Investments

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Available-for-Sale

We consider all our investments classified as current assets to be available-for-sale. The following tables summarize our investments as of the dates indicated:


	September 30, 2020
	Amortized Cost		Gross Unrealized				Estimated Fair Value
			Gains		Losses

	(In millions)
Corporate debt securities	$	1,007	$	35	$	1	$	1,041
Mortgage-backed securities	408		10		1		417
Municipal securities	166		2		—		168
Asset-backed securities	133		3		—		136
Certificates of deposit	5		—		—		5
U.S. Treasury notes	2		—		—		2


Total	$	1,721	$	50	$	2	$	1,769


	December 31, 2019
	Amortized Cost		Gross Unrealized				Estimated Fair Value
			Gains		Losses

	(In millions)
Corporate debt securities	$	1,174	$	5	$	1	$	1,178
Mortgage-backed securities	420		1		1		420
Municipal securities	78		—		—		78
Asset-backed securities	126		1		—		127
Certificates of deposit	1		—		—		1
U.S. Treasury notes	86		—		—		86
GSEs	49		—		—		49
Other	7		—		—		7
Total	$	1,941	$	7	$	2	$	1,946

The contractual maturities of our available-for-sale investments as of September 30, 2020 are summarized below:


	Amortized Cost		Estimated Fair Value

	(In millions)
Due in one year or less	$	193	$	195
Due after one year through five years	943		975
Due after five years through ten years	160		165
Due after ten years	425		434
Total	$	1,721	$	1,769

Gross realized gains and losses from sales of available-for-sale securities are calculated under the specific identification method and are included in investment income. Gross realized investment gains were insignificant for the three months ended September 30, 2020, and amounted to $6 million for the nine months ended September 30, 2020. Gross realized investment gains amounted to $11 million for the three and nine months ended September 30, 2019. Gross realized investment losses were insignificant for the three and nine months ended September 30, 2020, and 2019.

We have determined that unrealized losses at September 30, 2020, and December 31, 2019, primarily resulted from fluctuating interest rates, rather than a deterioration of the creditworthiness of the issuers. Therefore, we determined that an allowance for credit losses was not necessary. So long as we maintain the intent and ability to hold these securities to maturity, we are unlikely to experience losses. In the event that we dispose of these securities before maturity, we expect that realized losses, if any, will be insignificant.

The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months as of September 30, 2020 and December 31, 2019:


	September 30, 2020					December 31, 2019
	Estimated Fair Value		Unrealized Losses		Total Number of Positions	Estimated Fair Value		Unrealized Losses		Total Number of Positions

	(Dollars in millions)
Corporate debt securities	$	35	$	1	18	$	222	$	1	167
Mortgage-backed securities	104		1		7	143		1		72



Total	$	139	$	2	25	$	365	$	2	239

None of our available-for-sale investments were in a continuous loss position for 12 months or more as of September 30, 2020, or December 31, 2019.

Held-to-Maturity

Pursuant to the regulations governing our Health Plans segment subsidiaries, we maintain statutory deposits and deposits required by government authorities primarily in cash, cash equivalents, and U.S. Treasury securities. We also maintain restricted investments as protection against the insolvency of certain capitated providers. The use of these funds is limited as required by regulations in the various states in which we operate, or as needed in the event

of insolvency of capitated providers. Therefore, such investments are reported as “Restricted investments” in the accompanying consolidated balance sheets. We have the ability to hold these restricted investments until maturity, and as a result, we would not expect the value of these investments to decline significantly due to a sudden change in market interest rates. Our held-to-maturity restricted investments are carried at amortized cost, which approximates fair value. Such investments amounted to $93 million at September 30, 2020, of which $91 million will mature in one year or less, and $2 million will mature in after one through five years.