Cover
Cover | 3 Months Ended |
Mar. 31, 2023 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2023 |
Document Transition Report | false |
Entity File Number | 1-5975 |
Entity Registrant Name | HUMANA INC |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 61-0647538 |
Entity Address, Address Line One | 500 West Main Street |
Entity Address, City or Town | Louisville |
Entity Address, State or Province | KY |
Entity Address, Postal Zip Code | 40202 |
City Area Code | 502 |
Local Phone Number | 580-1000 |
Title of 12(b) Security | Common stock, $0.16 2/3 par value |
Trading Symbol | HUM |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 124,944,994 |
Entity Central Index Key | 0000049071 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 13,735 | $ 5,061 |
Investment securities | 14,932 | 13,881 |
Receivables, net of allowances of $69 in 2023 and $70 in 2022 | 3,107 | 1,674 |
Other current assets | 5,758 | 5,567 |
Total current assets | 37,532 | 26,183 |
Property and equipment, net | 3,234 | 3,221 |
Long-term investment securities | 371 | 380 |
Equity method investments | 739 | 749 |
Goodwill | 9,320 | 9,142 |
Other long-term assets | 3,580 | 3,380 |
Total assets | 54,776 | 43,055 |
Current liabilities: | ||
Benefits payable | 10,018 | 9,264 |
Trade accounts payable and accrued expenses | 7,431 | 5,238 |
Book overdraft | 406 | 298 |
Unearned revenues | 7,220 | 286 |
Short-term debt | 1,867 | 2,092 |
Total current liabilities | 26,942 | 17,178 |
Long-term debt | 9,743 | 9,034 |
Other long-term liabilities | 1,457 | 1,473 |
Total liabilities | 38,142 | 27,685 |
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; 198,666,598 shares issued at March 31, 2023 and December 31, 2022 | 33 | 33 |
Capital in excess of par value | 3,262 | 3,246 |
Retained earnings | 26,619 | 25,492 |
Accumulated other comprehensive loss | (1,113) | (1,304) |
Treasury stock, at cost, 73,721,604 shares at March 31, 2023 and 73,691,955 shares at December 31, 2022 | (12,224) | (12,156) |
Total stockholders' equity | 16,577 | 15,311 |
Noncontrolling interests | 57 | 59 |
Total equity | 16,634 | 15,370 |
Total liabilities and equity | $ 54,776 | $ 43,055 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Receivables, net of allowances | $ 69 | $ 70 |
Preferred stock, par (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par (in dollars per share) | $ 0.1667 | $ 0.1667 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 198,666,598 | 198,666,598 |
Treasury stock, shares (in shares) | 73,721,604 | 73,691,955 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Health Care [Member] | Health Care [Member] |
Revenues: | ||
Premiums | $ 25,550 | $ 22,703 |
Services | 999 | 1,264 |
Investment income | 193 | 3 |
Total revenues | 26,742 | 23,970 |
Operating expenses: | ||
Benefits | 21,858 | 19,625 |
Operating costs | 2,979 | 2,886 |
Depreciation and amortization | 186 | 170 |
Total operating expenses | 25,023 | 22,681 |
Income from operations | 1,719 | 1,289 |
Interest expense | 113 | 90 |
Other income, net | (8) | (21) |
Income before income taxes and equity in net losses | 1,614 | 1,220 |
Provision for income taxes | 359 | 286 |
Equity in net losses | (17) | (4) |
Net income | 1,238 | 930 |
Net loss attributable to noncontrolling interests | 1 | 0 |
Net income attributable to Humana | $ 1,239 | $ 930 |
Basic earnings per common share (in dollars per share) | $ 9.91 | $ 7.32 |
Diluted earnings per common share (in dollars per share) | $ 9.87 | $ 7.29 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income attributable to Humana | $ 1,239 | $ 930 |
Other comprehensive income (loss): | ||
Change in gross unrealized investment gains (losses) | 188 | (769) |
Effect of income taxes | (43) | 176 |
Total change in unrealized investment gains (losses), net of tax | 145 | (593) |
Reclassification adjustment for net realized losses (gains) | 61 | (27) |
Effect of income taxes | (15) | 6 |
Total reclassification adjustment, net of tax | 46 | (21) |
Other comprehensive income (loss), net of tax | 191 | (614) |
Comprehensive income attributable to Humana | $ 1,430 | $ 316 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Millions | Total | Total Stockholders' Equity | Common Stock | Capital In Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (loss) | Treasury Stock | Noncontrolling Interests |
Balances (in shares) at Dec. 31, 2021 | 198,649 | |||||||
Balances at Dec. 31, 2021 | $ 16,103 | $ 16,080 | $ 33 | $ 3,082 | $ 23,086 | $ 42 | $ (10,163) | $ 23 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 930 | 930 | 930 | |||||
Other comprehensive income (loss) | (614) | (614) | (614) | |||||
Common stock repurchases | (1,024) | (1,024) | (1,024) | |||||
Dividends and dividend equivalents | (101) | (101) | (101) | |||||
Stock-based compensation | 43 | 43 | 43 | |||||
Restricted stock unit vesting | 0 | (24) | 24 | |||||
Stock option exercises | 5 | 5 | 2 | 3 | ||||
Balances (in shares) at Mar. 31, 2022 | 198,649 | |||||||
Balances at Mar. 31, 2022 | 15,342 | 15,319 | $ 33 | 3,103 | 23,915 | (572) | (11,160) | 23 |
Balances (in shares) at Dec. 31, 2022 | 198,667 | |||||||
Balances at Dec. 31, 2022 | 15,370 | 15,311 | $ 33 | 3,246 | 25,492 | (1,304) | (12,156) | 59 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 1,238 | 1,239 | 1,239 | (1) | ||||
Distribution from (to) noncontrolling interest holders, net | 4 | 4 | ||||||
Acquisition | (5) | (5) | ||||||
Other comprehensive income (loss) | 191 | 191 | 191 | |||||
Common stock repurchases | (94) | (94) | (94) | |||||
Dividends and dividend equivalents | (112) | (112) | (112) | |||||
Stock-based compensation | 38 | 38 | 38 | |||||
Restricted stock unit vesting | 0 | (24) | 24 | |||||
Stock option exercises | 4 | 4 | 2 | 2 | ||||
Balances (in shares) at Mar. 31, 2023 | 198,667 | |||||||
Balances at Mar. 31, 2023 | $ 16,634 | $ 16,577 | $ 33 | $ 3,262 | $ 26,619 | $ (1,113) | $ (12,224) | $ 57 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net income | $ 1,238 | $ 930 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Loss on investment securities, net | 60 | 76 |
Equity in net losses | 17 | 4 |
Stock-based compensation | 38 | 43 |
Depreciation | 200 | 181 |
Amortization | 18 | 24 |
Changes in operating assets and liabilities, net of effect of businesses acquired and disposed: | ||
Receivables | (1,433) | (1,360) |
Other assets | (907) | (628) |
Benefits payable | 754 | 1,089 |
Other liabilities | (238) | (103) |
Unearned revenues | 6,934 | 34 |
Other | 6 | 12 |
Net cash provided by operating activities | 6,687 | 302 |
Cash flows from investing activities | ||
Acquisitions, net of cash and cash equivalents acquired | (73) | (74) |
Purchases of property and equipment, net | (223) | (295) |
Purchases of investment securities | (1,313) | (2,161) |
Proceeds from maturities of investment securities | 267 | 588 |
Proceeds from sales of investment securities | 50 | 1,294 |
Net cash used in investing activities | (1,292) | (648) |
Cash flows from financing activities | ||
Receipts from contract deposits, net | 2,997 | 2,475 |
Proceeds from issuance of senior notes, net | 1,215 | 744 |
Repayments of senior notes | (60) | 0 |
Repayments from issuance of commercial paper, net | (177) | (265) |
Repayment of term loan | (500) | 0 |
Debt issue costs | (4) | (1) |
Change in book overdraft | 108 | (9) |
Common stock repurchases | (94) | (1,024) |
Dividends paid | (100) | (91) |
Other | (106) | (13) |
Net cash provided by financing activities | 3,279 | 1,816 |
Increase in cash and cash equivalents | 8,674 | 1,470 |
Cash and cash equivalents at beginning of period | 5,061 | 3,394 |
Cash and cash equivalents at end of period | 13,735 | 4,864 |
Supplemental cash flow disclosures: | ||
Interest payments | 97 | 67 |
Income tax payments (refund), net | 6 | (20) |
Details of businesses acquired in purchase transactions: | ||
Fair value of assets acquired, net of cash and cash equivalents acquired | 73 | 84 |
Less: Fair value of liabilities assumed | (5) | (10) |
Less: Noncontrolling interests acquired | 5 | 0 |
Cash paid for acquired businesses, net of cash and cash equivalents acquired | $ 73 | $ 74 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS | BASIS OF PRESENTATION AND SIGNIFICANT EVENTS The accompanying unaudited condensed consolidated financial statements are presented in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America, or GAAP, or those normally made in an Annual Report on Form 10-K. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. For further information, the reader of this Form 10-Q should refer to our Form 10-K for the year ended December 31, 2022, that was filed with the Securities and Exchange Commission, or the SEC, on February 16, 2023. We refer to this Form 10-K as the “2022 Form 10-K” in this document. References throughout this document to “we,” “us,” “our,” “Company,” and “Humana” mean Humana Inc. and its subsidiaries. The preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill and indefinite-lived intangible assets. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. For additional information regarding accounting policies considered in preparing our consolidated financial statements, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. The financial information has been prepared in accordance with our customary accounting practices and has not been audited. In our opinion, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature. Employer Group Commercial Medical Products Business Exit In February 2023, we announced our planned exit from the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs. No other Humana health plan offerings are materially affected. Following a strategic review, we determined the Employer Group Commercial Medical Products business was no longer positioned to sustainably meet the needs of commercial members over the long term or support our long-term strategic plans. The exit from this line of business will be phased over the next 18 to 24 months. Value Creation Initiatives During 2022, in order to create capacity to fund growth and investment in our Medicare Advantage business and further expansion of our healthcare services capabilities in 2023, we committed to drive additional value for the enterprise through cost saving, productivity initiatives, and value acceleration from previous investments. As a result of these initiatives, we recorded charges of $473 million for the year-ended December 31, 2022. These charges primarily relate to $248 million in asset impairments, including software and abandonment, and $116 million of severance charges in connection with workforce optimization. The remainder of the charges primarily relate to external consulting fees. These charges were recorded at the corporate level and not allocated to the segments. We did not record any charges in the first quarter of 2022, with no recurring charges in 2023. COVID-19 The emergence and spread of the novel coronavirus, or COVID-19, beginning in the first quarter of 2020 has impacted our business. During periods of increased incidences of COVID-19, a reduction in non-COVID-19 hospital admissions for non-emergent and elective medical care have resulted in lower overall healthcare system utilization. At the same time, COVID-19 treatment and testing costs increased utilization. During 2022, we experienced lower overall utilization of the healthcare system than anticipated, as the reduction in COVID-19 utilization following the increased incidence associated with the Omicron variant outpaced the increase in non-COVID-19 utilization. The significant disruption in utilization during 2020 also impacted our ability to implement clinical initiatives to manage health care costs and chronic conditions of our members, and appropriately document their risk profiles, and, as such, significantly affected our 2021 revenue under the risk adjustment payment model for Medicare Advantage plans. Finally, changes in utilization patterns and actions taken in 2021 as a result of the COVID-19 pandemic, including the suspension of certain financial recovery programs for a period of time and shifting the timing of claim payments and provider capitation surplus payments, impacted our claim reserve development and operating cash flows for 2021. The COVID-19 National Emergency declared in 2020 was terminated on April 10, 2023 and the Public Health Emergency is set to expire on May 11, 2023. Revenue Recognition Our revenues include premiums and services revenue. Services revenue includes administrative service fees that are recorded based upon established per member per month rates and the number of members for the month and are recognized as services are provided for the month. Additionally, services revenue includes net patient services revenue that are recorded based upon established billing rates, less allowances for contractual adjustments, and are recognized as services are provided. For additional information regarding our revenues, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. For additional information regarding disaggregation of revenue by segment and type, refer to Note 14 to the unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, "Financial Statements" of this Form 10-Q. At March 31, 2023, accounts receivable related to services were $246 million. For the three months ended March 31, 2023, we had no material bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the condensed consolidated balance sheet at March 31, 2023. For the three months ended March 31, 2023, services revenue recognized from performance obligations related to prior periods, such as due to changes in transaction price, was not material. Further, services revenue expected to be recognized in any future year related to remaining performance obligations was not material. |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTSIn November 2020, the FASB issued Accounting Standards Update No. 2020-11, Financial Services—Insurance (Topic 944): Effective Date and Early Application (“ASU 2020-11”). The amendments in ASU 2020-11 make changes to the effective date and early application of Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (“ASU 2018-12”), which was issued in November 2018. The amendments in ASU 2020-11 have extended the original effective date by one year, and now the amendments are required for our interim and annual reporting periods beginning after December 15, 2022. The new guidance relates to accounting for long-duration contracts of insurers which revises key elements of the measurement models and disclosure requirements for long-duration contracts issued by insurers, including the amortization of deferred contract acquisition costs and the measurement of liabilities for future policy benefits using current, rather than locked-in, assumptions. The new guidance, limited to our Medicare Supplement product which represent less than 1% of consolidated premiums and services revenue, became effective for us beginning January 1, 2023 and is to be applied to contracts in force on the basis of their existing carrying value amounts at the beginning of the earliest period presented. The adoption of the new standard in 2023 did not have a material impact on our consolidated results of operations, financial position or cash flows.There are no other recently issued accounting standards that apply to us or that are expected to have a material impact on our results of operations, financial condition, or cash flows. |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES On August 11, 2022, we completed the sale of a 60% i nterest in Gentiva, formerly Kindred, Hospice to Clayton, Dubilier & Rice, or CD&R, for cash proceeds of approximately $2.7 billion, net of cash disposed, including debt repayments from Gentiva Hospice to Humana of $1.9 billion. In connection with the sale we recognized a pre-tax gain, net of transaction costs, of $237 million. For the three months ended March 31, 2022, the accompanying condensed consolidated statement of income includes revenues related to Gentiva Hospice of $382 million and pretax earnings of $62 million. During 2023 and 2022, we acquired various 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 acquired in 2023 and 2022 have been included in our condensed consolidated statements of income and condensed consolidated balance sheets from the respective acquisition dates. Acquisition-related costs recognized in 2023 and 2022 were not material to our results of operations. For asset acquisitions, the goodwill acquired is 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. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | INVESTMENT SECURITIES Investment securities classified as current and long-term were as follows at March 31, 2023 and December 31, 2022, respectively: Amortized Gross Gross Fair (in millions) March 31, 2023 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 1,394 $ 9 $ (47) $ 1,356 Mortgage-backed securities 3,919 7 (423) 3,503 Tax-exempt municipal securities 762 1 (27) 736 Mortgage-backed securities: Residential 470 — (73) 397 Commercial 1,562 — (149) 1,413 Asset-backed securities 1,915 2 (64) 1,853 Corporate debt securities 6,725 16 (696) 6,045 Total debt securities $ 16,747 $ 35 $ (1,479) 15,303 Common stock — Total investment securities $ 15,303 December 31, 2022 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 1,093 $ 1 $ (55) $ 1,039 Mortgage-backed securities 3,697 4 (471) 3,230 Tax-exempt municipal securities 765 0 (37) 728 Mortgage-backed securities: Residential 477 — (76) 401 Commercial 1,554 — (155) 1,399 Asset-backed securities 1,809 1 (79) 1,731 Corporate debt securities 6,551 3 (828) 5,726 Total debt securities $ 15,946 $ 9 $ (1,701) 14,254 Common stock 7 Total investment securities $ 14,261 We held certain corporate debt securities of Gentiva Hospice at March 31, 2023 with amortized cost and fair value of approximately $281 million and $286 million, respectively. Gross unrealized losses and fair values aggregated by investment category and length of time of individual debt securities that have been in a continuous unrealized loss position for which no allowances for credit loss has been recorded were as follows at March 31, 2023 and December 31, 2022, respectively: Less than 12 months 12 months or more Total Fair Gross Fair Gross Fair Gross (in millions) March 31, 2023 U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations $ 290 $ (2) $ 396 $ (45) $ 686 $ (47) Mortgage-backed securities 867 (17) 2,123 (406) 2,990 (423) Tax-exempt municipal securities 343 (5) 314 (22) 657 (27) Mortgage-backed securities: Residential 25 (2) 369 (71) 394 (73) Commercial 119 (4) 1,275 (145) 1,394 (149) Asset-backed securities 583 (21) 971 (43) 1,554 (64) Corporate debt securities 1,453 (47) 3,634 (649) 5,087 (696) Total debt securities $ 3,680 $ (98) $ 9,082 $ (1,381) $ 12,762 $ (1,479) December 31, 2022 U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations $ 512 $ (5) $ 397 $ (50) $ 909 $ (55) Mortgage-backed securities 1,231 (104) 1,683 (367) 2,914 (471) Tax-exempt municipal securities 64 (2) 615 (36) 679 (38) Mortgage-backed securities: Residential 124 (16) 274 (60) 398 (76) Commercial 243 (13) 1,157 (142) 1,400 (155) Asset-backed securities 620 (32) 1,011 (46) 1,631 (78) Corporate debt securities 1,625 (98) 3,825 (730) 5,450 (828) Total debt securities $ 4,419 $ (270) $ 8,962 $ (1,431) $ 13,381 $ (1,701) Approximately 98% of our debt securities were investment-grade quality, with a weighted average credit rating of AA by Standard & Poor's Rating Service, or S&P, at March 31, 2023. 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 losses from all debt securities were generated from approximately 1,550 positions out of a total of approximately 1,950 positions at March 31, 2023. All issuers of debt securities we own that were trading at an unrealized loss at March 31, 2023 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 these debt securities were purchased. At March 31, 2023, we did not intend to sell any debt securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these debt securities before recovery of their amortized cost basis. Additionally, we did not record any material credit allowances for debt securities that were in an unrealized loss position for the three months ended March 31, 2023 or 2022. The detail of (losses) gains related to investment securities and included within investment income was as follows for the three months ended March 31, 2023 and 2022: Three months ended March 31, 2023 2022 (in millions) Gross gains on investment securities $ — $ 33 Gross losses on investment securities (61) (1) Gross gains on equity securities 1 — Gross losses on equity securities — (108) Net recognized losses on investment securities $ (60) $ (76) The gains and losses related to equity securities for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (in millions) Net gains (losses) recognized on equity securities during the period $ 1 $ (108) Less: Net gains (losses) recognized on equity securities sold during the period 1 (59) Unrealized losses recognized on equity securities still held at the end of the period $ — $ (49) The contractual maturities of debt securities available for sale at March 31, 2023, 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 $ 500 $ 495 Due after one year through five years 4,116 3,941 Due after five years through ten years 3,014 2,650 Due after ten years 1,251 1,051 Mortgage and asset-backed securities 7,866 7,166 Total debt securities $ 16,747 $ 15,303 |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Financial Assets The following table summarizes our fair value measurements at March 31, 2023 and December 31, 2022, respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Quoted Prices Other Unobservable (in millions) March 31, 2023 Cash equivalents $ 13,613 $ 13,613 $ — $ — Debt securities: U.S. Treasury and other U.S. government U.S. Treasury and agency obligations 1,356 — 1,356 — Mortgage-backed securities 3,503 — 3,503 — Tax-exempt municipal securities 736 — 736 — Mortgage-backed securities: Residential 397 — 397 — Commercial 1,413 — 1,413 — Asset-backed securities 1,853 — 1,853 — Corporate debt securities 6,045 — 5,946 99 Total debt securities 15,303 — 15,204 99 Common stock — — — — Total invested assets $ 28,916 $ 13,613 $ 15,204 $ 99 December 31, 2022 Cash equivalents $ 4,832 $ 4,832 $ — $ — Debt securities: U.S. Treasury and other U.S. government U.S. Treasury and agency obligations 1,039 — 1,039 — Mortgage-backed securities 3,230 — 3,230 — Tax-exempt municipal securities 728 — 728 — Mortgage-backed securities: Residential 401 — 401 — Commercial 1,399 — 1,399 — Asset-backed securities 1,731 — 1,731 — Corporate debt securities 5,726 — 5,625 101 Total debt securities 14,254 — 14,153 101 Common stock 7 7 — — Total invested assets $ 19,093 $ 4,839 $ 14,153 $ 101 Our Level 3 assets had a fair value of $99 million at March 31, 2023, or 0.3% of our total invested assets. During the year ended March 31, 2023, the changes in the fair value of the assets measured using significant unobservable inputs (Level 3) were comprised of the following: For the three months ended March 31, 2023 For the three months ended March 31, 2022 Private Placements (in millions) Beginning balance at January 1 $ 101 $ 68 Total gains or losses: Unrealized in other comprehensive income 1 (4) Purchases 1 17 Sales — (1) Transfer out (4) — Balance at March 31 $ 99 $ 80 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 $11.2 billion at March 31, 2023 and $10.0 billion at December 31, 2022. The fair value of our senior notes debt was $10.9 billion at March 31, 2023 and $9.4 billion at December 31, 2022. The fair value of our senior notes 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. Carrying value approximates fair value for our term loans and commercial paper borrowings. The commercial paper borrowings were $426 million at March 31, 2023. The term loans and commercial paper borrowings were $1.1 billion at December 31, 2022. Put and Call Options Measured at Fair Value Our put and call options associated with our equity method investments are measured at fair value each period using a Monte Carlo simulation. The put and call options fair values associated with our Primary Care Organization strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, which are exercisable at a fixed revenue exit multiple and provide a minimum return on WCAS' investment if exercised, are measured at fair value each reporting period using a Monte Carlo simulation. The put and call options fair values, derived from the Monte Carlo simulation, were $318 million and $8 million, respectively, at March 31, 2023. The put and call options fair values, derived from the Monte Carlo simulation, were $267 million and $10 million, respectively, at December 31, 2022. The significant unobservable inputs utilized in these Level 3 fair value measurements (and selected values) include the enterprise value, annualized volatility and credit spread. Enterprise value was derived from a discounted cash flow model, which utilized significant unobservable inputs for long-term revenue, to measure underlying cash flows, weighted average cost of capital and long term growth rate. The table below presents the assumptions used for each reporting period. March 31, 2023 December 31, 2022 Annualized volatility 16.7% - 19.3% 16.7% - 20.8% Credit spread 1.2% - 1.4% 1.3% - 1.5% Revenue exit multiple 1.5x - 2.5x 1.5x - 2.5x Weighted average cost of capital 12.0% - 13.0% 11.5% - 12.5% Long term growth rate 3.0 % 3.0 % The assumptions used for annualized volatility, credit spread and weighted average cost of capital reflect the lowest and highest values where they differ significantly across the series of put and call options due to their expected exercise dates. Other Assets and Liabilities Measured at Fair Value Certain assets and liabilities are measured at fair value on a non-recurring basis subject to fair value adjustment only in certain circumstances. As disclosed in Note 3, we acquired various health and wellness related businesses during 2023. The net assets acquired and resulting goodwill and other intangible assets were recorded at fair value primarily using Level 3 inputs. The net tangible assets including receivables and accrued liabilities were recorded at their carrying value which approximated their fair value due to their short term nature. The fair value of goodwill and other intangible assets were internally estimated based primarily on the income approach. The income approach estimates fair value based on the present value of cash flow that the assets could be expected to generate in the future. We developed internal estimates for expected cash flows in the present value calculation using inputs and significant assumptions that include historical revenues and earnings, revenue growth rates, the amount and timing of future cash flows, discount rates, contributory asset charges and future tax rates, among others. The excess purchase price over the fair value of assets and liabilities acquired is recorded as goodwill. As disclosed in Note 3, we completed the sale of Gentiva Hospice on August 11, 2022. The carrying value of the assets and liabilities of Gentiva Hospice disposed approximates fair value. The amount of goodwill included in the carrying value is based on the relative fair value of the Home Solutions reporting unit included within the CenterWell segment. Other than the assets and liabilities acquired during 2023, there were no other material assets or liabilities measured at fair value on a recurring or nonrecurring basis during 2023. For additional information regarding our fair value measurements, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. |
MEDICARE PART D
MEDICARE PART D | 3 Months Ended |
Mar. 31, 2023 | |
Insurance [Abstract] | |
MEDICARE PART D | MEDICARE PART D We cover prescription drug benefits in accordance with Medicare Part D under multiple contracts with the Centers for Medicare and Medicaid Services, or CMS. The accompanying condensed consolidated balance sheets include the following amounts associated with Medicare Part D at March 31, 2023 and December 31, 2022. 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. For additional information regarding our prescription drug benefits coverage in accordance with Medicare Part D, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. March 31, 2023 December 31, 2022 Risk CMS Risk CMS (in millions) Other current assets $ 86 $ 239 $ 240 $ 696 Trade accounts payable and accrued expenses (147) (3,805) (166) (1,236) Net current (liability) asset (61) (3,566) 74 (540) Other long-term assets 307 — 19 — Other long-term liabilities (93) — (78) — Net long-term asset (liability) 214 — (59) — Total net asset (liability) $ 153 $ (3,566) $ 15 $ (540) |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
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 three months ended March 31, 2023 were as follows: Insurance CenterWell Total (in millions) Balance at January 1, 2023 $ 2,472 $ 6,670 $ 9,142 Acquisitions 106 72 178 Balance at March 31, 2023 $ 2,578 $ 6,742 $ 9,320 The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Weighted Cost Accumulated Net Cost Accumulated Net ($ in millions) Other intangible assets: Certificates of need Indefinite $ 1,132 $ — $ 1,132 $ 1,132 $ — $ 1,132 Medicare licenses Indefinite 286 — 286 286 — 286 Customer contracts/ 9.3 years 932 685 247 929 673 256 Trade names and 6.8 years 134 101 33 142 107 35 Provider contracts 11.6 years 73 63 10 73 63 10 Noncompetes and 8.4 years 84 38 46 86 40 46 Total other intangible 9.1 years $ 2,641 $ 887 $ 1,754 $ 2,648 $ 883 $ 1,765 For the three months ended March 31, 2023 and 2022, amortization expense for other intangible assets was approximately $18 million. The following table presents our estimate of amortization expense remaining for 2023 and each of the five next succeeding years at March 31, 2023: (in millions) For the years ending December 31, 2023 $ 47 2024 56 2025 54 2026 41 2027 32 2028 27 For additional information regarding our goodwill and intangible assets, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. |
BENEFITS PAYABLE
BENEFITS PAYABLE | 3 Months Ended |
Mar. 31, 2023 | |
Insurance [Abstract] | |
BENEFITS PAYABLE | BENEFITS PAYABLE On a consolidated basis, which represents our Insurance segment net of eliminations, activity in benefits payable was as follows for the three months ended March 31, 2023 and 2022: For the three months ended March 31, 2023 2022 (in millions) Balances, beginning of period $ 9,264 $ 8,289 Incurred related to: Current year 22,380 19,985 Prior years (522) (360) Total incurred 21,858 19,625 Paid related to: Current year (14,203) (12,284) Prior years (6,901) (6,252) Total paid (21,104) (18,536) Balances, end of period $ 10,018 $ 9,378 The total estimate of benefits payable for claims incurred but not reported, or IBNR, is included within the net incurred claims amounts. At March 31, 2023, benefits payable included IBNR of approximately $6.3 billion, primarily associated with claims incurred in 2023. Amounts incurred related to prior periods vary from previously estimated liabilities as the claims ultimately are settled. Negative amounts reported for incurred related to prior years result from claims being ultimately settled for amounts less than originally estimated (favorable development). Our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for claims. Actuarial standards require the use of assumptions based on moderately adverse experience, which generally results in favorable reserve development, or reserves that are considered redundant. For additional information regarding our benefits payable and benefits expense recognition, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. |
EARNINGS PER COMMON SHARE COMPU
EARNINGS PER COMMON SHARE COMPUTATION | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE COMPUTATION | EARNINGS PER COMMON SHARE COMPUTATION Detail supporting the computation of basic and diluted earnings per common share was as follows for the three months ended March 31, 2023 and 2022: Three months ended March 31, 2023 2022 (dollars in millions, except per common share results; number of shares in thousands) Net income available for common stockholders $ 1,239 $ 930 Weighted average outstanding shares of common stock 125,005 126,938 Dilutive effect of: Employee stock options 34 40 Restricted stock 525 496 Shares used to compute diluted earnings per common share 125,564 127,474 Basic earnings per common share $ 9.91 $ 7.32 Diluted earnings per common share $ 9.87 $ 7.29 Number of antidilutive stock options and restricted stock 538 626 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Dividends The following table provides details of dividend payments, excluding dividend equivalent rights for unvested stock awards, during 2023 under our Board approved quarterly cash dividend policy: Record Payment Amount Total (in millions) 12/30/2022 1/27/2023 $ 0.7900 $ 98 In February 2023, the Board declared a cash dividend of $0.885 per share payable on April 28, 2023 to stockholders of record on March 31, 2023. In April 2023, the Board declared a cash dividend of $0.885 per share payable on July 28, 2023 to stockholders of record as of the close of business on June 30, 2023. Declaration and payment of future quarterly dividends are at the discretion of our Board and may be adjusted as business needs or market conditions change. Stock Repurchases Our Board of Directors may authorize the purchase of our common stock shares. Under the share repurchase authorization, shares may be purchased from time to time at prevailing prices in the open market, by block purchases, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or in privately-negotiated transactions, including pursuant to accelerated share repurchase agreements with investment banks, subject to certain regulatory restrictions on volume, pricing, and timing. On February 15, 2023, the Board of Directors replaced the previous share repurchase authorization of up to $3 billion (of which approximately $1 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 as of February 15, 2026. During the three months ended March 31, 2023, we repurchased 0.1 million shares in open market transactions for $67 million at an average price of $495.68 under the current share repurchase authorization. During the three months ended March 31, 2022 we did not repurchase shares in open market transactions. Our remaining repurchase authorization was $2.8 billion as of April 25, 2023. In connection with employee stock plans, we acquired 0.05 million common shares for $27 million and 0.06 million common shares for $24 million during the three months ended March 31, 2023 and 2022, respectively. For additional information regarding our stockholders' equity, refer to Note 16 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective income tax rate was 22.5% and 23.5% for the three months ended March 31, 2023 and 2022, respectively. The year-over-year decrease in the effective income tax rate is primarily due to the recognition of a non-taxable gain in the 2023 quarter. For additional information regarding income taxes, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The carrying value of debt outstanding, net of unamortized debt issuance costs, was as follows at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 (in millions) Short-term debt: Commercial paper $ 426 $ 595 Senior notes: $1.5 billion, 0.650% due August 3, 2023 1,441 1,497 Total senior notes 1,441 1,497 Total short-term debt $ 1,867 $ 2,092 Long-term debt: Senior notes: $600 million, 3.850% due October 1, 2024 $ 595 $ 599 $600 million, 4.500% due April 1, 2025 597 597 $500 million, 5.700% due March 13, 2026 497 — $750 million, 1.350% due February 3, 2027 745 745 $600 million, 3.950% due March 15, 2027 597 597 $500 million, 5.750% due March 1, 2028 494 494 $750 million, 3.700% due March 23, 2029 743 743 $500 million, 3.125% due August 15, 2029 496 496 $500 million, 4.875% due April 1, 2030 496 495 $750 million, 2.150% due February 3, 2032 743 743 $750 million, 5.880% due March 1, 2033 740 739 $250 million, 8.150% due June 15, 2038 261 261 $400 million, 4.625% due December 1, 2042 396 396 $750 million, 4.950% due October 1, 2044 740 740 $400 million, 4.800% due March 15, 2047 396 396 $500 million, 3.950% due August 15, 2049 493 493 $750 million, 5.500% due March 15, 2053 714 — Total senior notes 9,743 8,534 Term loans: Delayed draw term loan, due May 28, 2024 — 500 Total term loans — 500 Total long-term debt $ 9,743 $ 9,034 Senior Notes In March 2023, we issued $500 million of 5.700% unsecured senior notes due March 13, 2026 and $750 million of 5.500% unsecured senior notes due March 15, 2053. Our net proceeds, reduced for the underwriters' discounts and commissions paid, were $1.2 billion. We used the net proceeds to repay outstanding amounts under our $500 million Delayed Draw Term Loan. The remaining net proceeds will be used for general corporate purposes, which include the repayment of existing indebtedness, including borrowings under our commercial paper program. In March 2023, we entered into a Rule 10b5-1 Repurchase Plan, or the Plan, to repurchase a portion of our $1.5 billion aggregate principal amount of 0.650% senior notes maturing in August 2023 and our $600 million aggregate principal amount of 3.850% senior notes maturing in October 2024 during the Plan period beginning on March 13, 2023 and ending on June 15, 2023. During the three months ended March 31, 2023, we repurchased $61 million aggregate principal amount, for cash totaling approximately $60 million. For additional information regarding our Senior Notes, refer to Note 13 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. Revolving Credit Agreements Our credit agreements contain customary restrictive covenants and a financial covenant regarding maximum debt to capitalization of 60%, as well as customary events of default. We are in compliance with this financial covenant, with actual debt to capitalization of 41.1% as measured in accordance with the revolving credit agreements as of March 31, 2023. At March 31, 2023, we had no borrowings and approximately $39 million of letters of credit outstanding under the revolving credit agreements, including those of KAH. Accordingly, as of March 31, 2023, we had $2.4 billion of remaining borrowing capacity under the 5-year revolving credit agreement and $1.5 billion of remaining borrowing capacity under the 364-day revolving credit agreement (which excludes the uncommitted $750 million of incremental loan facilities), none of which would be restricted by our financial covenant compliance requirement. For additional information regarding our Revolving Credit Agreements, refer to Note 13 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. 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. 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 three months ended March 31, 2023 was $626 million, with $426 million outstanding at March 31, 2023 compared to $595 million outstanding at December 31, 2022. The outstanding commercial paper at March 31, 2023 had a weighted average annual interest rate of 5.45%. For additional information regarding our Commercial Paper refer to Note 13 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. Other Short-term Borrowings |
COMMITMENTS, GUARANTEES AND CON
COMMITMENTS, GUARANTEES AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, GUARANTEES AND CONTINGENCIES | COMMITMENTS, GUARANTEES AND CONTINGENCIES Government Contracts Our Medicare products, which accounted for approximately 84% of our total premiums and services revenue for the three months ended March 31, 2023, 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 2023, and all of our product offerings filed with CMS for 2023 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, or BBA, and the Benefits Improvement and Protection Act of 2000, or 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 account for certain demographic characteristics and health status of our enrolled members. Under the risk-adjustment methodology, all MA plans must collect from providers and submit the necessary diagnosis code information to CMS within prescribed deadlines. The CMS risk-adjustment model uses the diagnosis data, collected from providers, to calculate the health status-related risk-adjusted premium payment to MA plans, which CMS further adjusts for coding pattern differences between the health plans and the government fee-for-service, or FFS, 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 health status-adjusted 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. CMS and the Office of the Inspector General of Health and Human Services, or HHS-OIG, perform audits of various companies’ risk adjustment diagnosis data submissions. 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 that influence the calculation of health status-related premium payments to MA plans. In 2012, CMS released an MA contract-level RADV methodology that would extrapolate the results of each CMS RADV audit sample to the audited MA contract’s entire health status-related risk adjusted premium amount for the year under audit. In doing so, CMS recognized “that the documentation standard used in RADV audits to determine a contract’s payment error (medical records) is different from the documentation standard used to develop the Part C risk-adjustment model (FFS claims).” To correct for this difference, CMS stated that it would apply a “Fee-for-Service Adjuster (FFS Adjuster)” as “an offset to the preliminary recovery amount.” This adjuster would be “calculated by CMS based on a RADV-like review of records submitted to support FFS claims data.” CMS stated that this methodology would apply to audits beginning with PY 2011. Humana relied on CMS’s 2012 guidance in submitting MA bids to CMS. Humana also launched a “Self-Audits” program in 2013 that applied CMS’s 2012 RADV audit methodology and included an estimated FFS Adjuster. Humana completed Self-Audits for PYs 2011-2016 and reported results to CMS. In October 2018, however, CMS issued a proposed rule announcing possible changes to the RADV audit methodology, including elimination of the FFS Adjuster. CMS proposed applying its revised methodology, including extrapolated recoveries without application of a FFS Adjuster, to RADV audits dating back to PY 2011. On January 30, 2023, CMS published a final rule related to the RADV audit methodology (Final RADV Rule). The Final RADV Rule confirmed CMS’s decision to eliminate the FFS Adjuster. The Final RADV Rule states CMS’s intention to extrapolate results from CMS and HHS-OIG RADV audits beginning with PY 2018, rather than PY 2011 as proposed. However, CMS’s Final RADV Rule does not adopt a specific sampling, extrapolation or audit methodology. CMS instead stated its general plan to rely on “any statistically valid method . . . that is determined to be well-suited to a particular audit.” Humana is considering its legal options with respect to CMS’s changed position on the FFS Adjuster and seeking clarity regarding our compliance obligations in light of the Final RADV Rule. We believe that the Final RADV Rule fails to address adequately the statutory requirement of actuarial equivalence. Further, Humana’s actuarially certified bids through PY 2023 preserved Humana’s position that CMS should apply an FFS Adjuster in any RADV audit that CMS intends to extrapolate. We expect CMS to apply the Final RADV Rule, including the first application of extrapolated audit results to determine audit settlements without a FFS Adjuster, to CMS and HHS-OIG RADV audits conducted for PY 2018 and subsequent years. The Final RADV Rule, including the lack of a FFS Adjuster, 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. As we explore our legal options and compliance obligations, we remain committed to working alongside CMS to promote the integrity of the MA program as well as affordability and cost certainty for our members. It is critical that MA plans are paid accurately and that payment model principles, including the application of a FFS Adjuster, 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. Our state-based Medicaid business, which accounted for approximately 7% of our total premiums and services revenue for the three months ended March 31, 2023 primarily consisted of serving members enrolled in Medicaid, and in certain circumstances members who qualify for both Medicaid and Medicare, under contracts with various states. At March 31, 2023, our Military business, which accounted for approximately 1% of our total premiums and services revenue for the three months ended March 31, 2023, primarily consisted of the TRICARE T2017 East Region contract. The T2017 East Region contract comprising 32 states and approximately 6 million TRICARE beneficiaries, under which delivery of health care services commenced on January 1, 2018. The T2017 East Region contract, which was originally set to expire on December 31, 2022, was subsequently extended by the DoD and is currently scheduled to expire on December 31, 2023, unless further extended. In December 2022, we were awarded the next generation of TRICARE Managed Care Support Contracts, or T-5, for the TRICARE East Region by the Defense Health Agency of the DoD. The contract is expected to go into effect in 2024. Until then the T2017 contract remains in place. Under the terms of the award, our service area covers approximately 4.6 million beneficiaries in a region consisting of 24 states and Washington, D.C. The length of the contract is one 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 cooperated with the Department of Justice, and we have not heard from the Department of Justice on this matter since 2020. 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 have substantially completed discovery with the relator who has pursued the matter on behalf of the United States following its unsealing. On March 31, 2022, the Court denied the parties' Motions for Summary Judgement. We take seriously our obligations to comply with applicable CMS requirements and actuarial standards of practice, and continue to vigorously defend against these allegations. 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, sales practices, and provision of care by our healthcare services businesses, 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, disputes arising from competitive procurement process, 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 false claims litigation, such as qui tam lawsuits brought by individuals who seek to sue on behalf of the government, alleging that the government contractor submitted false claims to the government or related overpayments from 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 nonperformance 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 | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION During December 2022, we realigned our businesses into two distinct segments: Insurance and CenterWell. The Insurance segment includes the businesses that were previously included in the Retail and Group and Specialty segments, as well as the Pharmacy Benefit Manager, or PBM, business which was previously included in the Healthcare Services segment. The CenterWell segment (formerly Healthcare Services) represents our payor-agnostic healthcare services offerings, including pharmacy dispensing services, provider services, and home services. In addition to the new segment classifications being utilized to assess performance and allocate resources, we believe this simpler structure will create greater collaboration across the Insurance and CenterWell businesses and will accelerate work that is underway to centralize and integrate operations within the organization. Prior period segment financial information has been recast to conform to the 2023 presentation. Our two reportable segments, Insurance and CenterWell, 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 Insurance segment consists of Medicare benefits, marketed to individuals or directly via group Medicare accounts, as well as 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 demonstration, and Long-Term Support Services benefits, which we refer to collectively as our state-based contracts. This segment also includes products consisting 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. In addition, our Insurance segment includes our Military business, primarily our T-2017 East Region contract, as well as the operations of our PBM business. The CenterWell segment includes our pharmacy, provider services, and home solutions operations. The segment also includes our strategic partnerships with WCAS to develop and operate senior-focused, payor-agnostic, primary care centers, as well as our minority ownership interest in hospice operations. Services offered by this segment are designed to enhance the overall healthcare experience. These services may lead to lower utilization associated with improved member health and/or lower drug costs. Our CenterWell intersegment revenues primarily relate to the operations of CenterWell Pharmacy (our mail- order pharmacy business), CenterWell Specialty Pharmacy, and retail pharmacies jointly located within CenterWell Senior Primary Care clinics. In addition, our CenterWell intersegment revenues include revenues earned by certain owned providers derived from certain value-based arrangements with our health plans. Under these value-based arrangements, our owned providers enter into agreements with our health plans to stand ready to deliver, integrate, direct and control the administration and management of certain health care services for our members. In exchange, the owned provider receives a premium that is typically paid on a per-member per-month basis. These value-based arrangements represent a single performance obligation where revenues are recognized in the period in which we are obligated to provide integrated health care services to our members. Fee-for-service revenue is recognized at agreed upon rates, net of contractual allowances, as the performance obligation is completed on the date of service. We present our condensed consolidated results of operations from the perspective of the health plans. As a result, the cost of providing benefits to our members, whether provided via a third party provider or internally through a stand-alone subsidiary, is classified as benefits expense and excludes the portion of the cost for which the health plans do not bear responsibility, including member co-share amounts and government subsidies of $4.0 billion and $4.0 billion for the three months ended March 31, 2023 and 2022, respectively. In addition, depreciation and amortization expense associated with certain businesses 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 $33 million and $30 million for the three months ended March 31, 2023 and 2022, respectively. Other than those described previously, the accounting policies of each segment are the same. For additional information regarding our accounting policies refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. Transactions between reportable segments primarily consist of sales of services rendered by our CenterWell segment, primarily pharmacy, provider, and home services, to our Insurance segment customers. Intersegment sales and expenses are recorded at fair value and eliminated in consolidation. Members served by our segments often use the same provider networks, enabling us in some instances to obtain more favorable contract terms with providers. Our segments also share indirect costs and assets. As a result, the profitability of each segment is interdependent. We allocate most operating expenses to our segments. Assets and certain corporate income and expenses are not allocated to the segments, including the portion of investment income not supporting segment operations, interest expense on corporate debt, and certain other corporate expenses. These items are managed at a corporate level. These corporate amounts are reported separately from our reportable segments and are included with intersegment eliminations in the tables presenting segment results below. Our segment results were as follows for the three months ended March 31, 2023 and 2022: Insurance CenterWell Eliminations/ Consolidated Three months ended March 31, 2023 (in millions) External revenues Premiums: Individual Medicare Advantage $ 19,809 $ — $ — $ 19,809 Group Medicare Advantage 1,765 — — 1,765 Medicare stand-alone PDP 616 — — 616 Total Medicare 22,190 — — 22,190 Commercial fully-insured 1,018 — — 1,018 Specialty benefits 254 — — 254 Medicare Supplement 179 — — 179 Medicaid and other 1,909 — — 1,909 Total premiums 25,550 — — 25,550 Services revenue: Home solutions — 314 — 314 Provider services — 201 — 201 Commercial ASO 71 — — 71 Military and other 171 — — 171 Pharmacy solutions — 242 — 242 Total services revenue 242 757 — 999 Total external revenues 25,792 757 — 26,549 Intersegment revenues Services 14 1,133 (1,147) — Products — 2,615 (2,615) — Total intersegment revenues 14 3,748 (3,762) — Investment income 97 — 96 193 Total revenues 25,903 4,505 (3,666) 26,742 Operating expenses: Benefits 21,993 — (135) 21,858 Operating costs 2,418 4,126 (3,565) 2,979 Depreciation and amortization 165 49 (28) 186 Total operating expenses 24,576 4,175 (3,728) 25,023 Income from operations 1,327 330 62 1,719 Interest expense — — 113 113 Other income, net — — (8) (8) Income (loss) before income taxes and equity in net losses 1,327 330 (43) 1,614 Equity in net losses (3) (14) — (17) Segment earnings (loss) $ 1,324 $ 316 $ (43) $ 1,597 Net loss attributable to noncontrolling interests 1 — — 1 Segment earnings (loss) attributable to Humana $ 1,325 $ 316 $ (43) $ 1,598 Insurance CenterWell Eliminations/ Consolidated Three months ended March 31, 2022 (in millions) External Revenues Premiums: Individual Medicare Advantage $ 17,052 $ — $ — $ 17,052 Group Medicare Advantage 1,875 — — 1,875 Medicare stand-alone PDP 639 — — 639 Total Medicare 19,566 — — 19,566 Commercial fully-insured 1,140 — — 1,140 Specialty benefits 261 — — 261 Medicare Supplement 182 — — 182 Medicaid and other 1,554 — — 1,554 Total premiums 22,703 — — 22,703 Services revenue: Home solutions — 726 — 726 Provider services — 113 — 113 Commercial ASO 77 — — 77 Military and other 127 — — 127 Pharmacy solutions — 221 — 221 Total services revenue 204 1,060 — 1,264 Total external revenues 22,907 1,060 — 23,967 Intersegment revenues Services 14 857 (871) — Products — 2,446 (2,446) — Total intersegment revenues 14 3,303 (3,317) — Investment income (loss) 46 2 (45) 3 Total revenues 22,967 4,365 (3,362) 23,970 Operating expenses: Benefits 19,734 — (109) 19,625 Operating costs 2,087 3,948 (3,149) 2,886 Depreciation and amortization 150 47 (27) 170 Total operating expenses 21,971 3,995 (3,285) 22,681 Income (loss) from operations 996 370 (77) 1,289 Interest expense — — 90 90 Other income, net — — (21) (21) Income (loss) before income taxes and equity in net losses 996 370 (146) 1,220 Equity in net losses — (4) — (4) Segment earnings (loss) $ 996 $ 366 $ (146) $ 1,216 Net loss (income) attributable to noncontrolling interests — — — — Segment earnings (loss) attributable to Humana $ 996 $ 366 $ (146) $ 1,216 |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements are presented in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America, or GAAP, or those normally made in an Annual Report on Form 10-K. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. For further information, the reader of this Form 10-Q should refer to our Form 10-K for the year ended December 31, 2022, that was filed with the Securities and Exchange Commission, or the SEC, on February 16, 2023. We refer to this Form 10-K as the “2022 Form 10-K” in this document. References throughout this document to “we,” “us,” “our,” “Company,” and “Humana” mean Humana Inc. and its subsidiaries. The preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill and indefinite-lived intangible assets. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. For additional information regarding accounting policies considered in preparing our consolidated financial statements, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. The financial information has been prepared in accordance with our customary accounting practices and has not been audited. In our opinion, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature. Employer Group Commercial Medical Products Business Exit In February 2023, we announced our planned exit from the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs. No other Humana health plan offerings are materially affected. Following a strategic review, we determined the Employer Group Commercial Medical Products business was no longer positioned to sustainably meet the needs of commercial members over the long term or support our long-term strategic plans. The exit from this line of business will be phased over the next 18 to 24 months. Value Creation Initiatives |
Revenue Recognition | Revenue Recognition Our revenues include premiums and services revenue. Services revenue includes administrative service fees that are recorded based upon established per member per month rates and the number of members for the month and are recognized as services are provided for the month. Additionally, services revenue includes net patient services revenue that are recorded based upon established billing rates, less allowances for contractual adjustments, and are recognized as services are provided. For additional information regarding our revenues, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. For additional information regarding disaggregation of revenue by segment and type, refer to Note 14 to the unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, "Financial Statements" of this Form 10-Q. |
Recently Issued Accounting Pronouncements | In November 2020, the FASB issued Accounting Standards Update No. 2020-11, Financial Services—Insurance (Topic 944): Effective Date and Early Application (“ASU 2020-11”). The amendments in ASU 2020-11 make changes to the effective date and early application of Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (“ASU 2018-12”), which was issued in November 2018. The amendments in ASU 2020-11 have extended the original effective date by one year, and now the amendments are required for our interim and annual reporting periods beginning after December 15, 2022. The new guidance relates to accounting for long-duration contracts of insurers which revises key elements of the measurement models and disclosure requirements for long-duration contracts issued by insurers, including the amortization of deferred contract acquisition costs and the measurement of liabilities for future policy benefits using current, rather than locked-in, assumptions. The new guidance, limited to our Medicare Supplement product which represent less than 1% of consolidated premiums and services revenue, became effective for us beginning January 1, 2023 and is to be applied to contracts in force on the basis of their existing carrying value amounts at the beginning of the earliest period presented. The adoption of the new standard in 2023 did not have a material impact on our consolidated results of operations, financial position or cash flows.There are no other recently issued accounting standards that apply to us or that are expected to have a material impact on our results of operations, financial condition, or cash flows. |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 and December 31, 2022, respectively: Amortized Gross Gross Fair (in millions) March 31, 2023 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 1,394 $ 9 $ (47) $ 1,356 Mortgage-backed securities 3,919 7 (423) 3,503 Tax-exempt municipal securities 762 1 (27) 736 Mortgage-backed securities: Residential 470 — (73) 397 Commercial 1,562 — (149) 1,413 Asset-backed securities 1,915 2 (64) 1,853 Corporate debt securities 6,725 16 (696) 6,045 Total debt securities $ 16,747 $ 35 $ (1,479) 15,303 Common stock — Total investment securities $ 15,303 December 31, 2022 U.S. Treasury and other U.S. government U.S. Treasury and agency obligations $ 1,093 $ 1 $ (55) $ 1,039 Mortgage-backed securities 3,697 4 (471) 3,230 Tax-exempt municipal securities 765 0 (37) 728 Mortgage-backed securities: Residential 477 — (76) 401 Commercial 1,554 — (155) 1,399 Asset-backed securities 1,809 1 (79) 1,731 Corporate debt securities 6,551 3 (828) 5,726 Total debt securities $ 15,946 $ 9 $ (1,701) 14,254 Common stock 7 Total investment securities $ 14,261 |
Schedule of Gross Unrealized Losses and Fair Value of Securities | Gross unrealized losses and fair values aggregated by investment category and length of time of individual debt securities that have been in a continuous unrealized loss position for which no allowances for credit loss has been recorded were as follows at March 31, 2023 and December 31, 2022, respectively: Less than 12 months 12 months or more Total Fair Gross Fair Gross Fair Gross (in millions) March 31, 2023 U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations $ 290 $ (2) $ 396 $ (45) $ 686 $ (47) Mortgage-backed securities 867 (17) 2,123 (406) 2,990 (423) Tax-exempt municipal securities 343 (5) 314 (22) 657 (27) Mortgage-backed securities: Residential 25 (2) 369 (71) 394 (73) Commercial 119 (4) 1,275 (145) 1,394 (149) Asset-backed securities 583 (21) 971 (43) 1,554 (64) Corporate debt securities 1,453 (47) 3,634 (649) 5,087 (696) Total debt securities $ 3,680 $ (98) $ 9,082 $ (1,381) $ 12,762 $ (1,479) December 31, 2022 U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations $ 512 $ (5) $ 397 $ (50) $ 909 $ (55) Mortgage-backed securities 1,231 (104) 1,683 (367) 2,914 (471) Tax-exempt municipal securities 64 (2) 615 (36) 679 (38) Mortgage-backed securities: Residential 124 (16) 274 (60) 398 (76) Commercial 243 (13) 1,157 (142) 1,400 (155) Asset-backed securities 620 (32) 1,011 (46) 1,631 (78) Corporate debt securities 1,625 (98) 3,825 (730) 5,450 (828) Total debt securities $ 4,419 $ (270) $ 8,962 $ (1,431) $ 13,381 $ (1,701) |
Schedule of Realized Gains (Losses) Related to Investment Securities Included Within Investment Income | The detail of (losses) gains related to investment securities and included within investment income was as follows for the three months ended March 31, 2023 and 2022: Three months ended March 31, 2023 2022 (in millions) Gross gains on investment securities $ — $ 33 Gross losses on investment securities (61) (1) Gross gains on equity securities 1 — Gross losses on equity securities — (108) Net recognized losses on investment securities $ (60) $ (76) |
Schedule of Gain (Loss) on Equity Securities | The gains and losses related to equity securities for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (in millions) Net gains (losses) recognized on equity securities during the period $ 1 $ (108) Less: Net gains (losses) recognized on equity securities sold during the period 1 (59) Unrealized losses recognized on equity securities still held at the end of the period $ — $ (49) |
Schedule of Contractual Maturity of Debt Securities Available for Sale | The contractual maturities of debt securities available for sale at March 31, 2023, 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 $ 500 $ 495 Due after one year through five years 4,116 3,941 Due after five years through ten years 3,014 2,650 Due after ten years 1,251 1,051 Mortgage and asset-backed securities 7,866 7,166 Total debt securities $ 16,747 $ 15,303 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets Measured at Fair Value on Recurring Basis | The following table summarizes our fair value measurements at March 31, 2023 and December 31, 2022, respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Quoted Prices Other Unobservable (in millions) March 31, 2023 Cash equivalents $ 13,613 $ 13,613 $ — $ — Debt securities: U.S. Treasury and other U.S. government U.S. Treasury and agency obligations 1,356 — 1,356 — Mortgage-backed securities 3,503 — 3,503 — Tax-exempt municipal securities 736 — 736 — Mortgage-backed securities: Residential 397 — 397 — Commercial 1,413 — 1,413 — Asset-backed securities 1,853 — 1,853 — Corporate debt securities 6,045 — 5,946 99 Total debt securities 15,303 — 15,204 99 Common stock — — — — Total invested assets $ 28,916 $ 13,613 $ 15,204 $ 99 December 31, 2022 Cash equivalents $ 4,832 $ 4,832 $ — $ — Debt securities: U.S. Treasury and other U.S. government U.S. Treasury and agency obligations 1,039 — 1,039 — Mortgage-backed securities 3,230 — 3,230 — Tax-exempt municipal securities 728 — 728 — Mortgage-backed securities: Residential 401 — 401 — Commercial 1,399 — 1,399 — Asset-backed securities 1,731 — 1,731 — Corporate debt securities 5,726 — 5,625 101 Total debt securities 14,254 — 14,153 101 Common stock 7 7 — — Total invested assets $ 19,093 $ 4,839 $ 14,153 $ 101 |
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | During the year ended March 31, 2023, the changes in the fair value of the assets measured using significant unobservable inputs (Level 3) were comprised of the following: For the three months ended March 31, 2023 For the three months ended March 31, 2022 Private Placements (in millions) Beginning balance at January 1 $ 101 $ 68 Total gains or losses: Unrealized in other comprehensive income 1 (4) Purchases 1 17 Sales — (1) Transfer out (4) — Balance at March 31 $ 99 $ 80 |
Schedule of Assumptions Used For Inputs In Fair Value Measurement | The table below presents the assumptions used for each reporting period. March 31, 2023 December 31, 2022 Annualized volatility 16.7% - 19.3% 16.7% - 20.8% Credit spread 1.2% - 1.4% 1.3% - 1.5% Revenue exit multiple 1.5x - 2.5x 1.5x - 2.5x Weighted average cost of capital 12.0% - 13.0% 11.5% - 12.5% Long term growth rate 3.0 % 3.0 % |
MEDICARE PART D (Tables)
MEDICARE PART D (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Insurance [Abstract] | |
Schedule of Balance Sheet Amounts Associated With Medicare Part D | The accompanying condensed consolidated balance sheets include the following amounts associated with Medicare Part D at March 31, 2023 and December 31, 2022. 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. For additional information regarding our prescription drug benefits coverage in accordance with Medicare Part D, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. March 31, 2023 December 31, 2022 Risk CMS Risk CMS (in millions) Other current assets $ 86 $ 239 $ 240 $ 696 Trade accounts payable and accrued expenses (147) (3,805) (166) (1,236) Net current (liability) asset (61) (3,566) 74 (540) Other long-term assets 307 — 19 — Other long-term liabilities (93) — (78) — Net long-term asset (liability) 214 — (59) — Total net asset (liability) $ 153 $ (3,566) $ 15 $ (540) |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 three months ended March 31, 2023 were as follows: Insurance CenterWell Total (in millions) Balance at January 1, 2023 $ 2,472 $ 6,670 $ 9,142 Acquisitions 106 72 178 Balance at March 31, 2023 $ 2,578 $ 6,742 $ 9,320 |
Schedule of Other Intangible Assets, Indefinite-Lived | The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Weighted Cost Accumulated Net Cost Accumulated Net ($ in millions) Other intangible assets: Certificates of need Indefinite $ 1,132 $ — $ 1,132 $ 1,132 $ — $ 1,132 Medicare licenses Indefinite 286 — 286 286 — 286 Customer contracts/ 9.3 years 932 685 247 929 673 256 Trade names and 6.8 years 134 101 33 142 107 35 Provider contracts 11.6 years 73 63 10 73 63 10 Noncompetes and 8.4 years 84 38 46 86 40 46 Total other intangible 9.1 years $ 2,641 $ 887 $ 1,754 $ 2,648 $ 883 $ 1,765 |
Schedule of Other Intangible Assets, Amortizable | The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Weighted Cost Accumulated Net Cost Accumulated Net ($ in millions) Other intangible assets: Certificates of need Indefinite $ 1,132 $ — $ 1,132 $ 1,132 $ — $ 1,132 Medicare licenses Indefinite 286 — 286 286 — 286 Customer contracts/ 9.3 years 932 685 247 929 673 256 Trade names and 6.8 years 134 101 33 142 107 35 Provider contracts 11.6 years 73 63 10 73 63 10 Noncompetes and 8.4 years 84 38 46 86 40 46 Total other intangible 9.1 years $ 2,641 $ 887 $ 1,754 $ 2,648 $ 883 $ 1,765 |
Schedule of Estimated Amortization Expense | The following table presents our estimate of amortization expense remaining for 2023 and each of the five next succeeding years at March 31, 2023: (in millions) For the years ending December 31, 2023 $ 47 2024 56 2025 54 2026 41 2027 32 2028 27 |
BENEFITS PAYABLE (Tables)
BENEFITS PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Insurance [Abstract] | |
Schedule of Activity in Benefits Payable | On a consolidated basis, which represents our Insurance segment net of eliminations, activity in benefits payable was as follows for the three months ended March 31, 2023 and 2022: For the three months ended March 31, 2023 2022 (in millions) Balances, beginning of period $ 9,264 $ 8,289 Incurred related to: Current year 22,380 19,985 Prior years (522) (360) Total incurred 21,858 19,625 Paid related to: Current year (14,203) (12,284) Prior years (6,901) (6,252) Total paid (21,104) (18,536) Balances, end of period $ 10,018 $ 9,378 |
EARNINGS PER COMMON SHARE COM_2
EARNINGS PER COMMON SHARE COMPUTATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Details Supporting Computation of Earnings Per Share | Detail supporting the computation of basic and diluted earnings per common share was as follows for the three months ended March 31, 2023 and 2022: Three months ended March 31, 2023 2022 (dollars in millions, except per common share results; number of shares in thousands) Net income available for common stockholders $ 1,239 $ 930 Weighted average outstanding shares of common stock 125,005 126,938 Dilutive effect of: Employee stock options 34 40 Restricted stock 525 496 Shares used to compute diluted earnings per common share 125,564 127,474 Basic earnings per common share $ 9.91 $ 7.32 Diluted earnings per common share $ 9.87 $ 7.29 Number of antidilutive stock options and restricted stock 538 626 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Details of Dividend Payments | The following table provides details of dividend payments, excluding dividend equivalent rights for unvested stock awards, during 2023 under our Board approved quarterly cash dividend policy: Record Payment Amount Total (in millions) 12/30/2022 1/27/2023 $ 0.7900 $ 98 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Value of Debt Outstanding | The carrying value of debt outstanding, net of unamortized debt issuance costs, was as follows at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 (in millions) Short-term debt: Commercial paper $ 426 $ 595 Senior notes: $1.5 billion, 0.650% due August 3, 2023 1,441 1,497 Total senior notes 1,441 1,497 Total short-term debt $ 1,867 $ 2,092 Long-term debt: Senior notes: $600 million, 3.850% due October 1, 2024 $ 595 $ 599 $600 million, 4.500% due April 1, 2025 597 597 $500 million, 5.700% due March 13, 2026 497 — $750 million, 1.350% due February 3, 2027 745 745 $600 million, 3.950% due March 15, 2027 597 597 $500 million, 5.750% due March 1, 2028 494 494 $750 million, 3.700% due March 23, 2029 743 743 $500 million, 3.125% due August 15, 2029 496 496 $500 million, 4.875% due April 1, 2030 496 495 $750 million, 2.150% due February 3, 2032 743 743 $750 million, 5.880% due March 1, 2033 740 739 $250 million, 8.150% due June 15, 2038 261 261 $400 million, 4.625% due December 1, 2042 396 396 $750 million, 4.950% due October 1, 2044 740 740 $400 million, 4.800% due March 15, 2047 396 396 $500 million, 3.950% due August 15, 2049 493 493 $750 million, 5.500% due March 15, 2053 714 — Total senior notes 9,743 8,534 Term loans: Delayed draw term loan, due May 28, 2024 — 500 Total term loans — 500 Total long-term debt $ 9,743 $ 9,034 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Results | Our segment results were as follows for the three months ended March 31, 2023 and 2022: Insurance CenterWell Eliminations/ Consolidated Three months ended March 31, 2023 (in millions) External revenues Premiums: Individual Medicare Advantage $ 19,809 $ — $ — $ 19,809 Group Medicare Advantage 1,765 — — 1,765 Medicare stand-alone PDP 616 — — 616 Total Medicare 22,190 — — 22,190 Commercial fully-insured 1,018 — — 1,018 Specialty benefits 254 — — 254 Medicare Supplement 179 — — 179 Medicaid and other 1,909 — — 1,909 Total premiums 25,550 — — 25,550 Services revenue: Home solutions — 314 — 314 Provider services — 201 — 201 Commercial ASO 71 — — 71 Military and other 171 — — 171 Pharmacy solutions — 242 — 242 Total services revenue 242 757 — 999 Total external revenues 25,792 757 — 26,549 Intersegment revenues Services 14 1,133 (1,147) — Products — 2,615 (2,615) — Total intersegment revenues 14 3,748 (3,762) — Investment income 97 — 96 193 Total revenues 25,903 4,505 (3,666) 26,742 Operating expenses: Benefits 21,993 — (135) 21,858 Operating costs 2,418 4,126 (3,565) 2,979 Depreciation and amortization 165 49 (28) 186 Total operating expenses 24,576 4,175 (3,728) 25,023 Income from operations 1,327 330 62 1,719 Interest expense — — 113 113 Other income, net — — (8) (8) Income (loss) before income taxes and equity in net losses 1,327 330 (43) 1,614 Equity in net losses (3) (14) — (17) Segment earnings (loss) $ 1,324 $ 316 $ (43) $ 1,597 Net loss attributable to noncontrolling interests 1 — — 1 Segment earnings (loss) attributable to Humana $ 1,325 $ 316 $ (43) $ 1,598 Insurance CenterWell Eliminations/ Consolidated Three months ended March 31, 2022 (in millions) External Revenues Premiums: Individual Medicare Advantage $ 17,052 $ — $ — $ 17,052 Group Medicare Advantage 1,875 — — 1,875 Medicare stand-alone PDP 639 — — 639 Total Medicare 19,566 — — 19,566 Commercial fully-insured 1,140 — — 1,140 Specialty benefits 261 — — 261 Medicare Supplement 182 — — 182 Medicaid and other 1,554 — — 1,554 Total premiums 22,703 — — 22,703 Services revenue: Home solutions — 726 — 726 Provider services — 113 — 113 Commercial ASO 77 — — 77 Military and other 127 — — 127 Pharmacy solutions — 221 — 221 Total services revenue 204 1,060 — 1,264 Total external revenues 22,907 1,060 — 23,967 Intersegment revenues Services 14 857 (871) — Products — 2,446 (2,446) — Total intersegment revenues 14 3,303 (3,317) — Investment income (loss) 46 2 (45) 3 Total revenues 22,967 4,365 (3,362) 23,970 Operating expenses: Benefits 19,734 — (109) 19,625 Operating costs 2,087 3,948 (3,149) 2,886 Depreciation and amortization 150 47 (27) 170 Total operating expenses 21,971 3,995 (3,285) 22,681 Income (loss) from operations 996 370 (77) 1,289 Interest expense — — 90 90 Other income, net — — (21) (21) Income (loss) before income taxes and equity in net losses 996 370 (146) 1,220 Equity in net losses — (4) — (4) Segment earnings (loss) $ 996 $ 366 $ (146) $ 1,216 Net loss (income) attributable to noncontrolling interests — — — — Segment earnings (loss) attributable to Humana $ 996 $ 366 $ (146) $ 1,216 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Minimum | |||
Receivables and Other [Line Items] | |||
Business segment phase out period | 18 months | ||
Maximum | |||
Receivables and Other [Line Items] | |||
Business segment phase out period | 24 months | ||
Services | |||
Receivables and Other [Line Items] | |||
Accounts receivable | $ 246,000,000 | ||
Value Creation Initiatives | |||
Receivables and Other [Line Items] | |||
Restructuring and impairment charge | $ 0 | $ 473,000,000 | |
Assets held for abandonment | 248,000,000 | ||
Severance costs | $ 116,000,000 |
RECENTLY ISSUED ACCOUNTING PR_2
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Product Concentration Risk | Revenue Benchmark | Medicare Supplement | |
Concentration Risk [Line Items] | |
Concentration risk, less than (percent) | 1% |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Gentiva Hospice - USD ($) $ in Millions | 3 Months Ended | |
Aug. 11, 2022 | Mar. 31, 2022 | |
Business Acquisition [Line Items] | ||
Equity interest to be sold | 60% | |
Consideration to be received | $ 2,700 | |
Pre-tax gain, net of transaction costs | 237 | |
Revenue | $ 382 | |
Pretax earnings | $ 62 | |
Term Loan Due October 2023 | Term Loan | ||
Business Acquisition [Line Items] | ||
Repayment of debt | $ 1,900 |
INVESTMENT SECURITIES - Securit
INVESTMENT SECURITIES - Securities Classified as Current and Long-Term (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | $ 16,747 | $ 15,946 |
Gross Unrealized Gains | 35 | 9 |
Gross Unrealized Losses | (1,479) | (1,701) |
Fair Value | 15,303 | 14,254 |
Common stock | 0 | 7 |
Total investment securities | 15,303 | 14,261 |
U.S. Treasury and agency obligations | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 1,394 | 1,093 |
Gross Unrealized Gains | 9 | 1 |
Gross Unrealized Losses | (47) | (55) |
Fair Value | 1,356 | 1,039 |
Mortgage-backed securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 3,919 | 3,697 |
Gross Unrealized Gains | 7 | 4 |
Gross Unrealized Losses | (423) | (471) |
Fair Value | 3,503 | 3,230 |
Tax-exempt municipal securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 762 | 765 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (27) | (37) |
Fair Value | 736 | 728 |
Residential | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 470 | 477 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (73) | (76) |
Fair Value | 397 | 401 |
Commercial | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 1,562 | 1,554 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (149) | (155) |
Fair Value | 1,413 | 1,399 |
Asset-backed securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 1,915 | 1,809 |
Gross Unrealized Gains | 2 | 1 |
Gross Unrealized Losses | (64) | (79) |
Fair Value | 1,853 | 1,731 |
Corporate debt securities | ||
Investment Securities, Available-for-sale Amortized Cost to Fair Value | ||
Amortized Cost | 6,725 | 6,551 |
Gross Unrealized Gains | 16 | 3 |
Gross Unrealized Losses | (696) | (828) |
Fair Value | $ 6,045 | $ 5,726 |
INVESTMENT SECURITIES - Narrati
INVESTMENT SECURITIES - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) position | Dec. 31, 2022 USD ($) | |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Book value | $ 16,747 | $ 15,946 |
Fair value | $ 15,303 | $ 14,254 |
Maximum individual state general bond obligation as a percentage of total debt securities (percent) | 1% | |
Securities in unrealized loss positions, number of positions | position | 1,550 | |
Securities, number of positions | position | 1,950 | |
Standard & Poor's, AA Rating | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Percentage of debt securities considered to be of investment-grade (percent) | 98% | |
Dispositions | Gentiva Hospice | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Book value | $ 281 | |
Fair value | $ 286 |
INVESTMENT SECURITIES - Gross U
INVESTMENT SECURITIES - Gross Unrealized Losses and Fair Values of Securities (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value | ||
Less than 12 months | $ 3,680 | $ 4,419 |
12 months or more | 9,082 | 8,962 |
Total | 12,762 | 13,381 |
Gross Unrealized Losses | ||
Less than 12 months | (98) | (270) |
12 months or more | (1,381) | (1,431) |
Total | (1,479) | (1,701) |
U.S. Treasury and agency obligations | ||
Fair Value | ||
Less than 12 months | 290 | 512 |
12 months or more | 396 | 397 |
Total | 686 | 909 |
Gross Unrealized Losses | ||
Less than 12 months | (2) | (5) |
12 months or more | (45) | (50) |
Total | (47) | (55) |
Mortgage-backed securities | ||
Fair Value | ||
Less than 12 months | 867 | 1,231 |
12 months or more | 2,123 | 1,683 |
Total | 2,990 | 2,914 |
Gross Unrealized Losses | ||
Less than 12 months | (17) | (104) |
12 months or more | (406) | (367) |
Total | (423) | (471) |
Tax-exempt municipal securities | ||
Fair Value | ||
Less than 12 months | 343 | 64 |
12 months or more | 314 | 615 |
Total | 657 | 679 |
Gross Unrealized Losses | ||
Less than 12 months | (5) | (2) |
12 months or more | (22) | (36) |
Total | (27) | (38) |
Residential | ||
Fair Value | ||
Less than 12 months | 25 | 124 |
12 months or more | 369 | 274 |
Total | 394 | 398 |
Gross Unrealized Losses | ||
Less than 12 months | (2) | (16) |
12 months or more | (71) | (60) |
Total | (73) | (76) |
Commercial | ||
Fair Value | ||
Less than 12 months | 119 | 243 |
12 months or more | 1,275 | 1,157 |
Total | 1,394 | 1,400 |
Gross Unrealized Losses | ||
Less than 12 months | (4) | (13) |
12 months or more | (145) | (142) |
Total | (149) | (155) |
Asset-backed securities | ||
Fair Value | ||
Less than 12 months | 583 | 620 |
12 months or more | 971 | 1,011 |
Total | 1,554 | 1,631 |
Gross Unrealized Losses | ||
Less than 12 months | (21) | (32) |
12 months or more | (43) | (46) |
Total | (64) | (78) |
Corporate debt securities | ||
Fair Value | ||
Less than 12 months | 1,453 | 1,625 |
12 months or more | 3,634 | 3,825 |
Total | 5,087 | 5,450 |
Gross Unrealized Losses | ||
Less than 12 months | (47) | (98) |
12 months or more | (649) | (730) |
Total | $ (696) | $ (828) |
INVESTMENT SECURITIES - Gains (
INVESTMENT SECURITIES - Gains (Losses) Within Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||
Gross gains on investment securities | $ 0 | $ 33 |
Gross losses on investment securities | (61) | (1) |
Gross gains on equity securities | 1 | 0 |
Gross losses on equity securities | 0 | (108) |
Net recognized losses on investment securities | $ (60) | $ (76) |
INVESTMENT SECURITIES - Gains a
INVESTMENT SECURITIES - Gains and Losses Related to Equity Securities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||
Net gains (losses) recognized on equity securities during the period | $ 1 | $ (108) |
Less: Net gains (losses) recognized on equity securities sold during the period | 1 | (59) |
Unrealized losses recognized on equity securities still held at the end of the period | $ 0 | $ (49) |
INVESTMENT SECURITIES - Contrac
INVESTMENT SECURITIES - Contractual Maturities of Debt Securities Available for Sale (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Amortized Cost | ||
Due within one year | $ 500 | |
Due after one year through five years | 4,116 | |
Due after five years through ten years | 3,014 | |
Due after ten years | 1,251 | |
Mortgage and asset-backed securities | 7,866 | |
Amortized Cost | 16,747 | $ 15,946 |
Fair Value | ||
Due within one year | 495 | |
Due after one year through five years | 3,941 | |
Due after five years through ten years | 2,650 | |
Due after ten years | 1,051 | |
Mortgage and asset-backed securities | 7,166 | |
Fair Value | $ 15,303 | $ 14,254 |
FAIR VALUE - Financial Assets M
FAIR VALUE - Financial Assets Measured on Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | $ 15,303 | $ 14,254 |
Common stock | 0 | 7 |
U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 1,356 | 1,039 |
Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 3,503 | 3,230 |
Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 736 | 728 |
Residential | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 397 | 401 |
Commercial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 1,413 | 1,399 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 1,853 | 1,731 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 6,045 | 5,726 |
Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 13,613 | 4,832 |
Total debt securities | 15,303 | 14,254 |
Common stock | 0 | 7 |
Total invested assets | 28,916 | 19,093 |
Recurring Basis | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 1,356 | 1,039 |
Recurring Basis | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 3,503 | 3,230 |
Recurring Basis | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 736 | 728 |
Recurring Basis | Residential | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 397 | 401 |
Recurring Basis | Commercial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 1,413 | 1,399 |
Recurring Basis | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 1,853 | 1,731 |
Recurring Basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 6,045 | 5,726 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 13,613 | 4,832 |
Total debt securities | 0 | 0 |
Common stock | 0 | 7 |
Total invested assets | 13,613 | 4,839 |
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] | ||
Total 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] | ||
Total 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] | ||
Total debt securities | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Residential | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 0 | 0 |
Recurring Basis | Quoted Prices in Active Markets (Level 1) | Commercial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total 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] | ||
Total 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] | ||
Total 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 |
Total debt securities | 15,204 | 14,153 |
Common stock | 0 | 0 |
Total invested assets | 15,204 | 14,153 |
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] | ||
Total debt securities | 1,356 | 1,039 |
Recurring Basis | Other Observable Inputs (Level 2) | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 3,503 | 3,230 |
Recurring Basis | Other Observable Inputs (Level 2) | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 736 | 728 |
Recurring Basis | Other Observable Inputs (Level 2) | Residential | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 397 | 401 |
Recurring Basis | Other Observable Inputs (Level 2) | Commercial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 1,413 | 1,399 |
Recurring Basis | Other Observable Inputs (Level 2) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 1,853 | 1,731 |
Recurring Basis | Other Observable Inputs (Level 2) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 5,946 | 5,625 |
Recurring Basis | Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Total debt securities | 99 | 101 |
Common stock | 0 | 0 |
Total invested assets | 99 | 101 |
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] | ||
Total 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] | ||
Total 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] | ||
Total debt securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | Residential | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 0 | 0 |
Recurring Basis | Unobservable Inputs (Level 3) | Commercial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total 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] | ||
Total 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] | ||
Total debt securities | $ 99 | $ 101 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value | $ 99 | $ 101 | $ 80 | $ 68 |
Put option | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of financial liability | 318 | 267 | ||
Call option | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of financial asset | 8 | 10 | ||
Term Loan And Commercial Paper | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Short-term debt | 426 | 1,100 | ||
Carrying Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt outstanding | 11,200 | 10,000 | ||
Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt outstanding | $ 10,900 | $ 9,400 | ||
Unobservable Inputs (Level 3) | Investments | Fair Value Risk | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Concentration risk (percent) | 0.30% |
FAIR VALUE - Significant Unobse
FAIR VALUE - Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance at January 1 | $ 101 | $ 68 |
Total gains or losses: | ||
Unrealized in other comprehensive income | 1 | (4) |
Purchases | 1 | 17 |
Sales | 0 | (1) |
Transfer out | (4) | 0 |
Balance at March 31 | $ 99 | $ 80 |
FAIR VALUE - Put and Call Optio
FAIR VALUE - Put and Call Options Measured at Fair Value (Details) - Options - Level 3 fair value measurement | Mar. 31, 2023 | Dec. 31, 2022 |
Annualized volatility | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.167 | 0.167 |
Annualized volatility | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.193 | 0.208 |
Credit spread | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.012 | 0.013 |
Credit spread | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.014 | 0.015 |
Revenue exit multiple | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 1.5 | 1.5 |
Revenue exit multiple | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 2.5 | 2.5 |
Weighted average cost of capital | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.120 | 0.115 |
Weighted average cost of capital | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.130 | 0.125 |
Long term growth rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable inputs | 0.030 | 0.030 |
MEDICARE PART D (Details)
MEDICARE PART D (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Segment Reporting Information [Line Items] | ||
Other current assets | $ 5,758 | $ 5,567 |
Trade accounts payable and accrued expenses | (7,431) | (5,238) |
Other long-term assets | 3,580 | 3,380 |
Other long-term liabilities | (1,457) | (1,473) |
Risk Corridor Settlement | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 86 | 240 |
Trade accounts payable and accrued expenses | (147) | (166) |
Net current (liability) asset | (61) | 74 |
Other long-term assets | 307 | 19 |
Other long-term liabilities | (93) | (78) |
Net long-term asset (liability) | 214 | (59) |
Total net asset (liability) | 153 | 15 |
CMS Subsidies/ Discounts | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 239 | 696 |
Trade accounts payable and accrued expenses | (3,805) | (1,236) |
Net current (liability) asset | (3,566) | (540) |
Other long-term assets | 0 | 0 |
Other long-term liabilities | 0 | 0 |
Net long-term asset (liability) | 0 | 0 |
Total net asset (liability) | $ (3,566) | $ (540) |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill by Segments (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill | |
Goodwill, beginning balance | $ 9,142 |
Acquisitions | 178 |
Goodwill, ending balance | 9,320 |
Insurance | |
Goodwill | |
Goodwill, beginning balance | 2,472 |
Acquisitions | 106 |
Goodwill, ending balance | 2,578 |
CenterWell | |
Goodwill | |
Goodwill, beginning balance | 6,670 |
Acquisitions | 72 |
Goodwill, ending balance | $ 6,742 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets Subject to Amortization (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Other intangible assets: | ||
Weighted average life (in years) | 9 years 1 month 6 days | |
Total other intangible assets, cost | $ 2,641 | $ 2,648 |
Amortizable intangible assets, accumulated amortization | 887 | 883 |
Total other intangible assets, net | 1,754 | 1,765 |
Certificates of need | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 1,132 | 1,132 |
Medicare licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 286 | 286 |
Customer contracts/ relationships | ||
Other intangible assets: | ||
Weighted average life (in years) | 9 years 3 months 18 days | |
Amortizable intangible assets, cost | $ 932 | 929 |
Amortizable intangible assets, accumulated amortization | 685 | 673 |
Amortizable intangible assets, net | $ 247 | 256 |
Trade names and technology | ||
Other intangible assets: | ||
Weighted average life (in years) | 6 years 9 months 18 days | |
Amortizable intangible assets, cost | $ 134 | 142 |
Amortizable intangible assets, accumulated amortization | 101 | 107 |
Amortizable intangible assets, net | $ 33 | 35 |
Provider contracts | ||
Other intangible assets: | ||
Weighted average life (in years) | 11 years 7 months 6 days | |
Amortizable intangible assets, cost | $ 73 | 73 |
Amortizable intangible assets, accumulated amortization | 63 | 63 |
Amortizable intangible assets, net | $ 10 | 10 |
Noncompetes and other | ||
Other intangible assets: | ||
Weighted average life (in years) | 8 years 4 months 24 days | |
Amortizable intangible assets, cost | $ 84 | 86 |
Amortizable intangible assets, accumulated amortization | 38 | 40 |
Amortizable intangible assets, net | $ 46 | $ 46 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization | $ 18 | $ 18 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization and Estimated Future Amortization Expense (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Estimated amortization remaining for the years ending December 31, | |
2023 | $ 47 |
2024 | 56 |
2025 | 54 |
2026 | 41 |
2027 | 32 |
2028 | $ 27 |
BENEFITS PAYABLE - Activity in
BENEFITS PAYABLE - Activity in Benefits Payable (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances, beginning of period | $ 9,264 | $ 8,289 |
Incurred related to: | ||
Current year | 22,380 | 19,985 |
Prior years | (522) | (360) |
Total incurred | 21,858 | 19,625 |
Paid related to: | ||
Current year | (14,203) | (12,284) |
Prior years | (6,901) | (6,252) |
Total paid | (21,104) | (18,536) |
Balances, end of period | 10,018 | $ 9,378 |
Total IBNR included in benefits payable | $ 6,300 |
EARNINGS PER COMMON SHARE COM_3
EARNINGS PER COMMON SHARE COMPUTATION (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net income available for common stockholders | $ 1,239 | $ 930 |
Weighted average outstanding shares of common stock used to compute basic earnings per common share (in shares) | 125,005 | 126,938 |
Shares used to compute diluted earnings per common share (in shares) | 125,564 | 127,474 |
Basic earnings per common share (in dollars per share) | $ 9.91 | $ 7.32 |
Diluted earnings per common share (in dollars per share) | $ 9.87 | $ 7.29 |
Number of antidilutive stock options and restricted stock excluded from computation (in shares) | 538 | 626 |
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) | 34 | 40 |
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) | 525 | 496 |
STOCKHOLDERS' EQUITY - Dividend
STOCKHOLDERS' EQUITY - Dividends (Details) $ / shares in Units, $ in Millions | Jan. 27, 2023 USD ($) $ / shares |
Equity [Abstract] | |
Amount per Share (in dollars per share) | $ / shares | $ 0.7900 |
Total Amount | $ | $ 98 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Apr. 30, 2023 | Feb. 28, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Apr. 25, 2023 | Feb. 15, 2023 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Dividends declared (in dollars per share) | $ 0.885 | |||||
Stock repurchases (in shares) | 0 | |||||
Stock repurchases | $ 94,000,000 | $ 1,024,000,000 | ||||
Common shares acquired in connection with employee stock plans (in shares) | 50,000 | 60,000 | ||||
Common shares acquired in connection with employee stock plans, amount | $ 27,000,000 | $ 24,000,000 | ||||
2021 Share Repurchase Authorization | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Share repurchase authorization | $ 3,000,000,000 | |||||
Remaining authorized amount | $ 1,000,000,000 | |||||
2023 Share Repurchase Authorization | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchases (in shares) | 100,000 | |||||
Stock repurchases | $ 67,000,000 | |||||
Stock repurchase average price (in dollars per share) | $ 495.68 | |||||
Subsequent event | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Dividends declared (in dollars per share) | $ 0.885 | |||||
Remaining authorized amount | $ 2,800,000,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (percent) | 22.50% | 23.50% |
DEBT - Debt Outstanding (Detail
DEBT - Debt Outstanding (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total short-term debt | $ 1,867,000,000 | $ 2,092,000,000 |
Total long-term debt | 9,743,000,000 | 9,034,000,000 |
$500 million, 5.700% due March 13, 2026 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 500,000,000 | |
Stated interest rate (percent) | 5.70% | |
Total long-term debt | $ 497,000,000 | 0 |
$750 million, 5.880% due March 1, 2033 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 750,000,000 | |
Stated interest rate (percent) | 5.88% | |
Total long-term debt | $ 740,000,000 | 739,000,000 |
$750 million, 5.500% due March 15, 2053 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 750,000,000 | |
Stated interest rate (percent) | 5.50% | |
Total long-term debt | $ 714,000,000 | 0 |
Senior notes: | ||
Debt Instrument [Line Items] | ||
Total senior notes | 1,441,000,000 | 1,497,000,000 |
Total long-term debt | 9,743,000,000 | 8,534,000,000 |
Senior notes: | $1.5 billion, 0.650% due August 3, 2023 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 1,500,000,000 | |
Stated interest rate (percent) | 0.65% | |
Total senior notes | $ 1,441,000,000 | 1,497,000,000 |
Senior notes: | $600 million, 3.850% due October 1, 2024 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 600,000,000 | |
Stated interest rate (percent) | 3.85% | |
Total long-term debt | $ 595,000,000 | 599,000,000 |
Senior notes: | $600 million, 4.500% due April 1, 2025 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 600,000,000 | |
Stated interest rate (percent) | 4.50% | |
Total long-term debt | $ 597,000,000 | 597,000,000 |
Senior notes: | $500 million, 5.700% due March 13, 2026 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 500,000,000 | |
Stated interest rate (percent) | 5.70% | |
Senior notes: | $750 million, 1.350% due February 3, 2027 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 750,000,000 | |
Stated interest rate (percent) | 1.35% | |
Total long-term debt | $ 745,000,000 | 745,000,000 |
Senior notes: | $600 million, 3.950% due March 15, 2027 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 600,000,000 | |
Stated interest rate (percent) | 3.95% | |
Total long-term debt | $ 597,000,000 | 597,000,000 |
Senior notes: | $500 million, 5.750% due March 1, 2028 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 500,000,000 | |
Stated interest rate (percent) | 5.75% | |
Total long-term debt | $ 494,000,000 | 494,000,000 |
Senior notes: | $750 million, 3.700% due March 23, 2029 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 750,000,000 | |
Stated interest rate (percent) | 3.70% | |
Total long-term debt | $ 743,000,000 | 743,000,000 |
Senior notes: | $500 million, 3.125% due August 15, 2029 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 500,000,000 | |
Stated interest rate (percent) | 3.125% | |
Total long-term debt | $ 496,000,000 | 496,000,000 |
Senior notes: | $500 million, 4.875% due April 1, 2030 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 500,000,000 | |
Stated interest rate (percent) | 4.875% | |
Total long-term debt | $ 496,000,000 | 495,000,000 |
Senior notes: | $750 million, 2.150% due February 3, 2032 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 750,000,000 | |
Stated interest rate (percent) | 2.15% | |
Total long-term debt | $ 743,000,000 | 743,000,000 |
Senior notes: | $250 million, 8.150% due June 15, 2038 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 250,000,000 | |
Stated interest rate (percent) | 8.15% | |
Total long-term debt | $ 261,000,000 | 261,000,000 |
Senior notes: | $400 million, 4.625% due December 1, 2042 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 400,000,000 | |
Stated interest rate (percent) | 4.625% | |
Total long-term debt | $ 396,000,000 | 396,000,000 |
Senior notes: | $750 million, 4.950% due October 1, 2044 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 750,000,000 | |
Stated interest rate (percent) | 4.95% | |
Total long-term debt | $ 740,000,000 | 740,000,000 |
Senior notes: | $400 million, 4.800% due March 15, 2047 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 400,000,000 | |
Stated interest rate (percent) | 4.80% | |
Total long-term debt | $ 396,000,000 | 396,000,000 |
Senior notes: | $500 million, 3.950% due August 15, 2049 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 500,000,000 | |
Stated interest rate (percent) | 3.95% | |
Total long-term debt | $ 493,000,000 | 493,000,000 |
Senior notes: | $750 million, 5.500% due March 15, 2053 | ||
Debt Instrument [Line Items] | ||
Aggregate principal | $ 750,000,000 | |
Stated interest rate (percent) | 5.50% | |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 0 | 500,000,000 |
Term Loan | Delayed draw term loan, due May 28, 2024 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 0 | 500,000,000 |
Commercial paper | ||
Debt Instrument [Line Items] | ||
Short-term debt | $ 426,000,000 | $ 595,000,000 |
DEBT - Senior Notes (Details)
DEBT - Senior Notes (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Debt Instrument [Line Items] | |||
Proceeds from issuance of senior notes, net | $ 1,215,000,000 | $ 744,000,000 | |
Debt instrument, repurchased face amount | 61,000,000 | ||
Debt instrument, repurchase amount | 60,000,000 | ||
5.70 Percent Senior Notes Due March 2026 and 5.50 Percent Senior Notes Due March 2053 | Senior notes: | |||
Debt Instrument [Line Items] | |||
Proceeds from issuance of senior notes, net | $ 1,200,000,000 | ||
$500 million, 5.700% due March 13, 2026 | |||
Debt Instrument [Line Items] | |||
Aggregate principal | $ 500,000,000 | ||
Stated interest rate (percent) | 5.70% | ||
$500 million, 5.700% due March 13, 2026 | Senior notes: | |||
Debt Instrument [Line Items] | |||
Aggregate principal | $ 500,000,000 | ||
Stated interest rate (percent) | 5.70% | ||
$750 million, 5.500% due March 15, 2053 | |||
Debt Instrument [Line Items] | |||
Aggregate principal | $ 750,000,000 | ||
Stated interest rate (percent) | 5.50% | ||
$750 million, 5.500% due March 15, 2053 | Senior notes: | |||
Debt Instrument [Line Items] | |||
Aggregate principal | $ 750,000,000 | ||
Stated interest rate (percent) | 5.50% | ||
$1.5 billion, 0.650% due August 3, 2023 | Senior notes: | |||
Debt Instrument [Line Items] | |||
Aggregate principal | $ 1,500,000,000 | ||
Stated interest rate (percent) | 0.65% | ||
$600 million, 3.850% due October 1, 2024 | Senior notes: | |||
Debt Instrument [Line Items] | |||
Aggregate principal | $ 600,000,000 | ||
Stated interest rate (percent) | 3.85% | ||
Delayed Draw Term Loan | Term Loan | |||
Debt Instrument [Line Items] | |||
Aggregate principal | $ 500,000,000 |
DEBT - Revolving Credit Agreeme
DEBT - Revolving Credit Agreements (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Term Loan | |
Line of Credit Facility [Line Items] | |
Actual debt to capitalization percentage | 41.10% |
Revolving credit facility | |
Line of Credit Facility [Line Items] | |
Debt to capitalization percentage, maximum | 60% |
Outstanding borrowings | $ 0 |
Uncommitted incremental loan facility | 750,000,000 |
Revolving credit facility | 5-year unsecured revolving credit agreement | |
Line of Credit Facility [Line Items] | |
Remaining borrowing capacity | $ 2,400,000,000 |
Debt instrument term (in years) | 5 years |
Revolving credit facility | 364-day unsecured revolving credit agreement | |
Line of Credit Facility [Line Items] | |
Remaining borrowing capacity | $ 1,500,000,000 |
Debt instrument term (in years) | 364 days |
Letter of credit | |
Line of Credit Facility [Line Items] | |
Outstanding borrowings | $ 39,000,000 |
DEBT - Commercial Paper and Oth
DEBT - Commercial Paper and Other Short-term Borrowings (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Commercial paper | ||
Short-term Debt [Line Items] | ||
Maximum amount outstanding during period | $ 626,000,000 | |
Short-term debt outstanding | $ 426,000,000 | $ 595,000,000 |
Weighted average annual interest rate (percent) | 5.45% | |
FHLB borrowings | ||
Short-term Debt [Line Items] | ||
Short-term debt outstanding | $ 0 |
COMMITMENTS, GUARANTEES AND C_2
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Details) | 1 Months Ended | 3 Months Ended |
Dec. 31, 2022 state option_period beneficiary | Mar. 31, 2023 beneficiary state | |
T2017 East Region | ||
Loss Contingencies [Line Items] | ||
Number of states comprising TRICARE beneficiaries | state | 32 | |
Number of TRICARE beneficiaries | beneficiary | 6,000,000 | |
T-5, Effective 2024 | ||
Loss Contingencies [Line Items] | ||
Number of TRICARE managed care support contract beneficiaries | beneficiary | 4,600,000 | |
Number of states comprising of TRICARE managed care support contract beneficiaries | state | 24 | |
Contract base term | 1 year | |
Annual option periods | option_period | 8 | |
Contract term with exercises | 9 years | |
Medicare | ||
Loss Contingencies [Line Items] | ||
Percentage of premiums and services revenue | 84% | |
Medicaid | ||
Loss Contingencies [Line Items] | ||
Percentage of premiums and services revenue | 7% | |
Military services | T2017 East Region | ||
Loss Contingencies [Line Items] | ||
Percentage of premiums and services revenue | 1% |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2022 segment | Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 2 | 2 | |
Member co-share amounts and government subsidies | $ 4,000 | $ 4,000 | |
Depreciation and amortization classified as benefit expense | $ 33 | $ 30 |
SEGMENT INFORMATION - Segment R
SEGMENT INFORMATION - Segment Results (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Premiums | $ 25,550 | $ 22,703 |
Services revenue: | 999 | 1,264 |
Total revenues | 26,742 | 23,970 |
Investment income (loss) | 193 | 3 |
Benefits | 21,858 | 19,625 |
Operating costs | 2,979 | 2,886 |
Depreciation and amortization | 186 | 170 |
Total operating expenses | 25,023 | 22,681 |
Income from operations | 1,719 | 1,289 |
Interest expense | 113 | 90 |
Other income, net | (8) | (21) |
Income before income taxes and equity in net losses | 1,614 | 1,220 |
Equity in net losses | (17) | (4) |
Segment earnings (loss) | 1,597 | 1,216 |
Net loss (income) attributable to noncontrolling interests | 1 | 0 |
Segment earnings (loss) attributable to Humana | 1,598 | 1,216 |
Insurance | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 25,903 | 22,967 |
Investment income (loss) | 97 | 46 |
Total operating expenses | 24,576 | 21,971 |
CenterWell | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 4,505 | 4,365 |
Investment income (loss) | 0 | 2 |
Total operating expenses | 4,175 | 3,995 |
Operating segments | ||
Segment Reporting Information [Line Items] | ||
Premiums | 25,550 | 22,703 |
Services revenue: | 999 | 1,264 |
Total revenues | 26,549 | 23,967 |
Operating segments | Individual Medicare Advantage | ||
Segment Reporting Information [Line Items] | ||
Premiums | 19,809 | 17,052 |
Operating segments | Group Medicare Advantage | ||
Segment Reporting Information [Line Items] | ||
Premiums | 1,765 | 1,875 |
Operating segments | Medicare stand-alone PDP | ||
Segment Reporting Information [Line Items] | ||
Premiums | 616 | 639 |
Operating segments | Total Medicare | ||
Segment Reporting Information [Line Items] | ||
Premiums | 22,190 | 19,566 |
Operating segments | Commercial fully-insured | ||
Segment Reporting Information [Line Items] | ||
Premiums | 1,018 | 1,140 |
Operating segments | Specialty benefits | ||
Segment Reporting Information [Line Items] | ||
Premiums | 254 | 261 |
Operating segments | Medicare Supplement | ||
Segment Reporting Information [Line Items] | ||
Premiums | 179 | 182 |
Operating segments | Medicaid and other | ||
Segment Reporting Information [Line Items] | ||
Premiums | 1,909 | 1,554 |
Operating segments | Home solutions | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 314 | 726 |
Operating segments | Provider services | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 201 | 113 |
Operating segments | Commercial ASO | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 71 | 77 |
Operating segments | Military and other | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 171 | 127 |
Operating segments | Pharmacy solutions | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 242 | 221 |
Operating segments | Insurance | ||
Segment Reporting Information [Line Items] | ||
Premiums | 25,550 | 22,703 |
Services revenue: | 242 | 204 |
Total revenues | 25,792 | 22,907 |
Benefits | 21,993 | 19,734 |
Operating costs | 2,418 | 2,087 |
Depreciation and amortization | 165 | 150 |
Income from operations | 1,327 | 996 |
Interest expense | 0 | 0 |
Other income, net | 0 | 0 |
Income before income taxes and equity in net losses | 1,327 | 996 |
Equity in net losses | (3) | 0 |
Segment earnings (loss) | 1,324 | 996 |
Net loss (income) attributable to noncontrolling interests | 1 | 0 |
Segment earnings (loss) attributable to Humana | 1,325 | 996 |
Operating segments | Insurance | Individual Medicare Advantage | ||
Segment Reporting Information [Line Items] | ||
Premiums | 19,809 | 17,052 |
Operating segments | Insurance | Group Medicare Advantage | ||
Segment Reporting Information [Line Items] | ||
Premiums | 1,765 | 1,875 |
Operating segments | Insurance | Medicare stand-alone PDP | ||
Segment Reporting Information [Line Items] | ||
Premiums | 616 | 639 |
Operating segments | Insurance | Total Medicare | ||
Segment Reporting Information [Line Items] | ||
Premiums | 22,190 | 19,566 |
Operating segments | Insurance | Commercial fully-insured | ||
Segment Reporting Information [Line Items] | ||
Premiums | 1,018 | 1,140 |
Operating segments | Insurance | Specialty benefits | ||
Segment Reporting Information [Line Items] | ||
Premiums | 254 | 261 |
Operating segments | Insurance | Medicare Supplement | ||
Segment Reporting Information [Line Items] | ||
Premiums | 179 | 182 |
Operating segments | Insurance | Medicaid and other | ||
Segment Reporting Information [Line Items] | ||
Premiums | 1,909 | 1,554 |
Operating segments | Insurance | Home solutions | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 0 | 0 |
Operating segments | Insurance | Provider services | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 0 | 0 |
Operating segments | Insurance | Commercial ASO | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 71 | 77 |
Operating segments | Insurance | Military and other | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 171 | 127 |
Operating segments | Insurance | Pharmacy solutions | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 0 | 0 |
Operating segments | CenterWell | ||
Segment Reporting Information [Line Items] | ||
Premiums | 0 | 0 |
Services revenue: | 757 | 1,060 |
Total revenues | 757 | 1,060 |
Benefits | 0 | 0 |
Operating costs | 4,126 | 3,948 |
Depreciation and amortization | 49 | 47 |
Income from operations | 330 | 370 |
Interest expense | 0 | 0 |
Other income, net | 0 | 0 |
Income before income taxes and equity in net losses | 330 | 370 |
Equity in net losses | (14) | (4) |
Segment earnings (loss) | 316 | 366 |
Net loss (income) attributable to noncontrolling interests | 0 | 0 |
Segment earnings (loss) attributable to Humana | 316 | 366 |
Operating segments | CenterWell | Individual Medicare Advantage | ||
Segment Reporting Information [Line Items] | ||
Premiums | 0 | 0 |
Operating segments | CenterWell | Group Medicare Advantage | ||
Segment Reporting Information [Line Items] | ||
Premiums | 0 | 0 |
Operating segments | CenterWell | Medicare stand-alone PDP | ||
Segment Reporting Information [Line Items] | ||
Premiums | 0 | 0 |
Operating segments | CenterWell | Total Medicare | ||
Segment Reporting Information [Line Items] | ||
Premiums | 0 | 0 |
Operating segments | CenterWell | Commercial fully-insured | ||
Segment Reporting Information [Line Items] | ||
Premiums | 0 | 0 |
Operating segments | CenterWell | Specialty benefits | ||
Segment Reporting Information [Line Items] | ||
Premiums | 0 | 0 |
Operating segments | CenterWell | Medicare Supplement | ||
Segment Reporting Information [Line Items] | ||
Premiums | 0 | 0 |
Operating segments | CenterWell | Medicaid and other | ||
Segment Reporting Information [Line Items] | ||
Premiums | 0 | 0 |
Operating segments | CenterWell | Home solutions | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 314 | 726 |
Operating segments | CenterWell | Provider services | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 201 | 113 |
Operating segments | CenterWell | Commercial ASO | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 0 | 0 |
Operating segments | CenterWell | Military and other | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 0 | 0 |
Operating segments | CenterWell | Pharmacy solutions | ||
Segment Reporting Information [Line Items] | ||
Services revenue: | 242 | 221 |
Eliminations/ Corporate | ||
Segment Reporting Information [Line Items] | ||
Total revenues | (3,666) | (3,362) |
Investment income (loss) | 96 | (45) |
Benefits | (135) | (109) |
Operating costs | (3,565) | (3,149) |
Depreciation and amortization | (28) | (27) |
Total operating expenses | (3,728) | (3,285) |
Income from operations | 62 | (77) |
Interest expense | 113 | 90 |
Other income, net | (8) | (21) |
Income before income taxes and equity in net losses | (43) | (146) |
Equity in net losses | 0 | 0 |
Segment earnings (loss) | (43) | (146) |
Net loss (income) attributable to noncontrolling interests | 0 | 0 |
Segment earnings (loss) attributable to Humana | (43) | (146) |
Eliminations/ Corporate | Insurance | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 14 | 14 |
Eliminations/ Corporate | Insurance | Services | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 14 | 14 |
Eliminations/ Corporate | Insurance | Products | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 0 | 0 |
Eliminations/ Corporate | CenterWell | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 3,748 | 3,303 |
Eliminations/ Corporate | CenterWell | Services | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 1,133 | 857 |
Eliminations/ Corporate | CenterWell | Products | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 2,615 | 2,446 |
Intersegment Eliminations | ||
Segment Reporting Information [Line Items] | ||
Total revenues | (3,762) | (3,317) |
Intersegment Eliminations | Services | ||
Segment Reporting Information [Line Items] | ||
Total revenues | (1,147) | (871) |
Intersegment Eliminations | Products | ||
Segment Reporting Information [Line Items] | ||
Total revenues | $ (2,615) | $ (2,446) |