segment Results (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Premiums | $ 15,776 | $ 13,713 | $ 31,427 | $ 27,524 |
Services revenue | 355 | 382 | 710 | 709 |
Total external revenues | 16,131 | 14,095 | 32,137 | 28,233 |
Intersegment revenues | 0 | 0 | 0 | 0 |
Investment income | 114 | 164 | 215 | 305 |
Total revenues | 16,245 | 14,259 | 32,352 | 28,538 |
Benefits | 13,318 | 11,536 | 26,811 | 23,206 |
Operating costs | 1,703 | 1,761 | 3,363 | 3,510 |
Depreciation and amortization | 109 | 100 | 216 | 200 |
Total operating expenses | 15,130 | 13,397 | 30,390 | 26,916 |
Income from operations | 1,115 | 862 | 1,962 | 1,622 |
Loss on sale of business | 0 | 790 | 0 | 790 |
Interest expense | 60 | 53 | 122 | 106 |
Other income, net | (174) | 0 | (135) | 0 |
Income before income taxes and equity in net earnings | 1,229 | 19 | 1,975 | 726 |
Equity in net earnings of Kindred at Home | 12 | 0 | 15 | 0 |
Segment earnings | 1,241 | 19 | 1,990 | 726 |
Individual Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 10,793 | 8,908 | 21,502 | 17,878 |
Group Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 1,626 | 1,509 | 3,258 | 3,033 |
Medicare stand-alone PDP | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 818 | 914 | 1,627 | 1,810 |
Total Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 13,237 | 11,331 | 26,387 | 22,721 |
Fully-insured | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 1,428 | 1,481 | 2,879 | 2,993 |
Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 387 | 342 | 760 | 689 |
Medicaid and other | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 724 | 559 | 1,401 | 1,121 |
Provider | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 111 | 112 | 231 | 177 |
ASO and other | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 198 | 213 | 397 | 436 |
Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 46 | 57 | 82 | 96 |
Services | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | 0 | 0 |
Products | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | 0 | 0 |
Operating Segments | Retail | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 14,105 | 12,006 | 28,072 | 24,074 |
Services revenue | 5 | 3 | 10 | 5 |
Total external revenues | 14,110 | 12,009 | 28,082 | 24,079 |
Intersegment revenues | 0 | 0 | 0 | 0 |
Investment income | 48 | 30 | 89 | 67 |
Total revenues | 14,158 | 12,039 | 28,171 | 24,146 |
Benefits | 12,019 | 10,270 | 24,346 | 20,822 |
Operating costs | 1,206 | 1,210 | 2,354 | 2,432 |
Depreciation and amortization | 77 | 66 | 150 | 132 |
Total operating expenses | 13,302 | 11,546 | 26,850 | 23,386 |
Income from operations | 856 | 493 | 1,321 | 760 |
Loss on sale of business | 0 | 0 | ||
Interest expense | 0 | 0 | 0 | 0 |
Other income, net | 0 | 0 | ||
Income before income taxes and equity in net earnings | 856 | 493 | 1,321 | 760 |
Equity in net earnings of Kindred at Home | 0 | 0 | 0 | 0 |
Segment earnings | 856 | 493 | 1,321 | 760 |
Operating Segments | Retail | Individual Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 10,793 | 8,908 | 21,502 | 17,878 |
Operating Segments | Retail | Group Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 1,626 | 1,509 | 3,258 | 3,033 |
Operating Segments | Retail | Medicare stand-alone PDP | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 818 | 914 | 1,627 | 1,810 |
Operating Segments | Retail | Total Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 13,237 | 11,331 | 26,387 | 22,721 |
Operating Segments | Retail | Fully-insured | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 144 | 125 | 284 | 250 |
Operating Segments | Retail | Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Retail | Medicaid and other | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 724 | 550 | 1,401 | 1,103 |
Operating Segments | Retail | Provider | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Operating Segments | Retail | ASO and other | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 5 | 3 | 10 | 5 |
Operating Segments | Retail | Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Operating Segments | Retail | Services | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | 0 | 0 |
Operating Segments | Retail | Products | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 1,671 | 1,688 | 3,355 | 3,427 |
Services revenue | 193 | 208 | 387 | 427 |
Total external revenues | 1,864 | 1,896 | 3,742 | 3,854 |
Intersegment revenues | 5 | 4 | 9 | 9 |
Investment income | 5 | 6 | 10 | 13 |
Total revenues | 1,874 | 1,906 | 3,761 | 3,876 |
Benefits | 1,442 | 1,357 | 2,729 | 2,630 |
Operating costs | 406 | 447 | 819 | 910 |
Depreciation and amortization | 21 | 22 | 43 | 45 |
Total operating expenses | 1,869 | 1,826 | 3,591 | 3,585 |
Income from operations | 5 | 80 | 170 | 291 |
Loss on sale of business | 0 | 0 | ||
Interest expense | 0 | 0 | 0 | 0 |
Other income, net | 0 | 0 | ||
Income before income taxes and equity in net earnings | 5 | 80 | 170 | 291 |
Equity in net earnings of Kindred at Home | 0 | 0 | 0 | 0 |
Segment earnings | 5 | 80 | 170 | 291 |
Operating Segments | Group and Specialty | Individual Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | Group Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | Medicare stand-alone PDP | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | Total Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | Fully-insured | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 1,284 | 1,346 | 2,595 | 2,738 |
Operating Segments | Group and Specialty | Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 387 | 342 | 760 | 689 |
Operating Segments | Group and Specialty | Medicaid and other | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | Provider | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | ASO and other | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 193 | 208 | 387 | 427 |
Operating Segments | Group and Specialty | Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Operating Segments | Group and Specialty | Services | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 5 | 4 | 9 | 9 |
Operating Segments | Group and Specialty | Products | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Services revenue | 157 | 169 | 313 | 273 |
Total external revenues | 157 | 169 | 313 | 273 |
Intersegment revenues | 6,229 | 5,805 | 12,171 | 11,358 |
Investment income | 1 | 17 | 1 | 23 |
Total revenues | 6,387 | 5,991 | 12,485 | 11,654 |
Benefits | 0 | 0 | 0 | 0 |
Operating costs | 6,135 | 5,749 | 12,023 | 11,190 |
Depreciation and amortization | 40 | 36 | 78 | 85 |
Total operating expenses | 6,175 | 5,785 | 12,101 | 11,275 |
Income from operations | 212 | 206 | 384 | 379 |
Loss on sale of business | 0 | 0 | ||
Interest expense | 0 | 0 | 0 | 0 |
Other income, net | 0 | 0 | ||
Income before income taxes and equity in net earnings | 212 | 206 | 384 | 379 |
Equity in net earnings of Kindred at Home | 12 | 0 | 15 | 0 |
Segment earnings | 224 | 206 | 399 | 379 |
Operating Segments | Healthcare Services | Individual Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Group Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Medicare stand-alone PDP | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Total Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Fully-insured | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Medicaid and other | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Provider | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 111 | 112 | 231 | 177 |
Operating Segments | Healthcare Services | ASO and other | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Operating Segments | Healthcare Services | Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 46 | 57 | 82 | 96 |
Operating Segments | Healthcare Services | Services | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 4,496 | 4,194 | 8,802 | 8,212 |
Operating Segments | Healthcare Services | Products | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 1,733 | 1,611 | 3,369 | 3,146 |
Operating Segments | Individual Commercial | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 10 | 5 | ||
Services revenue | 0 | 0 | ||
Total external revenues | 10 | 5 | ||
Intersegment revenues | 0 | 0 | ||
Investment income | 0 | 0 | ||
Total revenues | 10 | 5 | ||
Benefits | (9) | (69) | ||
Operating costs | 1 | 3 | ||
Depreciation and amortization | 0 | 0 | ||
Total operating expenses | (8) | (66) | ||
Income from operations | 18 | 71 | ||
Loss on sale of business | 0 | 0 | ||
Interest expense | 0 | 0 | ||
Income before income taxes and equity in net earnings | 18 | 71 | ||
Equity in net earnings of Kindred at Home | 0 | 0 | ||
Segment earnings | 18 | 71 | ||
Operating Segments | Individual Commercial | Individual Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | ||
Operating Segments | Individual Commercial | Group Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | ||
Operating Segments | Individual Commercial | Medicare stand-alone PDP | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | ||
Operating Segments | Individual Commercial | Total Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | ||
Operating Segments | Individual Commercial | Fully-insured | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 10 | 5 | ||
Operating Segments | Individual Commercial | Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | ||
Operating Segments | Individual Commercial | Medicaid and other | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | ||
Operating Segments | Individual Commercial | Provider | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | ||
Operating Segments | Individual Commercial | ASO and other | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | ||
Operating Segments | Individual Commercial | Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | ||
Operating Segments | Individual Commercial | Services | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | ||
Operating Segments | Individual Commercial | Products | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | ||
Other Businesses | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 9 | 18 | ||
Services revenue | 2 | 4 | ||
Total external revenues | 11 | 22 | ||
Intersegment revenues | 0 | 0 | ||
Investment income | 65 | 100 | ||
Total revenues | 76 | 122 | ||
Benefits | 39 | 65 | ||
Operating costs | 2 | 4 | ||
Depreciation and amortization | 0 | 0 | ||
Total operating expenses | 41 | 69 | ||
Income from operations | 35 | 53 | ||
Loss on sale of business | 0 | 0 | ||
Interest expense | 0 | 0 | ||
Income before income taxes and equity in net earnings | 35 | 53 | ||
Equity in net earnings of Kindred at Home | 0 | 0 | ||
Segment earnings | 35 | 53 | ||
Other Businesses | Individual Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | ||
Other Businesses | Group Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | ||
Other Businesses | Medicare stand-alone PDP | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | ||
Other Businesses | Total Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | ||
Other Businesses | Fully-insured | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | ||
Other Businesses | Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | ||
Other Businesses | Medicaid and other | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 9 | 18 | ||
Other Businesses | Provider | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | ||
Other Businesses | ASO and other | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 2 | 4 | ||
Other Businesses | Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | ||
Other Businesses | Services | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | ||
Other Businesses | Products | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | 0 | 0 | ||
Eliminations/ Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Services revenue | 0 | 0 | 0 | 0 |
Total external revenues | 0 | 0 | 0 | 0 |
Intersegment revenues | (6,234) | (5,809) | (12,180) | (11,367) |
Investment income | 60 | 46 | 115 | 102 |
Total revenues | (6,174) | (5,763) | (12,065) | (11,265) |
Benefits | (143) | (121) | (264) | (242) |
Operating costs | (6,044) | (5,648) | (11,833) | (11,029) |
Depreciation and amortization | (29) | (24) | (55) | (62) |
Total operating expenses | (6,216) | (5,793) | (12,152) | (11,333) |
Income from operations | 42 | 30 | 87 | 68 |
Loss on sale of business | 790 | 790 | ||
Interest expense | 60 | 53 | 122 | 106 |
Other income, net | (174) | (135) | ||
Income before income taxes and equity in net earnings | 156 | (813) | 100 | (828) |
Equity in net earnings of Kindred at Home | 0 | 0 | 0 | 0 |
Segment earnings | 156 | (813) | 100 | (828) |
Eliminations/ Corporate | Individual Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Group Medicare Advantage | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Medicare stand-alone PDP | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Total Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Fully-insured | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Medicaid and other | ||||
Segment Reporting Information [Line Items] | ||||
Premiums | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Provider | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | ASO and other | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Services revenue | 0 | 0 | 0 | 0 |
Eliminations/ Corporate | Services | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | (4,501) | (4,198) | (8,811) | (8,221) |
Eliminations/ Corporate | Products | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment revenues | $ (1,733) | $ (1,611) | $ (3,369) | $ (3,146) |