Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 31, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 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 | FY | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 35,478,894,483 | ||
Entity Common Stock, Shares Outstanding | 132,106,497 | ||
Documents Incorporated by Reference | Parts II and III incorporate herein by reference portions of the Registrant’s Proxy Statement to be filed pursuant to Regulation 14A with respect to the Annual Meeting of Stockholders scheduled to be held on April 23, 2020. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 4,054 | $ 2,343 |
Investment securities | 10,972 | 10,026 |
Receivables, less allowance for doubtful accounts of $69 in 2019 and $79 in 2018 | 1,056 | 1,015 |
Other current assets | 3,806 | 3,564 |
Total current assets | 19,888 | 16,948 |
Property and equipment, net | 1,955 | 1,735 |
Long-term investment securities | 406 | 411 |
Goodwill | 3,928 | 3,897 |
Equity method investment in Kindred at Home | 1,063 | 1,047 |
Other long-term assets | 1,834 | 1,375 |
Total assets | 29,074 | 25,413 |
Current liabilities: | ||
Benefits payable | 6,004 | 4,862 |
Trade accounts payable and accrued expenses | 3,754 | 3,067 |
Book overdraft | 225 | 171 |
Unearned revenues | 247 | 283 |
Short-term debt | 699 | 1,694 |
Total current liabilities | 10,929 | 10,077 |
Long-term debt | 4,967 | 4,375 |
Future policy benefits payable | 206 | 219 |
Other long-term liabilities | 935 | 581 |
Total liabilities | 17,037 | 15,252 |
Commitments and contingencies (Note 17) | ||
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; 198,629,992 shares issued at December 31, 2019 and 198,594,841 shares issued at December 31, 2018 | 33 | 33 |
Capital in excess of par value | 2,820 | 2,535 |
Retained earnings | 17,483 | 15,072 |
Accumulated other comprehensive income (loss) | 156 | (159) |
Treasury stock, at cost, 66,524,771 shares at December 31, 2019 and 63,028,169 shares at December 31, 2018 | (8,455) | (7,320) |
Total stockholders’ equity | 12,037 | 10,161 |
Total liabilities and stockholders’ equity | $ 29,074 | $ 25,413 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 69 | $ 79 |
Preferred stock, par (in USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par (in USD per share) | $ 0.1667 | $ 0.1667 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 198,629,992 | 198,594,841 |
Treasury stock (in shares) | 66,524,771 | 63,028,169 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||||||||||
Premiums | $ 62,948 | $ 54,941 | $ 52,380 | ||||||||
Services | 1,439 | 1,457 | 982 | ||||||||
Investment income | 501 | 514 | 405 | ||||||||
Total revenues | $ 16,295 | $ 16,241 | $ 16,245 | $ 16,107 | $ 14,168 | $ 14,206 | $ 14,259 | $ 14,279 | 64,888 | 56,912 | 53,767 |
Operating expenses: | |||||||||||
Benefits | 53,857 | 45,882 | 43,496 | ||||||||
Operating costs | 7,381 | 7,525 | 6,567 | ||||||||
Merger termination fee and related costs, net | 0 | 0 | (936) | ||||||||
Depreciation and amortization | 458 | 405 | 378 | ||||||||
Total operating expenses | 61,696 | 53,812 | 49,505 | ||||||||
Income from operations | 3,192 | 3,100 | 4,262 | ||||||||
Loss on sale of business | 0 | 786 | 0 | ||||||||
Interest expense | 242 | 218 | 242 | ||||||||
Other (income) expense, net | (506) | 33 | 0 | ||||||||
Income before income taxes and equity in net earnings | 593 | 888 | 1,229 | 746 | 436 | 901 | 19 | 707 | 3,456 | 2,063 | 4,020 |
Provision for income taxes | 763 | 391 | 1,572 | ||||||||
Equity in net earnings of Kindred at Home | 14 | 11 | 0 | ||||||||
Net income | $ 512 | $ 689 | $ 940 | $ 566 | $ 355 | $ 644 | $ 193 | $ 491 | $ 2,707 | $ 1,683 | $ 2,448 |
Basic earnings per common share (in USD per share) | $ 3.87 | $ 5.16 | $ 6.96 | $ 4.18 | $ 2.60 | $ 4.68 | $ 1.40 | $ 3.56 | $ 20.20 | $ 12.24 | $ 16.94 |
Diluted earnings per common share (in USD per share) | $ 3.84 | $ 5.14 | $ 6.94 | $ 4.16 | $ 2.58 | $ 4.65 | $ 1.39 | $ 3.53 | $ 20.10 | $ 12.16 | $ 16.81 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||||||||||
Net income | $ 512 | $ 689 | $ 940 | $ 566 | $ 355 | $ 644 | $ 193 | $ 491 | $ 2,707 | $ 1,683 | $ 2,448 |
Other comprehensive income (loss): | |||||||||||
Change in gross unrealized investment losses/gains | 450 | (189) | 149 | ||||||||
Effect of income taxes | (105) | 51 | (55) | ||||||||
Total change in unrealized investment gains/losses, net of tax | 345 | (138) | 94 | ||||||||
Reclassification adjustment for net realized gains included in investment income | (34) | (53) | (14) | ||||||||
Effect of income taxes | 8 | 17 | 5 | ||||||||
Total reclassification adjustment, net of tax | (26) | (36) | (9) | ||||||||
Other comprehensive income (loss), net of tax | 319 | (174) | 85 | ||||||||
Comprehensive income attributable to our equity method investment in Kindred at Home | (4) | (4) | 0 | ||||||||
Comprehensive income | $ 3,022 | $ 1,505 | $ 2,533 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Capital In Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Balances at Dec. 31, 2016 | $ 10,685 | $ 33 | $ 2,562 | $ 11,454 | $ (66) | $ (3,298) |
Balances (in shares) at Dec. 31, 2016 | 198,495 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 2,448 | 2,448 | ||||
Other comprehensive income (loss) | 85 | 85 | ||||
Common stock repurchases | (3,365) | (200) | (3,165) | |||
Dividends and dividend equivalents | (232) | (232) | ||||
Stock-based compensation | 157 | 157 | ||||
Restricted stock unit vesting | 0 | (138) | 138 | |||
Restricted stock unit vesting (in shares) | 0 | |||||
Stock option exercises | 64 | 64 | ||||
Stock option exercises (in shares) | 77 | |||||
Balances at Dec. 31, 2017 | 9,842 | $ 33 | 2,445 | 13,670 | 19 | (6,325) |
Balances (in shares) at Dec. 31, 2017 | 198,572 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 1,683 | 1,683 | ||||
Other comprehensive income (loss) | (182) | (4) | (178) | |||
Common stock repurchases | (1,090) | 50 | (1,140) | |||
Dividends and dividend equivalents | (277) | (277) | ||||
Stock-based compensation | 137 | 137 | ||||
Restricted stock unit vesting | 0 | (145) | 145 | |||
Restricted stock unit vesting (in shares) | 0 | |||||
Stock option exercises | 48 | 48 | ||||
Stock option exercises (in shares) | 23 | |||||
Balances at Dec. 31, 2018 | 10,161 | $ 33 | 2,535 | 15,072 | (159) | (7,320) |
Balances (in shares) at Dec. 31, 2018 | 198,595 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 2,707 | 2,707 | ||||
Other comprehensive income (loss) | 315 | 315 | ||||
Common stock repurchases | (1,070) | 150 | (1,220) | |||
Dividends and dividend equivalents | (296) | (296) | ||||
Stock-based compensation | 163 | 163 | ||||
Restricted stock unit vesting | 0 | (48) | 48 | |||
Restricted stock unit vesting (in shares) | 32 | |||||
Stock option exercises | 57 | 20 | 37 | |||
Stock option exercises (in shares) | 3 | |||||
Balances at Dec. 31, 2019 | $ 12,037 | $ 33 | $ 2,820 | $ 17,483 | $ 156 | $ (8,455) |
Balances (in shares) at Dec. 31, 2019 | 198,630 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
Net income | $ 2,707 | $ 1,683 | $ 2,448 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Loss on sale of business | 0 | 786 | 0 |
Net realized capital gains | (62) | (90) | (14) |
Equity in net earnings of Kindred at Home | (14) | (11) | 0 |
Stock compensation | 163 | 137 | 157 |
Depreciation | 505 | 444 | 410 |
Amortization | 70 | 90 | 75 |
Provision for deferred income taxes | 162 | 194 | 132 |
Changes in operating assets and liabilities, net of effect of businesses acquired and dispositions: | |||
Receivables | (32) | (164) | 426 |
Other assets | 118 | (484) | (582) |
Benefits payable | 1,142 | 252 | 105 |
Other liabilities | 471 | (676) | 641 |
Unearned revenues | (36) | (95) | 98 |
Other | 90 | 107 | 155 |
Net cash provided by operating activities | 5,284 | 2,173 | 4,051 |
Cash flows from investing activities | |||
Acquisitions, net of cash acquired | 0 | (354) | (31) |
Purchase of equity method investment in Kindred at Home | 0 | (1,095) | 0 |
Cash transferred in sale of business | 0 | (805) | 0 |
Purchases of property and equipment | (736) | (612) | (524) |
Purchases of investment securities | (6,361) | (4,687) | (6,265) |
Maturities of investment securities | 1,733 | 972 | 1,111 |
Proceeds from sales of investment securities | 4,086 | 3,494 | 2,768 |
Net cash used in investing activities | (1,278) | (3,087) | (2,941) |
Cash flows from financing activities | |||
(Receipts) withdrawals from contract deposits, net | (623) | (640) | 1,823 |
Proceeds from issuance of senior notes, net | 987 | 0 | 1,779 |
(Repayments) proceeds from issuance of commercial paper, net | (360) | 485 | (153) |
Proceeds from term loan | 0 | 1,000 | 0 |
Repayment of term loan | (650) | (350) | 0 |
Repayment of long-term debt | (400) | 0 | (800) |
Common stock repurchases | (1,070) | (1,090) | (3,365) |
Dividends paid | (291) | (265) | (220) |
Change in book overdraft | 54 | 30 | (71) |
Proceeds from stock option exercises & other | 58 | 45 | 62 |
Net cash used in financing activities | (2,295) | (785) | (945) |
Increase (decrease) in cash and cash equivalents | 1,711 | (1,699) | 165 |
Cash and cash equivalents at beginning of period | 2,343 | 4,042 | 3,877 |
Cash and cash equivalents at end of period | 4,054 | 2,343 | 4,042 |
Supplemental cash flow disclosures: | |||
Interest payments | 212 | 195 | 216 |
Income tax payments, net | 518 | 631 | 1,498 |
Details of businesses acquired in purchase transactions: | |||
Fair value of assets acquired, net of cash acquired | 28 | 392 | 31 |
Less: Fair value of liabilities assumed | (28) | (38) | 0 |
Cash paid for acquired businesses, net of cash acquired | $ 0 | $ 354 | $ 31 |
REPORTING ENTITY
REPORTING ENTITY | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
REPORTING ENTITY | REPORTING ENTITY Nature of Operations Humana Inc., headquartered in Louisville, Kentucky, is a leading health and well-being company committed to helping our millions of medical and specialty members achieve their best health. Our successful history in care delivery and health plan administration is helping us create a new kind of integrated care with the power to improve health and well‐being and lower costs. Our efforts are leading to a better quality of life for people with Medicare, families, individuals, military service personnel, and communities at large. To accomplish that, we support physicians and other health care professionals as they work to deliver the right care in the right place for their patients, our members. Our range of clinical capabilities, resources and tools, such as in‐home care, behavioral health, pharmacy services, data analytics and wellness solutions, combine to produce a simplified experience that makes health care easier to navigate and more effective. References throughout these notes to consolidated financial statements to “we,” “us,” “our,” “Company,” and “Humana,” mean Humana Inc. and its subsidiaries. We derived approximately 82% of our total premiums and services revenue from contracts with the federal government in 2019 , including 15% |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Our consolidated financial statements include the accounts of Humana Inc. and subsidiaries that the Company controls, including variable interest entities associated with medical practices for which we are the primary beneficiary. We do not own many of our medical practices but instead enter into exclusive management agreements with the affiliated Professional Associations, or P.A.s, that operate these medical practices. Based upon the provisions of these agreements, these affiliated P.A.s are variable interest entities and we are the primary beneficiary, and accordingly we consolidate the affiliated P.A.s. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. Workforce Optimization We initiated involuntary workforce reduction programs during 2019 and 2017, as well as a voluntary early retirement program during 2017. These programs impacted approximately 1,000 associates in 2019 and 3,600 associates in 2017. As a result, we recorded charges of $47 million in 2019 and $148 million in 2017. Payments under these programs are made upon termination during the early retirement or severance pay period. The 2017 workforce optimization obligation was $12 million at December 31, 2018 and was fully settled as of December 31, 2019 . The remaining 2019 workforce optimization obligation was $45 million as of December 31, 2019 . Aetna Merger On February 16, 2017, under the terms of the Agreement and Plan of Merger, or Merger Agreement, with Aetna Inc., and certain wholly owned subsidiaries of Aetna Inc., which we collectively refer to as Aetna, we received a breakup fee of $1 billion from Aetna, which is included in our consolidated statement of income in the line captioned "Merger termination fee and related costs, net." Health Care Reform The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010 (which we collectively refer to as the Health Care Reform Law) enacted significant reforms to various aspects of the U.S. health insurance industry. Certain of these reforms became effective January 1, 2014, including an annual insurance industry premium-based fee and the establishment of federally-facilitated or state-based exchanges. Operating results for our individual commercial medical business compliant with the Health Care Reform Law were challenged primarily due to unanticipated modifications in the program subsequent to the passing of the Health Care Reform Law, resulting in higher covered population morbidity and the ensuing enrollment and claims issues causing volatility in claims experience. As a result of these and other factors, we exited our individual commercial medical business effective January 1, 2018. The annual premium-based fee on health insurers is not deductible for tax purposes. We estimate a liability for the health insurance industry fee and record it in full once qualifying insurance coverage is provided in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized ratably to expense over the same calendar year. We record the liability for the health insurance industry fee in trade accounts payable and accrued expenses and record the deferred cost in other current assets in our consolidated financial statements. We pay the health insurance industry fee in September or October of each year. The Consolidated Appropriations Act enacted on December 18, 2015, included a one year suspension in 2017 of the health insurance industry fee. In 2018, we paid the federal government $1.04 billion for the annual health insurance industry fee attributed to calendar year 2018. The Continuing Resolution bill, H.R. 195, enacted on January 22, 2018, included a one year suspension in 2019 of the health insurance industry fee, but the fee will resume for calendar year 2020. The Further Consolidated Appropriations Act, 2020, enacted on December 20, 2019, permanently repealed the health insurance industry fee beginning in calendar year 2021. Cash and Cash Equivalents Cash and cash equivalents include cash, time deposits, money market funds, commercial paper, other money market instruments, and certain U.S. Government securities with an original maturity of three months or less. Carrying value approximates fair value due to the short-term maturity of the investments. Investment Securities Investment securities, which consist primarily of debt securities, have been categorized as available for sale and, as a result, are stated at fair value. Investment securities available for current operations are classified as current assets. Investment securities available for our long-term insurance products and professional liability funding requirements, as well as restricted statutory deposits, are classified as long-term assets. For the purpose of determining gross realized gains and losses, which are included as a component of investment income in the consolidated statements of income, the cost of investment securities sold is based upon specific identification. Unrealized holding gains and losses, net of applicable deferred taxes, are included as a component of stockholders’ equity and comprehensive income until realized from a sale or other-than-temporary impairment. Under the other-than-temporary impairment model for debt securities held, we recognize an impairment loss in income in an amount equal to the full difference between the amortized cost basis and the fair value when we have the intent to sell the debt security or it is more likely than not we will be required to sell the debt security before recovery of our amortized cost basis. However, if we do not intend to sell the debt security, we evaluate the expected cash flows to be received as compared to amortized cost and determine if a credit loss has occurred. In the event of a credit loss, only the amount of the impairment associated with the credit loss is recognized currently in income with the remainder of the loss recognized in other comprehensive income. When we do not intend to sell a security in an unrealized loss position, potential other-than-temporary impairment is considered using a variety of factors, including the length of time and extent to which the fair value has been less than cost; adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a security; payment structure of the security; changes in credit rating of the security by the rating agencies; the volatility of the fair value changes; and changes in fair value of the security after the balance sheet date. For debt securities, we take into account expectations of relevant market and economic data. For example, with respect to mortgage and asset-backed securities, such data includes underlying loan level data and structural features such as seniority and other forms of credit enhancements. A decline in fair value is considered other-than-temporary when we do not expect to recover the entire amortized cost basis of the security. We estimate the amount of the credit loss component of a debt security as the difference between the amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of future cash flows discounted at the implicit interest rate at the date of purchase. Receivables and Revenue Recognition We generally establish one-year commercial membership contracts with employer groups, subject to cancellation by the employer group on 30 -day written notice. Our Medicare contracts with CMS renew annually. Our military services contracts with the federal government and certain contracts with various state Medicaid programs generally are multi-year contracts subject to annual renewal provisions. Premiums Revenue We receive monthly premiums from the federal government and various states according to government specified payment rates and various contractual terms. We bill and collect premium from employer groups and members in our Medicare and other individual products monthly. Changes in premium revenues resulting from the periodic changes in risk-adjustment scores derived from medical diagnoses for our membership are estimated by projecting the ultimate annual premium and are recognized ratably during the year, with adjustments each period to reflect changes in the ultimate premium. Receivables or payables are classified as current or long-term in our consolidated balance sheet based on the timing of the expected settlement. Premiums revenue is estimated by multiplying the membership covered under the various contracts by the contractual rates. Premiums revenue is recognized as income in the period members are entitled to receive services, and is net of estimated uncollectible amounts, retroactive membership adjustments, and adjustments to recognize rebates under the minimum benefit ratios required under the Health Care Reform Law. We estimate policyholder rebates by projecting calendar year minimum benefit ratios for the small group and large group markets, as defined by the Health Care Reform Law using a methodology prescribed by HHS, separately by state and legal entity. Medicare Advantage and Medicaid products are also subject to minimum benefit ratio requirements. Estimated calendar year rebates recognized ratably during the year are revised each period to reflect current experience. Retroactive membership adjustments result from enrollment changes not yet processed, or not yet reported by an employer group or the government. We routinely monitor the collectability of specific accounts, the aging of receivables, historical retroactivity trends, estimated rebates, as well as prevailing and anticipated economic conditions, and reflect any required adjustments in current operations. Premiums received prior to the service period are recorded as unearned revenues. Medicare Part D We cover prescription drug benefits in accordance with Medicare Part D under multiple contracts with CMS. The payments we receive monthly from CMS and members, which are determined from our annual bid, represent amounts for providing prescription drug insurance coverage. We recognize premiums revenue for providing this insurance coverage ratably over the term of our annual contract. Our CMS payment is subject to risk sharing through the Medicare Part D risk corridor provisions. In addition, receipts for reinsurance and low-income cost subsidies as well as receipts for certain discounts on brand name prescription drugs in the coverage gap represent payments for prescription drug costs for which we are not at risk. The risk corridor provisions compare costs targeted in our bids to actual prescription drug costs, limited to actual costs that would have been incurred under the standard coverage as defined by CMS. Variances exceeding certain thresholds may result in CMS making additional payments to us or require us to refund to CMS a portion of the premiums we received. As risk corridor provisions are considered in our overall annual bid process, we estimate and recognize an adjustment to premiums revenue related to these provisions based upon pharmacy claims experience. We record a receivable or payable at the contract level and classify the amount as current or long-term in our consolidated balance sheets based on the timing of expected settlement. Reinsurance and low-income cost subsidies represent funding from CMS in connection with the Medicare Part D program for which we assume no risk. Reinsurance subsidies represent funding from CMS for its portion of prescription drug costs which exceed the member’s out-of-pocket threshold, or the catastrophic coverage level. Low-income cost subsidies represent funding from CMS for all or a portion of the deductible, the coinsurance and co-payment amounts above the out-of-pocket threshold for low-income beneficiaries. Monthly prospective payments from CMS for reinsurance and low-income cost subsidies are based on assumptions submitted with our annual bid. A reconciliation and related settlement of CMS’s prospective subsidies against actual prescription drug costs we paid is made after the end of the year. The Health Care Reform Law mandates consumer discounts of 50% on brand name prescription drugs for Part D plan participants in the coverage gap. These discounts are funded by CMS and pharmaceutical manufacturers while we administer the application of these funds. We account for these subsidies and discounts as a deposit in our consolidated balance sheets and as a financing activity under receipts (withdrawals) from contract deposits in our consolidated statements of cash flows. For 2019 , subsidy and discount payments of $11.8 billion exceeded reimbursements of $11.2 billion by $0.6 billion . For 2018 , subsidy and discount payments of $10.3 billion exceeded reimbursements of $9.6 billion by $0.7 billion . For 2017 , subsidy and discount reimbursements of $12.1 billion exceeded payments of $10.2 billion by $1.9 billion . We do not recognize premiums revenue or benefit expenses for these subsidies or discounts. Receipt and payment activity is accumulated at the contract level and recorded in our consolidated balance sheets in other current assets or trade accounts payable and accrued expenses depending on the contract balance at the end of the reporting period. Settlement of the reinsurance and low-income cost subsidies as well as the risk corridor payment is based on a reconciliation made approximately 9 months after the close of each calendar year. Settlement with CMS for brand name prescription drug discounts is based on a reconciliation made approximately 14 to 18 months after the close of each calendar year. We continue to revise our estimates with respect to the risk corridor provisions based on subsequent period pharmacy claims data. See Note 7 for detail regarding amounts recorded to our consolidated balance sheets related to the risk corridor settlement and subsidies from CMS with respect to the Medicare Part D program. Services Revenue Patient services revenue Patient services include injury and illness care and related services as well as other healthcare services related to customer needs or as required by law. Patient services revenues are recognized in the period services are provided to the customer and are net of contractual allowances. Administrative services fees Administrative services fees cover the processing of claims, offering access to our provider networks and clinical programs, and responding to customer service inquiries from members of self-funded groups. Revenues from providing administration services, also known as administrative services only, or ASO, are recognized in the period services are performed and are net of estimated uncollectible amounts. ASO fees are estimated by multiplying the membership covered under the various contracts by the contractual rates. Under ASO contracts, self-funded employers retain the risk of financing substantially all of the cost of health benefits. However, many ASO customers purchase stop loss insurance coverage from us to cover catastrophic claims or to limit aggregate annual costs. Accordingly, we have recorded premiums revenue and benefits expense related to these stop loss insurance contracts. We routinely monitor the collectability of specific accounts, the aging of receivables, as well as prevailing and anticipated economic conditions, and reflect any required adjustments in current operations. ASO fees received prior to the service period are recorded as unearned revenues. Under our TRICARE contracts with the Department of Defense (DoD) we provide administrative services, including offering access to our provider networks and clinical programs, claim processing, customer service, enrollment, and other services, while the federal government retains all of the risk of the cost of health benefits. We account for revenues under our contracts net of estimated health care costs similar to an administrative services fee only agreement. Our contracts include fixed administrative services fees and incentive fees and penalties. Administrative services fees are recognized as services are performed. Our TRICARE members are served by both in-network and out-of-network providers in accordance with our contracts. We pay health care costs related to these services to the providers and are subsequently reimbursed by the DoD for such payments. We account for the payments of the federal government’s claims and the related reimbursements under deposit accounting in our consolidated balance sheets and as a financing activity under receipts (withdrawals) from contract deposits in our consolidated statements of cash flows. For 2019, health care cost payments of approximately $6.5 billion exceeded reimbursements of approximately $6.4 billion by $63 million . For 2018, health care cost reimbursements and payments were each approximately $5.6 billion , with reimbursements exceeding payments by $38 million for the year. For 2017, health care cost reimbursements and payments were each approximately $3.4 billion with reimbursements exceeding payments by $11 million for the year. Receivables Receivables, including premium receivables, patient services revenue receivables, and ASO fee receivables, are shown net of allowances for estimated uncollectible accounts, retroactive membership adjustments, and contractual allowances. At December 31, 2019 and 2018, accounts receivable related to services were $141 million and $123 million , respectively. For the year ended December 31, 2019 , we had no material bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the consolidated balance sheet at December 31, 2019 . For the year ended December 31, 2019 , revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price), was not material. Further, revenue expected to be recognized in any future year related to remaining performance obligations was not material. Other Current Assets Other current assets includes amounts associated with Medicare Part D as discussed above and in Note 7, rebates due from pharmaceutical manufacturers and other amounts due within one year. We accrue pharmaceutical rebates as they are earned based on contractual terms and usage of the product. The balance of pharmaceutical rebates receivable was $1.3 billion at December 31, 2019 and 2018 . Policy Acquisition Costs Policy acquisition costs are those costs that relate directly to the successful acquisition of new and renewal insurance policies. Such costs include commissions, costs of policy issuance and underwriting, and other costs we incur to acquire new business or renew existing business. We expense policy acquisition costs related to our employer-group prepaid health services policies as incurred. These short-duration employer-group prepaid health services policies typically have a 1 -year term and may be canceled upon 30 days notice by the employer group. Life insurance, annuities, certain health and other supplemental, and, prior to the sale of our wholly-owned subsidiary, KMG America Corporation, or KMG, in 2018, long term care policies sold to individuals are accounted for as long-duration insurance products because they are expected to remain in force for an extended period beyond one year and premium received in the earlier years is intended to pay anticipated benefits to be incurred in future years . As a result, we defer policy acquisition costs, primarily consisting of commissions, and amortize them over the estimated life of the policies in proportion to premiums earned. Deferred acquisition costs are reviewed to determine if they are recoverable from future income. Long-Lived Assets Property and equipment is recorded at cost. Gains and losses on sales or disposals of property and equipment are included in operating costs. Certain costs related to the development or purchase of internal-use software are capitalized. Depreciation is computed using the straight-line method over estimated useful lives ranging from 3 to 10 years for equipment, 3 to 5 years for computer software, and 10 to 20 years for buildings. Improvements to leased facilities are depreciated over the shorter of the remaining lease term or the anticipated life of the improvement. We periodically review long-lived assets, including property and equipment and definite-lived intangible assets, for impairment whenever adverse events or changes in circumstances indicate the carrying value of the asset may not be recoverable. Losses are recognized for a long-lived asset to be held and used in our operations when the undiscounted future cash flows expected to result from the use of the asset are less than its carrying value. We recognize an impairment loss based on the excess of the carrying value over the fair value of the asset. A long-lived asset held for sale is reported at the lower of the carrying amount or fair value less costs to sell. Depreciation expense is not recognized on assets held for sale. Losses are recognized for a long-lived asset to be abandoned when the asset ceases to be used. In addition, we periodically review the estimated lives of all long-lived assets for reasonableness. Equity Method Investments We use the equity method of accounting for equity investments in companies where we are able to exercise significant influence, but not control, over operating and financial policies of the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, representation on the board of directors, organizational structure, participation in policy-making decisions and material intra-entity transactions. Generally, under the equity method, original investments in these entities are recorded at cost and subsequently adjusted by our share of equity in income or losses after the date of acquisition as well as capital contributions to and distributions from these companies. Our proportionate share of the net income or loss of these companies is included in consolidated net income. Investment amounts in excess of our share of an investee's net assets are amortized over the life of the related asset creating the excess. Excess goodwill is not amortized. We evaluate equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by us when reviewing an equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than carrying value, the investee’s financial condition and near-term prospects and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. See Note 4 for further information. Goodwill and Definite-Lived Intangible Assets Goodwill represents the unamortized excess of cost over the fair value of the net tangible and other intangible assets acquired. We are required to test at least annually for impairment at a level of reporting referred to as the reporting unit, and more frequently if adverse events or changes in circumstances indicate that the asset may be impaired. A reporting unit either is our operating segments or one level below the operating segments, referred to as a component, which comprise our reportable segments. A component is considered a reporting unit if the component constitutes a business for which discrete financial information is available that is regularly reviewed by management. We aggregate the components of an operating segment into one reporting unit if they have similar economic characteristics. Goodwill is assigned to the reporting units that are expected to benefit from the specific synergies of the business combination. We use the one-step process to review goodwill for impairment to determine both the existence and amount of goodwill impairment, if any. Impairment tests are performed, at a minimum, in the fourth quarter of each year supported by our long-range business plan and annual planning process. We rely on an evaluation of future discounted cash flows to determine fair value of our reporting units. The fair value of our reporting units with significant goodwill exceeded carrying amounts by a substantial margin. A 100 basis point increase in the discount rate would not have a significant impact on the amount of margin for any of our reporting units with significant goodwill, with the exception of our clinical and provider reporting units in our Healthcare Services segment. Our clinical and provider reporting units primarily provide services to our Retail members. A significant increase in the discount rate, decrease in the long-term growth rate, or substantial reductions in our underlying cash flow assumptions, including revenue growth rates, medical and operating cost trends, and projected operating income, could have a negative impact on the estimated fair value of these reporting units. The clinical reporting unit had a fair value of $544 million which exceeded its carrying value of $533 million by $11 million or 2% . If the discount rate increased 100 basis points, then the clinical reporting unit would incur an impairment loss of approximately $62 million . The provider reporting unit had a fair value of $2.3 billion which exceeded its carrying value of $1.3 billion by $1.0 billion or 78% . The provider reporting unit estimate of fair value relies on multiple assumptions regarding the underlying long-term cash flows, any one of which may be significantly impacted by future changes in estimates and may negatively impact fair value. The clinical and provider reporting units account for $524 million and $761 million , respectively, of goodwill. Impairment tests completed for 2019 , 2018 , and 2017 did not result in an impairment loss. Definite-lived intangible assets primarily relate to acquired customer contracts/relationships and are included with other long-term assets in the consolidated balance sheets. Definite-lived intangible assets are amortized over the useful life generally using the straight-line method. We review definite-lived intangible assets for impairment under our long-lived asset policy. Benefits Payable and Benefits Expense Recognition Benefits expense includes claim payments, capitation payments, pharmacy costs net of rebates, allocations of certain centralized expenses and various other costs incurred to provide health insurance coverage to members, as well as estimates of future payments to hospitals and others for medical care and other supplemental benefits provided on or prior to the balance sheet date. Capitation payments represent monthly contractual fees disbursed to primary care and other providers who are responsible for providing medical care to members. Pharmacy costs represent payments for members’ prescription drug benefits, net of rebates from drug manufacturers. Receivables for such pharmacy rebates are included in other current assets in our consolidated balance sheets. Other supplemental benefits include dental, vision, and other supplemental health products. We estimate the costs of our benefits expense payments using actuarial methods and assumptions based upon claim payment patterns, medical cost inflation, historical developments such as claim inventory levels and claim receipt patterns, and other relevant factors, and record benefit reserves for future payments. We continually review estimates of future payments relating to claims costs for services incurred in the current and prior periods and make necessary adjustments to our reserves. Benefits expense is recognized in the period in which services are provided and includes an estimate of the cost of services which have been incurred but not yet reported, or IBNR. Our reserving practice is to consistently recognize the actuarial best point estimate within a level of confidence required by actuarial standards. Actuarial standards of practice generally require a level of confidence such that the liabilities established for IBNR have a greater probability of being adequate versus being insufficient, or such that the liabilities established for IBNR are sufficient to cover obligations under an assumption of moderately adverse conditions. Adverse conditions are situations in which the actual claims are expected to be higher than the otherwise estimated value of such claims at the time of the estimate. Therefore, in many situations, the claim amounts ultimately settled will be less than the estimate that satisfies the actuarial standards of practice. We develop our estimate for IBNR using actuarial methodologies and assumptions, primarily based upon historical claim experience. Depending on the period for which incurred claims are estimated, we apply a different method in determining our estimate. For periods prior to the most recent two months, the key assumption used in estimating our IBNR is that the completion factor pattern remains consistent over a rolling 12-month period after adjusting for known changes in claim inventory levels and known changes in claim payment processes. Completion factors result from the calculation of the percentage of claims incurred during a given period that have historically been adjudicated as of the reporting period. For the most recent two months, the incurred claims are estimated primarily from a trend analysis based upon per member per month claims trends developed from our historical experience in the preceding months, adjusted for known changes in estimates of recent hospital and drug utilization data, provider contracting changes, changes in benefit levels, changes in member cost sharing, changes in medical management processes, product mix, and workday seasonality. The completion factor method is used for the months of incurred claims prior to the most recent two months because the historical percentage of claims processed for those months is at a level sufficient to produce a consistently reliable result. Conversely, for the most recent two months of incurred claims, the volume of claims processed historically is not at a level sufficient to produce a reliable result, which therefore requires us to examine historical trend patterns as the primary method of evaluation. Changes in claim processes, including recoveries of overpayments, receipt cycle times, claim inventory levels, outsourcing, system conversions, and processing disruptions due to weather or other events affect views regarding the reasonable choice of completion factors. Claim payments to providers for services rendered are often net of overpayment recoveries for claims paid previously, as contractually allowed. Claim overpayment recoveries can result from many different factors, including retroactive enrollment activity, audits of provider billings, and/or payment errors. Changes in patterns of claim overpayment recoveries can be unpredictable and result in completion factor volatility, as they often impact older dates of service. The receipt cycle time measures the average length of time between when a medical claim was initially incurred and when the claim form was received. Increases in electronic claim submissions from providers decrease the receipt cycle time. If claims are submitted or processed on a faster (slower) pace than prior |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Recent Transactions In the first quarter of 2020 , we acquired privately held Enclara Healthcare, or Enclara, one of the nation’s largest hospice pharmacy and benefit management providers for cash consideration of approximately $707 million , net of cash received. The purchase accounting is incomplete due to the timing of the availability of information. Also in the first quarter of 2020, our Partners in Primary Care wholly-owned subsidiary entered into a strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, to accelerate the expansion of our primary care model. The WCAS partnership is expected to open approximately 50 payor-agnostic, senior-focused primary care centers over 3 years beginning in 2020. Partners in Primary Care committed to the acquisition of a non-controlling interest in the approximately $600 million entity. In addition, the agreement includes a series of put and call options through which WCAS may require us to purchase their interest in the entity and, through which we may acquire WCAS’s interest over the next 5 - 10 years . Sale of Closed Block of Commercial Long-Term Care Insurance Business On August 9, 2018 , we completed the sale of 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 tax benefit. Prior to the sale of KMG, we entered into reinsurance contracts to transfer the risk associated with certain voluntary benefit and financial protection products previously issued primarily by KIC to a third party. We transferred approximately $245 million of cash to the third party and recorded a commensurate reinsurance recoverable as a result of these transactions. The reinsurance recoverable was included as part of the net assets disposed. There was no material impact to operating results from these reinsurance transactions. KMG revenues and net income for the 2018 period prior to the date of sale was $182 million and $47 million , respectively. KMG revenues and net loss were $261 million and $117 million , respectively, for the year ended December 31, 2017. The assets and liabilities of KMG that were disposed of on August 9, 2018 were as follows: August 9, 2018 Assets (in millions) Cash and cash equivalents $ 805 Receivables, net 3 Investment securities 1,576 Other assets 1,085 Total assets disposed $ 3,469 Liabilities Benefits payable $ 58 Trade accounts payable and accrued expenses 70 Future policy benefits payable 2,573 Total liabilities disposed $ 2,701 Other Acquisitions and Divestitures In the first quarter of 2018, we acquired the remaining equity interest in MCCI Holdings, LLC, or MCCI, a privately held management service organization and healthcare provider headquartered in Miami, Florida, that primarily coordinates medical care for Medicare Advantage beneficiaries in Florida and Texas. The purchase price consisted primarily of $169 million cash, as well as our existing investment in MCCI and a note receivable and a revolving note with an aggregate balance of $383 million . This resulted in a 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 expense 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 consolidated statements of income and consolidated balance sheets from the respective acquisition dates. Acquisition-related costs recognized in each of 2019, 2018 and 2017 were not material to our results of operations. Goodwill and other intangible assets acquired are partially amortizable as deductible expenses for tax purposes. The pro forma financial information assuming the acquisitions had occurred as of the beginning of the calendar year prior to the year of acquisition, as well as the revenues and earnings generated during the year of acquisition, were not material for disclosure purposes. |
EQUITY METHOD INVESTMENT
EQUITY METHOD INVESTMENT | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENT | EQUITY METHOD INVESTMENT In the third quarter of 2018, we, along with TPG Capital, or TPG, and Welsh, Carson, Anderson & Stowe, or WCAS (together, the "Sponsors"), 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 consolidated balance sheets, with our share of income or loss reported as "Equity in net earnings of Kindred at Home" in our consolidated statements of income. We entered into a shareholders agreement with the Sponsors that provides for certain rights and obligations of each party. The shareholders agreement with the Sponsors includes a put option under which they have the right to require us to purchase their interest in the joint venture starting at the end of year three and ending at the end of year four following the closing. Likewise, we have a call option under which we have the right to require the Sponsors to sell their interest in the joint venture to Humana beginning at the end of 2022 and ending at the end of 2023 following the closing. The put and call options, which are exercisable at a fixed EBITDA multiple and provide a minimum return on the Sponsor's investment if exercised, are measured at fair value each period using a Monte Carlo simulation. The simulation relies on assumptions around Kindred at Home's equity value, risk free interest rates, volatility, and the details specific to the put and call options. The final purchase price allocation resulted in approximately $1 billion being allocated to the investment and $236 million and $291 million allocated to the put and call options, respectively. The fair values of the put option and call option were $28 million and $557 million , respectively, at December 31, 2019. The fair values of the put option and call option were $224 million and $246 million , respectively, at December 31, 2018. The put option is included within other long-term liabilities and the call option is included within other long term assets. The change in fair value of the put and call options for the years ended December 31, 2019 and 2018 of $(506) million and $33 million , respectively, are reported as "Other (income) expense, net" in our consolidated statements of income. The summarized balance sheets at December 31, 2019 and 2018, and income statement for the year ended December 31, 2019 and period beginning July 2, 2018 through December 31, 2018 of Kindred at Home were as follows: Balance sheets December 31, 2019 December 31, 2018 (in millions) Current assets $ 563 $ 536 Non-current assets 4,967 4,955 Current liabilities 405 351 Non-current liabilities 2,637 2,708 Shareholders' equity 2,488 2,432 Statements of income For the year ended December 31, 2019 July 2, 2018 through December 31, 2018 (in millions) Revenues $ 3,100 $ 1,587 Expenses 2,835 1,451 Net income 54 27 |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | INVESTMENT SECURITIES Investment securities classified as current and long-term were as follows at December 31, 2019 and 2018 , respectively: Amortized Gross Gross Fair (in millions) December 31, 2019 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 353 $ 1 $ — $ 354 Mortgage-backed securities 3,628 85 (3 ) 3,710 Tax-exempt municipal securities 1,433 30 — 1,463 Mortgage-backed securities: Commercial 786 18 — 804 Asset-backed securities 1,093 3 (3 ) 1,093 Corporate debt securities 3,867 82 (2 ) 3,947 Total debt securities $ 11,160 $ 219 $ (8 ) $ 11,371 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 We also held $7 million of equity securities carried at fair value as of December 31, 2019 consisting of common stock. Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at December 31, 2019 and 2018 , respectively: Less than 12 months 12 months or more Total Fair Gross Fair Gross Fair Gross (in millions) December 31, 2019 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 48 $ — $ 23 $ — $ 71 $ — Mortgage-backed securities 315 (1 ) 204 (2 ) 519 (3 ) Tax-exempt municipal securities 58 — 75 — 133 — Mortgage-backed securities: Commercial 118 — 36 — 154 — Asset-backed securities 20 — 607 (3 ) 627 (3 ) Corporate debt securities 589 (2 ) 155 — 744 (2 ) Total debt securities $ 1,148 $ (3 ) $ 1,100 $ (5 ) $ 2,248 $ (8 ) December 31, 2018 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 179 $ (1 ) $ 153 $ (2 ) $ 332 $ (3 ) Mortgage-backed securities 956 (16 ) 1,019 (38 ) 1,975 (54 ) Tax-exempt municipal securities 809 (9 ) 1,648 (28 ) 2,457 (37 ) Mortgage-backed securities: Residential — — 15 — 15 — Commercial 372 (8 ) 133 (6 ) 505 (14 ) Asset-backed securities 824 (7 ) 40 — 864 (7 ) Corporate debt securities 1,434 (35 ) 1,439 (63 ) 2,873 (98 ) Total debt securities $ 4,574 $ (76 ) $ 4,447 $ (137 ) $ 9,021 $ (213 ) Approximately 96% of our debt securities were investment-grade quality, with a weighted average credit rating of AA by S&P at December 31, 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 1% of our total debt securities. Our investment policy limits investments in a single issuer and requires diversification among various asset types. Our unrealized loss from all securities was generated from approximately 235 positions out of a total of approximately 1,515 positions at December 31, 2019 . All issuers of securities we own that were trading at an unrealized loss at December 31, 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 December 31, 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 December 31, 2019 . The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the years ended December 31, 2019 , 2018 , and 2017 : 2019 2018 2017 (in millions) Gross realized gains $ 129 $ 106 $ 35 Gross realized losses (67 ) (16 ) (21 ) Net realized capital gains $ 62 $ 90 $ 14 There were no material other-than-temporary impairments in 2019 , 2018 , or 2017 . The contractual maturities of debt securities available for sale at December 31, 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 $ 1,316 $ 1,317 Due after one year through five years 1,974 2,013 Due after five years through ten years 1,724 1,780 Due after ten years 639 654 Mortgage and asset-backed securities 5,507 5,607 Total debt securities $ 11,160 $ 11,371 |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Financial Assets The following table summarizes our fair value measurements at December 31, 2019 and 2018 , respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Value Quoted Prices Other Unobservable (in millions) December 31, 2019 Cash equivalents $ 3,660 $ 3,660 $ — $ — Debt securities: U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations 354 — 354 — Mortgage-backed securities 3,710 — 3,710 — Tax-exempt municipal securities 1,463 — 1,463 — Mortgage-backed securities: Commercial 804 — 804 — Asset-backed securities 1,093 — 1,093 — Corporate debt securities 3,947 — 3,947 — Total debt securities 11,371 — 11,371 — Common stock 7 7 — — Total invested assets $ 15,038 $ 3,667 $ 11,371 $ — December 31, 2018 Cash equivalents $ 2,024 $ 2,024 $ — $ — Debt securities: U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations 417 — 417 — Mortgage-backed securities 2,544 — 2,544 — Tax-exempt municipal securities 2,771 — 2,771 — Mortgage-backed securities: Residential 55 — 55 — Commercial 523 — 523 — Asset-backed securities 985 — 985 — Corporate debt securities 3,142 — 3,142 — Total debt securities 10,437 — 10,437 — Total invested assets $ 12,461 $ 2,024 $ 10,437 $ — 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 $5,366 million at December 31, 2019 and $4,774 million at December 31, 2018 . The fair value of our senior note debt was $5,916 million at December 31, 2019 and $4,885 million at December 31, 2018 . The fair value of our senior note debt is determined based on Level 2 inputs, including quoted market prices for the same or similar debt, or if no quoted market prices are available, on the current prices estimated to be available to us for debt with similar terms and remaining maturities. Due to the short-term nature, carrying value approximates fair value for our term note and commercial paper borrowings. The outstanding commercial paper borrowings were $300 million at December 31, 2019 and we repaid the term note balance in August 2019. The term note outstanding and commercial paper borrowings were $1,295 million at December 31, 2018 . Put and Call Options Measured at Fair Value The put and call options fair values, derived from the Monte Carlo simulation, were $28 million and $557 million , respectively at December 31, 2019 and $224 million and $246 million , respectively at December 31, 2018 . The significant unobservable inputs utilized in these Level 3 fair value measurements (and selected values) include the enterprise value of Kindred at Home, annualized volatility ( 19.8% ) and secured credit rate ( 2.2% ). Enterprise value was derived from a discounted cash flow model, which utilized significant unobservable inputs for long-term net operating profit after tax margin, or NOPAT, ( 12.0% ) to measure underlying cash flows, weighted average cost of capital ( 10.0% ) and long term growth rate ( 3.0% ). The calculation of NOPAT utilized net income plus after tax interest expense. We regularly evaluate each of the assumptions used in establishing these assets and liabilities. Significant changes in assumptions for weighted average cost of capital, long term growth rates, NOPAT, volatility, credit spreads, risk free rate, and underlying cash flow estimates, could result in significantly lower or higher fair value measurements. A change in one of these assumptions is not necessarily accompanied by a change in another assumption. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis As disclosed in Note 3, we acquired MCCI, FPG, and other health and wellness related businesses during 2019 , 2018 , and 2017 . The values of net tangible assets acquired and the resulting goodwill and other intangible assets were recorded at fair value using Level 3 inputs. The majority of the tangible assets acquired and liabilities assumed were recorded at their carrying values as of the respective dates of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in these acquisitions were internally estimated primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. We developed internal estimates for the expected future cash flows and discount rates used in the present value calculations. Other than assets acquired and liabilities assumed in these acquisitions, there were no material assets or liabilities measured at fair value on a nonrecurring basis during 2019 , 2018 , or 2017 . |
MEDICARE PART D
MEDICARE PART D | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
MEDICARE PART D | MEDICARE PART D As discussed in Note 2, we cover prescription drug benefits in accordance with Medicare Part D under multiple contracts with CMS. The accompanying consolidated balance sheets include the following amounts associated with Medicare Part D as of December 31, 2019 and 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. 2019 2018 Risk CMS Risk CMS (in millions) Other current assets $ 5 $ 585 $ 15 $ 172 Trade accounts payable and accrued expenses (120 ) (356 ) (103 ) (503 ) Net current (liability) asset (115 ) 229 (88 ) (331 ) Other long-term assets 6 — 7 — Other long-term liabilities (61 ) — (89 ) — Net long-term liability (55 ) — (82 ) — Total net (liability) asset $ (170 ) $ 229 $ (170 ) $ (331 ) |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment was comprised of the following at December 31, 2019 and 2018 . 2019 2018 (in millions) Land $ 20 $ 20 Buildings and leasehold improvements 874 766 Equipment 922 890 Computer software 2,799 2,372 4,615 4,048 Accumulated depreciation (2,660 ) (2,313 ) Property and equipment, net $ 1,955 $ 1,735 Depreciation expense was $505 million in 2019 , $444 million in 2018 , and $410 million in 2017 , including amortization expense for capitalized internally developed and purchased software of $343 million in 2019 , $298 million in 2018 , and $287 million in 2017 . |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 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 years ended December 31, 2019 and 2018 were as follows: Retail Group and Specialty Healthcare Services Total (in millions) Balance at January 1, 2018 $ 1,059 $ 261 $ 1,961 $ 3,281 Acquisitions 476 — 140 616 Balance at December 31, 2018 1,535 261 2,101 3,897 Acquisitions — — 31 31 Balance at December 31, 2019 $ 1,535 $ 261 $ 2,132 $ 3,928 The following table presents details of our other intangible assets included in other long-term assets in the accompanying consolidated balance sheets at December 31, 2019 and 2018 . Weighted 2019 2018 Cost Accumulated Net Cost Accumulated Net (in millions) Other intangible assets: Customer contracts/relationships 8.7 years $ 646 $ 496 $ 150 $ 646 $ 434 $ 212 Trade names and technology 6.4 years 84 84 — 84 83 1 Provider contracts 11.8 years 70 44 26 68 37 31 Noncompetes and other 7.3 years 29 28 1 29 28 1 Total other intangible assets 8.7 years $ 829 $ 652 $ 177 $ 827 $ 582 $ 245 Amortization expense for other intangible assets was approximately $70 million in 2019 , $90 million in 2018 , and $75 million in 2017 . Amortization expense for 2018 included $12 million associated with the write-off of a trade name value reflecting the re-branding of certain provider assets. The following table presents our estimate of amortization expense for each of the five next succeeding fiscal years: (in millions) For the years ending December 31, 2020 $ 68 2021 34 2022 31 2023 18 2024 11 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES 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. Our variable lease payments include, but are not limited to, common area maintenance, taxes and insurance which are not dependent upon an index or rate. 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 December 31, 2019 , $410 million of operating ROU assets are included within other long-term assets in our consolidated balance sheet. Additionally, at December 31, 2019 , $116 million and $332 million of operating lease liabilities are included within trade accounts payable and accrued expenses and other long-term liabilities, respectively, in our consolidated balance sheet based on the remaining lease term. For the year-ended December 31, 2019 , total fixed operating lease costs, excluding short-term lease costs, were $154 million and are included within operating costs in our consolidated statement of income. Short-term lease costs were not material. In addition, for the year-ended December 31, 2019 , total variable operating lease costs were $82 million and are included within operating costs in our consolidated statement of income. We sublease facilities or partial facilities to third party tenants for space not used in our operations. For the year-ended December 31, 2019 , sublease rental income was $45 million and is included within operating costs in our consolidated statement of income. The weighted average remaining lease term is 4.9 years with a weighted average discount rate of 4.1% at December 31, 2019 . For the year-ended December 31, 2019 , cash paid for amounts included in the measurement of lease liabilities included within our operating cash flows was $151 million . Maturity of Lease Liabilities December 31, 2019 (in millions) 2020 $ 133 2021 117 2022 97 2023 52 2024 31 After 2024 70 Total lease payments 500 Less: Interest 52 Present value of lease liabilities $ 448 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 noncancelable and expire on various dates through 2046. We sublease facilities or partial facilities to third party tenants for space not used in our operations. Rent with scheduled escalation terms are accounted for on a straight-line basis over the lease term. Rent expense and sublease rental income, which are recorded net as an operating cost, for all operating leases were as follows for the years ended December 31, 2018 and 2017: 2018 2017 (in millions) Rent expense $ 167 $ 204 Sublease rental income (32 ) (33 ) Net rent expense $ 135 $ 171 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 | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
BENEFITS PAYABLE | BENEFITS PAYABLE On a consolidated basis, activity in benefits payable, excluding military services, was as follows for the years ended December 31, 2019 , 2018 and 2017 : 2019 2018 2017 (in millions) Balances at January 1 $ 4,862 $ 4,668 $ 4,563 Less: Reinsurance recoverables (95 ) (70 ) (76 ) Balances at January 1, net 4,767 4,598 4,487 Incurred related to: Current year 54,193 46,385 44,001 Prior years (336 ) (503 ) (483 ) Total incurred 53,857 45,882 43,518 Paid related to: Current year (48,421 ) (41,736 ) (39,496 ) Prior years (4,267 ) (3,977 ) (3,911 ) Total paid (52,688 ) (45,713 ) (43,407 ) Reinsurance recoverable 68 95 70 Balances at December 31 $ 6,004 $ 4,862 $ 4,668 Amounts incurred related to prior years vary from previously estimated liabilities as the claims ultimately are settled. Negative amounts reported for incurred related to prior years result from claims being ultimately settled for amounts less than originally estimated (favorable development). As previously discussed, our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for claims. Actuarial standards require the use of assumptions based on moderately adverse experience, which generally results in favorable reserve development, or reserves that are considered redundant. We experienced favorable medical claims reserve development related to prior fiscal years of $336 million in 2019 , $503 million in 2018 , and $483 million in 2017 . The table below details our favorable medical claims reserve development related to prior fiscal years by segment for 2019 , 2018 , and 2017 . (Favorable) Unfavorable Medical Claims Reserve 2019 2018 2017 Retail Segment $ (386 ) $ (398 ) $ (386 ) Group and Specialty Segment 50 (46 ) (40 ) Individual Commercial Segment — (57 ) (56 ) Other Businesses — (2 ) (1 ) Total $ (336 ) $ (503 ) $ (483 ) The medical claims reserve development for 2019 , 2018 , and 2017 primarily reflects the consistent application of trend and completion factors estimated using an assumption of moderately adverse conditions. Favorable prior period development primarily resulted from our Medicare Advantage medical business. The unfavorable Group and Specialty medical claims reserve development for 2019 reflects higher than expected claims trend and provider settlements. Benefits expense reduction of $22 million associated with long-duration future policy benefits for the year ended December 31, 2017 was excluded from the previous short duration benefits payable rollforward table. Incurred and Paid Claims Development The following discussion provides information about incurred and paid claims development for our segments as of December 31, 2019 , net of reinsurance, as well as cumulative claim frequency and the total of IBNR included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended December 31, 2017 and 2018 is presented as supplementary information. Claims frequency is measured as medical fee-for-service claims for each service encounter with a unique provider identification number. Our claims frequency measure includes claims covered by deductibles as well as claims under capitated arrangements. Claim counts may vary based on product mix and the percentage of delegated capitation arrangements. Retail Segment Activity in benefits payable for our Retail segment was as follows for the years ended December 31, 2019 , 2018 and 2017 : 2019 2018 2017 (in millions) Balances at January 1 $ 4,338 $ 3,963 $ 3,506 Less: Reinsurance recoverables (95 ) (70 ) (76 ) Balances at January 1, net 4,243 3,893 3,430 Incurred related to: Current year 48,983 41,323 38,604 Prior years (386 ) (398 ) (386 ) Total incurred 48,597 40,925 38,218 Paid related to: Current year (43,831 ) (37,189 ) (34,781 ) Prior years (3,714 ) (3,386 ) (2,974 ) Total paid (47,545 ) (40,575 ) (37,755 ) Reinsurance recoverable 68 95 70 Balances at December 31 $ 5,363 $ 4,338 $ 3,963 At December 31, 2019 , benefits payable for our Retail segment included IBNR of approximately $3.6 billion , primarily associated with claims incurred in 2019 . The cumulative number of reported claims as of December 31, 2019 was approximately 123.0 million for claims incurred in 2019 , 109.6 million for claims incurred in 2018 , and 104.7 million for claims incurred in 2017 . The following tables provide information about incurred and paid claims development for the Retail segment as of December 31, 2019 , net of reinsurance. Incurred Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2017 2018 2019 (in millions) 2017 $ 38,604 $ 38,341 $ 38,310 2018 41,323 40,984 2019 48,983 Total $ 128,277 Cumulative Paid Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2017 2018 2019 (in millions) 2017 $ 34,781 $ 38,232 $ 38,310 2018 37,189 40,841 2019 43,831 Total $ 122,982 All outstanding benefit liabilities before 2017, net of reinsurance N/A Benefits payable, net of reinsurance $ 5,295 Group and Specialty Segment Activity in benefits payable for our Group and Specialty segment, excluding military services, was as follows for the years ended December 31, 2019 , 2018 and 2017 : 2019 2018 2017 (in millions) Balances at January 1 $ 517 $ 568 $ 579 Incurred related to: Current year 5,708 5,466 5,403 Prior years 50 (46 ) (40 ) Total incurred 5,758 5,420 5,363 Paid related to: Current year (5,081 ) (4,957 ) (4,843 ) Prior years (553 ) (514 ) (531 ) Total paid (5,634 ) (5,471 ) (5,374 ) Balances at December 31 $ 641 $ 517 $ 568 At December 31, 2019 , benefits payable for our Group and Specialty segment included IBNR of approximately $567 million , primarily associated with claims incurred in 2019 . The cumulative number of reported claims as of December 31, 2019 was approximately 9.7 million for claims incurred in 2019 , 10.8 million for claims incurred in 2018 , and 11.1 million for claims incurred in 2017 . The following tables provide information about incurred and paid claims development for the Group and Specialty segment as of December 31, 2019 , net of reinsurance. Incurred Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2017 2018 2019 (in millions) 2017 $ 5,403 $ 5,358 $ 5,372 2018 5,466 5,501 2019 5,708 Total $ 16,581 Cumulative Paid Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2017 2018 2019 (in millions) 2017 $ 4,843 $ 5,351 $ 5,372 2018 4,957 5,487 2019 5,081 Total $ 15,940 All outstanding benefit liabilities before 2017, net of reinsurance N/A Benefits payable, net of reinsurance $ 641 Reconciliation to Consolidated The reconciliation of the net incurred and paid claims development tables to benefits payable in the consolidated statement of financial position is as follows: December 31, Net outstanding liabilities Retail $ 5,295 Group and Specialty 641 Benefits payable, net of reinsurance 5,936 Reinsurance recoverable on unpaid claims Retail 68 Total benefits payable, gross $ 6,004 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The provision for income taxes consisted of the following for the years ended December 31, 2019 , 2018 and 2017 : 2019 2018 2017 (in millions) Current provision: Federal $ 560 $ 139 $ 1,324 States and Puerto Rico 41 58 116 Total current provision 601 197 1,440 Deferred expense 162 194 132 Provision for income taxes $ 763 $ 391 $ 1,572 The provision for income taxes was different from the amount computed using the federal statutory rate for the years ended December 31, 2019 , 2018 and 2017 due to the following: 2019 2018 2017 (in millions) Income tax provision at federal statutory rate $ 729 $ 436 $ 1,407 States, net of federal benefit, and Puerto Rico 49 42 80 Tax exempt investment income (6 ) (11 ) (22 ) Health insurance industry fee — 243 — Nondeductible executive compensation 25 17 36 Tax reform — (39 ) 133 KMG sale — (272 ) — Other, net (34 ) (25 ) (62 ) Provision for income taxes $ 763 $ 391 $ 1,572 The tax reform law enacted on December 22, 2017 (the "Tax Reform Law") reduced the statutory federal corporate income tax rate to 21 percent from 35 percent, beginning in 2018, and required a mandatory deemed repatriation of undistributed foreign earnings. The rate reduction required a remeasurement of our net deferred tax asset . These items resulted in an estimated increase in our 2017 tax provision of approximately $133 million , including approximately $10 million for the deemed repatriation tax imposed on the undistributed earnings of our Puerto Rico operations. Revisions to our prior estimate for the income tax effects of the Tax Reform Law decreased our 2018 tax provision by approximately $39 million . The incremental tax benefit on the sale of KMG of $272 million resulted from a tax loss higher than the loss recorded in the statement of income for the year ended December 31, 2018 due to a higher tax basis in KMG than book basis. In addition, the amount reflects our ability to carryback the capital loss to tax years 2015, 2016 and 2017 at the historical tax rate of 35 percent instead of the current tax rate of 21 percent. Deferred income tax balances reflect the impact of temporary differences between the tax bases of assets or liabilities and their reported amounts in our consolidated financial statements, and are stated at enacted tax rates expected to be in effect when the reported amounts are actually recovered or settled. Principal components of our net deferred tax balances at December 31, 2019 and 2018 were as follows: Assets (Liabilities) 2019 2018 (in millions) Compensation and other accrued expense $ 111 $ 89 Benefits payable 89 79 Net operating loss carryforward 42 38 Deferred acquisition costs 22 17 Unearned revenues 8 9 Other 8 8 Capital loss carryforward 1 15 Investment securities — 44 Total deferred income tax assets 281 299 Valuation allowance (45 ) (54 ) Total deferred income tax assets, net of valuation allowance 236 245 Depreciable property and intangible assets (329 ) (273 ) Investment securities (181 ) — Prepaid expenses (64 ) (52 ) Future policy benefits payable (3 ) (5 ) Total deferred income tax liabilities (577 ) (330 ) Total net deferred income tax liabilities $ (341 ) $ (85 ) All deferred tax liabilities and assets are classified as noncurrent in our consolidated balance sheets as other long-term liabilities at December 31, 2019 and 2018. At December 31, 2019 , we had approximately $114 million of net operating losses and $2 million of capital losses to carry forward. These loss carryforwards, if not used to offset future taxable income or capital gain, will expire from 2020 through 2033 . Due to limitations and uncertainty regarding our ability to use some of the loss carryforwards and certain other deferred tax assets, a valuation allowance of $45 million was established. For the remainder of the net operating loss carryforwards and other cumulative temporary differences, based on our historical record of producing taxable income and profitability, we have concluded that future operating income will be sufficient to give rise to tax expense to recover these deferred tax assets. We file income tax returns in the United States and Puerto Rico. The U.S. Internal Revenue Service, or IRS, has completed its examinations of our consolidated income tax returns for 2017 and prior years. Our 2018 tax return is in the post-filing review period under the Compliance Assurance Process, or CAP. Our 2019 tax return is under advance review by the IRS under CAP. With a few exceptions, which are immaterial in the aggregate, we no longer are subject to state, local and foreign tax examinations for years before 2016. We are not aware of any material adjustments that may be proposed as a result of any ongoing or future examinations. We do not have material uncertain tax positions reflected in our consolidated balance sheets. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The carrying value of debt outstanding was as follows at December 31, 2019 and 2018 : 2019 2018 (in millions) Short-term debt: Commercial paper $ 300 $ 645 Term note — 650 Senior notes: $400 million, 2.625% due October 1, 2019 — 399 $400 million, 2.50% due December 15, 2020 399 — Total short-term debt $ 699 $ 1,694 Long-term debt: Senior notes: $400 million, 2.50% due December 15, 2020 $ — $ 398 $600 million, 3.15% due December 1, 2022 598 596 $400 million, 2.90% due December 15, 2022 397 396 $600 million, 3.85% due October 1, 2024 597 597 $600 million, 3.95% due March 15, 2027 595 594 $500 million, 3.125% due August 15, 2029 495 — $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 396 396 $500 million, 3.95% due August 15, 2049 492 — Total long-term debt $ 4,967 $ 4,375 Maturities of the short-term and long-term debt for the years ending December 31, are as follows: For the years ending December 31, (in millions) 2020 $ 700 2021 — 2022 1,000 2023 — 2024 600 Thereafter 3,400 Senior Notes In August 2019, we issued $500 million of 3.125% senior notes due August 15, 2029 and $500 million of 3.950% senior notes due August 15, 2049. Our net proceeds, reduced for the underwriters' discount and commission and offering expenses paid were $987 million . We used the net proceeds from this offering, together with available cash, to repay the $650 million outstanding amount due under our term note in August 2019, and the $400 million aggregate principal amount of our 2.625% senior notes due on its maturity date of October 1, 2019. Our senior notes, which are unsecured, may be redeemed at our option at any time at 100% of the principal amount plus accrued interest and a specified make-whole amount. The 8.15% senior notes are subject to an interest rate adjustment if the debt ratings assigned to the notes are downgraded (or subsequently upgraded). In addition, our senior notes contain a change of control provision that may require us to purchase the notes under certain circumstances. We recognized a loss on extinguishment of debt of approximately $17 million in 2017 for the early redemption of senior notes, which is included in interest expense in the consolidated statements of income. Credit Agreement Our 5 -year, $2.0 billion unsecured revolving credit agreement expires May 2022. Under the credit agreement, at our option, we can borrow on either a competitive advance basis or a revolving credit basis. The revolving credit portion bears interest at either LIBOR plus a spread or the base rate plus a spread. If drawn upon, the revolving credit would revert to using the alternative base rate once LIBOR is discontinued. The LIBOR spread, currently 110.0 basis points, varies depending on our credit ratings ranging from 91.0 to 150.0 basis points. We also pay an annual facility fee regardless of utilization. This facility fee, currently 15.0 basis points, may fluctuate between 9.0 and 25.0 basis points, depending upon our credit ratings. The competitive advance portion of any borrowings will bear interest at market rates prevailing at the time of borrowing on either a fixed rate or a floating rate based on LIBOR, at our option. The terms of the credit agreement include standard provisions related to conditions of borrowing which could limit our ability to borrow additional funds. In addition, the credit agreement contains customary restrictive covenants and a financial covenant regarding maximum debt to capitalization of 50% as well as customary events of default. We are in compliance with this financial covenant, with an actual debt to capitalization of 32% as measured in accordance with the credit agreement as of December 31, 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 December 31, 2019 , we had no borrowings and no letters of credit outstanding under the credit agreement. Accordingly, as of December 31, 2019 , we had $2 billion of remaining borrowing capacity (which excludes the uncommitted $500 million incremental loan facility under the credit agreement), none of which would be restricted by our financial covenant compliance requirement. We have other customary, arms-length relationships, including financial advisory and banking, with some parties to the credit agreement. Commercial Paper Under our commercial paper program we may issue short-term, unsecured commercial paper notes privately placed on a discount basis through certain broker dealers at any time not to exceed $2 billion . Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The net proceeds of issuances have been and are expected to be used for general corporate purposes. The maximum principal amount outstanding at any one time during the year ended December 31, 2019 was $801 million , with $300 million outstanding at December 31, 2019 compared to $645 million outstanding at December 31, 2018 . The outstanding commercial paper at December 31, 2019 had a weighted average annual interest rate of 2% . 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 term note shares the customary terms and provisions as well as financial covenants of our credit agreement, as discussed above. The note was prepayable without penalty. We repaid $350 million prior to December 31, 2018 and repaid the outstanding balance of $650 million in August 2019. In February 2020, we entered into a new $1 billion term loan commitment with a bank that allows for up to three draws with the initial draw at a minimum of $300 million that matures 1 year after the first draw, subject to a 1 year extension. Following any initial draw, any unused commitments in excess of $300 million expire on June 30, 2020, with the remaining commitments of up to $300 million available until September 30, 2020. If the initial draw has not been made by June 30, 2020, then all commitments expire on June 30, 2020. The facility fee, interest rate and financial covenants are consistent with those of our revolving credit agreement. There is no prepayment penalty. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Employee Savings Plan We have defined contribution retirement savings plans covering eligible employees which include matching contributions based on the amount of our employees’ contributions to the plans. The cost of these plans amounted to approximately $221 million in 2019 , $197 million in 2018 , and $217 million in 2017 . The Company’s cash match is invested pursuant to the participant’s contribution direction. Based on the closing price of our common stock of $366.52 on December 31, 2019 , approximately 11% of the retirement and savings plan’s assets were invested in our common stock, or approximately 1.6 million shares, representing approximately 1.2% of the shares outstanding as of December 31, 2019 . At December 31, 2019 , approximately 1.8 million shares of our common stock were reserved for issuance under our defined contribution retirement savings plans. Stock-Based Compensation We have plans under which options to purchase our common stock and restricted stock units have been granted to executive officers, directors and key employees. Awards generally require both a change in control and termination of employment within 2 years of the date of the change in control to accelerate the vesting, including those granted to retirement-eligible participants. The terms and vesting schedules for stock-based awards vary by type of grant. Generally, the awards vest upon time-based conditions. We have also granted awards to certain employees that vest upon a combination of time and performance-based conditions. The stock awards of retirement-eligible participants are generally earned ratably over the service period for each tranche. Accordingly, upon retirement the earned portion of the current tranche will continue to vest on the originally scheduled vest date and any remaining unearned portion of the award will be forfeited. Our equity award program includes a retirement provision that generally treats employees with a combination of age and years of services with the Company totaling 65 or greater, with a minimum required age of 55 and a minimum requirement of 5 years of service, as retirement-eligible. Upon exercise, stock-based compensation awards are settled with authorized but unissued company stock or treasury stock. The compensation expense that has been charged against income for these plans was as follows for the years ended December 31, 2019 , 2018 , and 2017 : 2019 2018 2017 (in millions) Stock-based compensation expense by type: Restricted stock $ 152 $ 124 $ 145 Stock options 11 13 12 Total stock-based compensation expense 163 137 157 Tax benefit recognized (35 ) (21 ) (32 ) Stock-based compensation expense, net of tax $ 128 $ 116 $ 125 Stock-based compensation expense for certain restricted stock in 2017 included a $29 million modification expense for certain awards. The tax benefit recognized in our consolidated financial statements is based on the amount of compensation expense recorded for book purposes, subject to limitations on the deductibility of annual compensation in excess of $500,000 per employee as mandated by the Health Care Reform Law. The actual tax benefit realized in our tax return is based on the intrinsic value, or the excess of the market value over the exercise or purchase price, of stock options exercised and restricted stock vested during the period, subject to limitations on the deductibility of annual compensation in excess of $500,000 per employee as mandated by the Health Care Reform Law. The actual tax benefit realized for the deductions taken on our tax returns from option exercises and restricted stock vesting totaled $25 million in 2019 , $49 million in 2018 , and $68 million in 2017 . There was no capitalized stock-based compensation expense during these years. At December 31, 2019 , there were 12.5 million shares reserved for stock award plans under the Humana Inc. 2011 Stock Incentive Plan, or 2011 Plan, and 16.0 million shares reserved for stock award plans under the Humana Inc. 2019 Stock Incentive Plan, or 2019 Plan. These reserved shares included giving effect to, under the 2011 Plan, 3.8 million shares of common stock available for future grants assuming all stock options were granted or 1.7 million shares available for future grants assuming all restricted stock were granted. These reserved shares included giving effect to, under the 2019 Plan, 15.8 million shares of common stock available for future grants assuming all stock options were granted or 4.7 million shares available for future grants assuming all restricted stock were granted. Shares may be issued from authorized but unissued company stock or treasury stock. Restricted Stock Restricted stock is granted with a fair value equal to the market price of our common stock on the date of grant and generally vests in equal annual tranches over a three year period from the date of grant. Certain of our restricted stock grants also include performance-based conditions generally associated with return on invested capital and strategic membership growth. Restricted stock units have forfeitable dividend equivalent rights equal to the dividend paid on common stock. The weighted-average grant date fair value of our restricted stock was $302.09 in 2019 , $276.62 in 2018 , and $222.35 in 2017 . Activity for our restricted stock was as follows for the year ended December 31, 2019 : Shares Weighted- (shares in thousands) Nonvested restricted stock at December 31, 2018 964 $ 213.99 Granted 503 302.09 Vested (421 ) 239.42 Forfeited (70 ) 269.06 Nonvested restricted stock at December 31, 2019 976 $ 245.21 Approximately 22% of the nonvested restricted stock at December 31, 2019 included performance-based conditions. The fair value of shares vested was $141 million during 2019 , $298 million during 2018 , and $306 million during 2017 . Total compensation expense not yet recognized related to nonvested restricted stock was $164 million at December 31, 2019 . We expect to recognize this compensation expense over a weighted-average period of approximately 1.7 years. There are no other contractual terms covering restricted stock once vested. Stock Options Stock options are granted with an exercise price equal to the fair market value of the underlying common stock on the date of grant. Our stock plans, as approved by the Board of Directors and stockholders, define fair market value as the average of the highest and lowest stock prices reported on the composite tape by the New York Stock Exchange on a given date. Exercise provisions vary, but most options vest in whole or in part 1 to 3 years after grant and expire 7 years after grant. The weighted-average fair value of each option granted during 2019 , 2018 , and 2017 is provided below. The fair value was estimated on the date of grant using the Black-Scholes pricing model with the weighted-average assumptions indicated below: 2019 2018 2017 Weighted-average fair value at grant date $ 68.53 $ 63.67 $ 49.81 Expected option life (years) 4.1 years 4.1 years 4.1 years Expected volatility 25.5 % 26.1 % 27.1 % Risk-free interest rate at grant date 2.4 % 2.5 % 2.0 % Dividend yield 0.7 % 0.7 % 0.7 % When valuing employee stock options, we stratify the employee population into three homogeneous groups that historically have exhibited similar exercise behaviors. These groups are executive officers, directors, and all other employees. We value the stock options based on the unique assumptions for each of these employee groups. We calculate the expected term for our employee stock options based on historical employee exercise behavior and base the risk-free interest rate on a traded zero-coupon U.S. Treasury bond with a term substantially equal to the option’s expected term. The volatility used to value employee stock options is based on historical volatility. We calculate historical volatility using a simple-average calculation methodology based on daily price intervals as measured over the expected term of the option. Activity for our option plans was as follows for the year ended December 31, 2019 : Shares Under Weighted-Average (shares in thousands) Options outstanding at December 31, 2018 677 $ 213.17 Granted 121 304.59 Exercised (305 ) 189.24 Forfeited — — Options outstanding at December 31, 2019 493 $ 250.46 Options exercisable at December 31, 2019 109 $ 216.49 As of December 31, 2019 , outstanding stock options, substantially all of which are expected to vest, had an aggregate intrinsic value of $56 million , and a weighted-average remaining contractual term of 4.8 years. As of December 31, 2019 , exercisable stock options had an aggregate intrinsic value of $16 million , and a weighted-average remaining contractual term of 3.9 years. The total intrinsic value of stock options exercised during 2019 was $43 million , compared with $43 million during 2018 and $44 million during 2017 . Cash received from stock option exercises totaled $58 million in 2019 , $50 million in 2018 , and $63 million in 2017 . Total compensation expense not yet recognized related to nonvested options was $11 million at December 31, 2019 . We expect to recognize this compensation expense over a weighted-average period of approximately 1.7 years. |
EARNINGS PER COMMON SHARE COMPU
EARNINGS PER COMMON SHARE COMPUTATION | 12 Months Ended |
Dec. 31, 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 years ended December 31, 2019 , 2018 and 2017 : 2019 2018 2017 (dollars in millions, except per Net income available for common stockholders $ 2,707 $ 1,683 $ 2,448 Weighted-average outstanding shares of common stock used to 134,055 137,486 144,493 Dilutive effect of: Employee stock options 107 194 172 Restricted stock 565 723 920 Shares used to compute diluted earnings per common share 134,727 138,403 145,585 Basic earnings per common share $ 20.20 $ 12.24 $ 16.94 Diluted earnings per common share $ 20.10 $ 12.16 $ 16.81 Number of antidilutive stock options and restricted stock awards 478 223 539 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Dividends The following table provides details of dividend payments, excluding dividend equivalent rights, in 2017 , 2018 , and 2019 under our Board approved quarterly cash dividend policy: Payment Amount Total (in millions) 2017 $1.49 $216 2018 $1.90 $262 2019 $2.15 $289 On October 24, 2019 , the Board declared a cash dividend of $0.55 per share that was paid on January 31, 2020 to stockholders of record on December 31, 2019 , for an aggregate amount of $73 million . Declaration and payment of future quarterly dividends is at the discretion of our Board and may be adjusted as business needs or market conditions change. In February 2020, the Board declared a cash dividend of $0.625 per share payable on April 24, 2020 to stockholders of record on March 31, 2020. Stock Repurchases Our Board of Directors may authorize the purchase of our common shares. Under our share repurchase authorization, shares may have been purchased from time to time at prevailing prices in the open market, by block purchases, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or in privately-negotiated transactions (including pursuant to accelerated share repurchase agreements with investment banks), subject to certain regulatory restrictions on volume, pricing, and timing. On February 14, 2017, our Board of Directors authorized the repurchase of up to $2.25 billion of our common shares expiring on December 31, 2017, exclusive of shares repurchased in connection with employee stock plans. On February 16, 2017, we entered into an accelerated share repurchase agreement, the February 2017 ASR, with Goldman, Sachs & Co. LLC, or Goldman Sachs, to repurchase $1.5 billion of our common stock as part of the $2.25 billion share repurchase authorized on February 14, 2017. On February 22, 2017, we made a payment of $1.5 billion to Goldman Sachs from available cash on hand and received an initial delivery of 5.83 million shares of our common stock from Goldman Sachs based on the then current market price of Humana common stock. The payment to Goldman Sachs was recorded as a reduction to stockholders’ equity, consisting of a $1.2 billion increase in treasury stock, which reflected the value of the initial 5.83 million shares received upon initial settlement, and a $300 million decrease in capital in excess of par value, which reflected the value of stock held back by Goldman Sachs pending final settlement of the February 2017 ASR. Upon settlement of the February 2017 ASR on August 28, 2017, we received an additional 0.84 million shares as determined by the average daily volume weighted-average share price of our common stock during the term of the agreement, less a discount, of $224.81 , bringing the total shares received under this program to 6.67 million . In addition, upon settlement we reclassified the $300 million value of stock initially held back by Goldman Sachs from capital in excess of par value to treasury stock. Subsequent to settlement of the February 2017 ASR, we repurchased an additional 3.04 million shares in the open market, utilizing the remaining $750 million of the $2.25 billion authorization prior to expiration. On December 14, 2017, our Board of Directors authorized the repurchase of up to $3.0 billion of our common shares expiring on December 31, 2020, exclusive of shares repurchased in connection with employee stock plans. On December 21, 2017, we entered into an accelerated stock repurchase agreement, the December 2017 ASR, with Bank of America, N.A., or BofA, to repurchase $1.0 billion of our common stock as part of the $3.0 billion share repurchase program authorized on December 14, 2017. On December 22, 2017, we made a payment of $1.0 billion to BofA from available cash on hand and received an initial delivery of 3.28 million shares of our common stock from BofA based on the then current market price of Humana common stock. The payment to BofA was recorded as a reduction to stockholders’ equity, consisting of an $800 million increase in treasury stock, which reflected the value of the initial 3.28 million shares received upon initial settlement, and a $200 million decrease in capital in excess of par value, which reflected the value of stock held back by BofA pending final settlement of the December 2017 ASR. Upon settlement of the ASR on March 26, 2018, we received an additional 0.46 million shares as determined by the average daily volume weighted-average share price of our common stock during the term of the ASR Agreement, less a discount, of $267.55 , bringing the total shares received under this program to 3.74 million . In addition, upon settlement we reclassified the $200 million value of stock initially held back by BofA from capital in excess of par value to treasury stock. On November 28, 2018, we entered into an accelerated stock repurchase agreement, the November 2018 ASR, with Goldman Sachs to repurchase $750 million of our common stock as part of the $3.0 billion share repurchase program authorized by the Board of Directors on December 14, 2017. On November 29, 2018, we made a payment of $750 million to Goldman Sachs from available cash on hand and received an initial delivery of 1.94 million shares of our common stock from Goldman Sachs. The payment to Goldman Sachs was recorded as a reduction to stockholders’ equity, consisting of a $600 million increase in treasury stock, which reflected 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, less a discount, 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. On July 31, 2019, we entered into an accelerated stock repurchase agreement, the July 2019 ASR, with Citibank, N.A., or Citi, to repurchase $1 billion of our common stock. On August 2, 2019, we made a payment of $1 billion to Citi and received an initial delivery of 2.7 million shares of our common stock. We recorded the payment to Citi as a reduction to stockholders’ equity, consisting of an $800 million increase in treasury stock, which reflected the value of the initial 2.7 million shares received upon initial settlement, and a $200 million decrease in capital in excess of par value, which reflected the value of stock held back by Citi pending final settlement of the July 2019 ASR. Upon final settlement of the July 2019 ASR on December 26, 2019, we received an additional 0.7 million shares as determined by the average daily volume weighted-averages share price of our common stock during the term of the agreement, less a discount, of $296.19 , bringing the total shares received under the July 2019 ASR to 3.4 million . In addition, upon settlement we reclassified the $200 million value of stock initially held back by Citi from capital in excess of par value to treasury stock. Our remaining repurchase authorization was approximately $2.0 billion as of February 19, 2020. Excluding shares acquired in connection with employee stock plans, share repurchases were as follows during the years ended December 31, 2019 , 2018 and 2017 . 2019 2018 2017 Authorization Date Purchase Not to Exceed Shares Cost Shares Cost Shares Cost (in millions) February 2017 2,250 — — — — 9.71 2,250 December 2017 3,000 — — 3.07 1,024 3.28 800 July 2019 3,000 3.40 1,000 — — — — Total repurchases 3.40 $ 1,000 3.07 $ 1,024 12.99 $ 3,050 In connection with employee stock plans, we acquired 0.2 million common shares for $70 million in 2019 , 0.4 million common shares for $116 million in 2018 , and 0.5 million common shares for $115 million in 2017 . Regulatory Requirements Certain of our subsidiaries operate in states that regulate the payment of dividends, loans, or other cash transfers to Humana Inc., our parent company, and require minimum levels of equity as well as limit investments to approved securities. The amount of dividends that may be paid to Humana Inc. by these subsidiaries, without prior approval by state regulatory authorities, or ordinary dividends, is limited based on the entity’s level of statutory income and statutory capital and surplus. If the dividend, together with other dividends paid within the preceding twelve months, exceeds a specified statutory limit or is paid from sources other than earned surplus, it is generally considered an extraordinary dividend requiring prior regulatory approval. In most states, prior notification is provided before paying a dividend even if approval is not required. Although minimum required levels of equity are largely based on premium volume, product mix, and the quality of assets held, minimum requirements vary significantly at the state level. Our state regulated insurances subsidiaries had aggregate statutory capital and surplus of approximately $8.0 billion and $7.6 billion as of December 31, 2019 and 2018 , respectively, which exceeded aggregate minimum regulatory requirements of $5.9 billion and $5.2 billion , respectively. The amount of ordinary dividends that may be paid to our parent company in 2020 is approximately $1.0 billion in the aggregate. The amount, timing and mix of ordinary and extraordinary dividend payments will vary due to state regulatory requirements, the level of excess statutory capital and surplus and expected future surplus requirements related to, for example, premium volume and product mix. Actual dividends that were paid to our parent company were approximately $1.8 billion in 2019 , $2.3 billion in 2018 , and $1.4 billion in 2017 . |
COMMITMENTS, GUARANTEES AND CON
COMMITMENTS, GUARANTEES AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, GUARANTEES AND CONTINGENCIES | COMMITMENTS, GUARANTEES AND CONTINGENCIES Purchase Obligations We have agreements to purchase services, primarily information technology related services, or to make improvements to real estate, in each case that are enforceable and legally binding on us and that specify all significant terms, including: fixed or minimum levels of service to be purchased; fixed, minimum or variable price provisions; and the appropriate timing of the transaction. We have purchase obligation commitments of $922 million in 2020 , $647 million in 2021 , $489 million in 2022 , $246 million in 2023 , and $100 million in 2024. Purchase obligations exclude agreements that are cancelable without penalty. Off-Balance Sheet Arrangements As part of our ongoing business, we do not participate or knowingly seek to participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, or SPEs, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of December 31, 2019 , we were not involved in any SPE transactions. Guarantees and Indemnifications Through indemnity agreements approved by the state regulatory authorities, certain of our regulated subsidiaries generally are guaranteed by Humana Inc., our parent company, in the event of insolvency for (1) member coverage for which premium payment has been made prior to insolvency; (2) benefits for members then hospitalized until discharged; and (3) payment to providers for services rendered prior to insolvency. Our parent also has guaranteed the obligations of certain of our non-regulated subsidiaries and funding to maintain required statutory capital levels of certain regulated subsidiaries. In the ordinary course of business, we enter into contractual arrangements under which we may agree to indemnify a third party to such arrangement from any losses incurred relating to the services they perform on behalf of us, or for losses arising from certain events as defined within the particular contract, which may include, for example, litigation or claims relating to past performance. Such indemnification obligations may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial. Government Contracts Our Medicare products, which accounted for approximately 82% of our total premiums and services revenue for the year ended December 31, 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 , and all of our product offerings filed with CMS for 2020 have been approved. CMS uses a risk-adjustment model which adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members. The risk-adjustment model, which CMS implemented pursuant to the Balanced Budget Act of 1997 (BBA) and the Benefits Improvement and Protection Act of 2000 (BIPA), generally pays more where a plan's membership has higher expected costs. Under this model, rates paid to MA plans are based on actuarially determined bids, which include a process whereby our prospective payments are based on our estimated cost of providing standard Medicare-covered benefits to an enrollee with a "national average risk profile." That baseline payment amount is adjusted to reflect the health status of our enrolled membership. Under the risk-adjustment methodology, all MA plans must collect and submit the necessary diagnosis code information from hospital inpatient, hospital outpatient, and physician providers to CMS within prescribed deadlines. The CMS risk-adjustment model uses the diagnosis data to calculate the risk-adjusted premium payment to MA plans, which CMS adjusts for coding pattern differences between the health plans and the government fee-for-service program. We generally rely on providers, including certain providers in our network who are our employees, to code their claim submissions with appropriate diagnoses, which we send to CMS as the basis for our payment received from CMS under the actuarial risk-adjustment model. We also rely on these providers to document appropriately all medical data, including the diagnosis data submitted with claims. In addition, we conduct medical record reviews as part of our data and payment accuracy compliance efforts, to more accurately reflect diagnosis conditions under the risk adjustment model. These compliance efforts include the internal contract level audits described in more detail below, as well as ordinary course reviews of our internal business processes. CMS is phasing-in the process of calculating risk scores using diagnoses data from the Risk Adjustment Processing System, or RAPS, to diagnoses data from the Encounter Data System, or EDS. The RAPS process requires MA plans to apply a filter logic based on CMS guidelines and only submit diagnoses that satisfy those guidelines. For submissions through EDS, CMS requires MA plans to submit all the encounter data and CMS will apply the risk adjustment filtering logic to determine the risk scores. For 2019 , 25% of the risk score was calculated from claims data submitted through EDS. CMS will increase that percentage to 50% in 2020 and has proposed to increase that percentage to 75% in 2021 . The phase-in from RAPS to EDS could result in different risk scores from each dataset as a result of plan processing issues, CMS processing issues, or filtering logic differences between RAPS and EDS, and could have a material adverse effect on our results of operations, financial position, or cash flows. CMS and the Office of the Inspector General of Health and Human Services, or HHS-OIG, are continuing to perform audits of various companies’ selected MA contracts related to this risk adjustment diagnosis data. We refer to these audits as Risk-Adjustment Data Validation Audits, or RADV audits. RADV audits review medical records in an attempt to validate provider medical record documentation and coding practices which influence the calculation of premium payments to MA plans. In 2012, CMS released a “Notice of Final Payment Error Calculation Methodology for Part C Medicare Advantage Risk Adjustment Data Validation (RADV) Contract-Level Audits.” The payment error calculation methodology provided that, in calculating the economic impact of audit results for an MA contract, if any, the results of the RADV audit sample would be extrapolated to the entire MA contract after a comparison of the audit results to a similar audit of the government’s traditional fee-for-service Medicare program, or Medicare FFS. We refer to the process of accounting for errors in FFS claims as the "FFS Adjuster." This comparison of RADV audit results to the FFS error rate is necessary to determine the economic impact, if any, of RADV audit results because the government used the Medicare FFS program data set, including any attendant errors that are present in that data set, to estimate the costs of various health status conditions and to set the resulting adjustments to MA plans’ payment rates in order to establish actuarial equivalence in payment rates as required under the Medicare statute. CMS already makes other adjustments to payment rates based on a comparison of coding pattern differences between MA plans and Medicare FFS data (such as for frequency of coding for certain diagnoses in MA plan data versus the Medicare FFS program dataset). The final RADV extrapolation methodology, including the first application of extrapolated audit results to determine audit settlements, is expected to be applied to CMS RADV contract level audits conducted for contract year 2011 and subsequent years. CMS is currently conducting RADV contract level audits for certain of our Medicare Advantage plans. Estimated audit settlements are recorded as a reduction of premiums revenue in our consolidated statements of income, based upon available information. We perform internal contract level audits based on the RADV audit methodology prescribed by CMS. Included in these internal contract level audits is an audit of our Private Fee-For Service business which we used to represent a proxy of the FFS Adjuster which has not yet been finalized. We based our accrual of estimated audit settlements for each contract year on the results of these internal contract level audits and update our estimates as each audit is completed. Estimates derived from these results were not material to our results of operations, financial position, or cash flows. We report the results of these internal contract level audits to CMS, including identified overpayments, if any. On October 26, 2018, CMS issued a proposed rule and accompanying materials (which we refer to as the “Proposed Rule”) related to, among other things, the RADV audit methodology described above. If implemented, the Proposed Rule would use extrapolation in RADV audits applicable to payment year 2011 contract-level audits and all subsequent audits, without the application of a FFS Adjuster to audit findings. We believe that the Proposed Rule fails to address adequately the statutory requirement of actuarial equivalence, and have provided substantive comments to CMS on the Proposed Rule as part of the notice-and-comment rulemaking process. Whether, and to what extent, CMS finalizes the Proposed Rule, and any related regulatory, industry or company reactions, could have a material adverse effect on our results of operations, financial position, or cash flows. In addition, as part of our internal compliance efforts, we routinely perform ordinary course reviews of our internal business processes related to, among other things, our risk coding and data submissions in connection with the risk- adjustment model. These reviews may also result in the identification of errors and the submission of corrections to CMS, that may, either individually or in the aggregate, be material. As such, the result of these reviews may have a material adverse effect on our results of operations, financial position, or cash flows. We believe that CMS' statements and policies regarding the requirement to report and return identified overpayments received by MA plans are inconsistent with CMS' 2012 RADV audit methodology, and the Medicare statute's requirements. These statements and policies, such as certain statements contained in the preamble to CMS’ final rule release regarding Medicare Advantage and Part D prescription drug benefit program regulations for Contract Year 2015 (which we refer to as the "Overpayment Rule"), and the Proposed Rule, appear to equate each Medicare Advantage risk adjustment data error with an “overpayment” without addressing the principles underlying the FFS Adjuster referenced above. On September 7, 2018, the Federal District Court for the District of Columbia vacated CMS's Overpayment Rule, concluding that it violated the Medicare statute, including the requirement for actuarial equivalence, and that the Overpayment Rule was also arbitrary and capricious in departing from CMS's RADV methodology without adequate explanation (among other reasons). CMS has appealed the decision to the Circuit Court of Appeals. We will continue to work with CMS to ensure that MA plans are paid accurately and that payment model principles are in accordance with the requirements of the Social Security Act, which, if not implemented correctly could have a material adverse effect on our results of operations, financial position, or cash flows. At December 31, 2019, our military services business, which accounted for approximately 1% of our total premiums and services revenue for the year ended December 31, 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 year ended December 31, 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. Legal Proceedings and Certain Regulatory Matters As previously disclosed, the Civil Division of the United States Department of Justice provided us with an information request in December 2014, concerning our Medicare Part C risk adjustment practices. The request relates to our oversight and submission of risk adjustment data generated by providers in our Medicare Advantage network, as well as to our business and compliance practices related to risk adjustment data generated by our providers and by us, including medical record reviews conducted as part of our data and payment accuracy compliance efforts, the use of health and well-being assessments, and our fraud detection efforts. We believe that this request for information is in connection with a wider review of Medicare Risk Adjustment generally that includes a number of Medicare Advantage plans, providers and vendors. We continue to cooperate with and voluntarily respond to the information requests from the Department of Justice. These matters are expected to result in additional qui tam litigation. As previously disclosed, on January 19, 2016, an individual filed a qui tam suit captioned United States of America ex rel. Steven Scott v. Humana, Inc., in United States District Court, Central District of California, Western Division. The complaint alleges certain civil violations by us in connection with the actuarial equivalence of the plan benefits under Humana’s Basic PDP plan, a prescription drug plan offered by us under Medicare Part D. The action seeks damages and penalties on behalf of the United States under the False Claims Act. The court ordered the qui tam action unsealed on September 13, 2017, so that the relator could proceed, following notice from the U.S. Government that it was not intervening at that time. On January 29, 2018, the suit was transferred to the United States District Court, Western District of Kentucky, Louisville Division. We take seriously our obligations to comply with applicable CMS requirements and actuarial standards of practice, and continue to vigorously defend against these allegations since the transfer to the Western District of Kentucky. We have engaged in active discovery with the relator who has 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 December 31, 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 | 12 Months Ended |
Dec. 31, 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 in 2018, and therefore no longer report separately the Individual Commercial segment and the Other Businesses category in the current year. Previously, the Other Businesses 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. The reportable segments are based on a combination of the type of health plan customer and adjacent businesses centered on well-being solutions for our health plans and other customers, as described below. These segment groupings are consistent with information used by our Chief Executive Officer, the chief operating decision maker, to assess performance and allocate resources. The Retail segment consists of Medicare benefits, marketed to individuals or directly via group Medicare accounts. In addition, the Retail segment also includes our contract with CMS to administer the Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program and contracts with various states to provide Medicaid, dual eligible, and Long-Term Support Services benefits, which we refer to collectively as our state-based contracts. The Group and Specialty segment consists of employer group commercial fully-insured medical and specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health benefits, as well as administrative services only, or ASO products. In addition, our Group and Specialty segment includes our military services business, primarily our TRICARE T2017 East Region contract. The Healthcare Services segment includes our services offered to our health plan members as well as to third parties, including pharmacy solutions, provider services, and clinical care service, such as home health and other services and capabilities to promote wellness and advance population health, including our minority investment in Kindred at Home. Our Healthcare Services intersegment revenues primarily relate to managing prescription drug coverage for members of our other segments through Humana Pharmacy Solutions®, or HPS, and includes the operations of Humana Pharmacy, Inc., our mail order pharmacy business. These revenues consist of the prescription price (ingredient cost plus dispensing fee), including the portion to be settled with the member (co-share) or with the government (subsidies), plus any associated administrative fees. Services revenues related to the distribution of prescriptions by third party retail pharmacies in our networks are recognized when the claim is processed and product revenues from dispensing prescriptions from our mail order pharmacies are recorded when the prescription or product is shipped. Our pharmacy operations, which are responsible for designing pharmacy benefits, including defining member co-share responsibilities, determining formulary listings, contracting with retail pharmacies, confirming member eligibility, reviewing drug utilization, and processing claims, act as a principal in the arrangement on behalf of members in our other segments. As principal, our Healthcare Services segment reports revenues on a gross basis, including co-share amounts from members collected by third party retail pharmacies at the point of service. In addition, our Healthcare Services intersegment revenues include revenues earned by certain owned providers derived from risk-based and non-risk-based managed care agreements with our health plans. Under risk based agreements, the provider receives a monthly capitated fee that varies depending on the demographics and health status of the member, for each member assigned to these owned providers by our health plans. The owned provider assumes the economic risk of funding the assigned members’ healthcare services. Under non risk-based agreements, our health plans retain the economic risk of funding the assigned members' healthcare services. Our Healthcare Services segment reports provider services revenues associated with risk-based agreements on a gross basis, whereby capitation fee revenue is recognized in the period in which the assigned members are entitled to receive healthcare services. Provider services revenues associated with non-risk-based agreements are presented net of associated healthcare costs. We present our consolidated results of operations from the perspective of the health plans. As a result, the cost of providing benefits to our members, whether provided via a third party provider or internally through a stand-alone subsidiary, is classified as benefits expense and excludes the portion of the cost for which the health plans do not bear responsibility, including member co-share amounts and government subsidies of $14.9 billion in 2019 , $13.4 billion in 2018 , and $13.5 billion in 2017 . 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 $117 million in 2019 , $129 million in 2018 , and $107 million in 2017 . Other than those described previously, the accounting policies of each segment are the same and are described in Note 2. Transactions between reportable segments primarily consist of sales of services rendered by our Healthcare Services segment, primarily pharmacy, provider, and clinical care services, to our Retail and Group and Specialty segment customers . Intersegment sales and expenses are recorded at fair value and eliminated in consolidation. Members served by our segments often use the same provider networks, enabling us in some instances to obtain more favorable contract terms with providers. Our segments also share indirect costs and assets. As a result, the profitability of each segment is interdependent. We allocate most operating expenses to our segments. Assets and certain corporate income and expenses are not allocated to the segments, including the portion of investment income not supporting segment operations, interest expense on corporate debt, and certain other corporate expenses. These items are managed at a corporate level. These corporate amounts are reported separately from our reportable segments and are included with intersegment eliminations in the tables presenting segment results below. Retail Group and Specialty Healthcare Services Eliminations/ Consolidated (in millions) 2019 External revenues Premiums: Individual Medicare Advantage $ 43,128 $ — $ — $ — $ 43,128 Group Medicare Advantage 6,475 — — — 6,475 Medicare stand-alone PDP 3,165 — — — 3,165 Total Medicare 52,768 — — — 52,768 Fully-insured 588 5,123 — — 5,711 Specialty — 1,571 — — 1,571 Medicaid and other 2,898 — — — 2,898 Total premiums 56,254 6,694 — — 62,948 Services revenue: Provider — — 446 — 446 ASO and other 17 790 — — 807 Pharmacy — — 186 — 186 Total services revenue 17 790 632 — 1,439 Total external revenues 56,271 7,484 632 — 64,387 Intersegment revenues Services — 18 18,255 (18,273 ) — Products — — 6,894 (6,894 ) — Total intersegment revenues — 18 25,149 (25,167 ) — Investment income 195 23 2 281 501 Total revenues 56,466 7,525 25,783 (24,886 ) 64,888 Operating expenses: Benefits 48,602 5,758 — (503 ) 53,857 Operating costs 5,306 1,651 24,852 (24,428 ) 7,381 Depreciation and amortization 323 88 156 (109 ) 458 Total operating expenses 54,231 7,497 25,008 (25,040 ) 61,696 Income from operations 2,235 28 775 154 3,192 Interest expense — — — 242 242 Other income, net — — — (506 ) (506 ) Income before income taxes and equity in net earnings 2,235 28 775 418 3,456 Equity in net earnings of Kindred at Home — — 14 — 14 Segment earnings $ 2,235 $ 28 $ 789 $ 418 $ 3,470 Premium and services revenues derived from our contracts with the federal government, as a percentage of our total premium and services revenues, was approximately 82% for 2019 , compared to 81% for 2018 , and 79% for 2017 . Retail Group and Specialty Healthcare Services Individual Commercial Other Businesses Eliminations/ Consolidated (in millions) 2018 External revenues Premiums: Individual Medicare Advantage $ 35,656 $ — $ — $ — $ — $ — $ 35,656 Group Medicare Advantage 6,103 — — — — — 6,103 Medicare stand-alone PDP 3,584 — — — — — 3,584 Total Medicare 45,343 — — — — — 45,343 Fully-insured 510 5,444 — 8 — — 5,962 Specialty — 1,359 — — — — 1,359 Medicaid and other 2,255 — — — 22 — 2,277 Total premiums 48,108 6,803 — 8 22 — 54,941 Services revenue: Provider — — 404 — — — 404 ASO and other 11 835 — — 4 — 850 Pharmacy — — 203 — — — 203 Total services revenue 11 835 607 — 4 — 1,457 Total external revenues 48,119 7,638 607 8 26 — 56,398 Intersegment revenues Services — 18 16,840 — — (16,858 ) — Products — — 6,330 — — (6,330 ) — Total intersegment revenues — 18 23,170 — — (23,188 ) — Investment income 136 23 34 — 110 211 514 Total revenues 48,255 7,679 23,811 8 136 (22,977 ) 56,912 Operating expenses: Benefits 40,925 5,420 — (70 ) 77 (470 ) 45,882 Operating costs 5,327 1,810 22,905 4 6 (22,527 ) 7,525 Depreciation and amortization 270 88 163 — — (116 ) 405 Total operating expenses 46,522 7,318 23,068 (66 ) 83 (23,113 ) 53,812 Income from operations 1,733 361 743 74 53 136 3,100 Loss on sale of business — — — — — 786 786 Interest expense — — — — — 218 218 Other expense, net — — — — — 33 33 Income (loss) before income taxes and equity in net earnings 1,733 361 743 74 53 (901 ) 2,063 Equity in net earnings of Kindred at Home — — 11 — — — 11 Segment earnings (losses) $ 1,733 $ 361 $ 754 $ 74 $ 53 $ (901 ) $ 2,074 Retail Group and Specialty Healthcare Services Individual Commercial Other Businesses Eliminations/ Consolidated (in millions) 2017 External revenues Premiums: Individual Medicare Advantage $ 32,720 $ — $ — $ — $ — $ — $ 32,720 Group Medicare Advantage 5,155 — — — — — 5,155 Medicare stand-alone PDP 3,702 — — — — — 3,702 Total Medicare 41,577 — — — — — 41,577 Fully-insured 478 5,462 — 947 — — 6,887 Specialty — 1,310 — — — — 1,310 Medicaid and other 2,571 — — — 35 — 2,606 Total premiums 44,626 6,772 — 947 35 — 52,380 Services revenue: Provider — — 258 — — — 258 ASO and other 10 626 — — 8 — 644 Pharmacy — — 80 — — — 80 Total services revenue 10 626 338 — 8 — 982 Total external revenues 44,636 7,398 338 947 43 — 53,362 Intersegment revenues Services — 20 17,293 — — (17,313 ) — Products — — 6,292 — — (6,292 ) — Total intersegment revenues — 20 23,585 — — (23,605 ) — Investment income 90 31 35 4 87 158 405 Total revenues 44,726 7,449 23,958 951 130 (23,447 ) 53,767 Operating expenses: Benefits 38,218 5,363 — 544 131 (760 ) 43,496 Operating costs 4,292 1,590 22,848 201 12 (22,376 ) 6,567 Merger termination fee and related costs, net — — — — — (936 ) (936 ) Depreciation and amortization 238 84 143 13 — (100 ) 378 Total operating expenses 42,748 7,037 22,991 758 143 (24,172 ) 49,505 Income (loss) from operations 1,978 412 967 193 (13 ) 725 4,262 Interest expense — — — — — 242 242 Income (loss) before income taxes and equity in net earnings 1,978 412 967 193 (13 ) 483 4,020 Equity in net earnings of Kindred at Home — — — — — — — Segment earnings (losses) $ 1,978 $ 412 $ 967 $ 193 $ (13 ) $ 483 $ 4,020 |
REINSURANCE
REINSURANCE | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
REINSURANCE | REINSURANCE Certain blocks of insurance assumed in acquisitions, primarily life and annuities in run-off status and, prior to its sale in 2018, long-term care, are subject to reinsurance where some or all of the underwriting risk related to these policies has been ceded to a third party. In addition, a large portion of our reinsurance takes the form of 100% coinsurance agreements where, in addition to all of the underwriting risk, all administrative responsibilities, including premium collections and claim payment, have also been ceded to a third party. We acquired these policies and related reinsurance agreements with the purchase of stock of companies in which the policies were originally written. We acquired these companies for business reasons unrelated to these particular policies, including the companies’ other products and licenses necessary to fulfill strategic plans. A reinsurance agreement between two entities transfers the underwriting risk of policyholder liabilities to a reinsurer while the primary insurer retains the contractual relationship with the ultimate insured. As such, these reinsurance agreements do not completely relieve us of our potential liability to the ultimate insured. However, given the transfer of underwriting risk, our potential liability is limited to the credit exposure which exists should the reinsurer be unable to meet its obligations assumed under these reinsurance agreements. Reinsurance recoverables represent the portion of future policy benefits payable and benefits payable that are covered by reinsurance. Amounts recoverable from reinsurers are estimated in a manner consistent with the methods used to determine future policy benefits payable as detailed in Note 2. Reinsurance recoverables, included in other current and long-term assets, were $267 million at December 31, 2019 and $314 million at December 31, 2018 . The amount of these reinsurance recoverables resulting from 100% coinsurance agreements was approximately $267 million at December 31, 2019 and approximately $313 million at December 31, 2018 . Premiums ceded were $1 billion in 2019 , $976 million in 2018 and $969 million in 2017 . Benefits ceded were $881 million in 2019 , $980 million in 2018 , and $844 million in 2017 . Historical ceded premium and benefits reflect the activity associated with ceding all risk under a Medicaid contract to a third party reinsurer. The reinsurance agreement ceding all risk under the Medicaid contract was terminated effective January 1, 2020. We evaluate the financial condition of our reinsurers on a regular basis. Protective Life Insurance Company with $174 million in reinsurance recoverables is well-known and well-established with a AM Best rating of A+ (superior) at December 31, 2019 . The remaining reinsurance recoverables of $94 million are divided between 11 other reinsurers, with $72 million subject to funds withheld accounts or other financial guarantees supporting the repayment of these amounts. |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL INFORMATION (Unaudited) | QUARTERLY FINANCIAL INFORMATION (Unaudited) A summary of our quarterly unaudited results of operations for the years ended December 31, 2019 and 2018 follows: 2019 First Second Third Fourth (in millions, except per share results) Total revenues $ 16,107 $ 16,245 $ 16,241 $ 16,295 Income before income taxes and equity in net earnings 746 1,229 888 593 Net income 566 940 689 512 Basic earnings per common share (1) $ 4.18 $ 6.96 $ 5.16 $ 3.87 Diluted earnings per common share (1) $ 4.16 $ 6.94 $ 5.14 $ 3.84 2018 First Second Third Fourth (in millions, except per share results) Total revenues $ 14,279 $ 14,259 $ 14,206 $ 14,168 Income before income taxes and equity in net earnings 707 19 901 436 Net income 491 193 644 355 Basic earnings per common share (1) $ 3.56 $ 1.40 $ 4.68 $ 2.60 Diluted earnings per common share (1) $ 3.53 $ 1.39 $ 4.65 $ 2.58 (1) |
SCHEDULE I - PARENT COMPANY FIN
SCHEDULE I - PARENT COMPANY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
SCHEDULE I - PARENT COMPANY FINANCIAL INFORMATION | SCHEDULE I—PARENT COMPANY FINANCIAL INFORMATION CONDENSED BALANCE SHEETS December 31, 2019 2018 (in millions, except share ASSETS Current assets: Cash and cash equivalents $ 1,006 $ 265 Investment securities 355 313 Receivable from operating subsidiaries 1,248 1,306 Other current assets 778 628 Total current assets 3,387 2,512 Property and equipment, net 1,403 1,209 Investments in subsidiaries 14,763 16,951 Equity method investment in Kindred at Home 1,063 1,047 Other long-term assets 778 359 Total assets $ 21,394 $ 22,078 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Payable to operating subsidiaries $ 1,975 $ 4,487 Current portion of notes payable to operating subsidiaries 36 28 Book overdraft 40 38 Short-term debt 699 1,694 Other current liabilities 1,128 791 Total current liabilities 3,878 7,038 Long-term debt 4,967 4,375 Other long-term liabilities 512 504 Total liabilities 9,357 11,917 Commitments and contingencies Stockholders’ equity: Preferred stock, $1 par; 10,000,000 shares authorized; none issued — — Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 33 33 Capital in excess of par value 2,820 2,535 Retained earnings 17,483 15,072 Accumulated other comprehensive income (loss) 156 (159 ) Treasury stock, at cost, 66,524,771 shares at December 31, 2019 (8,455 ) (7,320 ) Total stockholders’ equity 12,037 10,161 Total liabilities and stockholders’ equity $ 21,394 $ 22,078 See accompanying notes to the parent company financial statements. SCHEDULE I—PARENT COMPANY FINANCIAL INFORMATION CONDENSED STATEMENTS OF INCOME For the year ended December 31, 2019 2018 2017 (in millions) Revenues: Management fees charged to operating subsidiaries $ 1,789 $ 1,666 $ 1,864 Investment and other income, net 28 30 57 1,817 1,696 1,921 Expenses: Operating costs 1,578 1,468 1,801 Merger termination fee and related costs, net — — (936 ) Depreciation 387 342 332 Interest 242 218 243 2,207 2,028 1,440 Other (income) expense, net (507 ) 33 — Loss on sale of business — 782 — Income (loss) before income taxes and equity in net earnings of subsidiaries 117 (1,147 ) 481 Provision (benefit) for income taxes 27 (542 ) 61 Income (loss) before equity in net earnings of subsidiaries 90 (605 ) 420 Equity in net earnings of subsidiaries 2,603 2,277 2,028 Equity in net earnings of Kindred at Home 14 11 — Net income $ 2,707 $ 1,683 $ 2,448 See accompanying notes to the parent company financial statements. SCHEDULE I—PARENT COMPANY FINANCIAL INFORMATION CONDENSED STATEMENTS OF COMPREHENSIVE INCOME For the year ended December 31, 2019 2018 2017 (in millions) Net income $ 2,707 $ 1,683 $ 2,448 Other comprehensive income (loss): Change in gross unrealized investment losses/gains 450 (189 ) 149 Effect of income taxes (105 ) 51 (55 ) Total change in unrealized investment 345 (138 ) 94 Reclassification adjustment for net realized (34 ) (53 ) (14 ) Effect of income taxes 8 17 5 Total reclassification adjustment, net of tax (26 ) (36 ) (9 ) Other comprehensive income (loss), net of tax 319 (174 ) 85 Comprehensive income attributable to our equity method (4 ) (4 ) — Comprehensive income $ 3,022 $ 1,505 $ 2,533 See accompanying notes to the parent company financial statements. SCHEDULE I—PARENT COMPANY FINANCIAL INFORMATION CONDENSED STATEMENTS OF CASH FLOWS For the year ended December 31, 2019 2018 2017 (in millions) Net cash provided by operating activities $ 3,529 $ 2,719 $ 2,423 Cash flows from investing activities: Acquisitions, net of cash acquired — (354 ) — Acquisitions, equity method investment in Kindred at Home — (1,095 ) — Capital contributions to operating subsidiaries (423 ) (697 ) (695 ) Purchases of investment securities (204 ) (145 ) (53 ) Proceeds from sale of investment securities 15 35 — Maturities of investment securities 134 59 51 Purchases of property and equipment, net (585 ) (465 ) (359 ) Net cash used in investing activities (1,063 ) (2,662 ) (1,056 ) Cash flows from financing activities: Proceeds from issuance of senior notes, net 987 — 1,779 (Repayments) proceeds from issuance of commercial paper, net (360 ) 485 (153 ) Proceeds from term loan — 1,000 — Repayment of term loan (650 ) (350 ) — Repayment of long-term debt (400 ) — (800 ) Change in book overdraft 2 (3 ) 3 Common stock repurchases (1,070 ) (1,090 ) (3,365 ) Dividends paid (291 ) (265 ) (220 ) Proceeds from stock option exercises and other 57 48 62 Net cash used in financing activities (1,725 ) (175 ) (2,694 ) Increase (decrease) in cash and cash equivalents 741 (118 ) (1,327 ) Cash and cash equivalents at beginning of year 265 383 1,710 Cash and cash equivalents at end of year $ 1,006 $ 265 $ 383 See accompanying notes to the parent company financial statements. SCHEDULE I—PARENT COMPANY FINANCIAL INFORMATION NOTES TO CONDENSED FINANCIAL STATEMENTS Parent company financial information has been derived from our consolidated financial statements and excludes the accounts of all operating subsidiaries. This information should be read in conjunction with our consolidated financial statements. Management Fee Through intercompany service agreements approved, if required, by state regulatory authorities, Humana Inc., our parent company, charges a management fee for reimbursement of certain centralized services provided to its subsidiaries including information systems, disbursement, investment and cash administration, marketing, legal, finance, and medical and executive management oversight. Dividends Cash dividends received from subsidiaries and included as a component of net cash provided by operating activities were $1.8 billion in 2019 , $2.3 billion in 2018 , and $1.4 billion in 2017 . Guarantee Through indemnity agreements approved by state regulatory authorities, certain of our regulated subsidiaries generally are guaranteed by our parent company in the event of insolvency for: (1) member coverage for which premium payment has been made prior to insolvency; (2) benefits for members then hospitalized until discharged; and (3) payment to providers for services rendered prior to insolvency. Our parent has also guaranteed the obligations of our military services subsidiaries and funding to maintain required statutory capital levels of certain other regulated subsidiaries. Certain of our subsidiaries operate in states that regulate the payment of dividends, loans, or other cash transfers to Humana Inc., our parent company, and require minimum levels of equity as well as limit investments to approved securities. The amount of dividends that may be paid to Humana Inc. by these subsidiaries, without prior approval by state regulatory authorities, or ordinary dividends, is limited based on the entity’s level of statutory income and statutory capital and surplus. If the dividend, together with other dividends paid within the preceding twelve months, exceeds a specified statutory limit or is paid from sources other than earned surplus, it is generally considered an extraordinary dividend requiring prior regulatory approval. In most states, prior notification is provided before paying a dividend even if approval is not required. Although minimum required levels of equity are largely based on premium volume, product mix, and the quality of assets held, minimum requirements vary significantly at the state level. Our state regulated insurances subsidiaries had aggregate statutory capital and surplus of approximately $8.0 billion and $7.6 billion as of December 31, 2019 and 2018 , respectively, which exceeded aggregate minimum regulatory requirements of $5.9 billion and $5.2 billion , respectively. The amount of ordinary dividends that may be paid to our parent company in 2020 is approximately $1 billion in the aggregate. The amount, timing and mix of ordinary and extraordinary dividend payments will vary due to state regulatory requirements, the level of excess statutory capital and surplus and expected future surplus requirements related to, for example, premium volume and product mix. Actual dividends that were paid to our parent company were approximately $1.8 billion in 2019 , $2.3 billion in 2018 , and $1.4 billion in 2017 . Our use of operating cash flows derived from our non-insurance subsidiaries, such as in our Healthcare Services segment, is generally not restricted by state departments of insurance (or comparable state regulators). Refer to Notes 3 and 4 of the notes to consolidated financial statements in this Annual Report on Form 10-K for a description of certain acquisitions and divestitures. During 2019 , 2018 and 2017 Refer to Note 12 of the notes to consolidated financial statements included in this Annual Report on Form 10-K for a description of income taxes. Refer to Note 13 of the notes to consolidated financial statements included in this Annual Report on Form 10-K for a description of debt. Refer to Note 16 of the notes to consolidated financial statements included in this Annual Report on Form 10-K for a description of stockholders’ equity, including stock repurchases and stockholder dividends. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS For the Years Ended December 31, 2019 , 2018 , and 2017 (in millions) Additions Balance at Acquired/(Disposed) Charged Charged to Deductions Balance at Allowance for loss on receivables: 2019 $ 79 $ — $ (1 ) $ — $ (9 ) $ 69 2018 96 — 36 (29 ) (24 ) 79 2017 118 — 20 (10 ) (32 ) 96 Deferred tax asset valuation allowance: 2019 (54 ) — 9 — — (45 ) 2018 (49 ) — (5 ) — — (54 ) 2017 (49 ) — — — — (49 ) (1) Represents changes in retroactive membership adjustments to premiums revenue and contractual allowances adjustments to services revenue as more fully described in Note 2 to the consolidated financial statements included in this annual report on Form 10-K. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Our consolidated financial statements include the accounts of Humana Inc. and subsidiaries that the Company controls, including variable interest entities associated with medical practices for which we are the primary beneficiary. We do not own many of our medical practices but instead enter into exclusive management agreements with the affiliated Professional Associations, or P.A.s, that operate these medical practices. Based upon the provisions of these agreements, these affiliated P.A.s are variable interest entities and we are the primary beneficiary, and accordingly we consolidate the affiliated P.A.s. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. |
Health Care Reform | Health Care Reform The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010 (which we collectively refer to as the Health Care Reform Law) enacted significant reforms to various aspects of the U.S. health insurance industry. Certain of these reforms became effective January 1, 2014, including an annual insurance industry premium-based fee and the establishment of federally-facilitated or state-based exchanges. Operating results for our individual commercial medical business compliant with the Health Care Reform Law were challenged primarily due to unanticipated modifications in the program subsequent to the passing of the Health Care Reform Law, resulting in higher covered population morbidity and the ensuing enrollment and claims issues causing volatility in claims experience. As a result of these and other factors, we exited our individual commercial medical business effective January 1, 2018. The annual premium-based fee on health insurers is not deductible for tax purposes. We estimate a liability for the health insurance industry fee and record it in full once qualifying insurance coverage is provided in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized ratably to expense over the same calendar year. We record the liability for the health insurance industry fee in trade accounts payable and accrued expenses and record the deferred cost in other current assets in our consolidated financial statements. We pay the health insurance industry fee in September or October of each year. The Consolidated Appropriations Act enacted on December 18, 2015, included a one year suspension in 2017 of the health insurance industry fee. In 2018, we paid the federal government $1.04 billion for the annual health insurance industry fee attributed to calendar year 2018. The Continuing Resolution bill, H.R. 195, enacted on January 22, 2018, included a one year suspension in 2019 of the health insurance industry fee, but the fee will resume for calendar year 2020. The Further Consolidated Appropriations Act, 2020, enacted on December 20, 2019, permanently repealed the health insurance industry fee beginning in calendar year 2021. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash, time deposits, money market funds, commercial paper, other money market instruments, and certain U.S. Government securities with an original maturity of three months or less. Carrying value approximates fair value due to the short-term maturity of the investments. |
Investment Securities | Investment Securities Investment securities, which consist primarily of debt securities, have been categorized as available for sale and, as a result, are stated at fair value. Investment securities available for current operations are classified as current assets. Investment securities available for our long-term insurance products and professional liability funding requirements, as well as restricted statutory deposits, are classified as long-term assets. For the purpose of determining gross realized gains and losses, which are included as a component of investment income in the consolidated statements of income, the cost of investment securities sold is based upon specific identification. Unrealized holding gains and losses, net of applicable deferred taxes, are included as a component of stockholders’ equity and comprehensive income until realized from a sale or other-than-temporary impairment. Under the other-than-temporary impairment model for debt securities held, we recognize an impairment loss in income in an amount equal to the full difference between the amortized cost basis and the fair value when we have the intent to sell the debt security or it is more likely than not we will be required to sell the debt security before recovery of our amortized cost basis. However, if we do not intend to sell the debt security, we evaluate the expected cash flows to be received as compared to amortized cost and determine if a credit loss has occurred. In the event of a credit loss, only the amount of the impairment associated with the credit loss is recognized currently in income with the remainder of the loss recognized in other comprehensive income. When we do not intend to sell a security in an unrealized loss position, potential other-than-temporary impairment is considered using a variety of factors, including the length of time and extent to which the fair value has been less than cost; adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a security; payment structure of the security; changes in credit rating of the security by the rating agencies; the volatility of the fair value changes; and changes in fair value of the security after the balance sheet date. For debt securities, we take into account expectations of relevant market and economic data. For example, with respect to mortgage and asset-backed securities, such data includes underlying loan level data and structural features such as seniority and other forms of credit enhancements. A decline in fair value is considered other-than-temporary when we do not expect to recover the entire amortized cost basis of the security. We estimate the amount of the credit loss component of a debt security as the difference between the amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of future cash flows discounted at the implicit interest rate at the date of purchase. |
Receivables and Revenue Recognition | Receivables and Revenue Recognition We generally establish one-year commercial membership contracts with employer groups, subject to cancellation by the employer group on 30 -day written notice. Our Medicare contracts with CMS renew annually. Our military services contracts with the federal government and certain contracts with various state Medicaid programs generally are multi-year contracts subject to annual renewal provisions. Premiums Revenue We receive monthly premiums from the federal government and various states according to government specified payment rates and various contractual terms. We bill and collect premium from employer groups and members in our Medicare and other individual products monthly. Changes in premium revenues resulting from the periodic changes in risk-adjustment scores derived from medical diagnoses for our membership are estimated by projecting the ultimate annual premium and are recognized ratably during the year, with adjustments each period to reflect changes in the ultimate premium. Receivables or payables are classified as current or long-term in our consolidated balance sheet based on the timing of the expected settlement. Premiums revenue is estimated by multiplying the membership covered under the various contracts by the contractual rates. Premiums revenue is recognized as income in the period members are entitled to receive services, and is net of estimated uncollectible amounts, retroactive membership adjustments, and adjustments to recognize rebates under the minimum benefit ratios required under the Health Care Reform Law. We estimate policyholder rebates by projecting calendar year minimum benefit ratios for the small group and large group markets, as defined by the Health Care Reform Law using a methodology prescribed by HHS, separately by state and legal entity. Medicare Advantage and Medicaid products are also subject to minimum benefit ratio requirements. Estimated calendar year rebates recognized ratably during the year are revised each period to reflect current experience. Retroactive membership adjustments result from enrollment changes not yet processed, or not yet reported by an employer group or the government. We routinely monitor the collectability of specific accounts, the aging of receivables, historical retroactivity trends, estimated rebates, as well as prevailing and anticipated economic conditions, and reflect any required adjustments in current operations. Premiums received prior to the service period are recorded as unearned revenues. Medicare Part D We cover prescription drug benefits in accordance with Medicare Part D under multiple contracts with CMS. The payments we receive monthly from CMS and members, which are determined from our annual bid, represent amounts for providing prescription drug insurance coverage. We recognize premiums revenue for providing this insurance coverage ratably over the term of our annual contract. Our CMS payment is subject to risk sharing through the Medicare Part D risk corridor provisions. In addition, receipts for reinsurance and low-income cost subsidies as well as receipts for certain discounts on brand name prescription drugs in the coverage gap represent payments for prescription drug costs for which we are not at risk. The risk corridor provisions compare costs targeted in our bids to actual prescription drug costs, limited to actual costs that would have been incurred under the standard coverage as defined by CMS. Variances exceeding certain thresholds may result in CMS making additional payments to us or require us to refund to CMS a portion of the premiums we received. As risk corridor provisions are considered in our overall annual bid process, we estimate and recognize an adjustment to premiums revenue related to these provisions based upon pharmacy claims experience. We record a receivable or payable at the contract level and classify the amount as current or long-term in our consolidated balance sheets based on the timing of expected settlement. Reinsurance and low-income cost subsidies represent funding from CMS in connection with the Medicare Part D program for which we assume no risk. Reinsurance subsidies represent funding from CMS for its portion of prescription drug costs which exceed the member’s out-of-pocket threshold, or the catastrophic coverage level. Low-income cost subsidies represent funding from CMS for all or a portion of the deductible, the coinsurance and co-payment amounts above the out-of-pocket threshold for low-income beneficiaries. Monthly prospective payments from CMS for reinsurance and low-income cost subsidies are based on assumptions submitted with our annual bid. A reconciliation and related settlement of CMS’s prospective subsidies against actual prescription drug costs we paid is made after the end of the year. The Health Care Reform Law mandates consumer discounts of 50% on brand name prescription drugs for Part D plan participants in the coverage gap. These discounts are funded by CMS and pharmaceutical manufacturers while we administer the application of these funds. We account for these subsidies and discounts as a deposit in our consolidated balance sheets and as a financing activity under receipts (withdrawals) from contract deposits in our consolidated statements of cash flows. For 2019 , subsidy and discount payments of $11.8 billion exceeded reimbursements of $11.2 billion by $0.6 billion . For 2018 , subsidy and discount payments of $10.3 billion exceeded reimbursements of $9.6 billion by $0.7 billion . For 2017 , subsidy and discount reimbursements of $12.1 billion exceeded payments of $10.2 billion by $1.9 billion . We do not recognize premiums revenue or benefit expenses for these subsidies or discounts. Receipt and payment activity is accumulated at the contract level and recorded in our consolidated balance sheets in other current assets or trade accounts payable and accrued expenses depending on the contract balance at the end of the reporting period. Settlement of the reinsurance and low-income cost subsidies as well as the risk corridor payment is based on a reconciliation made approximately 9 months after the close of each calendar year. Settlement with CMS for brand name prescription drug discounts is based on a reconciliation made approximately 14 to 18 months after the close of each calendar year. We continue to revise our estimates with respect to the risk corridor provisions based on subsequent period pharmacy claims data. See Note 7 for detail regarding amounts recorded to our consolidated balance sheets related to the risk corridor settlement and subsidies from CMS with respect to the Medicare Part D program. Services Revenue Patient services revenue Patient services include injury and illness care and related services as well as other healthcare services related to customer needs or as required by law. Patient services revenues are recognized in the period services are provided to the customer and are net of contractual allowances. Administrative services fees Administrative services fees cover the processing of claims, offering access to our provider networks and clinical programs, and responding to customer service inquiries from members of self-funded groups. Revenues from providing administration services, also known as administrative services only, or ASO, are recognized in the period services are performed and are net of estimated uncollectible amounts. ASO fees are estimated by multiplying the membership covered under the various contracts by the contractual rates. Under ASO contracts, self-funded employers retain the risk of financing substantially all of the cost of health benefits. However, many ASO customers purchase stop loss insurance coverage from us to cover catastrophic claims or to limit aggregate annual costs. Accordingly, we have recorded premiums revenue and benefits expense related to these stop loss insurance contracts. We routinely monitor the collectability of specific accounts, the aging of receivables, as well as prevailing and anticipated economic conditions, and reflect any required adjustments in current operations. ASO fees received prior to the service period are recorded as unearned revenues. Under our TRICARE contracts with the Department of Defense (DoD) we provide administrative services, including offering access to our provider networks and clinical programs, claim processing, customer service, enrollment, and other services, while the federal government retains all of the risk of the cost of health benefits. We account for revenues under our contracts net of estimated health care costs similar to an administrative services fee only agreement. Our contracts include fixed administrative services fees and incentive fees and penalties. Administrative services fees are recognized as services are performed. Our TRICARE members are served by both in-network and out-of-network providers in accordance with our contracts. We pay health care costs related to these services to the providers and are subsequently reimbursed by the DoD for such payments. We account for the payments of the federal government’s claims and the related reimbursements under deposit accounting in our consolidated balance sheets and as a financing activity under receipts (withdrawals) from contract deposits in our consolidated statements of cash flows. For 2019, health care cost payments of approximately $6.5 billion exceeded reimbursements of approximately $6.4 billion by $63 million . For 2018, health care cost reimbursements and payments were each approximately $5.6 billion , with reimbursements exceeding payments by $38 million for the year. For 2017, health care cost reimbursements and payments were each approximately $3.4 billion with reimbursements exceeding payments by $11 million for the year. Receivables Receivables, including premium receivables, patient services revenue receivables, and ASO fee receivables, are shown net of allowances for estimated uncollectible accounts, retroactive membership adjustments, and contractual allowances. |
Other Current Assets | Other Current Assets |
Policy Acquisition Costs | Policy Acquisition Costs Policy acquisition costs are those costs that relate directly to the successful acquisition of new and renewal insurance policies. Such costs include commissions, costs of policy issuance and underwriting, and other costs we incur to acquire new business or renew existing business. We expense policy acquisition costs related to our employer-group prepaid health services policies as incurred. These short-duration employer-group prepaid health services policies typically have a 1 -year term and may be canceled upon 30 days notice by the employer group. Life insurance, annuities, certain health and other supplemental, and, prior to the sale of our wholly-owned subsidiary, KMG America Corporation, or KMG, in 2018, long term care policies sold to individuals are accounted for as long-duration insurance products because they are expected to remain in force for an extended period beyond one year and premium received in the earlier years is intended to pay anticipated benefits to be incurred in future years . As a result, we defer policy acquisition costs, primarily consisting of commissions, and amortize them over the estimated life of the policies in proportion to premiums earned. Deferred acquisition costs are reviewed to determine if they are recoverable from future income. |
Long-Lived Assets | Long-Lived Assets Property and equipment is recorded at cost. Gains and losses on sales or disposals of property and equipment are included in operating costs. Certain costs related to the development or purchase of internal-use software are capitalized. Depreciation is computed using the straight-line method over estimated useful lives ranging from 3 to 10 years for equipment, 3 to 5 years for computer software, and 10 to 20 years for buildings. Improvements to leased facilities are depreciated over the shorter of the remaining lease term or the anticipated life of the improvement. We periodically review long-lived assets, including property and equipment and definite-lived intangible assets, for impairment whenever adverse events or changes in circumstances indicate the carrying value of the asset may not be recoverable. Losses are recognized for a long-lived asset to be held and used in our operations when the undiscounted future cash flows expected to result from the use of the asset are less than its carrying value. We recognize an impairment loss based on the excess of the carrying value over the fair value of the asset. A long-lived asset held for sale is reported at the lower of the carrying amount or fair value less costs to sell. Depreciation expense is not recognized on assets held for sale. Losses are recognized for a long-lived asset to be abandoned when the asset ceases to be used. In addition, we periodically review the estimated lives of all long-lived assets for reasonableness. |
Equity Method Investments | Equity Method Investments We use the equity method of accounting for equity investments in companies where we are able to exercise significant influence, but not control, over operating and financial policies of the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, representation on the board of directors, organizational structure, participation in policy-making decisions and material intra-entity transactions. Generally, under the equity method, original investments in these entities are recorded at cost and subsequently adjusted by our share of equity in income or losses after the date of acquisition as well as capital contributions to and distributions from these companies. Our proportionate share of the net income or loss of these companies is included in consolidated net income. Investment amounts in excess of our share of an investee's net assets are amortized over the life of the related asset creating the excess. Excess goodwill is not amortized. We evaluate equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by us when reviewing an equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than carrying value, the investee’s financial condition and near-term prospects and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. |
Goodwill and Definite-Lived Intangible Assets | Goodwill and Definite-Lived Intangible Assets Goodwill represents the unamortized excess of cost over the fair value of the net tangible and other intangible assets acquired. We are required to test at least annually for impairment at a level of reporting referred to as the reporting unit, and more frequently if adverse events or changes in circumstances indicate that the asset may be impaired. A reporting unit either is our operating segments or one level below the operating segments, referred to as a component, which comprise our reportable segments. A component is considered a reporting unit if the component constitutes a business for which discrete financial information is available that is regularly reviewed by management. We aggregate the components of an operating segment into one reporting unit if they have similar economic characteristics. Goodwill is assigned to the reporting units that are expected to benefit from the specific synergies of the business combination. We use the one-step process to review goodwill for impairment to determine both the existence and amount of goodwill impairment, if any. Impairment tests are performed, at a minimum, in the fourth quarter of each year supported by our long-range business plan and annual planning process. We rely on an evaluation of future discounted cash flows to determine fair value of our reporting units. The fair value of our reporting units with significant goodwill exceeded carrying amounts by a substantial margin. A 100 basis point increase in the discount rate would not have a significant impact on the amount of margin for any of our reporting units with significant goodwill, with the exception of our clinical and provider reporting units in our Healthcare Services segment. Our clinical and provider reporting units primarily provide services to our Retail members. A significant increase in the discount rate, decrease in the long-term growth rate, or substantial reductions in our underlying cash flow assumptions, including revenue growth rates, medical and operating cost trends, and projected operating income, could have a negative impact on the estimated fair value of these reporting units. The clinical reporting unit had a fair value of $544 million which exceeded its carrying value of $533 million by $11 million or 2% . If the discount rate increased 100 basis points, then the clinical reporting unit would incur an impairment loss of approximately $62 million . The provider reporting unit had a fair value of $2.3 billion which exceeded its carrying value of $1.3 billion by $1.0 billion or 78% . The provider reporting unit estimate of fair value relies on multiple assumptions regarding the underlying long-term cash flows, any one of which may be significantly impacted by future changes in estimates and may negatively impact fair value. The clinical and provider reporting units account for $524 million and $761 million , respectively, of goodwill. Impairment tests completed for 2019 , 2018 , and 2017 did not result in an impairment loss. Definite-lived intangible assets primarily relate to acquired customer contracts/relationships and are included with other long-term assets in the consolidated balance sheets. Definite-lived intangible assets are amortized over the useful life generally using the straight-line method. We review definite-lived intangible assets for impairment under our long-lived asset policy. |
Benefits Payable and Benefits Expense Recognition | Benefits Payable and Benefits Expense Recognition Benefits expense includes claim payments, capitation payments, pharmacy costs net of rebates, allocations of certain centralized expenses and various other costs incurred to provide health insurance coverage to members, as well as estimates of future payments to hospitals and others for medical care and other supplemental benefits provided on or prior to the balance sheet date. Capitation payments represent monthly contractual fees disbursed to primary care and other providers who are responsible for providing medical care to members. Pharmacy costs represent payments for members’ prescription drug benefits, net of rebates from drug manufacturers. Receivables for such pharmacy rebates are included in other current assets in our consolidated balance sheets. Other supplemental benefits include dental, vision, and other supplemental health products. We estimate the costs of our benefits expense payments using actuarial methods and assumptions based upon claim payment patterns, medical cost inflation, historical developments such as claim inventory levels and claim receipt patterns, and other relevant factors, and record benefit reserves for future payments. We continually review estimates of future payments relating to claims costs for services incurred in the current and prior periods and make necessary adjustments to our reserves. Benefits expense is recognized in the period in which services are provided and includes an estimate of the cost of services which have been incurred but not yet reported, or IBNR. Our reserving practice is to consistently recognize the actuarial best point estimate within a level of confidence required by actuarial standards. Actuarial standards of practice generally require a level of confidence such that the liabilities established for IBNR have a greater probability of being adequate versus being insufficient, or such that the liabilities established for IBNR are sufficient to cover obligations under an assumption of moderately adverse conditions. Adverse conditions are situations in which the actual claims are expected to be higher than the otherwise estimated value of such claims at the time of the estimate. Therefore, in many situations, the claim amounts ultimately settled will be less than the estimate that satisfies the actuarial standards of practice. We develop our estimate for IBNR using actuarial methodologies and assumptions, primarily based upon historical claim experience. Depending on the period for which incurred claims are estimated, we apply a different method in determining our estimate. For periods prior to the most recent two months, the key assumption used in estimating our IBNR is that the completion factor pattern remains consistent over a rolling 12-month period after adjusting for known changes in claim inventory levels and known changes in claim payment processes. Completion factors result from the calculation of the percentage of claims incurred during a given period that have historically been adjudicated as of the reporting period. For the most recent two months, the incurred claims are estimated primarily from a trend analysis based upon per member per month claims trends developed from our historical experience in the preceding months, adjusted for known changes in estimates of recent hospital and drug utilization data, provider contracting changes, changes in benefit levels, changes in member cost sharing, changes in medical management processes, product mix, and workday seasonality. The completion factor method is used for the months of incurred claims prior to the most recent two months because the historical percentage of claims processed for those months is at a level sufficient to produce a consistently reliable result. Conversely, for the most recent two months of incurred claims, the volume of claims processed historically is not at a level sufficient to produce a reliable result, which therefore requires us to examine historical trend patterns as the primary method of evaluation. Changes in claim processes, including recoveries of overpayments, receipt cycle times, claim inventory levels, outsourcing, system conversions, and processing disruptions due to weather or other events affect views regarding the reasonable choice of completion factors. Claim payments to providers for services rendered are often net of overpayment recoveries for claims paid previously, as contractually allowed. Claim overpayment recoveries can result from many different factors, including retroactive enrollment activity, audits of provider billings, and/or payment errors. Changes in patterns of claim overpayment recoveries can be unpredictable and result in completion factor volatility, as they often impact older dates of service. The receipt cycle time measures the average length of time between when a medical claim was initially incurred and when the claim form was received. Increases in electronic claim submissions from providers decrease the receipt cycle time. If claims are submitted or processed on a faster (slower) pace than prior periods, the actual claim may be more (less) complete than originally estimated using our completion factors, which may result in reserves that are higher (lower) than required. Medical cost trends potentially are more volatile than other segments of the economy. The drivers of medical cost trends include increases in the utilization of hospital facilities, physician services, new higher priced technologies and medical procedures, and new prescription drugs and therapies, as well as the inflationary effect on the cost per unit of each of these expense components. Other external factors such as government-mandated benefits or other regulatory changes, the tort liability system, increases in medical services capacity, direct to consumer advertising for prescription drugs and medical services, an aging population, lifestyle changes including diet and smoking, catastrophes, and epidemics also may impact medical cost trends. Internal factors such as system conversions, claims processing cycle times, changes in medical management practices and changes in provider contracts also may impact our ability to accurately predict estimates of historical completion factors or medical cost trends. All of these factors are considered in estimating IBNR and in estimating the per member per month claims trend for purposes of determining the reserve for the most recent two months. Additionally, we continually prepare and review follow-up studies to assess the reasonableness of the estimates generated by our process and methods over time. The results of these studies are also considered in determining the reserve for the most recent two months. Each of these factors requires significant judgment by management. We reassess the profitability of our contracts for providing insurance coverage to our members when current operating results or forecasts indicate probable future losses. We establish a premium deficiency reserve in current operations to the extent that the sum of expected future costs, claim adjustment expenses, and maintenance costs exceeds related future premiums under contracts without consideration of investment income. For purposes of determining premium deficiencies, contracts are grouped in a manner consistent with our method of acquiring, servicing, and measuring the profitability of such contracts. Losses recognized as a premium deficiency result in a beneficial effect in subsequent periods as operating losses under these contracts are charged to the liability previously established. Because the majority of our member contracts renew annually, we would not record a material premium deficiency reserve, except when unanticipated adverse events or changes in circumstances indicate otherwise. We believe our benefits payable are adequate to cover future claims payments required. However, such estimates are based on knowledge of current events and anticipated future events. Therefore, the actual liability could differ materially from the amounts provided. |
Future policy benefits payable | Future policy benefits payable Future policy benefits payable include liabilities for long-duration insurance policies including life insurance, annuities, certain health and other supplemental, and prior to the sale of KMG in 2018, long-term care policies sold to individuals for which some of the premium received in the earlier years is intended to pay anticipated benefits to be incurred in future years. At policy issuance, these reserves are recognized on a net level premium method based on interest rates, mortality, morbidity, and maintenance expense assumptions. Interest rates are based on our expected net investment returns on the investment portfolio supporting the reserves for these blocks of business. Mortality, a measure of expected death, and morbidity, a measure of health status, assumptions are based on industry actuarial tables, modified based upon actual experience. Changes in estimates of these reserves are recognized as an adjustment to benefits expense in the period the changes occur. We perform loss recognition tests at least annually in the fourth quarter, and more frequently if adverse events or changes in circumstances indicate that the level of the liability, together with the present value of future gross premiums, may not be adequate to provide for future expected policy benefits and maintenance costs. We adjust future policy benefits payable for the additional liability that would have been recorded if investment securities backing the liability had been sold at their stated aggregate fair value and the proceeds reinvested at current yields. We include the impact of this adjustment, if any, net of applicable deferred taxes, with the change in unrealized investment gain (loss) in accumulated other comprehensive income in stockholders’ equity. Health policies sold to individuals that conform to the Health Care Reform Law are accounted for under a short-duration model under which policy reserves are not established because premiums received in the current year are intended to pay anticipated benefits in that year . In addition, as previously underwritten members transition to plans compliant with the Health Care Reform Law, it results in policy lapses and the release of reserves for future policy benefits. |
Book Overdraft | Book Overdraft Under our cash management system, checks issued but not yet presented to banks that would result in negative bank balances when presented are classified as a current liability in the consolidated balance sheets. Changes in book overdrafts from period to period are reported in the consolidated statement of cash flows as a financing activity. |
Income Taxes | Income Taxes We recognize an asset or liability for the deferred tax consequences of temporary differences between the tax bases of assets or liabilities and their reported amounts in the consolidated financial statements. These temporary differences will result in taxable or deductible amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. We also recognize the future tax benefits such as net operating and capital loss carryforwards as deferred tax assets. A valuation allowance is provided against these deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized. Future years’ tax expense may be increased or decreased by adjustments to the valuation allowance or to the estimated accrual for income taxes. Deferred tax assets and deferred tax liabilities are further adjusted for changes in the enacted tax rates. We record tax benefits when it is more likely than not that the tax return position taken with respect to a particular transaction will be sustained. A liability, if recorded, is not considered resolved until the statute of limitations for the relevant taxing authority to examine and challenge the tax position has expired, or the tax position is ultimately settled through examination, negotiation, or litigation. We classify interest and penalties associated with uncertain tax positions in our provision for income taxes. |
Stock-Based Compensation | Stock-Based Compensation We generally recognize stock-based compensation expense, as determined on the date of grant at fair value, on a straight-line basis over the period during which an employee is required to provide service in exchange for the award (the vesting period). In addition, for awards with both time and performance-based conditions, we generally recognize compensation expense on a straight line basis over the vesting period when it is probable that the performance condition will be achieved. We estimate expected forfeitures and recognize compensation expense only for those awards which are expected to vest. We estimate the grant-date fair value of stock options using the Black-Scholes option-pricing model. |
Earnings Per Common Share | Earnings Per Common Share We compute basic earnings per common share on the basis of the weighted-average number of unrestricted common shares outstanding. Diluted earnings per common share is computed on the basis of the weighted-average number of unrestricted common shares outstanding plus the dilutive effect of outstanding employee stock options and restricted shares, or units, using the treasury stock method. |
Fair Value | Fair Value Assets and liabilities measured at fair value are categorized into a fair value hierarchy based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our own assumptions about the assumptions market participants would use. The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below. Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include securities that are traded in an active exchange market. Level 2 – Observable inputs other than Level 1 prices such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments as well as debt securities whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Level 3 – Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Level 3 includes assets and liabilities whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques reflecting our own assumptions about the assumptions market participants would use as well as those requiring significant management judgment. Fair value of actively traded debt securities are based on quoted market prices. Fair value of other debt securities are based on quoted market prices of identical or similar securities or based on observable inputs like interest rates generally using a market valuation approach, or, less frequently, an income valuation approach and are generally classified as Level 2. We obtain at least one price for each security from a third party pricing service. These prices are generally derived from recently reported trades for identical or similar securities, including adjustments through the reporting date based upon observable market information. When quoted prices are not available, the third party pricing service may use quoted market prices of comparable securities or discounted cash flow analysis, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include benchmark yields, reported trades, credit spreads, broker quotes, default rates, and prepayment speeds. We are responsible for the determination of fair value and as such we perform analysis on the prices received from the third party pricing service to determine whether the prices are reasonable estimates of fair value. Our analysis includes a review of monthly price fluctuations as well as a quarterly comparison of the prices received from the pricing service to prices reported by our third party investment adviser. In addition, on a quarterly basis we examine the underlying inputs and assumptions for a sample of individual securities across asset classes, credit rating levels, and various durations. Fair value of privately held debt securities are estimated using a variety of valuation methodologies, including both market and income approaches, where an observable quoted market does not exist and are generally classified as Level 3. For privately-held debt securities, such methodologies include reviewing the value ascribed to the most recent financing, comparing the security with securities of publicly-traded companies in similar lines of business, and reviewing the underlying financial performance including estimating discounted cash flows. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Recently Adopted Accounting Pronouncements In 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 lease liabilities of approximately $470 million and right-of-use, or ROU, assets of $436 million , which equals the lease liabilities net of accrued rent and lease incentives. The standard does not materially affect our results of operations, cash flows and liquidity. See Note 10 for further information. 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 was 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 February 2018, the FASB issued guidance which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the December 22, 2017 enactment of the Tax Cuts and Jobs Act. The new guidance is effective for us beginning January 1, 2019, with early adoption permitted. We early adopted this guidance in the first quarter of 2018 and it did not have a material impact on our results of operations, financial condition or cash flows. Accounting Pronouncements Effective in Future Periods 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 primarily of available for sale debt securities. We adopted the new standard effective January 1, 2020. Due to the high concentration of our financial assets measured at amortized cost being with the federal government resulting in zero nonpayment risk as well as our available for sale debt securities primarily being in an unrealized gain position, the adoption of the new standard did not have a material impact on our results of operations, financial condition, or cash flows. |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Assets and Liabilities Disposed | The assets and liabilities of KMG that were disposed of on August 9, 2018 were as follows: August 9, 2018 Assets (in millions) Cash and cash equivalents $ 805 Receivables, net 3 Investment securities 1,576 Other assets 1,085 Total assets disposed $ 3,469 Liabilities Benefits payable $ 58 Trade accounts payable and accrued expenses 70 Future policy benefits payable 2,573 Total liabilities disposed $ 2,701 |
EQUITY METHOD INVESTMENT (Table
EQUITY METHOD INVESTMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Equity Method Investments | The summarized balance sheets at December 31, 2019 and 2018, and income statement for the year ended December 31, 2019 and period beginning July 2, 2018 through December 31, 2018 of Kindred at Home were as follows: Balance sheets December 31, 2019 December 31, 2018 (in millions) Current assets $ 563 $ 536 Non-current assets 4,967 4,955 Current liabilities 405 351 Non-current liabilities 2,637 2,708 Shareholders' equity 2,488 2,432 Statements of income For the year ended December 31, 2019 July 2, 2018 through December 31, 2018 (in millions) Revenues $ 3,100 $ 1,587 Expenses 2,835 1,451 Net income 54 27 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2019 and 2018 , respectively: Amortized Gross Gross Fair (in millions) December 31, 2019 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 353 $ 1 $ — $ 354 Mortgage-backed securities 3,628 85 (3 ) 3,710 Tax-exempt municipal securities 1,433 30 — 1,463 Mortgage-backed securities: Commercial 786 18 — 804 Asset-backed securities 1,093 3 (3 ) 1,093 Corporate debt securities 3,867 82 (2 ) 3,947 Total debt securities $ 11,160 $ 219 $ (8 ) $ 11,371 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 December 31, 2019 and 2018 , respectively: Less than 12 months 12 months or more Total Fair Gross Fair Gross Fair Gross (in millions) December 31, 2019 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 48 $ — $ 23 $ — $ 71 $ — Mortgage-backed securities 315 (1 ) 204 (2 ) 519 (3 ) Tax-exempt municipal securities 58 — 75 — 133 — Mortgage-backed securities: Commercial 118 — 36 — 154 — Asset-backed securities 20 — 607 (3 ) 627 (3 ) Corporate debt securities 589 (2 ) 155 — 744 (2 ) Total debt securities $ 1,148 $ (3 ) $ 1,100 $ (5 ) $ 2,248 $ (8 ) December 31, 2018 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 179 $ (1 ) $ 153 $ (2 ) $ 332 $ (3 ) Mortgage-backed securities 956 (16 ) 1,019 (38 ) 1,975 (54 ) Tax-exempt municipal securities 809 (9 ) 1,648 (28 ) 2,457 (37 ) Mortgage-backed securities: Residential — — 15 — 15 — Commercial 372 (8 ) 133 (6 ) 505 (14 ) Asset-backed securities 824 (7 ) 40 — 864 (7 ) Corporate debt securities 1,434 (35 ) 1,439 (63 ) 2,873 (98 ) Total debt securities $ 4,574 $ (76 ) $ 4,447 $ (137 ) $ 9,021 $ (213 ) |
Schedule of Realized Gains (Losses) Related to Investment Securities Included Within Investment Income | The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the years ended December 31, 2019 , 2018 , and 2017 : 2019 2018 2017 (in millions) Gross realized gains $ 129 $ 106 $ 35 Gross realized losses (67 ) (16 ) (21 ) Net realized capital gains $ 62 $ 90 $ 14 |
Schedule of Contractual Maturity of Debt Securities Available for Sale | The contractual maturities of debt securities available for sale at December 31, 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 $ 1,316 $ 1,317 Due after one year through five years 1,974 2,013 Due after five years through ten years 1,724 1,780 Due after ten years 639 654 Mortgage and asset-backed securities 5,507 5,607 Total debt securities $ 11,160 $ 11,371 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements | The following table summarizes our fair value measurements at December 31, 2019 and 2018 , respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Value Quoted Prices Other Unobservable (in millions) December 31, 2019 Cash equivalents $ 3,660 $ 3,660 $ — $ — Debt securities: U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations 354 — 354 — Mortgage-backed securities 3,710 — 3,710 — Tax-exempt municipal securities 1,463 — 1,463 — Mortgage-backed securities: Commercial 804 — 804 — Asset-backed securities 1,093 — 1,093 — Corporate debt securities 3,947 — 3,947 — Total debt securities 11,371 — 11,371 — Common stock 7 7 — — Total invested assets $ 15,038 $ 3,667 $ 11,371 $ — December 31, 2018 Cash equivalents $ 2,024 $ 2,024 $ — $ — Debt securities: U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations 417 — 417 — Mortgage-backed securities 2,544 — 2,544 — Tax-exempt municipal securities 2,771 — 2,771 — Mortgage-backed securities: Residential 55 — 55 — Commercial 523 — 523 — Asset-backed securities 985 — 985 — Corporate debt securities 3,142 — 3,142 — Total debt securities 10,437 — 10,437 — Total invested assets $ 12,461 $ 2,024 $ 10,437 $ — |
MEDICARE PART D (Tables)
MEDICARE PART D (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Schedule of Balance Sheet Amounts Associated With Medicare Part D | The accompanying consolidated balance sheets include the following amounts associated with Medicare Part D as of December 31, 2019 and 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. 2019 2018 Risk CMS Risk CMS (in millions) Other current assets $ 5 $ 585 $ 15 $ 172 Trade accounts payable and accrued expenses (120 ) (356 ) (103 ) (503 ) Net current (liability) asset (115 ) 229 (88 ) (331 ) Other long-term assets 6 — 7 — Other long-term liabilities (61 ) — (89 ) — Net long-term liability (55 ) — (82 ) — Total net (liability) asset $ (170 ) $ 229 $ (170 ) $ (331 ) |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment was comprised of the following at December 31, 2019 and 2018 . 2019 2018 (in millions) Land $ 20 $ 20 Buildings and leasehold improvements 874 766 Equipment 922 890 Computer software 2,799 2,372 4,615 4,048 Accumulated depreciation (2,660 ) (2,313 ) Property and equipment, net $ 1,955 $ 1,735 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 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 years ended December 31, 2019 and 2018 were as follows: Retail Group and Specialty Healthcare Services Total (in millions) Balance at January 1, 2018 $ 1,059 $ 261 $ 1,961 $ 3,281 Acquisitions 476 — 140 616 Balance at December 31, 2018 1,535 261 2,101 3,897 Acquisitions — — 31 31 Balance at December 31, 2019 $ 1,535 $ 261 $ 2,132 $ 3,928 |
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 consolidated balance sheets at December 31, 2019 and 2018 . Weighted 2019 2018 Cost Accumulated Net Cost Accumulated Net (in millions) Other intangible assets: Customer contracts/relationships 8.7 years $ 646 $ 496 $ 150 $ 646 $ 434 $ 212 Trade names and technology 6.4 years 84 84 — 84 83 1 Provider contracts 11.8 years 70 44 26 68 37 31 Noncompetes and other 7.3 years 29 28 1 29 28 1 Total other intangible assets 8.7 years $ 829 $ 652 $ 177 $ 827 $ 582 $ 245 |
Schedule of Estimate of Amortization Expense | The following table presents our estimate of amortization expense for each of the five next succeeding fiscal years: (in millions) For the years ending December 31, 2020 $ 68 2021 34 2022 31 2023 18 2024 11 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Maturity of Lease Liabilities | Maturity of Lease Liabilities December 31, 2019 (in millions) 2020 $ 133 2021 117 2022 97 2023 52 2024 31 After 2024 70 Total lease payments 500 Less: Interest 52 Present value of lease liabilities $ 448 |
Schedule of Rent Expense and Sublease Rental Income in Prior Years | 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 and 2017: 2018 2017 (in millions) Rent expense $ 167 $ 204 Sublease rental income (32 ) (33 ) Net rent expense $ 135 $ 171 |
Schedule of Future Annual Minimum Payments Due at Prior Year End | 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) | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Schedule of Activity in Benefits Payable | Activity in benefits payable for our Group and Specialty segment, excluding military services, was as follows for the years ended December 31, 2019 , 2018 and 2017 : 2019 2018 2017 (in millions) Balances at January 1 $ 517 $ 568 $ 579 Incurred related to: Current year 5,708 5,466 5,403 Prior years 50 (46 ) (40 ) Total incurred 5,758 5,420 5,363 Paid related to: Current year (5,081 ) (4,957 ) (4,843 ) Prior years (553 ) (514 ) (531 ) Total paid (5,634 ) (5,471 ) (5,374 ) Balances at December 31 $ 641 $ 517 $ 568 On a consolidated basis, activity in benefits payable, excluding military services, was as follows for the years ended December 31, 2019 , 2018 and 2017 : 2019 2018 2017 (in millions) Balances at January 1 $ 4,862 $ 4,668 $ 4,563 Less: Reinsurance recoverables (95 ) (70 ) (76 ) Balances at January 1, net 4,767 4,598 4,487 Incurred related to: Current year 54,193 46,385 44,001 Prior years (336 ) (503 ) (483 ) Total incurred 53,857 45,882 43,518 Paid related to: Current year (48,421 ) (41,736 ) (39,496 ) Prior years (4,267 ) (3,977 ) (3,911 ) Total paid (52,688 ) (45,713 ) (43,407 ) Reinsurance recoverable 68 95 70 Balances at December 31 $ 6,004 $ 4,862 $ 4,668 Activity in benefits payable for our Retail segment was as follows for the years ended December 31, 2019 , 2018 and 2017 : 2019 2018 2017 (in millions) Balances at January 1 $ 4,338 $ 3,963 $ 3,506 Less: Reinsurance recoverables (95 ) (70 ) (76 ) Balances at January 1, net 4,243 3,893 3,430 Incurred related to: Current year 48,983 41,323 38,604 Prior years (386 ) (398 ) (386 ) Total incurred 48,597 40,925 38,218 Paid related to: Current year (43,831 ) (37,189 ) (34,781 ) Prior years (3,714 ) (3,386 ) (2,974 ) Total paid (47,545 ) (40,575 ) (37,755 ) Reinsurance recoverable 68 95 70 Balances at December 31 $ 5,363 $ 4,338 $ 3,963 |
Schedule of Favorable Medical Claims Reserve Development Related to Prior Fiscal Years by Segment | The table below details our favorable medical claims reserve development related to prior fiscal years by segment for 2019 , 2018 , and 2017 . (Favorable) Unfavorable Medical Claims Reserve 2019 2018 2017 Retail Segment $ (386 ) $ (398 ) $ (386 ) Group and Specialty Segment 50 (46 ) (40 ) Individual Commercial Segment — (57 ) (56 ) Other Businesses — (2 ) (1 ) Total $ (336 ) $ (503 ) $ (483 ) |
Schedule of Incurred and Paid Claims Development | The following tables provide information about incurred and paid claims development for the Group and Specialty segment as of December 31, 2019 , net of reinsurance. Incurred Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2017 2018 2019 (in millions) 2017 $ 5,403 $ 5,358 $ 5,372 2018 5,466 5,501 2019 5,708 Total $ 16,581 Cumulative Paid Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2017 2018 2019 (in millions) 2017 $ 4,843 $ 5,351 $ 5,372 2018 4,957 5,487 2019 5,081 Total $ 15,940 All outstanding benefit liabilities before 2017, net of reinsurance N/A Benefits payable, net of reinsurance $ 641 The following tables provide information about incurred and paid claims development for the Retail segment as of December 31, 2019 , net of reinsurance. Incurred Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2017 2018 2019 (in millions) 2017 $ 38,604 $ 38,341 $ 38,310 2018 41,323 40,984 2019 48,983 Total $ 128,277 Cumulative Paid Claims, Net of Reinsurance For the Years Ended December 31, Claims Incurred Year 2017 2018 2019 (in millions) 2017 $ 34,781 $ 38,232 $ 38,310 2018 37,189 40,841 2019 43,831 Total $ 122,982 All outstanding benefit liabilities before 2017, net of reinsurance N/A Benefits payable, net of reinsurance $ 5,295 |
Schedule of Reconciliation of Net Incurred and Paid Claims to 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: December 31, Net outstanding liabilities Retail $ 5,295 Group and Specialty 641 Benefits payable, net of reinsurance 5,936 Reinsurance recoverable on unpaid claims Retail 68 Total benefits payable, gross $ 6,004 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | The provision for income taxes consisted of the following for the years ended December 31, 2019 , 2018 and 2017 : 2019 2018 2017 (in millions) Current provision: Federal $ 560 $ 139 $ 1,324 States and Puerto Rico 41 58 116 Total current provision 601 197 1,440 Deferred expense 162 194 132 Provision for income taxes $ 763 $ 391 $ 1,572 |
Provision for Income Taxes Using Federal Statutory Rate | The provision for income taxes was different from the amount computed using the federal statutory rate for the years ended December 31, 2019 , 2018 and 2017 due to the following: 2019 2018 2017 (in millions) Income tax provision at federal statutory rate $ 729 $ 436 $ 1,407 States, net of federal benefit, and Puerto Rico 49 42 80 Tax exempt investment income (6 ) (11 ) (22 ) Health insurance industry fee — 243 — Nondeductible executive compensation 25 17 36 Tax reform — (39 ) 133 KMG sale — (272 ) — Other, net (34 ) (25 ) (62 ) Provision for income taxes $ 763 $ 391 $ 1,572 |
Principal Components of Net Deferred Tax Balances | Principal components of our net deferred tax balances at December 31, 2019 and 2018 were as follows: Assets (Liabilities) 2019 2018 (in millions) Compensation and other accrued expense $ 111 $ 89 Benefits payable 89 79 Net operating loss carryforward 42 38 Deferred acquisition costs 22 17 Unearned revenues 8 9 Other 8 8 Capital loss carryforward 1 15 Investment securities — 44 Total deferred income tax assets 281 299 Valuation allowance (45 ) (54 ) Total deferred income tax assets, net of valuation allowance 236 245 Depreciable property and intangible assets (329 ) (273 ) Investment securities (181 ) — Prepaid expenses (64 ) (52 ) Future policy benefits payable (3 ) (5 ) Total deferred income tax liabilities (577 ) (330 ) Total net deferred income tax liabilities $ (341 ) $ (85 ) |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Value of Debt Outstanding | The carrying value of debt outstanding was as follows at December 31, 2019 and 2018 : 2019 2018 (in millions) Short-term debt: Commercial paper $ 300 $ 645 Term note — 650 Senior notes: $400 million, 2.625% due October 1, 2019 — 399 $400 million, 2.50% due December 15, 2020 399 — Total short-term debt $ 699 $ 1,694 Long-term debt: Senior notes: $400 million, 2.50% due December 15, 2020 $ — $ 398 $600 million, 3.15% due December 1, 2022 598 596 $400 million, 2.90% due December 15, 2022 397 396 $600 million, 3.85% due October 1, 2024 597 597 $600 million, 3.95% due March 15, 2027 595 594 $500 million, 3.125% due August 15, 2029 495 — $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 396 396 $500 million, 3.95% due August 15, 2049 492 — Total long-term debt $ 4,967 $ 4,375 |
Schedule of Maturities of Long-term Debt | Maturities of the short-term and long-term debt for the years ending December 31, are as follows: For the years ending December 31, (in millions) 2020 $ 700 2021 — 2022 1,000 2023 — 2024 600 Thereafter 3,400 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Stock-Based Compensation Expense | The compensation expense that has been charged against income for these plans was as follows for the years ended December 31, 2019 , 2018 , and 2017 : 2019 2018 2017 (in millions) Stock-based compensation expense by type: Restricted stock $ 152 $ 124 $ 145 Stock options 11 13 12 Total stock-based compensation expense 163 137 157 Tax benefit recognized (35 ) (21 ) (32 ) Stock-based compensation expense, net of tax $ 128 $ 116 $ 125 |
Activity for Restricted Stock Awards | Activity for our restricted stock was as follows for the year ended December 31, 2019 : Shares Weighted- (shares in thousands) Nonvested restricted stock at December 31, 2018 964 $ 213.99 Granted 503 302.09 Vested (421 ) 239.42 Forfeited (70 ) 269.06 Nonvested restricted stock at December 31, 2019 976 $ 245.21 |
Weighted-Average Fair Value of Stock Options | The fair value was estimated on the date of grant using the Black-Scholes pricing model with the weighted-average assumptions indicated below: 2019 2018 2017 Weighted-average fair value at grant date $ 68.53 $ 63.67 $ 49.81 Expected option life (years) 4.1 years 4.1 years 4.1 years Expected volatility 25.5 % 26.1 % 27.1 % Risk-free interest rate at grant date 2.4 % 2.5 % 2.0 % Dividend yield 0.7 % 0.7 % 0.7 % |
Activity for Option Plans | Activity for our option plans was as follows for the year ended December 31, 2019 : Shares Under Weighted-Average (shares in thousands) Options outstanding at December 31, 2018 677 $ 213.17 Granted 121 304.59 Exercised (305 ) 189.24 Forfeited — — Options outstanding at December 31, 2019 493 $ 250.46 Options exercisable at December 31, 2019 109 $ 216.49 |
EARNINGS PER COMMON SHARE COM_2
EARNINGS PER COMMON SHARE COMPUTATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Common Share | Detail supporting the computation of basic and diluted earnings per common share was as follows for the years ended December 31, 2019 , 2018 and 2017 : 2019 2018 2017 (dollars in millions, except per Net income available for common stockholders $ 2,707 $ 1,683 $ 2,448 Weighted-average outstanding shares of common stock used to 134,055 137,486 144,493 Dilutive effect of: Employee stock options 107 194 172 Restricted stock 565 723 920 Shares used to compute diluted earnings per common share 134,727 138,403 145,585 Basic earnings per common share $ 20.20 $ 12.24 $ 16.94 Diluted earnings per common share $ 20.10 $ 12.16 $ 16.81 Number of antidilutive stock options and restricted stock awards 478 223 539 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Details of Dividend Payments | The following table provides details of dividend payments, excluding dividend equivalent rights, in 2017 , 2018 , and 2019 under our Board approved quarterly cash dividend policy: Payment Amount Total (in millions) 2017 $1.49 $216 2018 $1.90 $262 2019 $2.15 $289 |
Class of Treasury Stock | Excluding shares acquired in connection with employee stock plans, share repurchases were as follows during the years ended December 31, 2019 , 2018 and 2017 . 2019 2018 2017 Authorization Date Purchase Not to Exceed Shares Cost Shares Cost Shares Cost (in millions) February 2017 2,250 — — — — 9.71 2,250 December 2017 3,000 — — 3.07 1,024 3.28 800 July 2019 3,000 3.40 1,000 — — — — Total repurchases 3.40 $ 1,000 3.07 $ 1,024 12.99 $ 3,050 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, By Segment | Retail Group and Specialty Healthcare Services Eliminations/ Consolidated (in millions) 2019 External revenues Premiums: Individual Medicare Advantage $ 43,128 $ — $ — $ — $ 43,128 Group Medicare Advantage 6,475 — — — 6,475 Medicare stand-alone PDP 3,165 — — — 3,165 Total Medicare 52,768 — — — 52,768 Fully-insured 588 5,123 — — 5,711 Specialty — 1,571 — — 1,571 Medicaid and other 2,898 — — — 2,898 Total premiums 56,254 6,694 — — 62,948 Services revenue: Provider — — 446 — 446 ASO and other 17 790 — — 807 Pharmacy — — 186 — 186 Total services revenue 17 790 632 — 1,439 Total external revenues 56,271 7,484 632 — 64,387 Intersegment revenues Services — 18 18,255 (18,273 ) — Products — — 6,894 (6,894 ) — Total intersegment revenues — 18 25,149 (25,167 ) — Investment income 195 23 2 281 501 Total revenues 56,466 7,525 25,783 (24,886 ) 64,888 Operating expenses: Benefits 48,602 5,758 — (503 ) 53,857 Operating costs 5,306 1,651 24,852 (24,428 ) 7,381 Depreciation and amortization 323 88 156 (109 ) 458 Total operating expenses 54,231 7,497 25,008 (25,040 ) 61,696 Income from operations 2,235 28 775 154 3,192 Interest expense — — — 242 242 Other income, net — — — (506 ) (506 ) Income before income taxes and equity in net earnings 2,235 28 775 418 3,456 Equity in net earnings of Kindred at Home — — 14 — 14 Segment earnings $ 2,235 $ 28 $ 789 $ 418 $ 3,470 Premium and services revenues derived from our contracts with the federal government, as a percentage of our total premium and services revenues, was approximately 82% for 2019 , compared to 81% for 2018 , and 79% for 2017 . Retail Group and Specialty Healthcare Services Individual Commercial Other Businesses Eliminations/ Consolidated (in millions) 2018 External revenues Premiums: Individual Medicare Advantage $ 35,656 $ — $ — $ — $ — $ — $ 35,656 Group Medicare Advantage 6,103 — — — — — 6,103 Medicare stand-alone PDP 3,584 — — — — — 3,584 Total Medicare 45,343 — — — — — 45,343 Fully-insured 510 5,444 — 8 — — 5,962 Specialty — 1,359 — — — — 1,359 Medicaid and other 2,255 — — — 22 — 2,277 Total premiums 48,108 6,803 — 8 22 — 54,941 Services revenue: Provider — — 404 — — — 404 ASO and other 11 835 — — 4 — 850 Pharmacy — — 203 — — — 203 Total services revenue 11 835 607 — 4 — 1,457 Total external revenues 48,119 7,638 607 8 26 — 56,398 Intersegment revenues Services — 18 16,840 — — (16,858 ) — Products — — 6,330 — — (6,330 ) — Total intersegment revenues — 18 23,170 — — (23,188 ) — Investment income 136 23 34 — 110 211 514 Total revenues 48,255 7,679 23,811 8 136 (22,977 ) 56,912 Operating expenses: Benefits 40,925 5,420 — (70 ) 77 (470 ) 45,882 Operating costs 5,327 1,810 22,905 4 6 (22,527 ) 7,525 Depreciation and amortization 270 88 163 — — (116 ) 405 Total operating expenses 46,522 7,318 23,068 (66 ) 83 (23,113 ) 53,812 Income from operations 1,733 361 743 74 53 136 3,100 Loss on sale of business — — — — — 786 786 Interest expense — — — — — 218 218 Other expense, net — — — — — 33 33 Income (loss) before income taxes and equity in net earnings 1,733 361 743 74 53 (901 ) 2,063 Equity in net earnings of Kindred at Home — — 11 — — — 11 Segment earnings (losses) $ 1,733 $ 361 $ 754 $ 74 $ 53 $ (901 ) $ 2,074 Retail Group and Specialty Healthcare Services Individual Commercial Other Businesses Eliminations/ Consolidated (in millions) 2017 External revenues Premiums: Individual Medicare Advantage $ 32,720 $ — $ — $ — $ — $ — $ 32,720 Group Medicare Advantage 5,155 — — — — — 5,155 Medicare stand-alone PDP 3,702 — — — — — 3,702 Total Medicare 41,577 — — — — — 41,577 Fully-insured 478 5,462 — 947 — — 6,887 Specialty — 1,310 — — — — 1,310 Medicaid and other 2,571 — — — 35 — 2,606 Total premiums 44,626 6,772 — 947 35 — 52,380 Services revenue: Provider — — 258 — — — 258 ASO and other 10 626 — — 8 — 644 Pharmacy — — 80 — — — 80 Total services revenue 10 626 338 — 8 — 982 Total external revenues 44,636 7,398 338 947 43 — 53,362 Intersegment revenues Services — 20 17,293 — — (17,313 ) — Products — — 6,292 — — (6,292 ) — Total intersegment revenues — 20 23,585 — — (23,605 ) — Investment income 90 31 35 4 87 158 405 Total revenues 44,726 7,449 23,958 951 130 (23,447 ) 53,767 Operating expenses: Benefits 38,218 5,363 — 544 131 (760 ) 43,496 Operating costs 4,292 1,590 22,848 201 12 (22,376 ) 6,567 Merger termination fee and related costs, net — — — — — (936 ) (936 ) Depreciation and amortization 238 84 143 13 — (100 ) 378 Total operating expenses 42,748 7,037 22,991 758 143 (24,172 ) 49,505 Income (loss) from operations 1,978 412 967 193 (13 ) 725 4,262 Interest expense — — — — — 242 242 Income (loss) before income taxes and equity in net earnings 1,978 412 967 193 (13 ) 483 4,020 Equity in net earnings of Kindred at Home — — — — — — — Segment earnings (losses) $ 1,978 $ 412 $ 967 $ 193 $ (13 ) $ 483 $ 4,020 |
QUARTERLY FINANCIAL INFORMATI_2
QUARTERLY FINANCIAL INFORMATION (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | A summary of our quarterly unaudited results of operations for the years ended December 31, 2019 and 2018 follows: 2019 First Second Third Fourth (in millions, except per share results) Total revenues $ 16,107 $ 16,245 $ 16,241 $ 16,295 Income before income taxes and equity in net earnings 746 1,229 888 593 Net income 566 940 689 512 Basic earnings per common share (1) $ 4.18 $ 6.96 $ 5.16 $ 3.87 Diluted earnings per common share (1) $ 4.16 $ 6.94 $ 5.14 $ 3.84 2018 First Second Third Fourth (in millions, except per share results) Total revenues $ 14,279 $ 14,259 $ 14,206 $ 14,168 Income before income taxes and equity in net earnings 707 19 901 436 Net income 491 193 644 355 Basic earnings per common share (1) $ 3.56 $ 1.40 $ 4.68 $ 2.60 Diluted earnings per common share (1) $ 3.53 $ 1.39 $ 4.65 $ 2.58 (1) The calculation of earnings per common share is based on the weighted average shares outstanding during each quarter and, accordingly, the sum may not equal the total for the year. |
REPORTING ENTITY (Details)
REPORTING ENTITY (Details) - Premiums and services revenue - Government Contracts Concentration Risk | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Federal government contracts | |||
Concentration Risk [Line Items] | |||
Premiums and services revenue (percent) | 82.00% | 81.00% | 79.00% |
CMS, coverage for individual Medicare Advantage members in Florida | |||
Concentration Risk [Line Items] | |||
Premiums and services revenue (percent) | 15.00% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | Feb. 16, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 |
Significant Accounting Policies [Line Items] | |||||
Number of days notice for employer group to cancel short-duration prepaid health services policies | 30 days | ||||
Consumer discounts on brand name prescription drugs | 50.00% | ||||
Contract liabilities | $ 0 | ||||
Deferred costs | 0 | ||||
Pharmaceutical rebates | $ 1,300,000,000 | $ 1,300,000,000 | |||
Typical term (in years) of short-duration employer-group prepaid health services policies | 1 year | ||||
Lease liabilities | $ 448,000,000 | ||||
Right-of-use assets | 410,000,000 | ||||
Aetna | |||||
Significant Accounting Policies [Line Items] | |||||
Merger breakup fee received | $ 1,000,000,000 | ||||
Tricare South Region Contract | |||||
Significant Accounting Policies [Line Items] | |||||
TRICARE health care cost reimbursements | 6,400,000,000 | 5,600,000,000 | $ 3,400,000,000 | ||
TRICARE health care cost payments | 6,500,000,000 | ||||
Difference between TRICARE health care costs payments and reimbursements | $ 63,000,000 | (38,000,000) | (11,000,000) | ||
Equipment | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Useful life | 3 years | ||||
Equipment | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Useful life | 10 years | ||||
Computer Software | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Useful life | 3 years | ||||
Computer Software | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Useful life | 5 years | ||||
Building | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Useful life | 10 years | ||||
Building | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Useful life | 20 years | ||||
Health Care Reform | |||||
Significant Accounting Policies [Line Items] | |||||
Payment of annual health insurance industry fee | 1,040,000,000 | ||||
CMS reinsurance subsidies and discounts | |||||
Significant Accounting Policies [Line Items] | |||||
Subsidy and discount payments | $ 11,800,000,000 | 10,300,000,000 | 10,200,000,000 | ||
Subsidy reimbursements | 11,200,000,000 | 9,600,000,000 | 12,100,000,000 | ||
Subsidy and discount payments in excess of reimbursements | $ 600,000,000 | 700,000,000 | $ 1,900,000,000 | ||
Settlement period after close | 9 months | ||||
CMS brand name prescription drug discounts | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Settlement period after close | 14 months | ||||
CMS brand name prescription drug discounts | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Settlement period after close | 18 months | ||||
Services | |||||
Significant Accounting Policies [Line Items] | |||||
Accounts receivable, net, current | $ 141,000,000 | $ 123,000,000 | |||
Bad-debt expense | 0 | ||||
Contract with customer, asset, net | $ 0 | ||||
ASU 2016-02 | |||||
Significant Accounting Policies [Line Items] | |||||
Lease liabilities | $ 470,000,000 | ||||
Right-of-use assets | $ 436,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Workforce Optimization (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)employee | Dec. 31, 2017USD ($)employee | Dec. 31, 2018USD ($) | |
Accounting Policies [Abstract] | |||
Expected number of associates impacted | employee | 1,000 | 3,600 | |
Estimated charges | $ 47 | $ 148 | |
Workforce optimization obligation | $ 45 | $ 12 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | |||
Goodwill | $ 3,928,000,000 | $ 3,897,000,000 | $ 3,281,000,000 |
Goodwill impairment loss | 0 | $ 0 | $ 0 |
Healthcare Services | Clinical | |||
Goodwill [Line Items] | |||
Fair value of reporting unit | 544,000,000 | ||
Carrying value of reporting unit | 533,000,000 | ||
Fair value in excess of carrying value | $ 11,000,000 | ||
Fair value in excess of carrying value (percent) | 2.00% | ||
Hypothetical goodwill impairment if 100 basis point increase in discount rate | $ 62,000,000 | ||
Goodwill | 524,000,000 | ||
Healthcare Services | Provider | |||
Goodwill [Line Items] | |||
Fair value of reporting unit | 2,300,000,000 | ||
Carrying value of reporting unit | 1,300,000,000 | ||
Fair value in excess of carrying value | $ 1,000,000,000 | ||
Fair value in excess of carrying value (percent) | 78.00% | ||
Goodwill | $ 761,000,000 |
ACQUISITIONS AND DIVESTITURES -
ACQUISITIONS AND DIVESTITURES - Narrative (Details) $ in Millions | Aug. 09, 2018USD ($) | Aug. 08, 2018USD ($) | Feb. 20, 2020USD ($)primary_care_center | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Aug. 08, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Disclosures by Disposal Groups [Line Items] | |||||||||
Purchase price allocated to goodwill | $ 31 | $ 616 | |||||||
Disposed of by sale | KMG America Corporation | |||||||||
Disclosures by Disposal Groups [Line Items] | |||||||||
Cash contribution from parent to disposal group to fund transaction | $ 190 | ||||||||
Statutory capital transferred with sale | 160 | ||||||||
Loss, including transaction costs, on disposal | 786 | ||||||||
Tax benefit on disposal transaction | $ 452 | ||||||||
Cash transferred to third party prior to sale | $ 245 | ||||||||
Disposal group revenues | $ 182 | $ 261 | |||||||
Disposal group income | $ 47 | $ 117 | |||||||
Enclara | Subsequent Event | |||||||||
Disclosures by Disposal Groups [Line Items] | |||||||||
Cash consideration for acquisition | $ 707 | ||||||||
MCCI Holdings LLC | |||||||||
Disclosures by Disposal Groups [Line Items] | |||||||||
Cash consideration for acquisition | $ 169 | ||||||||
Purchase price allocated to goodwill | 483 | ||||||||
Purchase price allocated to other intangible assets | 80 | ||||||||
Purchase price allocated to net tangible assets | $ 24 | ||||||||
Estimated weighted average useful life of acquired intangible assets (in years) | 8 years | ||||||||
Family Physicians Group | |||||||||
Disclosures by Disposal Groups [Line Items] | |||||||||
Cash consideration for acquisition | $ 185 | ||||||||
Purchase price allocated to goodwill | 133 | ||||||||
Purchase price allocated to other intangible assets | 38 | ||||||||
Purchase price allocated to net tangible assets | $ 14 | ||||||||
Estimated weighted average useful life of acquired intangible assets (in years) | 4 years 10 months 24 days | ||||||||
WCAS | Subsequent Event | |||||||||
Disclosures by Disposal Groups [Line Items] | |||||||||
Expected number of payor-agnostic, senior-focused primary care centers to be opened by strategic partnership | primary_care_center | 50 | ||||||||
Expected time frame for opening primary care centers | 3 years | ||||||||
Value of partnership entity | $ 600 | ||||||||
Time frame for put and call option activity per partnership agreement, minimum | 5 years | ||||||||
Time frame for put and call option activity per partnership agreement, maximum | 10 years | ||||||||
MCCI Holdings LLC | |||||||||
Disclosures by Disposal Groups [Line Items] | |||||||||
Note receivable | $ 383 |
ACQUISITIONS AND DIVESTITURES_2
ACQUISITIONS AND DIVESTITURES - Assets and Liabilities Disposed Of (Details) - Disposed of by sale - KMG America Corporation $ in Millions | Aug. 09, 2018USD ($) |
Disclosures by Disposal Groups [Line Items] | |
Cash and cash equivalents | $ 805 |
Receivables, net | 3 |
Investment securities | 1,576 |
Other assets | 1,085 |
Total assets disposed | 3,469 |
Benefits payable | 58 |
Trade accounts payable and accrued expenses | 70 |
Future policy benefits payable | 2,573 |
Total liabilities disposed | $ 2,701 |
EQUITY METHOD INVESTMENT - Narr
EQUITY METHOD INVESTMENT - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||
Purchase of equity method investment | $ 0 | $ 1,095 | $ 0 | |
Equity method investment | 1,063 | 1,047 | ||
Put option | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Purchase price allocated to put options | $ 236 | |||
Call option | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Purchase price allocated to call options | $ 291 | |||
Options | ||||
Schedule of Equity Method Investments [Line Items] | ||||
(Income) expense on put and call options | (506) | 33 | ||
Other long-term liabilities | Put option | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Fair value of financial liability | 28 | 224 | ||
Other long-term assets | Call option | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Fair value of financial asset | $ 557 | $ 246 | ||
Kindred at Home | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment ownership (percent) | 40.00% | |||
Purchase of equity method investment | $ 1,100 | |||
Equity method investment | $ 1,000 |
EQUITY METHOD INVESTMENT - Summ
EQUITY METHOD INVESTMENT - Summary of Balances Sheets and Income Statement (Details) - Kindred at Home - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2019 | |
Balance sheets | ||
Current assets | $ 536 | $ 563 |
Non-current assets | 4,955 | 4,967 |
Current liabilities | 351 | 405 |
Non-current liabilities | 2,708 | 2,637 |
Shareholders' equity | 2,432 | 2,488 |
Statements of income | ||
Revenues | 1,587 | 3,100 |
Expenses | 1,451 | 2,835 |
Net income | $ 27 | $ 54 |
INVESTMENT SECURITIES - Investm
INVESTMENT SECURITIES - Investment Securities Classified as Current and Long-Term (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Amortized Cost to Fair Value | ||
Amortized Cost | $ 11,160 | $ 10,641 |
Gross Unrealized Gains | 219 | 9 |
Gross Unrealized Losses | (8) | (213) |
Fair Value | 11,371 | 10,437 |
U.S. Treasury and agency obligations | ||
Amortized Cost to Fair Value | ||
Amortized Cost | 353 | 419 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | 0 | (3) |
Fair Value | 354 | 417 |
Mortgage-backed securities | ||
Amortized Cost to Fair Value | ||
Amortized Cost | 3,628 | 2,595 |
Gross Unrealized Gains | 85 | 3 |
Gross Unrealized Losses | (3) | (54) |
Fair Value | 3,710 | 2,544 |
Tax-exempt municipal securities | ||
Amortized Cost to Fair Value | ||
Amortized Cost | 1,433 | 2,805 |
Gross Unrealized Gains | 30 | 3 |
Gross Unrealized Losses | 0 | (37) |
Fair Value | 1,463 | 2,771 |
Residential mortgage-backed securities | ||
Amortized Cost to Fair Value | ||
Amortized Cost | 55 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 55 | |
Commercial mortgage-backed securities | ||
Amortized Cost to Fair Value | ||
Amortized Cost | 786 | 537 |
Gross Unrealized Gains | 18 | 0 |
Gross Unrealized Losses | 0 | (14) |
Fair Value | 804 | 523 |
Asset-backed securities | ||
Amortized Cost to Fair Value | ||
Amortized Cost | 1,093 | 991 |
Gross Unrealized Gains | 3 | 1 |
Gross Unrealized Losses | (3) | (7) |
Fair Value | 1,093 | 985 |
Corporate debt securities | ||
Amortized Cost to Fair Value | ||
Amortized Cost | 3,867 | 3,239 |
Gross Unrealized Gains | 82 | 1 |
Gross Unrealized Losses | (2) | (98) |
Fair Value | $ 3,947 | $ 3,142 |
INVESTMENT SECURITIES - Gross U
INVESTMENT SECURITIES - Gross Unrealized Losses and Fair Values of Securities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value | ||
Less than 12 months | $ 1,148 | $ 4,574 |
12 months or more | 1,100 | 4,447 |
Total | 2,248 | 9,021 |
Gross Unrealized Losses | ||
Less than 12 months | (3) | (76) |
12 months or more | (5) | (137) |
Total | (8) | (213) |
U.S. Treasury and agency obligations | ||
Fair Value | ||
Less than 12 months | 48 | 179 |
12 months or more | 23 | 153 |
Total | 71 | 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 | 315 | 956 |
12 months or more | 204 | 1,019 |
Total | 519 | 1,975 |
Gross Unrealized Losses | ||
Less than 12 months | (1) | (16) |
12 months or more | (2) | (38) |
Total | (3) | (54) |
Tax-exempt municipal securities | ||
Fair Value | ||
Less than 12 months | 58 | 809 |
12 months or more | 75 | 1,648 |
Total | 133 | 2,457 |
Gross Unrealized Losses | ||
Less than 12 months | 0 | (9) |
12 months or more | 0 | (28) |
Total | 0 | (37) |
Residential mortgage-backed securities | ||
Fair Value | ||
Less than 12 months | 0 | |
12 months or more | 15 | |
Total | 15 | |
Gross Unrealized Losses | ||
Less than 12 months | 0 | |
12 months or more | 0 | |
Total | 0 | |
Commercial mortgage-backed securities | ||
Fair Value | ||
Less than 12 months | 118 | 372 |
12 months or more | 36 | 133 |
Total | 154 | 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 | 20 | 824 |
12 months or more | 607 | 40 |
Total | 627 | 864 |
Gross Unrealized Losses | ||
Less than 12 months | 0 | (7) |
12 months or more | (3) | 0 |
Total | (3) | (7) |
Corporate debt securities | ||
Fair Value | ||
Less than 12 months | 589 | 1,434 |
12 months or more | 155 | 1,439 |
Total | 744 | 2,873 |
Gross Unrealized Losses | ||
Less than 12 months | (2) | (35) |
12 months or more | 0 | (63) |
Total | $ (2) | $ (98) |
INVESTMENT SECURITIES - Narrati
INVESTMENT SECURITIES - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)position | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |||
Equity securities | $ | $ 7,000,000 | ||
Percentage of debt securities considered to be of investment-grade (percent) | 96.00% | ||
Maximum individual state general bond obligation as a percentage of total debt securities (percent) | 1.00% | ||
Securities in unrealized loss position, number of positions | position | 235 | ||
Securities, number of positions | position | 1,515 | ||
Other-than-temporary impairments | $ | $ 0 | $ 0 | $ 0 |
INVESTMENT SECURITIES - Realize
INVESTMENT SECURITIES - Realized Gains (Losses) Included Within Investment Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |||
Gross realized gains | $ 129 | $ 106 | $ 35 |
Gross realized losses | (67) | (16) | (21) |
Net realized capital gains | $ 62 | $ 90 | $ 14 |
INVESTMENT SECURITIES - Contrac
INVESTMENT SECURITIES - Contractual Maturities of Debt Securities Available for Sale (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due within one year | $ 1,316 | |
Due after one year through five years | 1,974 | |
Due after five years through ten years | 1,724 | |
Due after ten years | 639 | |
Mortgage and asset-backed securities | 5,507 | |
Amortized Cost | 11,160 | $ 10,641 |
Fair Value | ||
Due within one year | 1,317 | |
Due after one year through five years | 2,013 | |
Due after five years through ten years | 1,780 | |
Due after ten years | 654 | |
Mortgage and asset-backed securities | 5,607 | |
Fair Value | $ 11,371 | $ 10,437 |
FAIR VALUE - Financial Assets M
FAIR VALUE - Financial Assets Measured on Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 11,371 | $ 10,437 |
Common stock | 7 | |
U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 354 | 417 |
Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,710 | 2,544 |
Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,463 | 2,771 |
Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 55 | |
Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 804 | 523 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,093 | 985 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,947 | 3,142 |
Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,660 | 2,024 |
Debt securities | 11,371 | 10,437 |
Common stock | 7 | |
Total invested assets | 15,038 | 12,461 |
Recurring Basis | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 354 | 417 |
Recurring Basis | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,710 | 2,544 |
Recurring Basis | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,463 | 2,771 |
Recurring Basis | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 55 | |
Recurring Basis | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 804 | 523 |
Recurring Basis | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 1,093 | 985 |
Recurring Basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 3,947 | 3,142 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,660 | 2,024 |
Debt securities | 0 | 0 |
Common stock | 7 | |
Total invested assets | 3,667 | 2,024 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Debt securities | 11,371 | 10,437 |
Common stock | 0 | |
Total invested assets | 11,371 | 10,437 |
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 | 354 | 417 |
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 | 3,710 | 2,544 |
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 | 1,463 | 2,771 |
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 | 55 | |
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 | 804 | 523 |
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 | 1,093 | 985 |
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 | 3,947 | 3,142 |
Recurring Basis | Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Debt securities | 0 | 0 |
Common stock | 0 | |
Total invested assets | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | |
Recurring Basis | Unobservable Inputs (Level 3) | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 0 | $ 0 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt outstanding | $ 5,366 | $ 4,774 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt outstanding | 5,916 | 4,885 |
Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt | $ 300 | 645 |
Term loan and commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt | $ 1,295 |
FAIR VALUE - Put and Call Optio
FAIR VALUE - Put and Call Options Measured at Fair Value (Details) $ in Millions | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Put option | Other long-term liabilities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value of financial liability | $ 28 | $ 224 |
Call option | Other long-term assets | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value of financial asset | $ 557 | $ 246 |
Options | Level 3 fair value measurement | Annualized volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.198 | |
Options | Level 3 fair value measurement | Secured credit rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.022 | |
Options | Level 3 fair value measurement | Long-term net operating profit after tax | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.120 | |
Options | Level 3 fair value measurement | Weighted average cost of capital | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.100 | |
Options | Level 3 fair value measurement | Long term growth rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.030 |
MEDICARE PART D (Details)
MEDICARE PART D (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Other current assets | $ 3,806 | $ 3,564 |
Trade accounts payable and accrued expenses | (3,754) | (3,067) |
Other long-term assets | 1,834 | 1,375 |
Other long-term liabilities | (935) | (581) |
Risk Corridor Settlement | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 5 | 15 |
Trade accounts payable and accrued expenses | (120) | (103) |
Net current (liability) asset | (115) | (88) |
Other long-term assets | 6 | 7 |
Other long-term liabilities | (61) | (89) |
Net long-term liability | (55) | (82) |
Total net (liability) asset | (170) | (170) |
CMS Subsidies/ Discounts | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 585 | 172 |
Trade accounts payable and accrued expenses | (356) | (503) |
Net current (liability) asset | 229 | (331) |
Other long-term assets | 0 | 0 |
Other long-term liabilities | 0 | 0 |
Net long-term liability | 0 | 0 |
Total net (liability) asset | $ 229 | $ (331) |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 20 | $ 20 |
Buildings and leasehold improvements | 874 | 766 |
Equipment | 922 | 890 |
Computer software | 2,799 | 2,372 |
Property and equipment, gross | 4,615 | 4,048 |
Accumulated depreciation | (2,660) | (2,313) |
Property and equipment, net | $ 1,955 | $ 1,735 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 505 | $ 444 | $ 410 |
Amortization expense for capitalized internally developed and purchased software | $ 343 | $ 298 | $ 287 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Carrying Amount of Goodwill by Reportable Segments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 3,897 | $ 3,281 |
Acquisitions | 31 | 616 |
Ending balance | 3,928 | 3,897 |
Retail | ||
Goodwill [Roll Forward] | ||
Beginning balance | 1,535 | 1,059 |
Acquisitions | 0 | 476 |
Ending balance | 1,535 | 1,535 |
Group and Specialty | ||
Goodwill [Roll Forward] | ||
Beginning balance | 261 | 261 |
Acquisitions | 0 | 0 |
Ending balance | 261 | 261 |
Healthcare Services | ||
Goodwill [Roll Forward] | ||
Beginning balance | 2,101 | 1,961 |
Acquisitions | 31 | 140 |
Ending balance | $ 2,132 | $ 2,101 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Details of Intangible Assets Included in Other Long-Term Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible Assets | ||
Weighted Average Life | 8 years 8 months 12 days | |
Cost | $ 829 | $ 827 |
Accumulated Amortization | 652 | 582 |
Net | $ 177 | 245 |
Customer contracts/relationships | ||
Intangible Assets | ||
Weighted Average Life | 8 years 8 months 12 days | |
Cost | $ 646 | 646 |
Accumulated Amortization | 496 | 434 |
Net | $ 150 | 212 |
Trade names and technology | ||
Intangible Assets | ||
Weighted Average Life | 6 years 4 months 24 days | |
Cost | $ 84 | 84 |
Accumulated Amortization | 84 | 83 |
Net | $ 0 | 1 |
Provider contracts | ||
Intangible Assets | ||
Weighted Average Life | 11 years 9 months 18 days | |
Cost | $ 70 | 68 |
Accumulated Amortization | 44 | 37 |
Net | $ 26 | 31 |
Noncompetes and other | ||
Intangible Assets | ||
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 - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense for other intangible assets | $ 70 | $ 90 | $ 75 |
Impairment of intangible assets, finite-lived | $ 12 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Estimate of Amortization Expense (Details) $ in Millions | Dec. 31, 2019USD ($) |
Estimate of Amortization Expense | |
2020 | $ 68 |
2021 | 34 |
2022 | 31 |
2023 | 18 |
2024 | $ 11 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating right-of-use lease assets included within other long-term assets | $ 410 |
Operating lease liabilities included within trade accounts payable and accrued expenses | 116 |
Operating lease liabilities included within other long-term liabilities | 332 |
Fixed operating lease costs | 154 |
Variable lease costs | 82 |
Sublease rental income | $ 45 |
Weighted average remaining lease term (in years) | 4 years 10 months 24 days |
Weighted average discount rate (percent) | 4.10% |
Operating lease cash payments | $ 151 |
LEASES - Maturity of Lease Liab
LEASES - Maturity of Lease Liabilities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Maturity of Lease Liabilities | |
2020 | $ 133 |
2021 | 117 |
2022 | 97 |
2023 | 52 |
2024 | 31 |
After 2024 | 70 |
Total lease payments | 500 |
Less: Interest | 52 |
Present value of lease liabilities | $ 448 |
LEASES - Rent Expense and Suble
LEASES - Rent Expense and Sublease Rental Income in Prior Years (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Rent Expense and Sublease Rental Income | ||
Rent expense | $ 167 | $ 204 |
Sublease rental income | (32) | (33) |
Net rent expense | $ 135 | $ 171 |
LEASES - Future Annual Minimum
LEASES - Future Annual Minimum Payments Due at Prior Year End (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 | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Balances, beginning of period | $ 4,862 | $ 4,668 | $ 4,563 |
Less: Reinsurance recoverables | (95) | (70) | (76) |
Balances, beginning of period, net | 4,767 | 4,598 | 4,487 |
Incurred related to: | |||
Current year | 54,193 | 46,385 | 44,001 |
Prior years | (336) | (503) | (483) |
Total incurred | 53,857 | 45,882 | 43,518 |
Paid related to: | |||
Current year | (48,421) | (41,736) | (39,496) |
Prior years | (4,267) | (3,977) | (3,911) |
Total paid | (52,688) | (45,713) | (43,407) |
Reinsurance recoverable | 68 | 95 | 70 |
Balances, end of period | 6,004 | 4,862 | 4,668 |
Retail | |||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Balances, beginning of period | 4,338 | 3,963 | 3,506 |
Less: Reinsurance recoverables | (95) | (70) | (76) |
Balances, beginning of period, net | 4,243 | 3,893 | 3,430 |
Incurred related to: | |||
Current year | 48,983 | 41,323 | 38,604 |
Prior years | (386) | (398) | (386) |
Total incurred | 48,597 | 40,925 | 38,218 |
Paid related to: | |||
Current year | (43,831) | (37,189) | (34,781) |
Prior years | (3,714) | (3,386) | (2,974) |
Total paid | (47,545) | (40,575) | (37,755) |
Reinsurance recoverable | 68 | 95 | 70 |
Balances, end of period | 5,363 | 4,338 | 3,963 |
Group and Specialty | |||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Balances, beginning of period | 517 | 568 | 579 |
Incurred related to: | |||
Current year | 5,708 | 5,466 | 5,403 |
Prior years | 50 | (46) | (40) |
Total incurred | 5,758 | 5,420 | 5,363 |
Paid related to: | |||
Current year | (5,081) | (4,957) | (4,843) |
Prior years | (553) | (514) | (531) |
Total paid | (5,634) | (5,471) | (5,374) |
Balances, end of period | $ 641 | $ 517 | $ 568 |
BENEFITS PAYABLE - Favorable Me
BENEFITS PAYABLE - Favorable Medical Claims Reserve Development (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
(Favorable) unfavorable medical claims reserve development | $ (336) | $ (503) | $ (483) |
Retail | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
(Favorable) unfavorable medical claims reserve development | (386) | (398) | (386) |
Group and Specialty | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
(Favorable) unfavorable medical claims reserve development | 50 | (46) | (40) |
Operating Segments | Retail | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
(Favorable) unfavorable medical claims reserve development | (386) | (398) | (386) |
Operating Segments | Group and Specialty | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
(Favorable) unfavorable medical claims reserve development | 50 | (46) | (40) |
Operating Segments | Individual Commercial | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
(Favorable) unfavorable medical claims reserve development | 0 | (57) | (56) |
Other Businesses | |||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||
(Favorable) unfavorable medical claims reserve development | $ 0 | $ (2) | $ (1) |
BENEFITS PAYABLE - Narrative (D
BENEFITS PAYABLE - Narrative (Details) claim in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)claim | Dec. 31, 2018USD ($)claim | Dec. 31, 2017USD ($)claim | |
Claims Development [Line Items] | |||
Favorable medical claims reserve development related to prior fiscal years | $ | $ 336 | $ 503 | $ 483 |
Benefit expense reduction excluded from previous short duration benefits payable rollforward | $ | $ (22) | ||
Retail | |||
Claims Development [Line Items] | |||
Total IBNR | $ | 3,600 | ||
Group and Specialty | |||
Claims Development [Line Items] | |||
Total IBNR | $ | $ 567 | ||
2019 Claims Incurred Year | Retail | |||
Claims Development [Line Items] | |||
Cumulative number of reported claims | 123 | ||
2019 Claims Incurred Year | Group and Specialty | |||
Claims Development [Line Items] | |||
Cumulative number of reported claims | 9.7 | ||
2018 Claims Incurred Year | Retail | |||
Claims Development [Line Items] | |||
Cumulative number of reported claims | 109.6 | ||
2018 Claims Incurred Year | Group and Specialty | |||
Claims Development [Line Items] | |||
Cumulative number of reported claims | 10.8 | ||
2017 Claims Incurred Year | Retail | |||
Claims Development [Line Items] | |||
Cumulative number of reported claims | 104.7 | ||
2017 Claims Incurred Year | Group and Specialty | |||
Claims Development [Line Items] | |||
Cumulative number of reported claims | 11.1 |
BENEFITS PAYABLE - Incurred and
BENEFITS PAYABLE - Incurred and Paid Claims Development (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Claims Development [Line Items] | |||
Benefits payable, net of reinsurance | $ 5,936 | ||
Retail | |||
Claims Development [Line Items] | |||
Incurred Claims, Net of Reinsurance | 128,277 | ||
Cumulative Paid Claims, Net of Reinsurance | 122,982 | ||
Benefits payable, net of reinsurance | 5,295 | ||
Group and Specialty | |||
Claims Development [Line Items] | |||
Incurred Claims, Net of Reinsurance | 16,581 | ||
Cumulative Paid Claims, Net of Reinsurance | 15,940 | ||
Benefits payable, net of reinsurance | 641 | ||
2017 Claims Incurred Year | Retail | |||
Claims Development [Line Items] | |||
Incurred Claims, Net of Reinsurance | 38,310 | $ 38,341 | $ 38,604 |
Cumulative Paid Claims, Net of Reinsurance | 38,310 | 38,232 | 34,781 |
2017 Claims Incurred Year | Group and Specialty | |||
Claims Development [Line Items] | |||
Incurred Claims, Net of Reinsurance | 5,372 | 5,358 | 5,403 |
Cumulative Paid Claims, Net of Reinsurance | 5,372 | 5,351 | $ 4,843 |
2018 Claims Incurred Year | Retail | |||
Claims Development [Line Items] | |||
Incurred Claims, Net of Reinsurance | 40,984 | 41,323 | |
Cumulative Paid Claims, Net of Reinsurance | 40,841 | 37,189 | |
2018 Claims Incurred Year | Group and Specialty | |||
Claims Development [Line Items] | |||
Incurred Claims, Net of Reinsurance | 5,501 | 5,466 | |
Cumulative Paid Claims, Net of Reinsurance | 5,487 | $ 4,957 | |
2019 Claims Incurred Year | Retail | |||
Claims Development [Line Items] | |||
Incurred Claims, Net of Reinsurance | 48,983 | ||
Cumulative Paid Claims, Net of Reinsurance | 43,831 | ||
2019 Claims Incurred Year | Group and Specialty | |||
Claims Development [Line Items] | |||
Incurred Claims, Net of Reinsurance | 5,708 | ||
Cumulative Paid Claims, Net of Reinsurance | $ 5,081 |
BENEFITS PAYABLE - Reconciliati
BENEFITS PAYABLE - Reconciliation to Consolidated (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Benefits payable, net of reinsurance | $ 5,936 | |||
Reinsurance recoverable on unpaid claims | 68 | $ 95 | $ 70 | $ 76 |
Total benefits payable, gross | 6,004 | 4,862 | 4,668 | 4,563 |
Retail | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Benefits payable, net of reinsurance | 5,295 | |||
Reinsurance recoverable on unpaid claims | 68 | 95 | 70 | 76 |
Total benefits payable, gross | 5,363 | 4,338 | 3,963 | 3,506 |
Group and Specialty | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Benefits payable, net of reinsurance | 641 | |||
Total benefits payable, gross | 641 | $ 517 | $ 568 | $ 579 |
Operating Segments | Retail | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Reinsurance recoverable on unpaid claims | $ 68 |
INCOME TAXES - Provision for In
INCOME TAXES - Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal | $ 560 | $ 139 | $ 1,324 |
States and Puerto Rico | 41 | 58 | 116 |
Total current provision | 601 | 197 | 1,440 |
Deferred expense | 162 | 194 | 132 |
Provision for income taxes | $ 763 | $ 391 | $ 1,572 |
INCOME TAXES - Provision for _2
INCOME TAXES - Provision for Income Taxes Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax provision at federal statutory rate | $ 729 | $ 436 | $ 1,407 |
States, net of federal benefit, and Puerto Rico | 49 | 42 | 80 |
Tax exempt investment income | (6) | (11) | (22) |
Health insurance industry fee | 0 | 243 | 0 |
Nondeductible executive compensation | 25 | 17 | 36 |
Tax reform | 0 | (39) | 133 |
KMG sale | 0 | (272) | 0 |
Other, net | (34) | (25) | (62) |
Provision for income taxes | $ 763 | $ 391 | $ 1,572 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | |||
Increase in tax provision from remeasurement to deferred tax asset due to Tax Reform Law | $ 133 | ||
Decrease to tax provision from revisions of Tax Reform Law estimates | $ 39 | ||
Benefit on sale of business | $ 0 | 272 | 0 |
Net operating losses to carryforward related to prior acquisitions | 114 | ||
Valuation allowances on net operating loss carryforwards related to prior acquisitions | 45 | $ 54 | |
Puerto Rico | |||
Operating Loss Carryforwards [Line Items] | |||
Repatriation tax for undistributed foreign earnings | $ 10 | ||
Capital Loss Carryforward | |||
Operating Loss Carryforwards [Line Items] | |||
Capital loss carryforward | $ 2 |
INCOME TAXES - Principal Compon
INCOME TAXES - Principal Components of Net Deferred Tax Balances (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Compensation and other accrued expense | $ 111 | $ 89 |
Benefits payable | 89 | 79 |
Net operating loss carryforward | 42 | 38 |
Deferred acquisition costs | 22 | 17 |
Unearned revenues | 8 | 9 |
Other | 8 | 8 |
Capital loss carryforward | 1 | 15 |
Investment securities | 0 | 44 |
Total deferred income tax assets | 281 | 299 |
Valuation allowance | (45) | (54) |
Total deferred income tax assets, net of valuation allowance | 236 | 245 |
Depreciable property and intangible assets | (329) | (273) |
Investment securities | (181) | 0 |
Prepaid expenses | (64) | (52) |
Future policy benefits payable | (3) | (5) |
Total deferred income tax liabilities | (577) | (330) |
Total net deferred income tax liabilities | $ (341) | $ (85) |
DEBT - Debt Outstanding (Detail
DEBT - Debt Outstanding (Details) - USD ($) | Dec. 31, 2019 | Oct. 01, 2019 | Aug. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Total short-term debt | $ 699,000,000 | $ 1,694,000,000 | ||
Long-term debt | 4,967,000,000 | 4,375,000,000 | ||
$500 million, 3.95% due August 15, 2049 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 500,000,000 | |||
Stated interest rate (percent) | 3.95% | |||
Commercial paper | ||||
Debt Instrument [Line Items] | ||||
Short-term debt | $ 300,000,000 | 645,000,000 | ||
Term note | ||||
Debt Instrument [Line Items] | ||||
Short-term debt | 0 | 650,000,000 | ||
Senior notes | $400 million, 2.625% due October 1, 2019 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 400,000,000 | |||
Stated interest rate (percent) | 2.625% | 2.625% | ||
Long-term debt, current maturities | $ 0 | 399,000,000 | ||
Senior notes | $400 million, 2.50% due December 15, 2020 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 400,000,000 | |||
Stated interest rate (percent) | 2.50% | |||
Long-term debt, current maturities | $ 399,000,000 | 0 | ||
Long-term debt | 0 | 398,000,000 | ||
Senior notes | $600 million, 3.15% due December 1, 2022 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 600,000,000 | |||
Stated interest rate (percent) | 3.15% | |||
Long-term debt | $ 598,000,000 | 596,000,000 | ||
Senior notes | $400 million, 2.90% due December 15, 2022 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 400,000,000 | |||
Stated interest rate (percent) | 2.90% | |||
Long-term debt | $ 397,000,000 | 396,000,000 | ||
Senior notes | $600 million, 3.85% due October 1, 2024 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 600,000,000 | |||
Stated interest rate (percent) | 3.85% | |||
Long-term debt | $ 597,000,000 | 597,000,000 | ||
Senior notes | $600 million, 3.95% due March 15, 2027 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 600,000,000 | |||
Stated interest rate (percent) | 3.95% | |||
Long-term debt | $ 595,000,000 | 594,000,000 | ||
Senior notes | $500 million, 3.125% due August 15, 2029 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 500,000,000 | $ 500,000,000 | ||
Stated interest rate (percent) | 3.125% | 3.125% | ||
Long-term debt | $ 495,000,000 | 0 | ||
Senior notes | $250 million, 8.15% due June 15, 2038 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 250,000,000 | |||
Stated interest rate (percent) | 8.15% | |||
Long-term debt | $ 262,000,000 | 263,000,000 | ||
Senior notes | $400 million, 4.625% due December 1, 2042 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 400,000,000 | |||
Stated interest rate (percent) | 4.625% | |||
Long-term debt | $ 396,000,000 | 396,000,000 | ||
Senior notes | $750 million, 4.95% due October 1, 2044 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 750,000,000 | |||
Stated interest rate (percent) | 4.95% | |||
Long-term debt | $ 739,000,000 | 739,000,000 | ||
Senior notes | $400 million, 4.80% due March 15, 2047 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 400,000,000 | |||
Stated interest rate (percent) | 4.80% | |||
Long-term debt | $ 396,000,000 | 396,000,000 | ||
Senior notes | $500 million, 3.95% due August 15, 2049 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 500,000,000 | |||
Stated interest rate (percent) | 3.95% | |||
Long-term debt | $ 492,000,000 | $ 0 |
DEBT - Maturities of Debt (Deta
DEBT - Maturities of Debt (Details) $ in Millions | Dec. 31, 2019USD ($) |
Maturities of debt | |
2020 | $ 700 |
2021 | 0 |
2022 | 1,000 |
2023 | 0 |
2024 | 600 |
Thereafter | $ 3,400 |
DEBT - Senior Notes (Details)
DEBT - Senior Notes (Details) - USD ($) | Oct. 01, 2019 | Aug. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||||
Repayment of short-term debt | $ 650,000,000 | $ 350,000,000 | $ 0 | |||
Repayment of long-term debt | 400,000,000 | $ 0 | 800,000,000 | |||
$500 million, 3.95% due August 15, 2049 | ||||||
Debt Instrument [Line Items] | ||||||
Face amount | $ 500,000,000 | $ 500,000,000 | ||||
Stated interest rate (percent) | 3.95% | 3.95% | ||||
Senior notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt redemption price (percent) | 100.00% | |||||
Proceeds from issuance of debt, net | $ 987,000,000 | |||||
Loss on extinguishment of debt | $ 17,000,000 | |||||
Senior notes | $500 million, 3.125% due August 15, 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Face amount | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | |||
Stated interest rate (percent) | 3.125% | 3.125% | 3.125% | |||
Senior notes | $500 million, 3.95% due August 15, 2049 | ||||||
Debt Instrument [Line Items] | ||||||
Face amount | $ 500,000,000 | |||||
Stated interest rate (percent) | 3.95% | |||||
Senior notes | $400 million, 2.625% due October 1, 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Face amount | $ 400,000,000 | $ 400,000,000 | ||||
Stated interest rate (percent) | 2.625% | 2.625% | 2.625% | |||
Repayment of long-term debt | $ 400,000,000 | |||||
Senior notes | $250 million, 8.15% due June 15, 2038 | ||||||
Debt Instrument [Line Items] | ||||||
Face amount | $ 250,000,000 | $ 250,000,000 | ||||
Stated interest rate (percent) | 8.15% | 8.15% | ||||
Term note | ||||||
Debt Instrument [Line Items] | ||||||
Repayment of short-term debt | $ 650,000,000 |
DEBT - Credit Agreement (Detail
DEBT - Credit Agreement (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Line of Credit | Unsecured Revolving Credit Agreement | Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Debt instrument term (in years) | 5 years |
Maximum borrowing capacity | $ 2,000,000,000 |
Facility fee (percent) | 0.15% |
Debt to capitalization percentage, maximum | 50.00% |
Actual debt to capitalization percentage | 32.00% |
Maximum borrowing capacity including uncommitted incremental loan facility | $ 2,500,000,000 |
Uncommitted incremental loan facility | 500,000,000 |
Line of credit, outstanding borrowings | 0 |
Remaining borrowing capacity | $ 2,000,000,000 |
Line of Credit | Unsecured Revolving Credit Agreement | Revolving Credit Facility | Minimum | |
Debt Instrument [Line Items] | |
Facility fee (percent) | 0.09% |
Line of Credit | Unsecured Revolving Credit Agreement | Revolving Credit Facility | Maximum | |
Debt Instrument [Line Items] | |
Facility fee (percent) | 0.25% |
Line of Credit | Unsecured Revolving Credit Agreement | Revolving Credit Facility | LIBOR | |
Debt Instrument [Line Items] | |
Basis points spread on variable rate (percent) | 1.10% |
Line of Credit | Unsecured Revolving Credit Agreement | Revolving Credit Facility | LIBOR | Minimum | |
Debt Instrument [Line Items] | |
Basis points spread on variable rate (percent) | 0.91% |
Line of Credit | Unsecured Revolving Credit Agreement | Revolving Credit Facility | LIBOR | Maximum | |
Debt Instrument [Line Items] | |
Basis points spread on variable rate (percent) | 1.50% |
Line of Credit | Unsecured Revolving Credit Agreement | Letter of Credit | |
Debt Instrument [Line Items] | |
Line of credit, outstanding borrowings | $ 0 |
Commercial paper | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 2,000,000,000 |
DEBT - Commercial Paper (Detail
DEBT - Commercial Paper (Details) - Commercial paper - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||
Maximum borrowing capacity | $ 2,000,000,000 | |
Maximum amount outstanding during period | 801,000,000 | |
Short-term debt outstanding | $ 300,000,000 | $ 645,000,000 |
Weighted average annual interest rate (percent) | 2.00% |
DEBT - Term Note (Details)
DEBT - Term Note (Details) | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||||
Feb. 20, 2020USD ($)draw | Aug. 31, 2019USD ($) | Nov. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Short-term Debt [Line Items] | |||||||
Repayment of short-term debt | $ 650,000,000 | $ 350,000,000 | $ 0 | ||||
Term note | |||||||
Short-term Debt [Line Items] | |||||||
Repayment of short-term debt | $ 650,000,000 | ||||||
2018 Term Note | Term note | |||||||
Short-term Debt [Line Items] | |||||||
Face amount | $ 1,000,000,000 | ||||||
Debt instrument term (in years) | 1 year | ||||||
Repayment of short-term debt | $ 650,000,000 | $ 350,000,000 | |||||
2018 Term Note | Term note | LIBOR | |||||||
Short-term Debt [Line Items] | |||||||
Basis points spread on variable rate (percent) | 1.15% | ||||||
Base rate component, basis spread on variable rate (percent) | 1.00% | ||||||
2018 Term Note | Term note | Federal Funds Rate | |||||||
Short-term Debt [Line Items] | |||||||
Base rate component, basis spread on variable rate (percent) | 0.50% | ||||||
2020 Term Loan Commitment | Subsequent Event | Term note | |||||||
Short-term Debt [Line Items] | |||||||
Face amount | $ 1,000,000,000 | ||||||
Debt instrument term (in years) | 1 year | ||||||
Extension period term (in years) | 1 year | ||||||
Number of draws on term loan commitment allowable per agreement | draw | 3 | ||||||
Minimum draw amount on term loan commitment allowable per agreement | $ 300,000,000 | ||||||
Unused commitment threshold for expiration | $ 300,000,000 | ||||||
2020 Term Loan Commitment | Subsequent Event | Term note | LIBOR | |||||||
Short-term Debt [Line Items] | |||||||
Basis points spread on variable rate (percent) | 1.15% | ||||||
Base rate component, basis spread on variable rate (percent) | 1.00% | ||||||
2020 Term Loan Commitment | Subsequent Event | Term note | Federal Funds Rate | |||||||
Short-term Debt [Line Items] | |||||||
Base rate component, basis spread on variable rate (percent) | 0.50% |
EMPLOYEE BENEFIT PLANS - Narrat
EMPLOYEE BENEFIT PLANS - Narrative (Details) $ / shares in Units, shares in Millions | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019USD ($)employee_group$ / sharesshares | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($)$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Employee retirement and savings plan cost | $ 221,000,000 | $ 197,000,000 | $ 217,000,000 | |
Closing stock price (in USD per share) | $ / shares | $ 366.52 | |||
Percentage of retirement and savings plan's assets invested in our company common stock | 11.00% | |||
Shares of retirement and savings plans invested in company's common stock (in shares) | shares | 1.6 | 1.6 | ||
Percentage of the retirement and savings plan's assets invested in our common stock as compared to company's outstanding shares at year-end | 1.20% | |||
Number of shares of our common stock reserved for issuance (in shares) | shares | 1.8 | 1.8 | ||
Combination of age and years necessary for retirement provision as related to our equity award program | 65 years | |||
Minimum age required for retirement eligibility as related to our equity award program | 55 years | |||
Minimum number of years of service for retirement eligibility as related to our equity award program | 5 years | |||
Limitations on deductibility of excess annual employee compensation as mandated by health insurance reforms | $ 500,000 | |||
Employee service share based compensation tax benefit realized from exercise of stock options and restricted stock vesting | 25,000,000 | 49,000,000 | 68,000,000 | |
Fair value of shares vested | $ 141,000,000 | 298,000,000 | 306,000,000 | |
Stratified homogeneous employee groups in stock option valuation | employee_group | 3 | |||
Outstanding intrinsic value of stock options | $ 56,000,000 | $ 56,000,000 | ||
Weighted-average remaining contractual term (in years) | 4 years 9 months 18 days | |||
Exercisable stock options intrinsic value | $ 16,000,000 | $ 16,000,000 | ||
Exercisable stock options weighted-average remaining contractual term (in years) | 3 years 10 months 24 days | |||
Total intrinsic value of stock options exercised | $ 43,000,000 | 43,000,000 | 44,000,000 | |
Proceeds from stock options exercised | $ 58,000,000 | $ 50,000,000 | 63,000,000 | |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation modification expense | $ 29,000,000 | |||
Vesting period (in years) | 3 years | |||
Weighted-average grant date fair value of restricted stock awards (in USD per share) | $ / shares | $ 302.09 | $ 276.62 | $ 222.35 | |
Percent of stock with performance-based conditions | 22.00% | 22.00% | ||
Total compensation expense not yet recognized related to nonvested restricted stock | $ 164,000,000 | $ 164,000,000 | ||
Compensation expense over a weighted-average period (in years) | 1 year 8 months 12 days | |||
Employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total compensation expense not yet recognized related to nonvested restricted stock | $ 11,000,000 | $ 11,000,000 | ||
Compensation expense over a weighted-average period (in years) | 1 year 8 months 12 days | |||
Minimum | Employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period (in years) | 1 year | |||
Expiration period (in years) | 7 years | |||
Maximum | Employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period (in years) | 3 years | |||
2011 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock shares reserved for stock award plans (in shares) | shares | 12.5 | 12.5 | ||
2011 Plan | Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for future grants assuming all stock options or restricted stock are granted (in shares) | shares | 1.7 | 1.7 | ||
2011 Plan | Employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for future grants assuming all stock options or restricted stock are granted (in shares) | shares | 3.8 | 3.8 | ||
2019 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock shares reserved for stock award plans (in shares) | shares | 16 | 16 | ||
2019 Plan | Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for future grants assuming all stock options or restricted stock are granted (in shares) | shares | 4.7 | 4.7 | ||
2019 Plan | Employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for future grants assuming all stock options or restricted stock are granted (in shares) | shares | 15.8 | 15.8 |
EMPLOYEE BENEFIT PLANS - Stock-
EMPLOYEE BENEFIT PLANS - Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-based compensation expense by type: | |||
Restricted stock | $ 152 | $ 124 | $ 145 |
Stock options | 11 | 13 | 12 |
Total stock-based compensation expense | 163 | 137 | 157 |
Tax benefit recognized | (35) | (21) | (32) |
Stock-based compensation expense, net of tax | $ 128 | $ 116 | $ 125 |
EMPLOYEE BENEFIT PLANS - Restri
EMPLOYEE BENEFIT PLANS - Restricted Stock Activity (Details) - Restricted Stock - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | |||
Nonvested restricted stock, beginning balance (in shares) | 964 | ||
Granted (in shares) | 503 | ||
Vested (in shares) | (421) | ||
Forfeited (in shares) | (70) | ||
Nonvested restricted stock, ending balance (in shares) | 976 | 964 | |
Weighted- Average Grant-Date Fair Value | |||
Nonvested restricted stock, beginning balance (in USD per share) | $ 213.99 | ||
Granted (in USD per share) | 302.09 | $ 276.62 | $ 222.35 |
Vested (in USD per share) | 239.42 | ||
Forfeited (in USD per share) | 269.06 | ||
Nonvested restricted stock, ending balance (in USD per share) | $ 245.21 | $ 213.99 |
EMPLOYEE BENEFIT PLANS - Weight
EMPLOYEE BENEFIT PLANS - Weighted-Average Fair Value Assumptions for Stock Options (Details) - Employee Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value at grant date (in dollars per share) | $ 68.53 | $ 63.67 | $ 49.81 |
Expected option life (years) | 4 years 1 month 6 days | 4 years 1 month 6 days | 4 years 1 month 6 days |
Expected volatility (percent) | 25.50% | 26.10% | 27.10% |
Risk-free interest rate at grant date (percent) | 2.40% | 2.50% | 2.00% |
Dividend yield (percent) | 0.70% | 0.70% | 0.70% |
EMPLOYEE BENEFIT PLANS - Option
EMPLOYEE BENEFIT PLANS - Option Plans Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Shares Under Option | |
Options outstanding, beginning balance (in shares) | shares | 677 |
Granted (in shares) | shares | 121 |
Exercised (in shares) | shares | (305) |
Forfeited (in shares) | shares | 0 |
Options outstanding, ending balance (in shares) | shares | 493 |
Options exercisable, ending balance (in shares) | shares | 109 |
Weighted-Average Exercise Price | |
Options outstanding, beginning balance (in dollars per share) | $ / shares | $ 213.17 |
Granted (in dollars per share) | $ / shares | 304.59 |
Exercised (in dollars per share) | $ / shares | 189.24 |
Forfeited (in dollars per share) | $ / shares | 0 |
Options outstanding, ending balance (in dollars per share) | $ / shares | 250.46 |
Options exercisable, ending balance (in dollars per share) | $ / shares | $ 216.49 |
EARNINGS PER COMMON SHARE COM_3
EARNINGS PER COMMON SHARE COMPUTATION - Details Supporting Computation of Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Net income available for common stockholders | $ 512 | $ 689 | $ 940 | $ 566 | $ 355 | $ 644 | $ 193 | $ 491 | $ 2,707 | $ 1,683 | $ 2,448 |
Weighted-average outstanding shares of common stock used to compute basic earnings per common share (in shares) | 134,055 | 137,486 | 144,493 | ||||||||
Shares used to compute diluted earnings per common share (in shares) | 134,727 | 138,403 | 145,585 | ||||||||
Basic earnings per common share (in USD per share) | $ 3.87 | $ 5.16 | $ 6.96 | $ 4.18 | $ 2.60 | $ 4.68 | $ 1.40 | $ 3.56 | $ 20.20 | $ 12.24 | $ 16.94 |
Diluted earnings per common share (in USD per share) | $ 3.84 | $ 5.14 | $ 6.94 | $ 4.16 | $ 2.58 | $ 4.65 | $ 1.39 | $ 3.53 | $ 20.10 | $ 12.16 | $ 16.81 |
Number of antidilutive stock options and restricted stock awards excluded from computation (in shares) | 478 | 223 | 539 | ||||||||
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) | 107 | 194 | 172 | ||||||||
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) | 565 | 723 | 920 |
STOCKHOLDERS' EQUITY - Dividend
STOCKHOLDERS' EQUITY - Dividend Payments (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 31, 2020 | Oct. 24, 2019 | Feb. 20, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Dividends | ||||||
Amount per Share (in USD per share) | $ 2.15 | $ 1.90 | $ 1.49 | |||
Total Amount | $ 289 | $ 262 | $ 216 | |||
Cash dividend declared (in USD per share) | $ 0.55 | |||||
Subsequent Event | ||||||
Dividends | ||||||
Total Amount | $ 73 | |||||
Cash dividend declared (in USD per share) | $ 0.625 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands | Dec. 26, 2019 | Aug. 02, 2019 | Feb. 28, 2019 | Nov. 29, 2018 | Mar. 26, 2018 | Dec. 22, 2017 | Aug. 28, 2017 | Feb. 22, 2017 | Feb. 28, 2019 | Mar. 26, 2018 | Dec. 31, 2017 | Dec. 26, 2019 | Aug. 28, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 19, 2020 | Jul. 31, 2019 | Jul. 30, 2019 | Nov. 28, 2018 | Dec. 21, 2017 | Dec. 14, 2017 | Feb. 16, 2017 | Feb. 14, 2017 |
Equity, Class of Treasury Stock [Line Items] | ||||||||||||||||||||||||
Share repurchase authorization | $ 3,000,000,000 | $ 3,000,000,000 | $ 3,000,000,000 | $ 3,000,000,000 | $ 2,250,000,000 | $ 2,250,000,000 | ||||||||||||||||||
Shares received (in shares) | 3,040 | |||||||||||||||||||||||
Increase in treasury stock from share repurchases | $ 750,000,000 | $ 1,070,000,000 | $ 1,090,000,000 | $ 3,365,000,000 | ||||||||||||||||||||
Remaining share repurchase authorization at replacement | $ 1,030,000,000 | |||||||||||||||||||||||
Common shares acquired in connection with employee stock plans (in shares) | 200 | 400 | 500 | |||||||||||||||||||||
Common shares acquired in connection with employee stock plans, amount | $ 70,000,000 | $ 116,000,000 | $ 115,000,000 | |||||||||||||||||||||
Aggregate statutory capital and surplus in our state regulated insurance subsidiaries | 8,000,000,000 | 7,600,000,000 | ||||||||||||||||||||||
Aggregate minimum regulatory requirements of statutory capital and surplus | 5,900,000,000 | 5,200,000,000 | ||||||||||||||||||||||
Dividends that may be paid to the parent company without prior approval by state regulatory authorities in 2014 | 1,000,000,000 | |||||||||||||||||||||||
Dividends that were paid to the parent company without prior approval by state regulatory authorities | $ 1,800,000,000 | $ 2,300,000,000 | $ 1,400,000,000 | |||||||||||||||||||||
February 2017 ASR | ||||||||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||||||||||||||
Accelerated share repurchase agreement amount | $ 1,500,000,000 | |||||||||||||||||||||||
Accelerated share repurchase payment | $ 1,500,000,000 | |||||||||||||||||||||||
Shares received (in shares) | 840 | 5,830 | 6,670 | |||||||||||||||||||||
Increase in treasury stock from share repurchases | $ 1,200,000,000 | |||||||||||||||||||||||
Decrease in capital in excess of par value | $ 300,000,000 | |||||||||||||||||||||||
Average daily volume weighted-average share price of common stock during term of agreement (in USD per share) | $ 224.81 | |||||||||||||||||||||||
Reclassification from capital in excess of par value to treasury stock | $ 300,000,000 | |||||||||||||||||||||||
December 2017 ASR | ||||||||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||||||||||||||
Accelerated share repurchase agreement amount | $ 1,000,000,000 | |||||||||||||||||||||||
Accelerated share repurchase payment | $ 1,000,000,000 | |||||||||||||||||||||||
Shares received (in shares) | 460 | 3,280 | 3,740 | |||||||||||||||||||||
Increase in treasury stock from share repurchases | $ 800,000,000 | |||||||||||||||||||||||
Decrease in capital in excess of par value | $ 200,000,000 | |||||||||||||||||||||||
Average daily volume weighted-average share price of common stock during term of agreement (in USD per share) | $ 267.55 | |||||||||||||||||||||||
Reclassification from capital in excess of par value to treasury stock | $ 200,000,000 | |||||||||||||||||||||||
November 2018 ASR | ||||||||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||||||||||||||
Accelerated share repurchase agreement amount | $ 750,000,000 | |||||||||||||||||||||||
Accelerated share repurchase payment | $ 750,000,000 | |||||||||||||||||||||||
Shares received (in shares) | 600 | 1,940 | 2,540 | |||||||||||||||||||||
Increase in treasury stock from share repurchases | $ 600,000,000 | |||||||||||||||||||||||
Decrease in capital in excess of par value | $ 150,000,000 | |||||||||||||||||||||||
Average daily volume weighted-average share price of common stock during term of agreement (in USD per share) | $ 295.15 | |||||||||||||||||||||||
Reclassification from capital in excess of par value to treasury stock | $ 150,000,000 | |||||||||||||||||||||||
July 2019 ASR | ||||||||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||||||||||||||
Accelerated share repurchase agreement amount | $ 1,000,000,000 | |||||||||||||||||||||||
Accelerated share repurchase payment | $ 1,000,000,000 | |||||||||||||||||||||||
Shares received (in shares) | 700 | 2,700 | 3,400 | |||||||||||||||||||||
Increase in treasury stock from share repurchases | $ 800,000,000 | |||||||||||||||||||||||
Decrease in capital in excess of par value | $ 200,000,000 | |||||||||||||||||||||||
Average daily volume weighted-average share price of common stock during term of agreement (in USD per share) | $ 296.19 | |||||||||||||||||||||||
Reclassification from capital in excess of par value to treasury stock | $ 200,000,000 | |||||||||||||||||||||||
Subsequent Event | ||||||||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||||||||||||||
Remaining authorized amount | $ 2,000,000,000 |
STOCKHOLDERS' EQUITY - Share Re
STOCKHOLDERS' EQUITY - Share Repurchases (Details) - USD ($) shares in Thousands | 4 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 30, 2019 | Nov. 28, 2018 | Dec. 21, 2017 | Dec. 14, 2017 | Feb. 16, 2017 | Feb. 14, 2017 | |
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Share repurchase authorization | $ 3,000,000,000 | $ 3,000,000,000 | $ 3,000,000,000 | $ 3,000,000,000 | $ 2,250,000,000 | $ 2,250,000,000 | ||||
Shares repurchased (in shares) | 3,040 | |||||||||
Cost of repurchases | $ 750,000,000 | $ 1,070,000,000 | $ 1,090,000,000 | $ 3,365,000,000 | ||||||
February 2017 Authorization | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Share repurchase authorization | $ 2,250,000,000 | |||||||||
Shares repurchased (in shares) | 0 | 0 | 9,710 | |||||||
Cost of repurchases | $ 0 | $ 0 | $ 2,250,000,000 | |||||||
December 2017 Authorization | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Share repurchase authorization | $ 3,000,000,000 | |||||||||
Shares repurchased (in shares) | 0 | 3,070 | 3,280 | |||||||
Cost of repurchases | $ 0 | $ 1,024,000,000 | $ 800,000,000 | |||||||
July 2019 Authorization | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Share repurchase authorization | $ 3,000,000,000 | |||||||||
Shares repurchased (in shares) | 3,400 | 0 | 0 | |||||||
Cost of repurchases | $ 1,000,000,000 | $ 0 | $ 0 | |||||||
Excluding Employee Stock Plans and ASR | ||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||
Shares repurchased (in shares) | 3,400 | 3,070 | 12,990 | |||||||
Cost of repurchases | $ 1,000,000,000 | $ 1,024,000,000 | $ 3,050,000,000 |
COMMITMENTS, GUARANTEES AND C_2
COMMITMENTS, GUARANTEES AND CONTINGENCIES - Narrative (Details) beneficiary in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019USD ($)beneficiaryState | Nov. 02, 2017USD ($) | |
Loss Contingencies [Line Items] | ||||
Purchase obligations in 2020 | $ 922 | |||
Purchase obligations in 2021 | 647 | |||
Purchase obligations in 2022 | 489 | |||
Purchase obligations in 2023 | 246 | |||
Purchase obligations in 2024 | $ 100 | |||
Percentage of risk score calculated from claims submitted through EDS | 25.00% | |||
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 | |||
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% | |||
Forecast | ||||
Loss Contingencies [Line Items] | ||||
Percentage of risk score calculated from claims submitted through EDS | 75.00% | 50.00% |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | Segment | 3 | ||
Member co-share amounts and government subsidies | $ 14,900 | $ 13,400 | $ 13,500 |
Depreciation and amortization classified as benefit expense | $ 117 | $ 129 | $ 107 |
Government Contracts Concentration Risk | Premiums and services revenue | Federal government contracts | |||
Segment Reporting Information [Line Items] | |||
Premiums and services revenue (percent) | 82.00% | 81.00% | 79.00% |
SEGMENT INFORMATION - Segment R
SEGMENT INFORMATION - Segment Results (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Premiums | $ 62,948 | $ 54,941 | $ 52,380 | ||||||||
Services revenue | 1,439 | 1,457 | 982 | ||||||||
Total external revenues | 64,387 | 56,398 | 53,362 | ||||||||
Intersegment revenues | 0 | 0 | 0 | ||||||||
Investment income | 501 | 514 | 405 | ||||||||
Total revenues | $ 16,295 | $ 16,241 | $ 16,245 | $ 16,107 | $ 14,168 | $ 14,206 | $ 14,259 | $ 14,279 | 64,888 | 56,912 | 53,767 |
Benefits | 53,857 | 45,882 | 43,496 | ||||||||
Operating costs | 7,381 | 7,525 | 6,567 | ||||||||
Merger termination fee and related costs, net | 0 | 0 | (936) | ||||||||
Depreciation and amortization | 458 | 405 | 378 | ||||||||
Total operating expenses | 61,696 | 53,812 | 49,505 | ||||||||
Income from operations | 3,192 | 3,100 | 4,262 | ||||||||
Loss on sale of business | 0 | 786 | 0 | ||||||||
Interest expense | 242 | 218 | 242 | ||||||||
Other (income) expense, net | (506) | 33 | 0 | ||||||||
Income before income taxes and equity in net earnings | $ 593 | $ 888 | $ 1,229 | $ 746 | $ 436 | $ 901 | $ 19 | $ 707 | 3,456 | 2,063 | 4,020 |
Equity in net earnings of Kindred at Home | 14 | 11 | 0 | ||||||||
Segment earnings | 3,470 | 2,074 | 4,020 | ||||||||
Individual Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 43,128 | 35,656 | 32,720 | ||||||||
Group Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 6,475 | 6,103 | 5,155 | ||||||||
Medicare stand-alone PDP | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 3,165 | 3,584 | 3,702 | ||||||||
Total Medicare | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 52,768 | 45,343 | 41,577 | ||||||||
Fully-insured | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 5,711 | 5,962 | 6,887 | ||||||||
Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 1,571 | 1,359 | 1,310 | ||||||||
Medicaid and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 2,898 | 2,277 | 2,606 | ||||||||
Provider | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 446 | 404 | 258 | ||||||||
ASO and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 807 | 850 | 644 | ||||||||
Pharmacy | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 186 | 203 | 80 | ||||||||
Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment revenues | 0 | 0 | 0 | ||||||||
Products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment revenues | 0 | 0 | 0 | ||||||||
Operating Segments | Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 56,254 | 48,108 | 44,626 | ||||||||
Services revenue | 17 | 11 | 10 | ||||||||
Total external revenues | 56,271 | 48,119 | 44,636 | ||||||||
Intersegment revenues | 0 | 0 | 0 | ||||||||
Investment income | 195 | 136 | 90 | ||||||||
Total revenues | 56,466 | 48,255 | 44,726 | ||||||||
Benefits | 48,602 | 40,925 | 38,218 | ||||||||
Operating costs | 5,306 | 5,327 | 4,292 | ||||||||
Merger termination fee and related costs, net | 0 | ||||||||||
Depreciation and amortization | 323 | 270 | 238 | ||||||||
Total operating expenses | 54,231 | 46,522 | 42,748 | ||||||||
Income from operations | 2,235 | 1,733 | 1,978 | ||||||||
Loss on sale of business | 0 | ||||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Other (income) expense, net | 0 | 0 | |||||||||
Income before income taxes and equity in net earnings | 2,235 | 1,733 | 1,978 | ||||||||
Equity in net earnings of Kindred at Home | 0 | 0 | 0 | ||||||||
Segment earnings | 2,235 | 1,733 | 1,978 | ||||||||
Operating Segments | Retail | Individual Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 43,128 | 35,656 | 32,720 | ||||||||
Operating Segments | Retail | Group Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 6,475 | 6,103 | 5,155 | ||||||||
Operating Segments | Retail | Medicare stand-alone PDP | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 3,165 | 3,584 | 3,702 | ||||||||
Operating Segments | Retail | Total Medicare | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 52,768 | 45,343 | 41,577 | ||||||||
Operating Segments | Retail | Fully-insured | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 588 | 510 | 478 | ||||||||
Operating Segments | Retail | Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Retail | Medicaid and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 2,898 | 2,255 | 2,571 | ||||||||
Operating Segments | Retail | Provider | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 0 | 0 | 0 | ||||||||
Operating Segments | Retail | ASO and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 17 | 11 | 10 | ||||||||
Operating Segments | Retail | Pharmacy | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 0 | 0 | 0 | ||||||||
Operating Segments | Retail | Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment revenues | 0 | 0 | 0 | ||||||||
Operating Segments | Retail | Products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment revenues | 0 | 0 | 0 | ||||||||
Operating Segments | Group and Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 6,694 | 6,803 | 6,772 | ||||||||
Services revenue | 790 | 835 | 626 | ||||||||
Total external revenues | 7,484 | 7,638 | 7,398 | ||||||||
Intersegment revenues | 18 | 18 | 20 | ||||||||
Investment income | 23 | 23 | 31 | ||||||||
Total revenues | 7,525 | 7,679 | 7,449 | ||||||||
Benefits | 5,758 | 5,420 | 5,363 | ||||||||
Operating costs | 1,651 | 1,810 | 1,590 | ||||||||
Merger termination fee and related costs, net | 0 | ||||||||||
Depreciation and amortization | 88 | 88 | 84 | ||||||||
Total operating expenses | 7,497 | 7,318 | 7,037 | ||||||||
Income from operations | 28 | 361 | 412 | ||||||||
Loss on sale of business | 0 | ||||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Other (income) expense, net | 0 | 0 | |||||||||
Income before income taxes and equity in net earnings | 28 | 361 | 412 | ||||||||
Equity in net earnings of Kindred at Home | 0 | 0 | 0 | ||||||||
Segment earnings | 28 | 361 | 412 | ||||||||
Operating Segments | Group and Specialty | Individual Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Group and Specialty | Group Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Group and Specialty | Medicare stand-alone PDP | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Group and Specialty | Total Medicare | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Group and Specialty | Fully-insured | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 5,123 | 5,444 | 5,462 | ||||||||
Operating Segments | Group and Specialty | Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 1,571 | 1,359 | 1,310 | ||||||||
Operating Segments | Group and Specialty | Medicaid and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Group and Specialty | Provider | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 0 | 0 | 0 | ||||||||
Operating Segments | Group and Specialty | ASO and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 790 | 835 | 626 | ||||||||
Operating Segments | Group and Specialty | Pharmacy | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 0 | 0 | 0 | ||||||||
Operating Segments | Group and Specialty | Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment revenues | 18 | 18 | 20 | ||||||||
Operating Segments | Group and Specialty | Products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment revenues | 0 | 0 | 0 | ||||||||
Operating Segments | Healthcare Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Services revenue | 632 | 607 | 338 | ||||||||
Total external revenues | 632 | 607 | 338 | ||||||||
Intersegment revenues | 25,149 | 23,170 | 23,585 | ||||||||
Investment income | 2 | 34 | 35 | ||||||||
Total revenues | 25,783 | 23,811 | 23,958 | ||||||||
Benefits | 0 | 0 | 0 | ||||||||
Operating costs | 24,852 | 22,905 | 22,848 | ||||||||
Merger termination fee and related costs, net | 0 | ||||||||||
Depreciation and amortization | 156 | 163 | 143 | ||||||||
Total operating expenses | 25,008 | 23,068 | 22,991 | ||||||||
Income from operations | 775 | 743 | 967 | ||||||||
Loss on sale of business | 0 | ||||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Other (income) expense, net | 0 | 0 | |||||||||
Income before income taxes and equity in net earnings | 775 | 743 | 967 | ||||||||
Equity in net earnings of Kindred at Home | 14 | 11 | 0 | ||||||||
Segment earnings | 789 | 754 | 967 | ||||||||
Operating Segments | Healthcare Services | Individual Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Healthcare Services | Group Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Healthcare Services | Medicare stand-alone PDP | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Healthcare Services | Total Medicare | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Healthcare Services | Fully-insured | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Healthcare Services | Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Healthcare Services | Medicaid and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Operating Segments | Healthcare Services | Provider | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 446 | 404 | 258 | ||||||||
Operating Segments | Healthcare Services | ASO and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 0 | 0 | 0 | ||||||||
Operating Segments | Healthcare Services | Pharmacy | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 186 | 203 | 80 | ||||||||
Operating Segments | Healthcare Services | Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment revenues | 18,255 | 16,840 | 17,293 | ||||||||
Operating Segments | Healthcare Services | Products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment revenues | 6,894 | 6,330 | 6,292 | ||||||||
Operating Segments | Individual Commercial | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 8 | 947 | |||||||||
Services revenue | 0 | 0 | |||||||||
Total external revenues | 8 | 947 | |||||||||
Intersegment revenues | 0 | 0 | |||||||||
Investment income | 0 | 4 | |||||||||
Total revenues | 8 | 951 | |||||||||
Benefits | (70) | 544 | |||||||||
Operating costs | 4 | 201 | |||||||||
Merger termination fee and related costs, net | 0 | ||||||||||
Depreciation and amortization | 0 | 13 | |||||||||
Total operating expenses | (66) | 758 | |||||||||
Income from operations | 74 | 193 | |||||||||
Loss on sale of business | 0 | ||||||||||
Interest expense | 0 | 0 | |||||||||
Other (income) expense, net | 0 | ||||||||||
Income before income taxes and equity in net earnings | 74 | 193 | |||||||||
Equity in net earnings of Kindred at Home | 0 | 0 | |||||||||
Segment earnings | 74 | 193 | |||||||||
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 | 8 | 947 | |||||||||
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 | 22 | 35 | |||||||||
Services revenue | 4 | 8 | |||||||||
Total external revenues | 26 | 43 | |||||||||
Intersegment revenues | 0 | 0 | |||||||||
Investment income | 110 | 87 | |||||||||
Total revenues | 136 | 130 | |||||||||
Benefits | 77 | 131 | |||||||||
Operating costs | 6 | 12 | |||||||||
Merger termination fee and related costs, net | 0 | ||||||||||
Depreciation and amortization | 0 | 0 | |||||||||
Total operating expenses | 83 | 143 | |||||||||
Income from operations | 53 | (13) | |||||||||
Loss on sale of business | 0 | ||||||||||
Interest expense | 0 | 0 | |||||||||
Other (income) expense, net | 0 | ||||||||||
Income before income taxes and equity in net earnings | 53 | (13) | |||||||||
Equity in net earnings of Kindred at Home | 0 | 0 | |||||||||
Segment earnings | 53 | (13) | |||||||||
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 | 22 | 35 | |||||||||
Other Businesses | Provider | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 0 | 0 | |||||||||
Other Businesses | ASO and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 4 | 8 | |||||||||
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 | ||||||||
Services revenue | 0 | 0 | 0 | ||||||||
Total external revenues | 0 | 0 | 0 | ||||||||
Intersegment revenues | (25,167) | (23,188) | (23,605) | ||||||||
Investment income | 281 | 211 | 158 | ||||||||
Total revenues | (24,886) | (22,977) | (23,447) | ||||||||
Benefits | (503) | (470) | (760) | ||||||||
Operating costs | (24,428) | (22,527) | (22,376) | ||||||||
Merger termination fee and related costs, net | (936) | ||||||||||
Depreciation and amortization | (109) | (116) | (100) | ||||||||
Total operating expenses | (25,040) | (23,113) | (24,172) | ||||||||
Income from operations | 154 | 136 | 725 | ||||||||
Loss on sale of business | 786 | ||||||||||
Interest expense | 242 | 218 | 242 | ||||||||
Other (income) expense, net | (506) | 33 | |||||||||
Income before income taxes and equity in net earnings | 418 | (901) | 483 | ||||||||
Equity in net earnings of Kindred at Home | 0 | 0 | 0 | ||||||||
Segment earnings | 418 | (901) | 483 | ||||||||
Eliminations/Corporate | Individual Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Eliminations/Corporate | Group Medicare Advantage | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Eliminations/Corporate | Medicare stand-alone PDP | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Eliminations/Corporate | Total Medicare | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Eliminations/Corporate | Fully-insured | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Eliminations/Corporate | Specialty | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Eliminations/Corporate | Medicaid and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Eliminations/Corporate | Provider | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 0 | 0 | 0 | ||||||||
Eliminations/Corporate | ASO and other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 0 | 0 | 0 | ||||||||
Eliminations/Corporate | Pharmacy | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Services revenue | 0 | 0 | 0 | ||||||||
Eliminations/Corporate | Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment revenues | (18,273) | (16,858) | (17,313) | ||||||||
Eliminations/Corporate | Products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment revenues | $ (6,894) | $ (6,330) | $ (6,292) |
REINSURANCE - Narrative (Detail
REINSURANCE - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)Reinsurer | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables | $ 267 | $ 314 | |
Premiums ceded | 1,000 | 976 | $ 969 |
Benefits ceded | $ 881 | 980 | $ 844 |
Number of reinsurers comprising other reinsurance recoverables balance | Reinsurer | 11 | ||
Cash and securities in trusts held by certain reinsurers | $ 72 | ||
100% Coinsurance Agreements | |||
Effects of Reinsurance [Line Items] | |||
Percentage of coinsurance agreement | 100.00% | ||
Reinsurance Recoverables | Reinsurer Concentration Risk | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables | $ 267 | $ 313 | |
Protective Life Insurance Company | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables | 174 | ||
All others | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables | $ 94 |
QUARTERLY FINANCIAL INFORMATI_3
QUARTERLY FINANCIAL INFORMATION (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 16,295 | $ 16,241 | $ 16,245 | $ 16,107 | $ 14,168 | $ 14,206 | $ 14,259 | $ 14,279 | $ 64,888 | $ 56,912 | $ 53,767 |
Income (loss) before income taxes | 593 | 888 | 1,229 | 746 | 436 | 901 | 19 | 707 | 3,456 | 2,063 | 4,020 |
Net income | $ 512 | $ 689 | $ 940 | $ 566 | $ 355 | $ 644 | $ 193 | $ 491 | $ 2,707 | $ 1,683 | $ 2,448 |
Basic earnings per common share (in USD per share) | $ 3.87 | $ 5.16 | $ 6.96 | $ 4.18 | $ 2.60 | $ 4.68 | $ 1.40 | $ 3.56 | $ 20.20 | $ 12.24 | $ 16.94 |
Diluted earnings per common share (in USD per share) | $ 3.84 | $ 5.14 | $ 6.94 | $ 4.16 | $ 2.58 | $ 4.65 | $ 1.39 | $ 3.53 | $ 20.10 | $ 12.16 | $ 16.81 |
SCHEDULE I - PARENT COMPANY F_2
SCHEDULE I - PARENT COMPANY FINANCIAL INFORMATION (Condensed Balance Sheets) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||||
Cash and cash equivalents | $ 4,054 | $ 2,343 | ||
Investment securities | 10,972 | 10,026 | ||
Other current assets | 3,806 | 3,564 | ||
Total current assets | 19,888 | 16,948 | ||
Property and equipment, net | 1,955 | 1,735 | ||
Equity method investment in Kindred at Home | 1,063 | 1,047 | ||
Other long-term assets | 1,834 | 1,375 | ||
Total assets | 29,074 | 25,413 | ||
Current liabilities: | ||||
Total current liabilities | 10,929 | 10,077 | ||
Long-term debt | 4,967 | 4,375 | ||
Other long-term liabilities | 935 | 581 | ||
Total liabilities | 17,037 | 15,252 | ||
Commitments and contingencies | ||||
Stockholders’ equity: | ||||
Preferred stock, $1 par; 10,000,000 shares authorized; none issued | 0 | 0 | ||
Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 198,629,992 shares issued at December 31, 2019 and 198,594,841 shares issued at December 31, 2018 | 33 | 33 | ||
Capital in excess of par value | 2,820 | 2,535 | ||
Retained earnings | 17,483 | 15,072 | ||
Accumulated other comprehensive income (loss) | 156 | (159) | ||
Treasury stock, at cost, 66,524,771 shares at December 31, 2019 and 63,028,169 shares at December 31, 2018 | (8,455) | (7,320) | ||
Total stockholders’ equity | 12,037 | 10,161 | $ 9,842 | $ 10,685 |
Total liabilities and stockholders’ equity | 29,074 | 25,413 | ||
Parent Company | ||||
Current assets: | ||||
Cash and cash equivalents | 1,006 | 265 | ||
Investment securities | 355 | 313 | ||
Receivable from operating subsidiaries | 1,248 | 1,306 | ||
Other current assets | 778 | 628 | ||
Total current assets | 3,387 | 2,512 | ||
Property and equipment, net | 1,403 | 1,209 | ||
Investments in subsidiaries | 14,763 | 16,951 | ||
Equity method investment in Kindred at Home | 1,063 | 1,047 | ||
Other long-term assets | 778 | 359 | ||
Total assets | 21,394 | 22,078 | ||
Current liabilities: | ||||
Payable to operating subsidiaries | 1,975 | 4,487 | ||
Current portion of notes payable to operating subsidiaries | 36 | 28 | ||
Book overdraft | 40 | 38 | ||
Short-term debt | 699 | 1,694 | ||
Other current liabilities | 1,128 | 791 | ||
Total current liabilities | 3,878 | 7,038 | ||
Long-term debt | 4,967 | 4,375 | ||
Other long-term liabilities | 512 | 504 | ||
Total liabilities | 9,357 | 11,917 | ||
Commitments and contingencies | ||||
Stockholders’ equity: | ||||
Preferred stock, $1 par; 10,000,000 shares authorized; none issued | 0 | 0 | ||
Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 198,629,992 shares issued at December 31, 2019 and 198,594,841 shares issued at December 31, 2018 | 33 | 33 | ||
Capital in excess of par value | 2,820 | 2,535 | ||
Retained earnings | 17,483 | 15,072 | ||
Accumulated other comprehensive income (loss) | 156 | (159) | ||
Treasury stock, at cost, 66,524,771 shares at December 31, 2019 and 63,028,169 shares at December 31, 2018 | (8,455) | (7,320) | ||
Total stockholders’ equity | 12,037 | 10,161 | ||
Total liabilities and stockholders’ equity | $ 21,394 | $ 22,078 |
SCHEDULE I - PARENT COMPANY F_3
SCHEDULE I - PARENT COMPANY FINANCIAL INFORMATION (Condensed Balance Sheets Share Data) (Details) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Condensed Financial Statements, Captions [Line Items] | ||
Preferred stock, par (in USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par (in USD per share) | $ 0.1667 | $ 0.1667 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 198,629,992 | 198,594,841 |
Treasury stock (in shares) | 66,524,771 | 63,028,169 |
Parent Company | ||
Condensed Financial Statements, Captions [Line Items] | ||
Preferred stock, par (in USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par (in USD per share) | $ 0.1667 | $ 0.1667 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 198,629,992 | 198,594,841 |
Treasury stock (in shares) | 66,524,771 | 63,028,169 |
SCHEDULE I - PARENT COMPANY F_4
SCHEDULE I - PARENT COMPANY FINANCIAL INFORMATION (Condensed Statements of Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||||||||||
Total revenues | $ 16,295 | $ 16,241 | $ 16,245 | $ 16,107 | $ 14,168 | $ 14,206 | $ 14,259 | $ 14,279 | $ 64,888 | $ 56,912 | $ 53,767 |
Expenses: | |||||||||||
Operating costs | 7,381 | 7,525 | 6,567 | ||||||||
Merger termination fee and related costs, net | 0 | 0 | (936) | ||||||||
Depreciation | 505 | 444 | 410 | ||||||||
Interest | 242 | 218 | 242 | ||||||||
Other expense, net | (506) | 33 | 0 | ||||||||
Loss on sale of business | 0 | 786 | 0 | ||||||||
(Benefit) provision for income taxes | 763 | 391 | 1,572 | ||||||||
Equity in net earnings of Kindred at Home | 14 | 11 | 0 | ||||||||
Net income | $ 512 | $ 689 | $ 940 | $ 566 | $ 355 | $ 644 | $ 193 | $ 491 | 2,707 | 1,683 | 2,448 |
Parent Company | |||||||||||
Revenues: | |||||||||||
Management fees charged to operating subsidiaries | 1,789 | 1,666 | 1,864 | ||||||||
Investment and other income, net | 28 | 30 | 57 | ||||||||
Total revenues | 1,817 | 1,696 | 1,921 | ||||||||
Expenses: | |||||||||||
Operating costs | 1,578 | 1,468 | 1,801 | ||||||||
Merger termination fee and related costs, net | 0 | 0 | (936) | ||||||||
Depreciation | 387 | 342 | 332 | ||||||||
Interest | 242 | 218 | 243 | ||||||||
Total operating expenses | 2,207 | 2,028 | 1,440 | ||||||||
Other expense, net | (507) | 33 | 0 | ||||||||
Loss on sale of business | 0 | 782 | 0 | ||||||||
(Loss) income before income taxes and equity in net earnings of subsidiaries | 117 | (1,147) | 481 | ||||||||
(Benefit) provision for income taxes | 27 | (542) | 61 | ||||||||
(Loss) income before equity in net earnings of subsidiaries | 90 | (605) | 420 | ||||||||
Equity in net earnings of subsidiaries | 2,603 | 2,277 | 2,028 | ||||||||
Equity in net earnings of Kindred at Home | 14 | 11 | 0 | ||||||||
Net income | $ 2,707 | $ 1,683 | $ 2,448 |
SCHEDULE I - PARENT COMPANY F_5
SCHEDULE I - PARENT COMPANY FINANCIAL INFORMATION (Condensed Statements of Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | $ 512 | $ 689 | $ 940 | $ 566 | $ 355 | $ 644 | $ 193 | $ 491 | $ 2,707 | $ 1,683 | $ 2,448 |
Other comprehensive income (loss): | |||||||||||
Change in gross unrealized investment losses/gains | 450 | (189) | 149 | ||||||||
Effect of income taxes | (105) | 51 | (55) | ||||||||
Total change in unrealized investment gains/losses, net of tax | 345 | (138) | 94 | ||||||||
Reclassification adjustment for net realized gains included in investment income | (34) | (53) | (14) | ||||||||
Effect of income taxes | 8 | 17 | 5 | ||||||||
Total reclassification adjustment, net of tax | (26) | (36) | (9) | ||||||||
Other comprehensive income (loss), net of tax | 319 | (174) | 85 | ||||||||
Comprehensive income attributable to our equity method investment in Kindred at Home | (4) | (4) | 0 | ||||||||
Comprehensive income | 3,022 | 1,505 | 2,533 | ||||||||
Parent Company | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | 2,707 | 1,683 | 2,448 | ||||||||
Other comprehensive income (loss): | |||||||||||
Change in gross unrealized investment losses/gains | 450 | (189) | 149 | ||||||||
Effect of income taxes | (105) | 51 | (55) | ||||||||
Total change in unrealized investment gains/losses, net of tax | 345 | (138) | 94 | ||||||||
Reclassification adjustment for net realized gains included in investment income | (34) | (53) | (14) | ||||||||
Effect of income taxes | 8 | 17 | 5 | ||||||||
Total reclassification adjustment, net of tax | (26) | (36) | (9) | ||||||||
Other comprehensive income (loss), net of tax | 319 | (174) | 85 | ||||||||
Comprehensive income attributable to our equity method investment in Kindred at Home | (4) | (4) | 0 | ||||||||
Comprehensive income | $ 3,022 | $ 1,505 | $ 2,533 |
SCHEDULE I - PARENT COMPANY F_6
SCHEDULE I - PARENT COMPANY FINANCIAL INFORMATION (Condensed Statements of Cash Flows) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by operating activities | $ 5,284 | $ 2,173 | $ 4,051 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | 0 | (354) | (31) |
Purchase of equity method investment in Kindred at Home | 0 | (1,095) | 0 |
Purchases of investment securities | (6,361) | (4,687) | (6,265) |
Proceeds from sale of investment securities | 4,086 | 3,494 | 2,768 |
Maturities of investment securities | 1,733 | 972 | 1,111 |
Purchases of property and equipment, net | (736) | (612) | (524) |
Net cash used in investing activities | (1,278) | (3,087) | (2,941) |
Cash flows from financing activities: | |||
Proceeds from issuance of senior notes, net | 987 | 0 | 1,779 |
(Repayments) proceeds from issuance of commercial paper, net | (360) | 485 | (153) |
Proceeds from term loan | 0 | 1,000 | 0 |
Repayment of term loan | (650) | (350) | 0 |
Repayment of long-term debt | (400) | 0 | (800) |
Change in book overdraft | 54 | 30 | (71) |
Common stock repurchases | (1,070) | (1,090) | (3,365) |
Dividends paid | (291) | (265) | (220) |
Proceeds From Stock Options Exercised And Other | 58 | 45 | 62 |
Net cash used in financing activities | (2,295) | (785) | (945) |
Increase (decrease) in cash and cash equivalents | 1,711 | (1,699) | 165 |
Cash and cash equivalents at beginning of period | 2,343 | 4,042 | 3,877 |
Cash and cash equivalents at end of period | 4,054 | 2,343 | 4,042 |
Parent Company | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by operating activities | 3,529 | 2,719 | 2,423 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | 0 | (354) | 0 |
Purchase of equity method investment in Kindred at Home | 0 | (1,095) | 0 |
Capital contributions to operating subsidiaries | (423) | (697) | (695) |
Purchases of investment securities | (204) | (145) | (53) |
Proceeds from sale of investment securities | 15 | 35 | 0 |
Maturities of investment securities | 134 | 59 | 51 |
Purchases of property and equipment, net | (585) | (465) | (359) |
Net cash used in investing activities | (1,063) | (2,662) | (1,056) |
Cash flows from financing activities: | |||
Proceeds from issuance of senior notes, net | 987 | 0 | 1,779 |
(Repayments) proceeds from issuance of commercial paper, net | (360) | 485 | (153) |
Proceeds from term loan | 0 | 1,000 | 0 |
Repayment of term loan | (650) | (350) | 0 |
Repayment of long-term debt | (400) | 0 | (800) |
Change in book overdraft | 2 | (3) | 3 |
Common stock repurchases | (1,070) | (1,090) | (3,365) |
Dividends paid | (291) | (265) | (220) |
Proceeds From Stock Options Exercised And Other | 57 | 48 | 62 |
Net cash used in financing activities | (1,725) | (175) | (2,694) |
Increase (decrease) in cash and cash equivalents | 741 | (118) | (1,327) |
Cash and cash equivalents at beginning of period | 265 | 383 | 1,710 |
Cash and cash equivalents at end of period | $ 1,006 | $ 265 | $ 383 |
SCHEDULE I - PARENT COMPANY F_7
SCHEDULE I - PARENT COMPANY FINANCIAL INFORMATION (Notes to Condensed Financial Statements) (Details) - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Financial Information Disclosure [Abstract] | |||
Cash dividends received from subsidiary | $ 1.8 | $ 2.3 | $ 1.4 |
Aggregate statutory capital and surplus in our state regulated insurance subsidiaries | 8 | 7.6 | |
Aggregate minimum regulatory requirements of statutory capital and surplus | 5.9 | 5.2 | |
Dividends that may be paid to the parent company without prior approval by state regulatory authorities in 2014 | 1 | ||
Dividends that were paid to the parent company without prior approval by state regulatory authorities | $ 1.8 | $ 2.3 | $ 1.4 |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for loss on receivables: | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 79 | $ 96 | $ 118 |
Acquired/(Disposed) Balances | 0 | 0 | 0 |
Charged (Credited) to Costs and Expenses | (1) | 36 | 20 |
Charged to Other Accounts | 0 | (29) | (10) |
Deductions or Write-offs | (9) | (24) | (32) |
Balance at End of Period | 69 | 79 | 96 |
Deferred tax asset valuation allowance: | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 54 | 49 | 49 |
Acquired/(Disposed) Balances | 0 | 0 | 0 |
Charged (Credited) to Costs and Expenses | 9 | (5) | 0 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions or Write-offs | 0 | 0 | 0 |
Balance at End of Period | $ 45 | $ 54 | $ 49 |