Investments

3 Months Ended

Mar. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

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:

	March 31, 2021
	Amortized Cost		Gross Unrealized				Estimated Fair Value
			Gains		Losses
	(In millions)
Corporate debt securities	$	1,162	$	27	$	1	$	1,188
Mortgage-backed securities	424		6		1		429
Asset-backed securities	150		2		—		152
U.S. Treasury notes	97		—		—		97
Municipal securities	71		1		—		72
Total	$	1,904	$	36	$	2	$	1,938

	December 31, 2020
	Amortized Cost		Gross Unrealized				Estimated Fair Value
			Gains		Losses
	(In millions)
Corporate debt securities	$	1,220	$	36	$	—	$	1,256
Mortgage-backed securities	383		10		1		392
Asset-backed securities	130		2		—		132
U.S. Treasury notes	27		—		—		27
Municipal securities	66		2		—		68
Total	$	1,826	$	50	$	1	$	1,875

The contractual maturities of our available-for-sale investments as of March 31, 2021 are summarized below:

	Amortized Cost		Estimated Fair Value
	(In millions)
Due in one year or less	$	428	$	429
Due after one year through five years	948		974
Due after five years through ten years	167		169
Due after ten years	361		366
Total	$	1,904	$	1,938

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 in the three months ended March 31, 2021, and amounted to $5 million in the three months ended March 31, 2020. Gross realized investment losses were insignificant in the three months ended March 31, 2021, and 2020.

We have determined that unrealized losses at March 31, 2021, and December 31, 2020, 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 summarizes those available-for-sale investments that have been in a continuous loss position for less than 12 months. No investments have been in a continuous loss position for 12 months or more as of March 31, 2021, and December 31, 2020.

	March 31, 2021					December 31, 2020
	Estimated Fair Value		Unrealized Losses		Total Number of Positions	Estimated Fair Value		Unrealized Losses		Total Number of Positions
	(Dollars in millions)
Corporate debt securities	$	175	$	1	78	$	—	$	—	—
Mortgage-backed securities	101		1		34	77		1		21
Total	$	276	$	2	112	$	77	$	1	21

Held-to-Maturity

Pursuant to the regulations governing our state health plan 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 $138 million at March 31, 2021, of which $122 million will mature in one year or less, and $16 million will mature in after one through five years.