FORM 10-Q |
ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
HUMANA INC. (Exact name of registrant as specified in its charter) |
Delaware | 61-0647538 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Large accelerated filer | ý | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ | |
Emerging growth company | ¨ |
Class of Common Stock | Outstanding at June 30, 2018 |
$0.16 2/3 par value | 137,763,407 shares |
Page | ||
Part I: Financial Information | ||
Item 1. | Financial Statements (Unaudited) | |
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Certifications |
June 30, 2018 | December 31, 2017 | ||||||
(in millions, except share amounts) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 8,052 | $ | 4,042 | |||
Investment securities | 9,464 | 9,557 | |||||
Receivables, less allowance for doubtful accounts of $80 in 2018 and $96 in 2017 | 1,471 | 854 | |||||
Other current assets | 4,410 | 2,949 | |||||
Assets held-for-sale | 3,467 | — | |||||
Total current assets | 26,864 | 17,402 | |||||
Property and equipment, net | 1,626 | 1,584 | |||||
Long-term investment securities | 379 | 2,745 | |||||
Goodwill | 3,895 | 3,281 | |||||
Other long-term assets | 1,506 | 2,166 | |||||
Total assets | $ | 34,270 | $ | 27,178 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Benefits payable | $ | 5,020 | $ | 4,668 | |||
Trade accounts payable and accrued expenses | 6,952 | 4,069 | |||||
Book overdraft | 74 | 141 | |||||
Unearned revenues | 3,630 | 378 | |||||
Short-term debt | 398 | 150 | |||||
Liabilities held-for-sale | 2,694 | — | |||||
Total current liabilities | 18,768 | 9,406 | |||||
Long-term debt | 4,773 | 4,770 | |||||
Future policy benefits payable | 197 | 2,923 | |||||
Other long-term liabilities | 321 | 237 | |||||
Total liabilities | 24,059 | 17,336 | |||||
Commitments and contingencies (Note 14) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $1 par; 10,000,000 shares authorized; none issued | — | — | |||||
Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 198,591,361 shares issued at June 30, 2018 and 198,572,458 shares issued at December 31, 2017 | 33 | 33 | |||||
Capital in excess of par value | 2,672 | 2,445 | |||||
Retained earnings | 14,211 | 13,670 | |||||
Accumulated other comprehensive (loss) income | (176 | ) | 19 | ||||
Treasury stock, at cost, 60,827,954 shares at June 30, 2018 and 60,893,762 shares at December 31, 2017 | (6,529 | ) | (6,325 | ) | |||
Total stockholders’ equity | 10,211 | 9,842 | |||||
Total liabilities and stockholders’ equity | $ | 34,270 | $ | 27,178 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in millions, except per share results) | |||||||||||||||
Revenues: | |||||||||||||||
Premiums | $ | 13,713 | $ | 13,203 | $ | 27,524 | $ | 26,601 | |||||||
Services | 382 | 230 | 709 | 483 | |||||||||||
Investment income | 164 | 101 | 305 | 212 | |||||||||||
Total revenues | 14,259 | 13,534 | 28,538 | 27,296 | |||||||||||
Operating expenses: | |||||||||||||||
Benefits | 11,536 | 10,889 | 23,206 | 22,215 | |||||||||||
Operating costs | 1,761 | 1,453 | 3,510 | 3,006 | |||||||||||
Merger termination fee and related costs, net | — | — | — | (947 | ) | ||||||||||
Depreciation and amortization | 100 | 92 | 200 | 184 | |||||||||||
Total operating expenses | 13,397 | 12,434 | 26,916 | 24,458 | |||||||||||
Income from operations | 862 | 1,100 | 1,622 | 2,838 | |||||||||||
Loss on business held-for-sale | (790 | ) | — | (790 | ) | — | |||||||||
Interest expense | 53 | 58 | 106 | 107 | |||||||||||
Income before income taxes | 19 | 1,042 | 726 | 2,731 | |||||||||||
(Benefit) provision for income taxes | (174 | ) | 392 | 42 | 966 | ||||||||||
Net income | $ | 193 | $ | 650 | $ | 684 | $ | 1,765 | |||||||
Basic earnings per common share | $ | 1.40 | $ | 4.49 | $ | 4.96 | $ | 12.07 | |||||||
Diluted earnings per common share | $ | 1.39 | $ | 4.46 | $ | 4.93 | $ | 11.98 | |||||||
Dividends declared per common share | $ | 0.50 | $ | 0.40 | $ | 1.00 | $ | 0.80 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in millions) | |||||||||||||||
Net income | $ | 193 | $ | 650 | $ | 684 | $ | 1,765 | |||||||
Other comprehensive (loss) income: | |||||||||||||||
Change in gross unrealized investment gains/losses | (9 | ) | 88 | (212 | ) | 126 | |||||||||
Effect of income taxes | 2 | (33 | ) | 54 | (47 | ) | |||||||||
Total change in unrealized investment gains/losses, net of tax | (7 | ) | 55 | (158 | ) | 79 | |||||||||
Reclassification adjustment for net realized gains | (23 | ) | (2 | ) | (52 | ) | (28 | ) | |||||||
Effect of income taxes | 8 | — | 15 | 10 | |||||||||||
Total reclassification adjustment, net of tax | (15 | ) | (2 | ) | (37 | ) | (18 | ) | |||||||
Other comprehensive (loss) income, net of tax | (22 | ) | 53 | (195 | ) | 61 | |||||||||
Comprehensive income | $ | 171 | $ | 703 | $ | 489 | $ | 1,826 |
For the six months ended June 30, | |||||||
2018 | 2017 | ||||||
(in millions) | |||||||
Cash flows from operating activities | |||||||
Net income | $ | 684 | $ | 1,765 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss on business held-for-sale | 790 | — | |||||
Net realized capital gains | (82 | ) | (28 | ) | |||
Stock-based compensation | 69 | 83 | |||||
Depreciation | 218 | 201 | |||||
Other intangible amortization | 51 | 36 | |||||
(Benefit) provision for deferred income taxes | (304 | ) | 2 | ||||
Changes in operating assets and liabilities, net of effect of businesses acquired and dispositions: | |||||||
Receivables | (619 | ) | (1,150 | ) | |||
Other assets | (1,658 | ) | (545 | ) | |||
Benefits payable | 410 | 275 | |||||
Other liabilities | 680 | 317 | |||||
Unearned revenues | 3,252 | 3,076 | |||||
Other, net | 70 | 67 | |||||
Net cash provided by operating activities | 3,561 | 4,099 | |||||
Cash flows from investing activities | |||||||
Acquisitions, net of cash acquired | (354 | ) | (9 | ) | |||
Purchases of property and equipment, net | (272 | ) | (233 | ) | |||
Purchases of investment securities | (2,624 | ) | (3,208 | ) | |||
Maturities of investment securities | 555 | 649 | |||||
Proceeds from sales of investment securities | 2,408 | 1,723 | |||||
Net cash used in investing activities | (287 | ) | (1,078 | ) | |||
Cash flows from financing activities | |||||||
Receipts from contract deposits, net | 1,515 | 2,081 | |||||
Proceeds from issuance of senior notes, net | — | 985 | |||||
Proceeds (repayment) from issuance of commercial paper, net | 243 | (102 | ) | ||||
Change in book overdraft | (67 | ) | (95 | ) | |||
Common stock repurchases | (93 | ) | (1,578 | ) | |||
Dividends paid | (126 | ) | (104 | ) | |||
Proceeds from stock option exercises and other | 43 | 54 | |||||
Net cash provided by financing activities | 1,515 | 1,241 | |||||
Increase in cash and cash equivalents | 4,789 | 4,262 | |||||
Cash and cash equivalents at beginning of period | 4,042 | 3,877 | |||||
Cash and cash equivalents at end of period (1) | $ | 8,831 | $ | 8,139 | |||
Supplemental cash flow disclosures: | |||||||
Interest payments | $ | 98 | $ | 92 | |||
Income tax payments, net | $ | 405 | $ | 694 |
June 30, 2018 | |||
Assets | (in millions) | ||
Cash and cash equivalents | $ | 779 | |
Receivables, net | 2 | ||
Investment securities | 1,574 | ||
Other assets | 1,112 | ||
Total assets held-for-sale | $ | 3,467 | |
Liabilities | |||
Benefits payable | 58 | ||
Trade accounts payable and accrued expenses | 69 | ||
Future policy benefits payable | 2,567 | ||
Total liabilities held-for-sale | $ | 2,694 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(in millions) | |||||||||||||||
June 30, 2018 | |||||||||||||||
U.S. Treasury and other U.S. government corporations and agencies: | |||||||||||||||
U.S. Treasury and agency obligations | $ | 631 | $ | — | $ | (4 | ) | $ | 627 | ||||||
Mortgage-backed securities | 2,327 | — | (69 | ) | 2,258 | ||||||||||
Tax-exempt municipal securities | 3,045 | 3 | (49 | ) | 2,999 | ||||||||||
Mortgage-backed securities: | |||||||||||||||
Residential | 17 | — | — | 17 | |||||||||||
Commercial | 533 | — | (16 | ) | 517 | ||||||||||
Asset-backed securities | 574 | 1 | (2 | ) | 573 | ||||||||||
Corporate debt securities | 2,946 | 2 | (96 | ) | 2,852 | ||||||||||
Total debt securities | $ | 10,073 | $ | 6 | $ | (236 | ) | $ | 9,843 | ||||||
December 31, 2017 | |||||||||||||||
U.S. Treasury and other U.S. government corporations and agencies: | |||||||||||||||
U.S. Treasury and agency obligations | $ | 532 | $ | 1 | $ | (2 | ) | $ | 531 | ||||||
Mortgage-backed securities | 1,625 | 4 | (19 | ) | 1,610 | ||||||||||
Tax-exempt municipal securities | 3,884 | 33 | (28 | ) | 3,889 | ||||||||||
Mortgage-backed securities: | |||||||||||||||
Residential | 26 | — | — | 26 | |||||||||||
Commercial | 455 | 3 | (2 | ) | 456 | ||||||||||
Asset-backed securities | 407 | 1 | — | 408 | |||||||||||
Corporate debt securities | 5,175 | 244 | (37 | ) | 5,382 | ||||||||||
Total debt securities | $ | 12,104 | $ | 286 | $ | (88 | ) | $ | 12,302 |
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
June 30, 2018 | |||||||||||||||||||||||
U.S. Treasury and other U.S. government corporations and agencies: | |||||||||||||||||||||||
U.S. Treasury and agency obligations | $ | 437 | $ | (2 | ) | $ | 114 | $ | (2 | ) | $ | 551 | $ | (4 | ) | ||||||||
Mortgage-backed securities | 1,596 | (40 | ) | 583 | (29 | ) | 2,179 | (69 | ) | ||||||||||||||
Tax-exempt municipal securities | 2,245 | (34 | ) | 456 | (15 | ) | 2,701 | (49 | ) | ||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Residential | 16 | — | 1 | — | 17 | — | |||||||||||||||||
Commercial | 457 | (14 | ) | 27 | (2 | ) | 484 | (16 | ) | ||||||||||||||
Asset-backed securities | 334 | (2 | ) | 4 | — | 338 | (2 | ) | |||||||||||||||
Corporate debt securities | 2,037 | (62 | ) | 533 | (34 | ) | 2,570 | (96 | ) | ||||||||||||||
Total debt securities | $ | 7,122 | $ | (154 | ) | $ | 1,718 | $ | (82 | ) | $ | 8,840 | $ | (236 | ) | ||||||||
December 31, 2017 | |||||||||||||||||||||||
U.S. Treasury and other U.S. government corporations and agencies: | |||||||||||||||||||||||
U.S. Treasury and agency obligations | $ | 273 | $ | (1 | ) | $ | 130 | $ | (1 | ) | $ | 403 | $ | (2 | ) | ||||||||
Mortgage-backed securities | 581 | (2 | ) | 672 | (17 | ) | 1,253 | (19 | ) | ||||||||||||||
Tax-exempt municipal securities | 1,590 | (16 | ) | 661 | (12 | ) | 2,251 | (28 | ) | ||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Residential | 20 | — | 3 | — | 23 | — | |||||||||||||||||
Commercial | 131 | (1 | ) | 28 | (1 | ) | 159 | (2 | ) | ||||||||||||||
Asset-backed securities | 107 | — | 10 | — | 117 | — | |||||||||||||||||
Corporate debt securities | 1,297 | (10 | ) | 804 | (27 | ) | 2,101 | (37 | ) | ||||||||||||||
Total debt securities | $ | 3,999 | $ | (30 | ) | $ | 2,308 | $ | (58 | ) | $ | 6,307 | $ | (88 | ) |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in millions) | |||||||||||||||
Gross realized gains | $ | 63 | $ | 4 | $ | 94 | $ | 31 | |||||||
Gross realized losses | (10 | ) | (2 | ) | (12 | ) | (3 | ) | |||||||
Net realized capital gains | $ | 53 | $ | 2 | $ | 82 | $ | 28 |
Amortized Cost | Fair Value | ||||||
(in millions) | |||||||
Due within one year | $ | 722 | $ | 720 | |||
Due after one year through five years | 3,016 | 2,964 | |||||
Due after five years through ten years | 2,100 | 2,022 | |||||
Due after ten years | 784 | 772 | |||||
Mortgage and asset-backed securities | 3,451 | 3,365 | |||||
Total debt securities | $ | 10,073 | $ | 9,843 |
Fair Value Measurements Using | |||||||||||||||
Fair Value | Quoted Prices in Active Markets (Level 1) | Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||
(in millions) | |||||||||||||||
June 30, 2018 | |||||||||||||||
Cash equivalents | $ | 6,279 | $ | 6,279 | $ | — | $ | — | |||||||
Debt securities: | |||||||||||||||
U.S. Treasury and other U.S. government corporations and agencies: | |||||||||||||||
U.S. Treasury and agency obligations | 627 | — | 627 | — | |||||||||||
Mortgage-backed securities | 2,258 | — | 2,258 | — | |||||||||||
Tax-exempt municipal securities | 2,999 | — | 2,999 | — | |||||||||||
Mortgage-backed securities: | |||||||||||||||
Residential | 17 | — | 17 | — | |||||||||||
Commercial | 517 | — | 517 | — | |||||||||||
Asset-backed securities | 573 | — | 573 | — | |||||||||||
Corporate debt securities | 2,852 | — | 2,852 | — | |||||||||||
Total debt securities | 9,843 | — | 9,843 | — | |||||||||||
Total invested assets | $ | 16,122 | $ | 6,279 | $ | 9,843 | $ | — | |||||||
December 31, 2017 | |||||||||||||||
Cash equivalents | $ | 4,564 | $ | 4,564 | $ | — | $ | — | |||||||
Debt securities: | |||||||||||||||
U.S. Treasury and other U.S. government corporations and agencies: | |||||||||||||||
U.S. Treasury and agency obligations | 531 | — | 531 | — | |||||||||||
Mortgage-backed securities | 1,610 | — | 1,610 | — | |||||||||||
Tax-exempt municipal securities | 3,889 | — | 3,889 | — | |||||||||||
Mortgage-backed securities: | |||||||||||||||
Residential | 26 | — | 26 | — | |||||||||||
Commercial | 456 | — | 456 | — | |||||||||||
Asset-backed securities | 408 | — | 408 | — | |||||||||||
Corporate debt securities | 5,382 | — | 5,381 | 1 | |||||||||||
Total debt securities | 12,302 | — | 12,301 | 1 | |||||||||||
Total invested assets | $ | 16,866 | $ | 4,564 | $ | 12,301 | $ | 1 |
June 30, 2018 | December 31, 2017 | ||||||||||||||
Risk Corridor Settlement | CMS Subsidies/ Discounts | Risk Corridor Settlement | CMS Subsidies/ Discounts | ||||||||||||
(in millions) | |||||||||||||||
Other current assets | $ | 6 | $ | 42 | $ | 4 | $ | 101 | |||||||
Trade accounts payable and accrued expenses | (232 | ) | (2,588 | ) | (255 | ) | (1,085 | ) | |||||||
Net current liability | (226 | ) | (2,546 | ) | (251 | ) | (984 | ) | |||||||
Other long-term assets | 64 | — | — | — | |||||||||||
Other long-term liabilities | (87 | ) | — | (28 | ) | — | |||||||||
Net long-term liability | (23 | ) | — | (28 | ) | — | |||||||||
Total net liability | $ | (249 | ) | $ | (2,546 | ) | $ | (279 | ) | $ | (984 | ) |
June 30, 2018 | December 31, 2017 | ||||||||||||||||||
Risk Adjustment Settlement | Reinsurance Recoverables | Risk Adjustment Settlement | Reinsurance Recoverables | ||||||||||||||||
(in millions) | |||||||||||||||||||
Premiums receivable | $ | 65 | $ | — | $ | 62 | $ | — | |||||||||||
Other current assets | — | — | — | 44 | |||||||||||||||
Trade accounts payable and accrued expenses | (103 | ) | — | (80 | ) | — | |||||||||||||
Other long-term assets | 1 | — | 5 | — | |||||||||||||||
Other long-term liabilities | (27 | ) | — | — | — | ||||||||||||||
Total net (liability) asset | $ | (64 | ) | $ | — | $ | (13 | ) | $ | 44 |
Retail | Group and Specialty | Healthcare Services | Total | ||||||||||||
(in millions) | |||||||||||||||
Balance at January 1, 2018 | $ | 1,059 | $ | 261 | $ | 1,961 | $ | 3,281 | |||||||
Acquisitions | 476 | — | 138 | 614 | |||||||||||
Balance at June 30, 2018 | $ | 1,535 | $ | 261 | $ | 2,099 | $ | 3,895 |
June 30, 2018 | December 31, 2017 | ||||||||||||||||||||||||
Weighted Average Life | Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | |||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||
Other intangible assets: | |||||||||||||||||||||||||
Customer contracts/ relationships | 8.7 years | $ | 646 | $ | 404 | $ | 242 | $ | 566 | $ | 401 | $ | 165 | ||||||||||||
Trade names and technology | 6.4 years | 84 | 80 | 4 | 104 | 84 | 20 | ||||||||||||||||||
Provider contracts | 11.9 years | 68 | 34 | 34 | 68 | 30 | 38 | ||||||||||||||||||
Noncompetes and other | 8.1 years | 34 | 30 | 4 | 32 | 29 | 3 | ||||||||||||||||||
Total other intangible assets | 8.7 years | $ | 832 | $ | 548 | $ | 284 | $ | 770 | $ | 544 | $ | 226 |
(in millions) | |||
For the years ending December 31, | |||
2018 | $ | 91 | |
2019 | 72 | ||
2020 | 69 | ||
2021 | 36 | ||
2022 | 26 | ||
2023 | 16 |
For the six months ended June 30, | ||||||||
2018 | 2017 | |||||||
(in millions) | ||||||||
Balances, beginning of period | $ | 4,668 | $ | 4,563 | ||||
Less: Reinsurance recoverables | (70 | ) | (76 | ) | ||||
Balances, beginning of period, net | 4,598 | 4,487 | ||||||
Incurred related to: | ||||||||
Current year | 23,543 | 22,576 | ||||||
Prior years | (338 | ) | (345 | ) | ||||
Total incurred | 23,205 | 22,231 | ||||||
Paid related to: | ||||||||
Current year | (18,914 | ) | (18,332 | ) | ||||
Prior years | (3,897 | ) | (3,626 | ) | ||||
Total paid | (22,811 | ) | (21,958 | ) | ||||
Reinsurance recoverable | 86 | 78 | ||||||
Less: Held-for-sale | (58 | ) | — | |||||
Balances, end of period | $ | 5,020 | $ | 4,838 |
For the six months ended June 30, | ||||||||
2018 | 2017 | |||||||
(in millions) | ||||||||
Future policy benefits: | ||||||||
Individual Commercial | $ | (14 | ) | $ | (36 | ) | ||
Other Businesses | 15 | 20 | ||||||
Total future policy benefits | $ | 1 | $ | (16 | ) |
For the six months ended June 30, | ||||||||
2018 | 2017 | |||||||
(in millions) | ||||||||
Balances, beginning of period | $ | 3,963 | $ | 3,507 | ||||
Less: Reinsurance recoverables | (70 | ) | (76 | ) | ||||
Balances, beginning of period, net | 3,893 | 3,431 | ||||||
Incurred related to: | ||||||||
Current year | 21,069 | 20,010 | ||||||
Prior years | (247 | ) | (287 | ) | ||||
Total incurred | 20,822 | 19,723 | ||||||
Paid related to: | ||||||||
Current year | (17,061 | ) | (16,385 | ) | ||||
Prior years | (3,327 | ) | (2,707 | ) | ||||
Total paid | (20,388 | ) | (19,092 | ) | ||||
Reinsurance recoverable | 86 | 78 | ||||||
Balances, end of period | $ | 4,413 | $ | 4,140 |
For the six months ended June 30, | ||||||||
2018 | 2017 | |||||||
(in millions) | ||||||||
Balances, beginning of period | $ | 568 | $ | 578 | ||||
Incurred related to: | ||||||||
Current year | 2,665 | 2,629 | ||||||
Prior years | (34 | ) | (31 | ) | ||||
Total incurred | 2,631 | 2,598 | ||||||
Paid related to: | ||||||||
Current year | (2,094 | ) | (2,117 | ) | ||||
Prior years | (496 | ) | (518 | ) | ||||
Total paid | (2,590 | ) | (2,635 | ) | ||||
Balances, end of period | $ | 609 | $ | 541 |
For the six months ended June 30, | ||||||||
2018 | 2017 | |||||||
(in millions) | ||||||||
Balances, beginning of period | $ | 101 | $ | 454 | ||||
Incurred related to: | ||||||||
Current year | — | 304 | ||||||
Prior years | (55 | ) | (26 | ) | ||||
Total incurred | (55 | ) | 278 | |||||
Paid related to: | ||||||||
Current year | — | (223 | ) | |||||
Prior years | (31 | ) | (378 | ) | ||||
Total paid | (31 | ) | (601 | ) | ||||
Balance, end of period | $ | 15 | $ | 131 |
Reconciliation of the Disclosure of Incurred and Paid Claims Development to Benefits Payable, net of reinsurance | ||||
June 30, | ||||
2018 | ||||
Net outstanding liabilities | ||||
Retail | $ | 4,327 | ||
Group and Specialty | 609 | |||
Individual Commercial | 15 | |||
Other Businesses | 41 | |||
Benefits payable, net of reinsurance | 4,992 | |||
Reinsurance recoverable on unpaid claims | ||||
Retail | 86 | |||
Total reinsurance recoverable on unpaid claims | 86 | |||
Held-for-sale | (58 | ) | ||
Total benefits payable, gross | $ | 5,020 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(dollars in millions, except per common share results; number of shares in thousands) | |||||||||||||||
Net income available for common stockholders | $ | 193 | $ | 650 | $ | 684 | $ | 1,765 | |||||||
Weighted average outstanding shares of common stock used to compute basic earnings per common share | 137,763 | 144,600 | 137,833 | 146,212 | |||||||||||
Dilutive effect of: | |||||||||||||||
Employee stock options | 197 | 158 | 205 | 179 | |||||||||||
Restricted stock | 616 | 876 | 665 | 862 | |||||||||||
Shares used to compute diluted earnings per common share | 138,576 | 145,634 | 138,703 | 147,253 | |||||||||||
Basic earnings per common share | $ | 1.40 | $ | 4.49 | $ | 4.96 | $ | 12.07 | |||||||
Diluted earnings per common share | $ | 1.39 | $ | 4.46 | $ | 4.93 | $ | 11.98 | |||||||
Number of antidilutive stock options and restricted stock excluded from computation | 171 | 449 | 408 | 693 |
Record Date | Payment Date | Amount per Share | Total Amount | |||||||
(in millions) | ||||||||||
2017 payments | ||||||||||
1/12/2017 | 1/27/2017 | $ | 0.29 | $ | 43 | |||||
3/31/2017 | 4/28/2017 | $ | 0.40 | $ | 58 | |||||
6/30/2017 | 7/31/2017 | $ | 0.40 | $ | 58 | |||||
9/29/2017 | 10/27/2017 | $ | 0.40 | $ | 57 | |||||
2018 payments | ||||||||||
12/29/2017 | 1/26/2018 | $ | 0.40 | $ | 55 | |||||
3/30/2018 | 4/27/2018 | $ | 0.50 | $ | 69 | |||||
6/29/2018 | 7/27/2018 | $ | 0.50 | $ | 69 |
Six months ended June 30, | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Authorization Date | Purchase Not to Exceed | Shares | Cost | Shares | Cost | |||||||||||||
(in millions) | ||||||||||||||||||
February 2017 | $ | 2,250 | — | $ | — | — | $ | — | ||||||||||
December 2017 | $ | 3,000 | 0.08 | 24 | — | — | ||||||||||||
Total repurchases | 0.08 | $ | 24 | — | $ | — |
June 30, 2018 | December 31, 2017 | ||||||
(in millions) | |||||||
Senior notes: | |||||||
$400 million, 2.625% due October 1, 2019 | $ | 399 | $ | 399 | |||
$400 million, 2.50% due December 15, 2020 | 398 | 397 | |||||
$400 million, 2.90% due December 15, 2022 | 396 | 396 | |||||
$600 million, 3.15% due December 1, 2022 | 596 | 595 | |||||
$600 million, 3.85% due October 1, 2024 | 596 | 595 | |||||
$600 million, 3.95% due March 15, 2027 | 595 | 594 | |||||
$250 million, 8.15% due June 15, 2038 | 263 | 263 | |||||
$400 million, 4.625% due December 1, 2042 | 396 | 396 | |||||
$750 million, 4.95% due October 1, 2044 | 739 | 739 | |||||
$400 million, 4.80% due March 15, 2047 | 395 | 396 | |||||
Total long-term debt | $ | 4,773 | $ | 4,770 |
Retail | Group and Specialty | Healthcare Services | Individual Commercial | Other Businesses | Eliminations/ Corporate | Consolidated | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||
Three months ended June 30, 2018 | |||||||||||||||||||||||||||
Revenues - external customers | |||||||||||||||||||||||||||
Premiums: | |||||||||||||||||||||||||||
Individual Medicare Advantage | $ | 8,908 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 8,908 | |||||||||||||
Group Medicare Advantage | 1,509 | — | — | — | — | — | 1,509 | ||||||||||||||||||||
Medicare stand-alone PDP | 914 | — | — | — | — | — | 914 | ||||||||||||||||||||
Total Medicare | 11,331 | — | — | — | — | — | 11,331 | ||||||||||||||||||||
Fully-insured | 125 | 1,346 | — | 10 | — | — | 1,481 | ||||||||||||||||||||
Specialty | — | 342 | — | — | — | — | 342 | ||||||||||||||||||||
Medicaid and other | 550 | — | — | — | 9 | — | 559 | ||||||||||||||||||||
Total premiums | 12,006 | 1,688 | — | 10 | 9 | — | 13,713 | ||||||||||||||||||||
Services revenue: | |||||||||||||||||||||||||||
Provider | — | — | 112 | — | — | — | 112 | ||||||||||||||||||||
ASO and other | 3 | 208 | — | — | 2 | — | 213 | ||||||||||||||||||||
Pharmacy | — | — | 57 | — | — | — | 57 | ||||||||||||||||||||
Total services revenue | 3 | 208 | 169 | — | 2 | — | 382 | ||||||||||||||||||||
Total revenues - external customers | 12,009 | 1,896 | 169 | 10 | 11 | — | 14,095 | ||||||||||||||||||||
Intersegment revenues | |||||||||||||||||||||||||||
Services | — | 4 | 4,194 | — | — | (4,198 | ) | — | |||||||||||||||||||
Products | — | — | 1,611 | — | — | (1,611 | ) | — | |||||||||||||||||||
Total intersegment revenues | — | 4 | 5,805 | — | — | (5,809 | ) | — | |||||||||||||||||||
Investment income | 30 | 6 | 17 | — | 65 | 46 | 164 | ||||||||||||||||||||
Total revenues | 12,039 | 1,906 | 5,991 | 10 | 76 | (5,763 | ) | 14,259 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||
Benefits | 10,270 | 1,357 | — | (9 | ) | 39 | (121 | ) | 11,536 | ||||||||||||||||||
Operating costs | 1,210 | 447 | 5,749 | 1 | 2 | (5,648 | ) | 1,761 | |||||||||||||||||||
Depreciation and amortization | 66 | 22 | 36 | — | — | (24 | ) | 100 | |||||||||||||||||||
Total operating expenses | 11,546 | 1,826 | 5,785 | (8 | ) | 41 | (5,793 | ) | 13,397 | ||||||||||||||||||
Income from operations | 493 | 80 | 206 | 18 | 35 | 30 | 862 | ||||||||||||||||||||
Loss on business held-for-sale | — | — | — | — | — | (790 | ) | (790 | ) | ||||||||||||||||||
Interest expense | — | — | — | — | — | 53 | 53 | ||||||||||||||||||||
Income (loss) before income taxes | $ | 493 | $ | 80 | $ | 206 | $ | 18 | $ | 35 | $ | (813 | ) | $ | 19 |
Retail | Group and Specialty | Healthcare Services | Individual Commercial | Other Businesses | Eliminations/ Corporate | Consolidated | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||
Three months ended June 30, 2017 | |||||||||||||||||||||||||||
Revenues - external customers | |||||||||||||||||||||||||||
Premiums: | |||||||||||||||||||||||||||
Individual Medicare Advantage | $ | 8,282 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 8,282 | |||||||||||||
Group Medicare Advantage | 1,277 | — | — | — | — | — | 1,277 | ||||||||||||||||||||
Medicare stand-alone PDP | 925 | — | — | — | — | — | 925 | ||||||||||||||||||||
Total Medicare | 10,484 | — | — | — | — | — | 10,484 | ||||||||||||||||||||
Fully-insured | 118 | 1,350 | — | 247 | — | — | 1,715 | ||||||||||||||||||||
Specialty | — | 323 | — | — | — | — | 323 | ||||||||||||||||||||
Medicaid and other | 671 | — | — | — | 10 | — | 681 | ||||||||||||||||||||
Total premiums | 11,273 | 1,673 | — | 247 | 10 | — | 13,203 | ||||||||||||||||||||
Services revenue: | |||||||||||||||||||||||||||
Provider | — | — | 63 | — | — | — | 63 | ||||||||||||||||||||
ASO and other | 2 | 143 | — | — | 2 | — | 147 | ||||||||||||||||||||
Pharmacy | — | — | 20 | — | — | — | 20 | ||||||||||||||||||||
Total services revenue | 2 | 143 | 83 | — | 2 | — | 230 | ||||||||||||||||||||
Total revenues - external customers | 11,275 | 1,816 | 83 | 247 | 12 | — | 13,433 | ||||||||||||||||||||
Intersegment revenues | |||||||||||||||||||||||||||
Services | — | 5 | 4,309 | — | — | (4,314 | ) | — | |||||||||||||||||||
Products | — | — | 1,582 | — | — | (1,582 | ) | — | |||||||||||||||||||
Total intersegment revenues | — | 5 | 5,891 | — | — | (5,896 | ) | — | |||||||||||||||||||
Investment income | 24 | 7 | 8 | 1 | 21 | 40 | 101 | ||||||||||||||||||||
Total revenues | 11,299 | 1,828 | 5,982 | 248 | 33 | (5,856 | ) | 13,534 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||
Benefits | 9,672 | 1,312 | — | 86 | 32 | (213 | ) | 10,889 | |||||||||||||||||||
Operating costs | 963 | 394 | 5,677 | 40 | 2 | (5,623 | ) | 1,453 | |||||||||||||||||||
Depreciation and amortization | 57 | 21 | 35 | 4 | — | (25 | ) | 92 | |||||||||||||||||||
Total operating expenses | 10,692 | 1,727 | 5,712 | 130 | 34 | (5,861 | ) | 12,434 | |||||||||||||||||||
Income (loss) from operations | 607 | 101 | 270 | 118 | (1 | ) | 5 | 1,100 | |||||||||||||||||||
Interest expense | — | — | — | — | — | 58 | 58 | ||||||||||||||||||||
Income (loss) before income taxes | $ | 607 | $ | 101 | $ | 270 | $ | 118 | $ | (1 | ) | $ | (53 | ) | $ | 1,042 |
Retail | Group and Specialty | Healthcare Services | Individual Commercial | Other Businesses | Eliminations/ Corporate | Consolidated | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||
Six months ended June 30, 2018 | |||||||||||||||||||||||||||
Revenues - external customers | |||||||||||||||||||||||||||
Premiums: | |||||||||||||||||||||||||||
Individual Medicare Advantage | $ | 17,878 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 17,878 | |||||||||||||
Group Medicare Advantage | 3,033 | — | — | — | — | — | 3,033 | ||||||||||||||||||||
Medicare stand-alone PDP | 1,810 | — | — | — | — | — | 1,810 | ||||||||||||||||||||
Total Medicare | 22,721 | — | — | — | — | — | 22,721 | ||||||||||||||||||||
Fully-insured | 250 | 2,738 | — | 5 | — | — | 2,993 | ||||||||||||||||||||
Specialty | — | 689 | — | — | — | — | 689 | ||||||||||||||||||||
Medicaid and other | 1,103 | — | — | — | 18 | — | 1,121 | ||||||||||||||||||||
Total premiums | 24,074 | 3,427 | — | 5 | 18 | — | 27,524 | ||||||||||||||||||||
Services revenue: | |||||||||||||||||||||||||||
Provider | — | — | 177 | — | — | — | 177 | ||||||||||||||||||||
ASO and other | 5 | 427 | — | — | 4 | — | 436 | ||||||||||||||||||||
Pharmacy | — | — | 96 | — | — | — | 96 | ||||||||||||||||||||
Total services revenue | 5 | 427 | 273 | — | 4 | — | 709 | ||||||||||||||||||||
Total revenues - external customers | 24,079 | 3,854 | 273 | 5 | 22 | — | 28,233 | ||||||||||||||||||||
Intersegment revenues | |||||||||||||||||||||||||||
Services | — | 9 | 8,212 | — | — | (8,221 | ) | — | |||||||||||||||||||
Products | — | — | 3,146 | — | — | (3,146 | ) | — | |||||||||||||||||||
Total intersegment revenues | — | 9 | 11,358 | — | — | (11,367 | ) | — | |||||||||||||||||||
Investment income | 67 | 13 | 23 | — | 100 | 102 | 305 | ||||||||||||||||||||
Total revenues | 24,146 | 3,876 | 11,654 | 5 | 122 | (11,265 | ) | 28,538 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||
Benefits | 20,822 | 2,630 | — | (69 | ) | 65 | (242 | ) | 23,206 | ||||||||||||||||||
Operating costs | 2,432 | 910 | 11,190 | 3 | 4 | (11,029 | ) | 3,510 | |||||||||||||||||||
Depreciation and amortization | 132 | 45 | 85 | — | — | (62 | ) | 200 | |||||||||||||||||||
Total operating expenses | 23,386 | 3,585 | 11,275 | (66 | ) | 69 | (11,333 | ) | 26,916 | ||||||||||||||||||
Income from operations | 760 | 291 | 379 | 71 | 53 | 68 | 1,622 | ||||||||||||||||||||
Loss on business held-for-sale | — | — | — | — | — | (790 | ) | (790 | ) | ||||||||||||||||||
Interest expense | — | — | — | — | — | 106 | 106 | ||||||||||||||||||||
Income (loss) before income taxes | $ | 760 | $ | 291 | $ | 379 | $ | 71 | $ | 53 | $ | (828 | ) | $ | 726 |
Retail | Group and Specialty | Healthcare Services | Individual Commercial | Other Businesses | Eliminations/ Corporate | Consolidated | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||
Six months ended June 30, 2017 | |||||||||||||||||||||||||||
Revenues - external customers | |||||||||||||||||||||||||||
Premiums: | |||||||||||||||||||||||||||
Individual Medicare Advantage | $ | 16,658 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 16,658 | |||||||||||||
Group Medicare Advantage | 2,595 | — | — | — | — | — | 2,595 | ||||||||||||||||||||
Medicare stand-alone PDP | 1,866 | — | — | — | — | — | 1,866 | ||||||||||||||||||||
Total Medicare | 21,119 | — | — | — | — | — | 21,119 | ||||||||||||||||||||
Fully-insured | 236 | 2,728 | — | 530 | — | — | 3,494 | ||||||||||||||||||||
Specialty | — | 645 | — | — | — | — | 645 | ||||||||||||||||||||
Medicaid and other | 1,324 | — | — | — | 19 | — | 1,343 | ||||||||||||||||||||
Total premiums | 22,679 | 3,373 | — | 530 | 19 | — | 26,601 | ||||||||||||||||||||
Services revenue: | |||||||||||||||||||||||||||
Provider | — | — | 133 | — | — | — | 133 | ||||||||||||||||||||
ASO and other | 4 | 304 | — | — | 4 | — | 312 | ||||||||||||||||||||
Pharmacy | — | — | 38 | — | — | — | 38 | ||||||||||||||||||||
Total services revenue | 4 | 304 | 171 | — | 4 | — | 483 | ||||||||||||||||||||
Total revenues - external customers | 22,683 | 3,677 | 171 | 530 | 23 | — | 27,084 | ||||||||||||||||||||
Intersegment revenues | |||||||||||||||||||||||||||
Services | — | 10 | 8,619 | — | — | (8,629 | ) | — | |||||||||||||||||||
Products | — | — | 3,134 | — | — | (3,134 | ) | — | |||||||||||||||||||
Total intersegment revenues | — | 10 | 11,753 | — | — | (11,763 | ) | — | |||||||||||||||||||
Investment income | 49 | 18 | 16 | 2 | 42 | 85 | 212 | ||||||||||||||||||||
Total revenues | 22,732 | 3,705 | 11,940 | 532 | 65 | (11,678 | ) | 27,296 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||
Benefits | 19,723 | 2,598 | — | 242 | 61 | (409 | ) | 22,215 | |||||||||||||||||||
Operating costs | 1,917 | 793 | 11,357 | 102 | 6 | (11,169 | ) | 3,006 | |||||||||||||||||||
Merger termination fee and related costs, net | — | — | — | — | — | (947 | ) | (947 | ) | ||||||||||||||||||
Depreciation and amortization | 115 | 42 | 69 | 7 | — | (49 | ) | 184 | |||||||||||||||||||
Total operating expenses | 21,755 | 3,433 | 11,426 | 351 | 67 | (12,574 | ) | 24,458 | |||||||||||||||||||
Income (loss) from operations | 977 | 272 | 514 | 181 | (2 | ) | 896 | 2,838 | |||||||||||||||||||
Interest expense | — | — | — | — | — | 107 | 107 | ||||||||||||||||||||
Income (loss) before income taxes | $ | 977 | $ | 272 | $ | 514 | $ | 181 | $ | (2 | ) | $ | 789 | $ | 2,731 |
• | Our consolidated pretax results of $726 million for the six months ended June 30, 2018 as compared to $2.7 billion for the six months ended June 30, 2017 were primarily impacted by the loss on the expected sale of KMG recognized during the six months ended June 30, 2018, lower year-over-year pretax earnings in the Retail, Healthcare Services and Individual Commercial segments, and the net gain associated with the terminated Merger Agreement, mainly the break-up fee, that was recorded in the six months ended June 30, 2018. These items were partially offset by higher year-over-year pretax earnings in the Group and Specialty segment in the six months ended June 30, 2017. The year-over-year comparison was further impacted by the guaranty fund assessment expense to support policyholder obligations of Penn Treaty, an unaffiliated long-term care insurance company, recorded in the six months ended June 30, 2017. |
• | In connection with the expected sale of KMG, we recognized a pretax loss, including transaction costs, of $790 million which is reported as loss on business held-for-sale in the accompanying condensed consolidated statements of income for the three and six months ended June 30, 2018. We recorded a deferred tax benefit of $430 million from the loss which is included in the accompanying condensed consolidated statements of income for the three and six months ended June 30, 2018. |
• | Year-over-year comparisons of diluted earnings per common share are favorably impacted by a lower number of shares used to compute earnings per common share from share repurchases and the impact of a lower tax rate for the six months ended June 30, 2018. |
• | Our 2018 results through June 30, 2018 reflect the continued implementation of our strategy to offer our members affordable health care combined with a positive consumer experience in growing markets. At the core of this strategy is our integrated care delivery model, which unites quality care, high member engagement, and sophisticated data analytics. Our approach to primary, physician-directed care for our members aims to provide quality care that is consistent, integrated, cost-effective, and member-focused, provided by both employed physicians and physicians with network contract arrangements. The model is designed to improve health outcomes and affordability for individuals and for the health system as a whole, while offering our members a simple, seamless healthcare experience. We believe this strategy is positioning us for long-term growth in both membership and earnings. We offer providers a continuum of opportunities to increase the |
• | The annual health insurance industry fee was suspended for calendar year 2017, but has resumed in 2018. Operating costs associated with the health insurer fee attributable to the three and six months ended June 30, 2018 was $257 million and $520 million, respectively. This fee is not deductible for tax purposes, which increases our effective income tax rate. The one-year suspension in 2017 of the health insurer fee significantly reduced our operating costs and effective tax rate during the three and six months ended June 30, 2017. The annual health insurance industry fee is also, under current law, suspended for calendar year 2019. |
• | The 2018 quarter includes pretax income from our Individual Commercial business of $18 million, or $0.10 per diluted common share compared to $118 million, or $0.51 per diluted common share, included in the 2017 quarter. The 2018 period includes pretax income from our Individual Commercial business of $71 million, or $0.39 per diluted common share compared to $181 million, or $0.77 per diluted common share, included in the 2017 period. |
• | The 2018 period also includes an adjustment to provisional remeasurement of deferred taxes related to rate change from the tax reform law enacted on December 22, 2017 of $12.7 million, or $0.09 per diluted common share. |
• | We recorded a net gain associated with the terminated Merger Agreement, consisting primarily of the break-up fee, of approximately $947 million, or $4.31 per diluted common share during the six months ended June 30, 2017. Certain costs associated with the Merger were previously not deductible for tax purposes, but became deductible, and were recorded as such in the three months ended March 31, 2017 as a result of the termination of the Merger Agreement. |
• | On March 1, 2017, a court ordered the liquidation of Penn Treaty (an unaffiliated long-term care insurance company), which triggered assessments from state guaranty associations that resulted in our recording a $54 million, or $0.23 per diluted common share, estimate in operating costs in the three months ended March 31, 2017. |
• | On April 2, 2018, the Centers for Medicare and Medicaid Services (CMS) issued its announcement of 2019 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter (the Final Rate Notice). We expect the Final Rate Notice to result in a rate increase for our individual Medicare Advantage business that is slightly lower than CMS’ estimate for the sector, on a comparable basis, excluding the impact of Employer Group Waiver Plan (EGWP) funding changes and quality bonus changes. The difference between our and CMS projections primarily results from the geographic distribution of our members relative to the national average. In addition, the Final Rate Notice clarified that CMS has the authority to permit MA organizations to offer tailored supplemental benefits as recommended by a licensed medical professional. We expect that this additional flexibility will allow us to include supplemental benefits that we believe will improve health outcomes for our members. |
• | On April 24, 2018, we received a Notice of Intent to be Awarded a Comprehensive Medicaid Contract under Florida’s Statewide Managed Medicaid Program in all 11 regions, including the South Florida, Tampa, Jacksonville, and Orlando metro areas. The comprehensive program combines the traditional Medicaid, or TANF, and Long-Term Care programs. The new contract will phase in between December 2018 and February 2019. |
• | The T2017 East Region contract is a consolidation of the former T3 North and South Regions, comprising thirty-two states and approximately 5.9 million TRICARE beneficiaries, under which delivery of health care services commenced on January 1, 2018. The T2017 East Region contract is a 5-year contract set to expire on December 31, 2022 and is subject to renewals on January 1 of each year during its term at the government's option. During 2017, we delivered services under the 5-year T3 South Region contract, which expired on December 31, 2017. |
• | Medicare Advantage and dual demonstration program membership enrolled in a Humana chronic care management program was 752,700 at June 30, 2018, a decrease of 23.3% from 981,600 at June 30, 2017, and 5.3% from 794,900 at December 31, 2017. We have undergone an optimization process that ensures the appropriate level of member interaction with clinicians, including moving members into a monitoring program as their needs change, and graduating them out of the care management program when they no longer benefit from the services. This drives quality outcomes, which has resulted in reduced segment earnings but higher returns on investment. |
For the three months ended June 30, | Change | |||||||||||||
2018 | 2017 | Dollars | Percentage | |||||||||||
(dollars in millions, except per common share results) | ||||||||||||||
Revenues: | ||||||||||||||
Premiums: | ||||||||||||||
Retail | $ | 12,006 | $ | 11,273 | $ | 733 | 6.5 | % | ||||||
Group and Specialty | 1,688 | 1,673 | 15 | 0.9 | % | |||||||||
Individual Commercial | 10 | 247 | (237 | ) | (96.0 | )% | ||||||||
Other Businesses | 9 | 10 | (1 | ) | (10.0 | )% | ||||||||
Total premiums | 13,713 | 13,203 | 510 | 3.9 | % | |||||||||
Services: | ||||||||||||||
Retail | 3 | 2 | 1 | 50.0 | % | |||||||||
Group and Specialty | 208 | 143 | 65 | 45.5 | % | |||||||||
Healthcare Services | 169 | 83 | 86 | 103.6 | % | |||||||||
Other Businesses | 2 | 2 | — | — | % | |||||||||
Total services | 382 | 230 | 152 | 66.1 | % | |||||||||
Investment income | 164 | 101 | 63 | 62.4 | % | |||||||||
Total revenues | 14,259 | 13,534 | 725 | 5.4 | % | |||||||||
Operating expenses: | ||||||||||||||
Benefits | 11,536 | 10,889 | 647 | 5.9 | % | |||||||||
Operating costs | 1,761 | 1,453 | 308 | 21.2 | % | |||||||||
Depreciation and amortization | 100 | 92 | 8 | 8.7 | % | |||||||||
Total operating expenses | 13,397 | 12,434 | 963 | 7.7 | % | |||||||||
Income from operations | 862 | 1,100 | (238 | ) | (21.6 | )% | ||||||||
Loss on business held-for-sale | (790 | ) | — | (790 | ) | (100.0 | )% | |||||||
Interest expense | 53 | 58 | (5 | ) | (8.6 | )% | ||||||||
Income before income taxes | 19 | 1,042 | (1,023 | ) | (98.2 | )% | ||||||||
(Benefit) provision for income taxes | (174 | ) | 392 | (566 | ) | (144.4 | )% | |||||||
Net income | $ | 193 | $ | 650 | $ | (457 | ) | (70.3 | )% | |||||
Diluted earnings per common share | $ | 1.39 | $ | 4.46 | $ | (3.07 | ) | (68.8 | )% | |||||
Benefit ratio (a) | 84.1 | % | 82.5 | % | 1.6 | % | ||||||||
Operating cost ratio (b) | 12.5 | % | 10.8 | % | 1.7 | % | ||||||||
Effective tax rate | n/m | 37.6 | % | n/m |
n/m | - not meaningful |
(a) | Represents total benefits expense as a percentage of premiums revenue. |
(b) | Represents total operating costs and depreciation and amortization, as a percentage of total revenues less investment income. |
For the six months ended June 30, | Change | |||||||||||||
2018 | 2017 | Dollars | Percentage | |||||||||||
(dollars in millions, except per common share results) | ||||||||||||||
Revenues: | ||||||||||||||
Premiums: | ||||||||||||||
Retail | $ | 24,074 | $ | 22,679 | $ | 1,395 | 6.2 | % | ||||||
Group and Specialty | 3,427 | 3,373 | 54 | 1.6 | % | |||||||||
Individual Commercial | 5 | 530 | (525 | ) | (99.1 | )% | ||||||||
Other Businesses | 18 | 19 | (1 | ) | (5.3 | )% | ||||||||
Total premiums | 27,524 | 26,601 | 923 | 3.5 | % | |||||||||
Services: | ||||||||||||||
Retail | 5 | 4 | 1 | 25.0 | % | |||||||||
Group and Specialty | 427 | 304 | 123 | 40.5 | % | |||||||||
Healthcare Services | 273 | 171 | 102 | 59.6 | % | |||||||||
Other Businesses | 4 | 4 | — | — | % | |||||||||
Total services | 709 | 483 | 226 | 46.8 | % | |||||||||
Investment income | 305 | 212 | 93 | 43.9 | % | |||||||||
Total revenues | 28,538 | 27,296 | 1,242 | 4.6 | % | |||||||||
Operating expenses: | ||||||||||||||
Benefits | 23,206 | 22,215 | 991 | 4.5 | % | |||||||||
Operating costs | 3,510 | 3,006 | 504 | 16.8 | % | |||||||||
Merger termination fee and related costs, net | — | (947 | ) | 947 | 100.0 | % | ||||||||
Depreciation and amortization | 200 | 184 | 16 | 8.7 | % | |||||||||
Total operating expenses | 26,916 | 24,458 | 2,458 | 10.0 | % | |||||||||
Income from operations | 1,622 | 2,838 | (1,216 | ) | (42.8 | )% | ||||||||
Loss on business held-for-sale | (790 | ) | — | (790 | ) | (100.0 | )% | |||||||
Interest expense | 106 | 107 | (1 | ) | (0.9 | )% | ||||||||
Income before income taxes | 726 | 2,731 | (2,005 | ) | (73.4 | )% | ||||||||
Provision for income taxes | 42 | 966 | (924 | ) | (95.7 | )% | ||||||||
Net income | $ | 684 | $ | 1,765 | $ | (1,081 | ) | (61.2 | )% | |||||
Diluted earnings per common share | $ | 4.93 | $ | 11.98 | $ | (7.05 | ) | (58.8 | )% | |||||
Benefit ratio (a) | 84.3 | % | 83.5 | % | 0.8 | % | ||||||||
Operating cost ratio (b) | 12.4 | % | 11.1 | % | 1.3 | % | ||||||||
Effective tax rate | 5.8 | % | 35.4 | % | (29.6 | )% |
(a) | Represents total benefits expense as a percentage of premiums revenue. |
(b) | Represents total operating costs, excluding Merger termination fee and related costs, net, and depreciation and amortization, as a percentage of total revenues less investment income. |
June 30, | Change | ||||||||||
2018 | 2017 | Members | Percentage | ||||||||
Membership: | |||||||||||
Medical membership: | |||||||||||
Individual Medicare Advantage | 3,027,200 | 2,840,100 | 187,100 | 6.6 | % | ||||||
Group Medicare Advantage | 493,100 | 433,400 | 59,700 | 13.8 | % | ||||||
Medicare stand-alone PDP | 5,008,200 | 5,236,400 | (228,200 | ) | (4.4 | )% | |||||
Total Retail Medicare | 8,528,500 | 8,509,900 | 18,600 | 0.2 | % | ||||||
State-based Medicaid | 325,200 | 374,900 | (49,700 | ) | (13.3 | )% | |||||
Medicare Supplement | 241,500 | 232,700 | 8,800 | 3.8 | % | ||||||
Total Retail medical members | 9,095,200 | 9,117,500 | (22,300 | ) | (0.2 | )% |
For the three months ended June 30, | Change | |||||||||||||
2018 | 2017 | Dollars | Percentage | |||||||||||
(in millions) | ||||||||||||||
Premiums and Services Revenue: | ||||||||||||||
Premiums: | ||||||||||||||
Individual Medicare Advantage | $ | 8,908 | $ | 8,282 | $ | 626 | 7.6 | % | ||||||
Group Medicare Advantage | 1,509 | 1,277 | 232 | 18.2 | % | |||||||||
Medicare stand-alone PDP | 914 | 925 | (11 | ) | (1.2 | )% | ||||||||
Total Retail Medicare | 11,331 | 10,484 | 847 | 8.1 | % | |||||||||
State-based Medicaid | 550 | 671 | (121 | ) | (18.0 | )% | ||||||||
Medicare Supplement | 125 | 118 | 7 | 5.9 | % | |||||||||
Total premiums | 12,006 | 11,273 | 733 | 6.5 | % | |||||||||
Services | 3 | 2 | 1 | 50.0 | % | |||||||||
Total premiums and services revenue | $ | 12,009 | $ | 11,275 | $ | 734 | 6.5 | % | ||||||
Income before income taxes | $ | 493 | $ | 607 | $ | (114 | ) | (18.8 | )% | |||||
Benefit ratio | 85.5 | % | 85.8 | % | (0.3 | )% | ||||||||
Operating cost ratio | 10.1 | % | 8.5 | % | 1.6 | % |
For the six months ended June 30, | Change | |||||||||||||
2018 | 2017 | Dollars | Percentage | |||||||||||
(in millions) | ||||||||||||||
Premiums and Services Revenue: | ||||||||||||||
Premiums: | ||||||||||||||
Individual Medicare Advantage | $ | 17,878 | $ | 16,658 | $ | 1,220 | 7.3 | % | ||||||
Group Medicare Advantage | 3,033 | 2,595 | 438 | 16.9 | % | |||||||||
Medicare stand-alone PDP | 1,810 | 1,866 | (56 | ) | (3.0 | )% | ||||||||
Total Retail Medicare | 22,721 | 21,119 | 1,602 | 7.6 | % | |||||||||
State-based Medicaid | 1,103 | 1,324 | (221 | ) | (16.7 | )% | ||||||||
Medicare Supplement | 250 | 236 | 14 | 5.9 | % | |||||||||
Total premiums | 24,074 | 22,679 | 1,395 | 6.2 | % | |||||||||
Services | 5 | 4 | 1 | 25.0 | % | |||||||||
Total premiums and services revenue | $ | 24,079 | $ | 22,683 | $ | 1,396 | 6.2 | % | ||||||
Income before income taxes | $ | 760 | $ | 977 | $ | (217 | ) | (22.2 | )% | |||||
Benefit ratio | 86.5 | % | 87.0 | % | (0.5 | )% | ||||||||
Operating cost ratio | 10.1 | % | 8.5 | % | 1.6 | % |
• | Retail segment pretax income was $493 million in the 2018 quarter, a decrease of $114 million, or 18.8%, compared to $607 million in the 2017 quarter and was $760 million in the 2018 period, a decrease of $217 million, or 22.2%, compared to $977 million in the 2017 period. These decreases primarily were due to the result of the investment in benefit design for 2018 Medicare Advantage offerings further discussed below, investments made in the 2018 quarter as a result of the Tax Reform Law as previously described, and lower favorable prior-period reserve development. These items were partially offset by the significant operating cost efficiencies further discussed below. The 2018 period was also impacted by a more severe flu season. |
• | Individual Medicare Advantage membership increased 187,100 members, or 6.6%, from June 30, 2017 to June 30, 2018, primarily due to membership additions associated with the most recent Annual Election Period, or AEP, for Medicare beneficiaries. |
• | Group Medicare Advantage membership increased 59,700, or 13.8%, from June 30, 2017 to June 30, 2018, primarily due to increased sales to our existing group accounts during the most recent AEP for Medicare beneficiaries. |
• | Medicare stand-alone PDP membership decreased 228,200 members, or 4.4%, from June 30, 2017 to June 30, 2018 reflecting net declines during the most recent AEP for Medicare beneficiaries. These declines primarily resulted from the previously disclosed loss of auto assigned members in Florida and South Carolina due to pricing over CMS low income benchmark and continued membership declines in our Enhanced Plan. In addition, growth in our co-branded Walmart plan was significantly lower than historic levels due to the introduction of additional low-priced competitor offerings in many regions. |
• | State-based Medicaid membership decreased 49,700 members, or 13.3%, from June 30, 2017 to June 30, 2018, primarily driven by the previously disclosed decision to not participate in Illinois' Integrated Program Medicaid contract, along with lower membership associated with our Florida Medicaid contract due to overall strengthening economic conditions. |
• | Retail segment premiums increased $733 million, or 6.5%, from the 2017 quarter to the 2018 quarter and increased $1.4 billion, or 6.2%, from the 2017 period to the 2018 period primarily due to individual and group Medicare Advantage membership growth in the most recent AEP as well as increased per-member premiums for certain products within the segment, partially offset by declines in the state-based contracts and stand-alone PDP revenues resulting from membership declines discussed above. Average group and individual Medicare Advantage membership increased 7.4% for both the 2018 quarter and 2018 period. Average membership is calculated by summing the ending membership for each month in a period and dividing the result by the number of months in a period. Premiums revenue reflects changes in membership and average per-member premiums. Items impacting average per-member premiums include changes in premium rates as well as changes in the geographic mix of membership, the mix of product offerings, and the mix of benefit plans selected by our membership. |
• | The Retail segment benefit ratio decreased 30 basis points from 85.8% in the 2017 quarter to 85.5% in the 2018 quarter and decreased 50 basis points from 87.0% in the 2017 period to 86.5% in the 2018 period. These decreases were primarily due to the reinstatement of the health insurance industry fee in 2018 which was contemplated in the pricing and benefit design of our products. This was partially offset by the unfavorable impact from the enhanced 2018 Medicare Advantage member benefits resulting from the investment of the better than expected 2017 individual Medicare Advantage pretax earnings and lower favorable prior-period reserve development. The 2018 period was also impacted by a more severe flu season. |
• | The Retail segment’s benefits expense for the 2018 quarter included $60 million in favorable prior-period medical claims reserve development versus $83 million in the 2017 quarter. For the 2018 period, the Retail segment’s benefit expense include the beneficial effect of $247 million in favorable prior-period reserve development versus $287 million in the 2017 period. Prior-period medical claims reserve development decreased the Retail segment benefit ratio by approximately 50 basis points in the 2018 quarter versus approximately 70 basis points in the 2017 quarter. Favorable prior-period reserve development decreased the Retail segment benefit ratio by approximately 100 basis points in the 2018 period versus approximately 130 basis points in the 2017 period. |
• | The Retail segment operating cost ratio of 10.1% for the 2018 quarter increased 160 basis points from 8.5% for the 2017 quarter. The Retail segment operating cost ratio of 10.1% for the 2018 period increased 160 basis points from 8.5% for the 2017 period. The year-over-year comparison was negatively impacted by the reinstatement of the health insurance industry fee in 2018 and strategic investments made in the 2018 quarter as a result of the Tax Reform Law. These items were partially offset by significant operating cost efficiencies in the 2018 quarter driven by productivity initiatives implemented in 2017. The non-deductible health insurance industry fee impacted the operating cost ratio by 190 basis points in both the 2018 quarter and the 2018 period. |
June 30, | Change | ||||||||||
2018 | 2017 | Members | Percentage | ||||||||
Membership: | |||||||||||
Medical membership: | |||||||||||
Fully-insured commercial group | 1,050,900 | 1,107,500 | (56,600 | ) | (5.1 | )% | |||||
ASO | 458,800 | 446,800 | 12,000 | 2.7 | % | ||||||
Military services | 5,931,500 | 3,088,600 | 2,842,900 | 92.0 | % | ||||||
Total group and specialty medical members | 7,441,200 | 4,642,900 | 2,798,300 | 60.3 | % | ||||||
Specialty membership (a) | 6,227,700 | 6,917,800 | (690,100 | ) | (10.0 | )% |
(a) | Specialty products include dental, vision, voluntary benefit products and other supplemental health and financial protection products. Members included in these products may not be unique to each product since members have the ability to enroll in multiple products. |
For the three months ended June 30, | Change | |||||||||||||
2018 | 2017 | Dollars | Percentage | |||||||||||
(in millions) | ||||||||||||||
Premiums and Services Revenue: | ||||||||||||||
Premiums: | ||||||||||||||
Fully-insured commercial group | $ | 1,346 | $ | 1,350 | $ | (4 | ) | (0.3 | )% | |||||
Group specialty | 342 | 323 | 19 | 5.9 | % | |||||||||
Total premiums | 1,688 | 1,673 | 15 | 0.9 | % | |||||||||
Services | 208 | 143 | 65 | 45.5 | % | |||||||||
Total premiums and services revenue | $ | 1,896 | $ | 1,816 | $ | 80 | 4.4 | % | ||||||
Income before income taxes | $ | 80 | $ | 101 | $ | (21 | ) | (20.8 | )% | |||||
Benefit ratio | 80.4 | % | 78.4 | % | 2.0 | % | ||||||||
Operating cost ratio | 23.5 | % | 21.6 | % | 1.9 | % |
For the six months ended June 30, | Change | |||||||||||||
2018 | 2017 | Dollars | Percentage | |||||||||||
(in millions) | ||||||||||||||
Premiums and Services Revenue: | ||||||||||||||
Premiums: | ||||||||||||||
Fully-insured commercial group | $ | 2,738 | $ | 2,728 | $ | 10 | 0.4 | % | ||||||
Group specialty | 689 | 645 | 44 | 6.8 | % | |||||||||
Total premiums | 3,427 | 3,373 | 54 | 1.6 | % | |||||||||
Services | 427 | 304 | 123 | 40.5 | % | |||||||||
Total premiums and services revenue | $ | 3,854 | $ | 3,677 | $ | 177 | 4.8 | % | ||||||
Income before income taxes | $ | 291 | $ | 272 | $ | 19 | 7.0 | % | ||||||
Benefit ratio | 76.7 | % | 77.0 | % | (0.3 | )% | ||||||||
Operating cost ratio | 23.6 | % | 21.5 | % | 2.1 | % |
• | Group and Specialty segment pretax income decreased $21 million, or 20.8%, from $101 million in the 2017 quarter to $80 million in the 2018 quarter primarily reflecting the increase in the benefit ratio, partially offset by higher pretax earnings associated with our military services and specialty businesses. Group and Specialty segment pretax income increased $19 million, or 7.0%, from $272 million in the 2017 period to $291 million in the 2018 period primarily reflecting a decrease in the benefit ratio along with higher pretax earnings associated with our military business. |
• | Fully-insured commercial group medical membership decreased 56,600 members, or 5.1%, from June 30, 2017 to June 30, 2018 reflecting lower membership in small group accounts due in part to more small group accounts selecting level-funded ASO products in 2018. |
• | Group ASO commercial medical membership increased 12,000 members, or 2.7%, from June 30, 2017 to June 30, 2018 reflecting more small group accounts selecting level-funded ASO products in 2018, partially offset by the loss of certain large group accounts as a result of continued discipline in pricing of services for self-funded accounts amid a highly competitive environment. |
• | Military services membership increased 2,842,900 members, or 92.0%, from June 30, 2017 to June 30, 2018 primarily due to our transition to providing healthcare services to military service members, retirees, and their families under the new T2017 East Region contract covering 32 states, which became effective January 1, 2018. |
• | Specialty membership decreased 690,100 members, or 10.0%, from June 30, 2017 to June 30, 2018 primarily due to reinsuring a portion of our voluntary benefits and financial protection products membership to a third party in connection with the previously disclosed expected sale of KMG, as well as the losses of some large group accounts offering stand-alone dental and vision products. These decreases were partially offset by an increase in individual dental and vision membership. |
• | Group and Specialty segment premiums increased $15 million, or 0.9%, from the 2017 quarter to $1.7 billion for the 2018 quarter and increased $54 million, or 1.6%, from the 2017 period to $3.4 billion for the 2018 period. These increases were primarily due to higher stop-loss premiums related to our small group level |
• | Group and Specialty segment services revenue increased $65 million, or 45.5%, from the 2017 quarter to $208 million for the 2018 quarter and increased $123 million, or 40.5%, from the 2017 period to $427 million for the 2018 period as a result of the transition to the TRICARE T2017 East Region contract on January 1, 2018. |
• | The Group and Specialty segment benefit ratio increased 200 basis points from 78.4% in the 2017 quarter to 80.4% in the 2018 quarter primarily due to the unfavorable impact of seasonality on our fully-insured medical claims, the impact of the unfavorable comparison of the favorable prior-period reserve development, the impact of lower premiums resulting from the adjustment of our commercial risk adjustment, or CRA, accrual related to the Affordable Care Act, or ACA, compliant business resulting from the release of the Centers for Medicare & Medicaid Services' final 2017 CRA data. Also contributing was a change in membership mix, including the expected migration of healthier groups to ASO level funded products in 2018, which is occurring at an accelerated pace relative to our initial expectations. These factors were partially offset by the reinstatement of the health insurance industry fee in 2018 which was contemplated in the pricing of our products. The Group and Specialty segment benefit ratio decreased 30 basis points from 77.0% in the 2017 period to 76.7% in the 2018 period primarily due to the reinstatement of the health insurance industry fee in 2018, partially offset by the same unfavorable factors in the year-over-year quarter comparison, excluding the impact of the favorable prior-period reserve development. |
• | The Group and Specialty segment's benefits expense included $11 million in favorable prior-period medical claims reserve development in the 2017 quarter versus none in the 2018 quarter. This favorable prior-period medical claims reserve development decreased the Group and Specialty segment benefit ratio by approximately 70 basis points in the 2017 quarter. The Group and Specialty segment's benefits expense included the beneficial effect of a favorable prior-period medical claims reserve development of $34 million in the 2018 period versus $31 million in the 2017 period. This favorable prior-period medical claims reserve development decreased the Group and Specialty segment benefit ratio by approximately 100 basis points in the 2018 period and 90 basis points in the 2017 period. |
• | The Group and Specialty segment operating cost ratio of 23.5% for the 2018 quarter increased 190 basis points from 21.6% for the 2017 quarter. For the 2018 period, the Group and Specialty segment operating cost ratio of 23.6% increased 210 basis points from 21.5% for the 2017 period. These increases primarily were due to the reinstatement of the health insurance industry fee in 2018, growth in our military services business, which carries a higher operating cost ratio than other products within the segment, as a result of the transition to the TRICARE T2017 East Region contract, and investments made in the 2018 quarter as a result of the Tax Reform Law as previously described. These items were partially offset by significant operating cost efficiencies in the 2018 quarter driven by productivity initiatives implemented in 2017. The non-deductible health insurance industry fee impacted the operating cost ratio by 160 basis points in both the 2018 quarter and the 2018 period. |
For the three months ended June 30, | Change | |||||||||||||
2018 | 2017 | Dollars | Percentage | |||||||||||
(in millions) | ||||||||||||||
Revenues: | ||||||||||||||
Services: | ||||||||||||||
Pharmacy solutions | $ | 57 | $ | 20 | $ | 37 | 185.0 | % | ||||||
Clinical care services | 45 | 46 | (1 | ) | (2.2 | )% | ||||||||
Provider services | 67 | 17 | 50 | 294.1 | % | |||||||||
Total services revenues | 169 | 83 | 86 | 103.6 | % | |||||||||
Intersegment revenues: | ||||||||||||||
Pharmacy solutions | 5,094 | 5,194 | (100 | ) | (1.9 | )% | ||||||||
Provider services | 541 | 397 | 144 | 36.3 | % | |||||||||
Clinical care services | 170 | 300 | (130 | ) | (43.3 | )% | ||||||||
Total intersegment revenues | 5,805 | 5,891 | (86 | ) | (1.5 | )% | ||||||||
Total services and intersegment revenues | $ | 5,974 | $ | 5,974 | $ | — | — | % | ||||||
Income before income taxes | $ | 206 | $ | 270 | $ | (64 | ) | (23.7 | )% | |||||
Operating cost ratio | 96.2 | % | 95.0 | % | 1.2 | % |
For the six months ended June 30, | Change | |||||||||||||
2018 | 2017 | Dollars | Percentage | |||||||||||
(in millions) | ||||||||||||||
Revenues: | ||||||||||||||
Services: | ||||||||||||||
Pharmacy solutions | $ | 96 | $ | 38 | $ | 58 | 152.6 | % | ||||||
Clinical care services | 89 | 96 | (7 | ) | (7.3 | )% | ||||||||
Provider services | 88 | 37 | 51 | 137.8 | % | |||||||||
Total services revenues | 273 | 171 | 102 | 59.6 | % | |||||||||
Intersegment revenues: | ||||||||||||||
Pharmacy solutions | 10,089 | 10,335 | (246 | ) | (2.4 | )% | ||||||||
Provider services | 919 | 815 | 104 | 12.8 | % | |||||||||
Clinical care services | 350 | 603 | (253 | ) | (42.0 | )% | ||||||||
Total intersegment revenues | 11,358 | 11,753 | (395 | ) | (3.4 | )% | ||||||||
Total services and intersegment revenues | $ | 11,631 | $ | 11,924 | $ | (293 | ) | (2.5 | )% | |||||
Income before income taxes | $ | 379 | $ | 514 | $ | (135 | ) | (26.3 | )% | |||||
Operating cost ratio | 96.2 | % | 95.2 | % | 1.0 | % |
• | Healthcare Services segment pretax income of $206 million for the 2018 quarter decreased $64 million, or 23.7%, from $270 million in the 2017 quarter. For the 2018 period, the Healthcare Services segment pretax income of $379 million decreased $135 million, or 26.3%, from $514 million in the 2017 period. These decreases primarily were due to the impact of the optimization process associated with our chronic care |
• | Humana Pharmacy Solutions script volumes on an adjusted 30-day equivalent basis increased to approximately 110 million in the 2018 quarter, up 1.9%, versus scripts of approximately 108 million in the 2017 quarter. For the 2018 period, script volumes increased to approximately 218 million, up 1.5%, versus scripts of approximately 215 million in the 2017 period. These increases primarily reflected growth associated with higher individual Medicare Advantage membership, partially offset by the decline in stand-alone PDP and Individual Commercial membership. |
• | Services revenues increased $86 million, or 103.6%, from the 2017 quarter to $169 million for the 2018 quarter and increased $102 million, or 59.6%, from the 2017 period to $273 million for the 2018 period primarily due to service revenue growth from our provider services and pharmacy solutions businesses. |
• | Intersegment revenues decreased $86 million, or 1.5%, from the 2017 quarter to $5.8 billion for the 2018 quarter and decreased $395 million, or 3.4%, from the 2017 period to $11.4 billion for the 2018 period primarily due to the loss of intersegment revenues associated with our exit from the Individual commercial business, a decline in pharmacy solutions revenue year-over-year primarily due to lower stand-alone PDP membership, the result of improving the effectiveness of our chronic care management programs previously discussed, and the impact to our provider services business of the lower Medicare rates year-over-year in geographies where our provider assets are primarily located. These declines were partially offset by Medicare Advantage membership growth in both the 2018 quarter and period, as well higher revenues associated with our provider services business reflecting our previously disclosed acquisition of MCCI Holdings, LLC. |
• | The Healthcare Services segment operating cost ratio of 96.2% for the 2018 quarter increased 120 basis points from 95.0% for the 2017 quarter and increased 100 basis points from 95.2% for the 2017 period to 96.2% for the 2018 period primarily due to the lag in operating cost reduction associated with improving the effectiveness of our chronic conditions management programs, as compared to the timing of reduction in revenue, and the long-term sustainability investments in the 2018 quarter and period as a result of the Tax Reform Law. These items were partially offset by significant operating cost efficiencies in the 2018 quarter and period driven by productivity initiatives implemented in 2017. |
• | Individual Commercial segment pretax income of $18 million for the 2018 quarter decreased $100 million from the 2017 quarter and decreased $110 million from the 2017 period. The pretax income in the 2018 quarter and period primarily reflects the impact of favorable prior-period reserve development. |
Six Months Ended | |||||||
2018 | 2017 | ||||||
(in millions) | |||||||
Net cash provided by operating activities | $ | 3,561 | $ | 4,099 | |||
Net cash used in investing activities | (287 | ) | (1,078 | ) | |||
Net cash provided by financing activities | 1,515 | 1,241 | |||||
Increase in cash and cash equivalents | $ | 4,789 | $ | 4,262 |
June 30, 2018 | December 31, 2017 | 2018 Period Change | 2017 Period Change | ||||||||||||
(in millions) | |||||||||||||||
IBNR (1) | $ | 3,430 | $ | 3,154 | $ | 276 | $ | (117 | ) | ||||||
Reported claims in process (2) | 732 | 614 | 118 | (73 | ) | ||||||||||
Other benefits payable (3) | 916 | 900 | 16 | 465 | |||||||||||
Total benefits payable (4) | $ | 5,078 | $ | 4,668 | $ | 410 | $ | 275 |
(1) | IBNR represents an estimate of benefits payable for claims incurred but not reported (IBNR) at the balance sheet date and includes unprocessed claim inventories. The level of IBNR is primarily impacted by membership levels, medical claim trends and the receipt cycle time, which represents the length of time between when a claim is initially incurred and when the claim form is received and processed (i.e. a shorter time span results in a lower IBNR). IBNR includes unprocessed claims inventories. |
(2) | Reported claims in process represents the estimated valuation of processed claims that are in the post claim adjudication process, which consists of administrative functions such as audit and check batching and handling, as well as amounts owed to our pharmacy benefit administrator which fluctuate due to bi-weekly payments and the month-end cutoff. |
(3) | Other benefits payable primarily include amounts owed to providers under capitated and risk sharing arrangements. |
(4) | Includes $58 million classified as held-for-sale at June 30, 2018. |
June 30, 2018 | December 31, 2017 | 2018 Period Change | 2017 Period Change | ||||||||||||
(in millions) | |||||||||||||||
Medicare | $ | 1,181 | $ | 511 | $ | 670 | $ | 952 | |||||||
Commercial and other | 238 | 273 | (35 | ) | 139 | ||||||||||
Military services | 132 | 166 | (34 | ) | 33 | ||||||||||
Allowance for doubtful accounts | (80 | ) | (96 | ) | 16 | 26 | |||||||||
Total net receivables | $ | 1,471 | $ | 854 | $ | 617 | $ | 1,150 | |||||||
Reconciliation to cash flow statement: | |||||||||||||||
Change in receivables held-for-sale | 2 | — | |||||||||||||
Change in receivables per cash flow statement resulting in cash from operations | $ | 619 | $ | 1,150 |
Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds |
(a) | None. |
(b) | N/A |
(c) | The following table provides information about our purchases of equity securities that are registered by us pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, during the three months ended June 30, 2018: |
Period | Total Number of Shares Purchased (1)(2) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)(2) | Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) | |||||||||
April 2018 | — | $ | — | — | $ | 2,000,000,000 | |||||||
May 2018 | — | — | — | 2,000,000,000 | |||||||||
June 2018 | 78,423 | 299.47 | 78,423 | 1,976,514,548 | |||||||||
Total | 78,423 | $ | 299.47 | 78,423 |
(1) | On December 14, 2017, our Board of Directors authorized the repurchase of up to $3.0 billion of our common shares expiring on December 31, 2020, exclusive of shares repurchased in connection with employee stock plans. Under the current 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 bankers), subject to certain regulatory restrictions on volume, pricing, and timing. Our remaining repurchase authorization was approximately $2 billion as of August 1, 2018. |
(2) | Excludes 0.25 million shares repurchased in connection with employee stock plans. |
Item 3: | Defaults Upon Senior Securities |
Item 4: | Mine Safety Disclosures |
Item 5: | Other Information |
Item 6: | Exhibits |
3(i) | Restated Certificate of Incorporation of Humana Inc. filed with the Secretary of State of Delaware on November 9, 1989, as restated to incorporate the amendment of January 9, 1992, and the correction of March 23, 1992 (incorporated herein by reference to Exhibit 4(i) to Humana Inc.’s Post-Effective Amendment No. 1 to the Registration Statement on Form S-8 (Reg. No. 33-49305) filed February 2, 1994). |
101 | The following materials from Humana Inc.'s Quarterly Report on Form 10-Q formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at June 30, 2018 and December 31, 2017; (ii) the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2018 and 2017; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2018 and 2017; (iv) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017; and (v) Notes to Condensed Consolidated Financial Statements. |
HUMANA INC. | |||
(Registrant) | |||
Date: | August 1, 2018 | By: | /s/ CYNTHIA H. ZIPPERLE |
Cynthia H. Zipperle | |||
Senior Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) | |||
For the six months ended June 30, | For the twelve months ended December 31, | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
Income before income taxes | $ | 726 | $ | 4,020 | $ | 1,552 | $ | 2,431 | $ | 2,170 | $ | 1,921 | |||||||||||
Fixed charges | 131 | 310 | 249 | 253 | 267 | 216 | |||||||||||||||||
Total earnings | $ | 857 | $ | 4,330 | $ | 1,801 | $ | 2,684 | $ | 2,437 | $ | 2,137 | |||||||||||
Interest charged to expense | $ | 106 | $ | 242 | $ | 189 | $ | 186 | $ | 192 | $ | 140 | |||||||||||
One-third of rent expense | 25 | 68 | 60 | 67 | 75 | 76 | |||||||||||||||||
Total fixed charges | $ | 131 | $ | 310 | $ | 249 | $ | 253 | $ | 267 | $ | 216 | |||||||||||
Ratio of earnings to fixed charges (1)(2) | 6.5x | 14.0x | 7.2x | 10.6x | 9.1x | 9.9x | |||||||||||||||||
(1) | For the purposes of determining the ratio of earnings to fixed charges, earnings consist of income before income taxes and fixed charges. Fixed charges include gross interest expense, amortization of deferred financing expenses and an amount equivalent to interest included in rental charges. One-third of rental expense represents a reasonable approximation of the interest amount. |
(2) | There are no shares of preferred stock outstanding. |
Date: | August 1, 2018 |
Signature: | /s/ Bruce D. Broussard |
Bruce D. Broussard Principal Executive Officer |
Date: | August 1, 2018 | |
Signature: | /s/ Brian A. Kane | |
Brian A. Kane Principal Financial Officer |
/s/ Bruce D. Broussard |
Bruce D. Broussard Principal Executive Officer |
August 1, 2018 |
/s/ Brian A. Kane |
Brian A. Kane Principal Financial Officer |
August 1, 2018 |
Document and Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2018
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Document And Entity Information [Abstract] | |
Entity Registrant Name | HUMANA INC |
Entity Central Index Key | 0000049071 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | Q2 |
Trading Symbol | HUM |
Entity Common Stock, Shares Outstanding | 137,763,407 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
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Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 80 | $ 96 |
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) | 198,591,361 | 198,572,458 |
Treasury stock, shares (in shares) | 60,827,954 | 60,893,762 |
Condensed Consolidated Statements Of Income - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Revenues: | ||||
Premiums | $ 13,713 | $ 13,203 | $ 27,524 | $ 26,601 |
Services | 382 | 230 | 709 | 483 |
Investment income | 164 | 101 | 305 | 212 |
Total revenues | 14,259 | 13,534 | 28,538 | 27,296 |
Operating expenses: | ||||
Benefits | 11,536 | 10,889 | 23,206 | 22,215 |
Operating costs | 1,761 | 1,453 | 3,510 | 3,006 |
Merger termination fee and related costs, net | 0 | 0 | 0 | (947) |
Depreciation and amortization | 100 | 92 | 200 | 184 |
Total operating expenses | 13,397 | 12,434 | 26,916 | 24,458 |
Income (loss) from operations | 862 | 1,100 | 1,622 | 2,838 |
Loss on business held-for-sale | (790) | (790) | 0 | |
Interest expense | 53 | 58 | 106 | 107 |
Income (loss) before income taxes | 19 | 1,042 | 726 | 2,731 |
(Benefit) provision for income taxes | (174) | 392 | 42 | 966 |
Net income | $ 193 | $ 650 | $ 684 | $ 1,765 |
Basic earnings per common share (in dollars per share) | $ 1.40 | $ 4.49 | $ 4.96 | $ 12.07 |
Diluted earnings per common share (in dollars per share) | 1.39 | 4.46 | 4.93 | 11.98 |
Dividends declared per common share (in dollars per share) | $ 0.5 | $ 0.40 | $ 1 | $ 0.8 |
Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 193 | $ 650 | $ 684 | $ 1,765 |
Other comprehensive (loss) income: | ||||
Change in gross unrealized investment gains/losses | (9) | 88 | (212) | 126 |
Effect of income taxes | 2 | (33) | 54 | (47) |
Total change in unrealized investment gains/losses, net of tax | (7) | 55 | (158) | 79 |
Reclassification adjustment for net realized gains | (23) | (2) | (52) | (28) |
Effect of income taxes | 8 | 0 | 15 | 10 |
Total reclassification adjustment, net of tax | (15) | (2) | (37) | (18) |
Other comprehensive (loss) income, net of tax | (22) | 53 | (195) | 61 |
Comprehensive income | $ 171 | $ 703 | $ 489 | $ 1,826 |
Condensed Consolidated Statements Of Cash Flows (Parenthetical) $ in Millions |
Jun. 30, 2018
USD ($)
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Disposal Group, Held-for-sale, Not Discontinued Operations | |
Cash and cash equivalents | $ 779 |
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS |
6 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS | BASIS OF PRESENTATION AND SIGNIFICANT EVENTS The accompanying condensed consolidated financial statements are presented in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America, or GAAP, or those normally made in an Annual Report on Form 10-K. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. For further information, the reader of this Form 10-Q should refer to our Form 10-K for the year ended December 31, 2017, that was filed with the Securities and Exchange Commission, or the SEC, on February 16, 2018. We refer to the Form 10-K as the “2017 Form 10-K” in this document. References throughout this document to “we,” “us,” “our,” “Company,” and “Humana” mean Humana Inc. and its subsidiaries. The preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, future policy benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. Refer to Note 2 to the consolidated financial statements included in our 2017 Form 10-K for information on accounting policies that we consider in preparing our consolidated financial statements. The financial information has been prepared in accordance with our customary accounting practices and has not been audited. In our opinion, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature. Acquisition of a 40% Minority Interest in Kindred’s Homecare Business and Curo Health Services On July 2, 2018 we completed the acquisition of a 40% minority interest in the Kindred at Home Division, or Kindred at Home, of Kindred Healthcare, Inc., or Kindred, for cash consideration of approximately $850 million, including our share of transaction and related expenses. TPG Capital, or TPG, and Welsh, Carson, Anderson & Stowe, or WCAS, collectively, the Sponsors, along with us jointly created a consortium to purchase all of the outstanding and issued securities of Kindred. Immediately following the closing of that transaction, Kindred at Home and the Specialty Hospital company were separated, with the result being that the Long Term Acute Care and Rehabilitation businesses (the Specialty Hospital Company) is owned by the Sponsors and Kindred at Home is owned by a joint venture owned by the Sponsors and us. On July 11, 2018, we, along with the same Kindred at Home Sponsors, TPG and WCAS, collectively referred to as the "Consortium," completed the acquisition of privately-held Curo Health Services, or Curo, one of the nation's leading hospice operators providing care to patients at 245 locations in 22 states. The transaction was structured as a merger of Curo with the hospice business of Kindred at Home, and we thereby purchased a 40% minority interest in Curo for cash consideration of approximately $250 million. We have entered into a shareholders agreement with the Sponsors that will provide for certain rights and obligations of each party. The shareholders agreement with the Sponsors includes a put option under which they have the right to require us to purchase their interest in the joint venture starting at the end of year three and ending at the end of year four following the closing. Likewise, we have a call option under which we have the right to require the Sponsors to sell their interest in the joint venture to Humana beginning at the end of year four and ending at the end of year five following the closing. Workforce Optimization During the third quarter of 2017, we initiated a voluntary early retirement program and an involuntary workforce reduction program. These programs impacted approximately 3,600 associates, or 7.8%, of our workforce in 2017. As a result, in 2017 we recorded charges of $148 million, or $0.64 per diluted common share. At December 31, 2017, $140 million was classified as a current liability, included in our condensed consolidated balance sheet in the trade accounts payable and accrued expenses line. Payments under these programs are being made upon termination during the early retirement or severance pay period. The remaining workforce optimization liability at June 30, 2018 was $52 million and is expected to be paid in 2018. Aetna Merger On February 16, 2017, under the terms of the Agreement and Plan of Merger, or Merger Agreement, with Aetna Inc., and certain wholly owned subsidiaries of Aetna Inc., which we collectively refer to as Aetna, we received a breakup fee of $1 billion from Aetna, which is included in our consolidated statement of income in the line captioned "Merger termination fee and related costs, net." Revenue Recognition Our revenues include premium and service revenues. Service revenues include administrative service fees that are recorded based upon established per member per month rates and the number of members for the month and are recognized as services are provided for the month. Additionally, service revenues include net patient service revenues that are recorded based upon established billing rates, less allowances for contractual adjustments, and are recognized as services are provided. For more information about our revenues, refer to Note 2 to the consolidated financial statements included in our 2017 Form 10-K for information on accounting policies that we consider in preparing our consolidated financial statements. See Note 15 for disaggregation of revenue by segment and type. At June 30, 2018, accounts receivable related to services were $152 million. For the three and six months ended June 30, 2018, we had no material bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the condensed consolidated balance sheet at June 30, 2018. For the three and six months ended June 30, 2018, revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price), was not material. Further revenue expected to be recognized in any future year related to remaining performance obligations was not material. |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS |
6 Months Ended |
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Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board, or FASB, issued new guidance that amends the accounting for revenue recognition. The amendments are intended to provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices, and improve disclosure requirements. Insurance contracts are not included in the scope of this new guidance. Accordingly, our premiums revenue and investment income, collectively representing approximately 98% of our consolidated external revenues for the three and six months ended June 30, 2018, are not included in the scope of the new guidance. We adopted the new standard effective January 1, 2018, using the modified retrospective approach. As the majority of our revenues are not subject to the new guidance and the remaining revenues’ accounting treatment did not materially differ from pre-existing accounting treatment, the adoption of the new standard did not have a material impact on our consolidated results of operations, financial condition, cash flows, or related disclosures. In February 2016, the FASB issued new guidance related to accounting for leases which requires lessees to record assets and liabilities reflecting the leased assets and lease obligations, respectively, while following the dual model for recognition in statements of income requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). The new guidance is effective for us beginning with annual and interim periods in 2019, with earlier adoption permitted. We are in the process of implementing a new lease accounting system and expect to record significant leased assets and corresponding lease obligations based on our existing population of individual leases. We do not expect a material impact on our results of operations or cash flows. In June 2016, the FASB issued guidance introducing a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The guidance is effective for us beginning January 1, 2020. The new current expected credit losses (CECL) model generally calls for the immediate recognition of all expected credit losses and applies to loans, accounts and trade receivables as well as other financial assets measured at amortized cost, loan commitments and off-balance sheet credit exposures, debt securities and other financial assets measured at fair value through other comprehensive income, and beneficial interests in securitized financial assets. The new guidance replaces the current incurred loss model for measuring expected credit losses, requires expected losses on available-for-sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities, and provides for additional disclosure requirements. Our investment portfolio consists of available-for-sale debt securities. We are currently evaluating the impact on our results of operations, financial condition, and cash flows. In March 2017, the FASB issued new guidance that amends the accounting for premium amortization on purchased callable debt securities by shortening the amortization period. This amended guidance requires the premium to be amortized to the earliest call date instead of maturity date. The new guidance is effective for us beginning with annual and interim periods in 2019. We do not expect adoption of this guidance will have a material impact on our results of operations, financial condition and cash flows. In February 2018, the FASB issued guidance which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the December 22, 2017 enactment of the Tax Cuts and Jobs Act. The new guidance is effective for us beginning January 1, 2019, with early adoption permitted. We early adopted this guidance in the first quarter of 2018 and it did not have a material impact on our results of operations, financial condition or cash flows. 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 |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES In the third quarter of 2018, we expect to complete the sale of our wholly-owned subsidiary, KMG America Corporation, or KMG, to Continental General Insurance Company, or CGIC, a Texas-based insurance company wholly owned by HC2 Holdings, Inc., a diversified holding company. KMG's subsidiary, Kanawha Insurance Company, or KIC, includes our closed block of non-strategic commercial long-term care policies. Upon closing, we expect to fund the transaction with approximately $200 million of parent company cash contributed into KMG, subject to customary adjustments, in addition to the transfer of approximately $150 million of statutory capital with the sale. In connection with the expected sale of KMG, we recognized a pretax loss, including transaction costs, of $790 million which is reported as loss on business held-for-sale in the accompanying condensed consolidated statements of income for the three and six months ended June 30, 2018. We recorded a deferred tax benefit of $430 million from the loss which is included in the accompanying condensed consolidated statements of income for the three and six months ended June 30, 2018. During the three months ended June 30, 2018, we entered into reinsurance contracts to transfer the risk associated with certain voluntary benefit and financial protection products previously issued primarily by KIC to a third party. We transferred approximately $230 million of cash to the third party and recorded a commensurate reinsurance recoverable as a result of these transactions. There was no material impact to operating results from these reinsurance transactions. As of June 30, 2018, we classified KMG as held-for-sale and aggregated KMG's assets and liabilities separately on the balance sheet. With the carrying value of KMG’s net assets exceeding the fair value less cost to sell, the resulting net loss of $360 million was recognized during the second quarter of 2018, reflecting considerations for costs to sell, changes in the carrying value of net assets and the related tax effect. KMG revenues for the three and six months ended June 30, 2018 were $93 million and $172 million, respectively. KMG pretax income for the three and six months ended June 30, 2018 were $35 million and $53 million, respectively. The assets and liabilities of KMG that were classified as held-for-sale are as follows:
On March 1, 2018 we acquired the remaining equity interest in MCCI Holdings, LLC, or MCCI, a privately held management service organization headquartered in Miami, Florida, that primarily coordinates medical care for Medicare Advantage beneficiaries in Florida and Texas. The purchase price consisted primarily of $169 million cash, as well as our existing investment in MCCI and a note receivable and a revolving note with an aggregate balance of $383 million. This resulted in a preliminary purchase price allocation to goodwill of $479 million, other intangible assets of $80 million, and net tangible assets of $27 million. The goodwill was assigned to the Retail and Healthcare Services segments. The other intangible assets, which primarily consist of customer contracts, have an estimated weighted average useful life of 8 years. Goodwill and other intangible assets are amortizable as deductible expenses for tax purposes. On April 10, 2018, we acquired Family Physicians Group, or FPG, for cash consideration of approximately $185 million, net of cash received. FPG is one of the largest at-risk providers serving Medicare Advantage and Managed Medicaid HMO patients in Greater Orlando, Florida with a footprint that includes clinics located in Lake, Orange, Osceola and Seminole counties. This resulted in a preliminary purchase price allocation to goodwill of $135 million, other intangible assets of $38 million and net tangible assets of $17 million. The goodwill was assigned to the Retail and Healthcare Services segments. The other intangible assets, which primarily consist of customer contracts, have an estimated weighted average useful life of 4.9 years. The purchase price allocations for MCCI and FPG are preliminary, subject to completion of valuation analysis, including for example, refining assumptions used to calculate the fair value of intangible assets. During 2018 and 2017, we also acquired other health and wellness related businesses which, individually or in the aggregate, have not had a material impact on our results of operations, financial condition, or cash flows. The results of operations and financial condition of these businesses have been included in our condensed consolidated statements of income and condensed consolidated balance sheets from the respective acquisition dates. Acquisition-related costs recognized in 2018 and 2017 were not material to our results of operations. The pro forma financial information assuming the acquisitions had occurred as of the beginning of the calendar year prior to the year of acquisition, as well as the revenues and earnings generated during the year of acquisition, were not material for disclosure purposes. |
INVESTMENT SECURITIES |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES | INVESTMENT SECURITIES Investment securities classified as current and long-term were as follows at June 30, 2018 and December 31, 2017, respectively:
Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at June 30, 2018 and December 31, 2017, respectively:
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 June 30, 2018. 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 9%. In addition, 2% of our tax-exempt securities were insured by bond insurers and had an equivalent weighted average S&P credit rating of AA exclusive of the bond insurers’ guarantee. Our investment policy limits investments in a single issuer and requires diversification among various asset types. Our unrealized losses from all securities were generated from approximately 1,180 positions out of a total of approximately 1,480 positions at June 30, 2018. All issuers of securities we own that were trading at an unrealized loss at June 30, 2018 remain current on all contractual payments. After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets since the time the securities were purchased. At June 30, 2018, we did not intend to sell the securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these securities before recovery of their amortized cost basis. As a result, we believe that the securities with an unrealized loss were not other-than-temporarily impaired at June 30, 2018. The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the three and six months ended June 30, 2018 and 2017:
There were no material other-than-temporary impairments for the three and six months ended June 30, 2018 or 2017. The contractual maturities of debt securities available for sale at June 30, 2018, 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.
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FAIR VALUE |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | FAIR VALUE Financial Assets The following table summarizes our fair value measurements at June 30, 2018 and December 31, 2017, respectively, for financial assets measured at fair value on a recurring basis:
There were no material transfers between Level 1 and Level 2 during the three and six months ended June 30, 2018 or 2017. The table above excludes both assets held-for-sale and liabilities held-for-sale, which have been adjusted to fair value, less cost to sell, as a disposal group. See Note 3 for additional disclosures about assets and liabilities held-for-sale at June 30, 2018. Financial Liabilities Our debt is recorded at carrying value in our consolidated balance sheets. The carrying value of our senior notes debt outstanding, net of unamortized debt issuance costs, was $4,773 million at June 30, 2018 and $4,770 million at December 31, 2017. The fair value of our senior notes debt was $4,909 million at June 30, 2018 and $5,191 million at December 31, 2017. The fair value of our long-term debt is determined based on Level 2 inputs, including quoted market prices for the same or similar debt, or if no quoted market prices are available, on the current prices estimated to be available to us for debt with similar terms and remaining maturities. Due to the short-term nature, carrying value approximates fair value for our commercial paper borrowings. There were outstanding commercial paper borrowings of $398 million as of June 30, 2018 and $150 million as of December 31, 2017. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis As disclosed in Note 3, we acquired MCCI, FPG, and other health and wellness related businesses during 2018 and 2017. The values of net tangible assets acquired and the resulting goodwill and other intangible assets were recorded at fair value using Level 3 inputs. The majority of the tangible assets acquired and liabilities assumed were recorded at their carrying values as of the respective dates of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in these acquisitions were internally estimated primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. We developed internal estimates for the expected future cash flows and discount rates used in the present value calculations. Other than assets acquired and liabilities assumed in these acquisitions, there were no material assets or liabilities measured at fair value on a nonrecurring basis during 2018 or 2017. |
MEDICARE PART D |
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Insurance [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MEDICARE PART D | MEDICARE PART D We cover prescription drug benefits in accordance with Medicare Part D under multiple contracts with the Centers for Medicare and Medicaid Services, or CMS, as described further in Note 2 to the consolidated financial statements included in our 2017 Form 10-K. The accompanying condensed consolidated balance sheets include the following amounts associated with Medicare Part D at June 30, 2018 and December 31, 2017. 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.
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HEALTH CARE REFORM |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HEALTH CARE REFORM | HEALTH CARE REFORM The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010 (which we collectively refer to as the Health Care Reform Law) established risk spreading premium stabilization programs effective January 1, 2014, including a permanent risk adjustment program and temporary risk corridor and reinsurance programs, which we collectively refer to as the 3Rs. The 3Rs, applicable to certain of our commercial medical insurance products, are further discussed in Note 2 to our 2017 Form 10-K. The temporary programs were only applicable for years 2014 through 2016. As a result of our exit from our individual commercial medical business effective January 1, 2018, the permanent risk adjustment program is currently only applicable to our commercial small group health insurance business. On November 2, 2017, we filed suit against the United States of America in the United States Court of Federal Claims, on behalf of our health plans seeking recovery from the federal government of approximately $611 million in payments under the risk corridor premium stabilization program established under the Health Care Reform Law, for years 2014, 2015 and 2016. Our case has been stayed by the Court, pending resolution of similar cases filed by other insurers. The accompanying condensed consolidated balance sheets include the following amounts associated with the 3Rs at June 30, 2018 and December 31, 2017.
Net collections under the 3Rs were $46 million during the six months ended June 30, 2018 and were $64 million during the six months ended June 30, 2017. In September 2018, we expect to pay the federal government approximately $1.04 billion for our portion of the annual health insurance industry fee attributed to calendar year 2018 in accordance with the Health Care Reform Law. This fee, fixed in amount by law and apportioned to insurance carriers based on market share, is not deductible for tax purposes. Each year on January 1, except for 2017 when the fee was suspended, we record a liability for this fee in trade accounts payable and accrued expenses which we carry until the fee is paid. We record a corresponding deferred cost in other current assets in our condensed consolidated financial statements which is amortized ratably to expense over the calendar year. Amortization of the deferred cost was recorded in operating cost expense of approximately $257 million and $520 million for the three and six months ended June 30, 2018, resulting from the amortization of the 2018 annual health insurance industry fee. The annual health insurance industry fee was suspended for calendar year 2017, and is also, under current law, suspended for calendar year 2019. |
GOODWILL AND OTHER INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill for our reportable segments for the six months ended June 30, 2018 were as follows:
The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at June 30, 2018 and December 31, 2017.
Amortization expense for other intangible assets was approximately $21 million for the three months ended June 30, 2018 and $18 million for the three months ended June 30, 2017. For the six months ended June 30, 2018 and 2017, amortization expense for other intangible assets was approximately $51 million and $36 million, respectively. Amortization expense for the six months ended June 30, 2018 included $12 million associated with the write-off of a trade name value reflecting the re-branding of certain provider assets. The following table presents our estimate of amortization expense for 2018 and each of the five next succeeding years:
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BENEFITS PAYABLE |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BENEFITS PAYABLE | BENEFITS PAYABLE On a consolidated basis, activity in benefits payable, excluding military services, was as follows for the six months ended June 30, 2018 and 2017:
Amounts incurred related to prior periods vary from previously estimated liabilities as the claims ultimately are settled. Negative amounts reported for incurred related to prior years result from claims being ultimately settled for amounts less than originally estimated (favorable development). Our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for claims. Actuarial standards require the use of assumptions based on moderately adverse experience, which generally results in favorable reserve development, or reserves that are considered redundant. Benefits expense excluded from the previous table was as follows for the six months ended June 30, 2018 and 2017.
Incurred and Paid Claims Development The following discussion provides information about incurred and paid claims development for our Retail, Group and Specialty, and Individual Commercial segments as of June 30, 2018 and 2017, net of reinsurance, and the total of IBNR included within the net incurred claims amounts. Retail Segment Activity in benefits payable for our Retail segment was as follows for the six months ended June 30, 2018 and 2017:
At June 30, 2018, benefits payable for our Retail segment included IBNR of approximately $2.9 billion, primarily associated with claims incurred in 2018. Group and Specialty Segment Activity in benefits payable for our Group and Specialty segment, excluding military services, was as follows for the six months ended June 30, 2018 and 2017:
At June 30, 2018, benefits payable for our Group and Specialty segment included IBNR of approximately $530 million, primarily associated with claims incurred in 2018. Individual Commercial Segment Activity in benefits payable for our Individual Commercial segment was as follows for the six months ended June 30, 2018 and 2017:
At June 30, 2018, benefits payable for our Individual Commercial segment included IBNR of approximately $6 million, associated with claims incurred in 2017 and prior. Reconciliation to Consolidated The reconciliation of the net incurred and paid claims development tables to benefits payable in the consolidated statement of financial position is as follows:
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EARNINGS PER COMMON SHARE COMPUTATION |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER COMMON SHARE COMPUTATION | EARNINGS PER COMMON SHARE COMPUTATION Detail supporting the computation of basic and diluted earnings per common share was as follows for the three and six months ended June 30, 2018 and 2017:
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STOCKHOLDERS' EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Dividends The following table provides details of dividend payments, excluding dividend equivalent rights for unvested stock awards, in 2017 and 2018 under our Board approved quarterly cash dividend policy:
Stock Repurchases On December 14, 2017, our Board of Directors authorized the repurchase of up to $3.0 billion of our common shares expiring on December 31, 2020, exclusive of shares repurchased in connection with employee stock plans. Under the share repurchase authorization, shares may be purchased from time to time at prevailing prices in the open market, by block purchases, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or in privately-negotiated transactions, including pursuant to accelerated share repurchase agreements with investment banks, subject to certain regulatory restrictions on volume, pricing, and timing. On December 21, 2017, we entered into an accelerated stock repurchase agreement, or ASR, the December 2017 ASR, with Bank of America, N.A., or BofA, to repurchase $1.0 billion of our common stock as part of the $3.0 billion share repurchase authorization from our Board of Directors. On December 22, 2017, we made a payment of $1.0 billion to BofA from available cash on hand and received an initial delivery of 3.28 million shares of our common stock from BofA based on the then current market price of Humana common stock. The payment to BofA was recorded as a reduction to stockholders’ equity, consisting of an $800 million increase in treasury stock, which reflects the value of the initial 3.28 million shares received upon initial settlement, and a $200 million decrease in capital in excess of par value, which reflected the value of stock held back by BofA pending final settlement of the December 2017 ASR. Upon settlement of the ASR on March 26, 2018, we received an additional 0.46 million shares as determined by the average daily volume weighted-average share price of our common stock during the term of the ASR Agreement of $267.55, bringing the total shares received under this program to 3.74 million. In addition, upon settlement we reclassified the $200 million value of stock initially held back by BofA from capital in excess of par value to treasury stock. Excluding the 0.46 million shares received in March 2018 upon final settlement of our ASR Agreement for which no cash was paid during the period, as well as any prior year ASR activity, share repurchases were as follows during the six months ended June 30, 2018 and 2017:
Our remaining repurchase authorization was approximately $2 billion as of August 1, 2018. In connection with employee stock plans, we acquired 0.25 million common shares for $69 million and 0.37 million common shares for $78 million during the six months ended June 30, 2018 and 2017, respectively. Treasury Stock Reissuance We reissued 0.85 million shares of treasury stock during the six months ended June 30, 2018 at a cost of $89 million associated with restricted stock unit vestings and option exercises. Accumulated Other Comprehensive Income Accumulated other comprehensive income included net unrealized losses, net of tax, on our investment securities of $176 million at June 30, 2018 and net unrealized gains, net of tax, on our investment securities of $125 million at December 31, 2017. In addition, accumulated other comprehensive income included $106 million, net of tax, at December 31, 2017 for an additional liability that would exist on our closed block of long-term care insurance policies if unrealized gains on the sale of the investments backing such products had been realized and the proceeds reinvested at then current yields. Refer to Note 18 to the consolidated financial statements in our 2017 Form 10-K for further discussion of our long-term care insurance policies. |
INCOME TAXES |
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Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax benefit for the three months ended June 30, 2018 reflects a $430 million deferred tax benefit resulting from the loss on the expected sale of KMG attributable to its original tax basis and subsequent capital contributions to fund accumulated losses. See Note 3 for information on the expected sale of KMG. The effective income tax rate was 5.8% for the six months ended June 30, 2018, compared to 35.4% for the six months ended June 30, 2017, primarily due to the deferred tax benefit recognized from the loss on the expected sale of KMG and tax reform law enacted on December 22, 2017 (the "Tax Reform Law"), which was partially offset by the impact of the reinstatement of the non-deductible health insurance industry fee in 2018. The income tax rate for the six months ended June 30, 2017 included previously non-deductible transaction costs that, as a result of the termination of the Merger Agreement, became deductible for tax purposes. The Tax Reform Law reduced the statutory federal corporate income tax rate to 21 percent from 35 percent, beginning in 2018. The accounting for certain income tax effects of the Tax Reform Law is provisional. Revisions to prior estimates are recorded as additional analysis is completed using information available at each measurement date during 2018, with adjustments to the income tax provision recorded as new information becomes known. Revisions to our prior estimates for the income tax effects of the Tax Reform Law decreased our tax expense for the six months ended June 30, 2018 by $12.7 million. |
DEBT |
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DEBT | DEBT The carrying value of long-term debt outstanding, net of unamortized debt issuance costs, was as follows at June 30, 2018 and December 31, 2017:
Senior Notes In March 2017, we issued $600 million of 3.95% senior notes due March 15, 2027 and $400 million of 4.80% senior notes due March 15, 2047. Our net proceeds, reduced for the underwriters' discount and commission and offering expenses paid as of March 31, 2017, were $991 million. Our senior notes, which are unsecured, may be redeemed at our option at any time at 100% of the principal amount plus accrued interest and a specified make-whole amount. The 8.15% senior notes are subject to an interest rate adjustment if the debt ratings assigned to the notes are downgraded (or subsequently upgraded). In addition, our senior notes contain a change of control provision that may require us to purchase the notes under certain circumstances. Credit Agreement Our 5-year, $2.0 billion unsecured revolving credit agreement expires May 2022. Under the credit agreement, at our option, we can borrow on either a competitive advance basis or a revolving credit basis. The revolving credit portion bears interest at either LIBOR plus a spread or the base rate plus a spread. The LIBOR spread, currently 110.0 basis points, varies depending on our credit ratings ranging from 91.0 to 150.0 basis points. We also pay an annual facility fee regardless of utilization. This facility fee, currently 15.0 basis points, may fluctuate between 9.0 and 25.0 basis points, depending upon our credit ratings. The competitive advance portion of any borrowings will bear interest at market rates prevailing at the time of borrowing on either a fixed rate or a floating rate based on LIBOR, at our option. The terms of the credit agreement include standard provisions related to conditions of borrowing which could limit our ability to borrow additional funds. In addition, the credit agreement contains customary restrictive covenants and a financial covenant regarding maximum debt to capitalization of 50%, as well as customary events of default. We are in compliance with this financial covenant, with actual debt to capitalization of 33.6% as measured in accordance with the credit agreement as of June 30, 2018. Upon our agreement with one or more financial institutions, we may expand the aggregate commitments under the credit agreement to a maximum of $2.5 billion, through a $500.0 million incremental loan facility. At June 30, 2018, we had no borrowings and no letters of credit outstanding under the credit agreement. Accordingly, as of June 30, 2018, we had $2.0 billion of remaining borrowing capacity (which excludes the uncommitted $500 million incremental loan facility under the credit agreement), none of which would be restricted by our financial covenant compliance requirement. We have other customary, arms-length relationships, including financial advisory and banking, with some parties to the credit agreement. Commercial Paper Under our commercial paper program we may issue short-term, unsecured commercial paper notes privately placed on a discount basis through certain broker dealers at any time not to exceed $2 billion. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The net proceeds of issuances have been and are expected to be used for general corporate purposes. The maximum principal amount outstanding at any one time during the six months ended June 30, 2018 was $442 million. There were outstanding borrowings of $398 million at June 30, 2018 and $150 million at December 31, 2017. |
GUARANTEES AND CONTINGENCIES |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
GUARANTEES AND CONTINGENCIES | GUARANTEES AND CONTINGENCIES Government Contracts Our Medicare products, which accounted for approximately 80% of our total premiums and services revenue for the six months ended June 30, 2018, 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 2019. However, our offerings of products under those contracts are subject to approval by CMS, which we expect to receive in the fall of 2018. CMS uses a risk-adjustment model which adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members. The risk-adjustment model, which CMS implemented pursuant to the Balanced Budget Act of 1997 (BBA) and the Benefits Improvement and Protection Act of 2000 (BIPA), generally pays more where a plan's membership has higher expected costs. Under this model, rates paid to MA plans are based on actuarially determined bids, which include a process whereby our prospective payments are based on our estimated cost of providing standard Medicare-covered benefits to an enrollee with a "national average risk profile." That baseline payment amount is adjusted to reflect the health status of our enrolled membership. Under the risk-adjustment methodology, all MA plans must collect and submit the necessary diagnosis code information from hospital inpatient, hospital outpatient, and physician providers to CMS within prescribed deadlines. The CMS risk-adjustment model uses the diagnosis data to calculate the risk-adjusted premium payment to MA plans, which CMS adjusts for coding pattern differences between the health plans and the government fee-for-service program. We generally rely on providers, including certain providers in our network who are our employees, to code their claim submissions with appropriate diagnoses, which we send to CMS as the basis for our payment received from CMS under the actuarial risk-adjustment model. We also rely on these providers to document appropriately all medical data, including the diagnosis data submitted with claims. In addition, we conduct medical record reviews as part of our data and payment accuracy compliance efforts, to more accurately reflect diagnosis conditions under the risk-adjustment model. These compliance efforts include the internal contract level audits described in more detail below, as well as ordinary course reviews of our internal business processes. CMS is phasing-in the process of calculating risk scores using diagnoses data from the Risk Adjustment Processing System, or RAPS, to diagnoses data from the Encounter Data System, or EDS. The RAPS process requires MA plans to apply a filter logic based on CMS guidelines and only submit diagnoses that satisfy those guidelines. For submissions through EDS, CMS requires MA plans to submit all the encounter data and CMS will apply the risk adjustment filtering logic to determine the risk scores. For 2017, 25% of the risk score was calculated from claims data submitted through EDS. CMS has revised the pace of the phase-in and, for 2018 and 2019, 15% and 25%, respectively, of the risk score will be calculated from claims data submitted through EDS. The phase-in from RAPS to EDS could result in different risk scores from each dataset as a result of plan processing issues, CMS processing issues, or filtering logic differences between RAPS and EDS, and could have a material adverse effect on our results of operations, financial position, or cash flows. CMS is continuing to perform audits of various companies’ selected MA contracts related to this risk adjustment diagnosis data. We refer to these audits as Risk-Adjustment Data Validation Audits, or RADV audits. RADV audits review medical records in an attempt to validate provider medical record documentation and coding practices which influence the calculation of premium payments to MA plans. In 2012, CMS released a “Notice of Final Payment Error Calculation Methodology for Part C Medicare Advantage Risk Adjustment Data Validation (RADV) Contract-Level Audits.” The payment error calculation methodology provides that, in calculating the economic impact of audit results for an MA contract, if any, the results of the RADV audit sample will be extrapolated to the entire MA contract after a comparison of the audit results to a similar audit of Medicare FFS (we refer to the process of accounting for errors in FFS claims as the "FFS Adjuster"). This comparison of RADV audit results to the FFS error rate is necessary to determine the economic impact, if any, of RADV audit results because the government used the Medicare FFS program data set, including any attendant errors that are present in that data set, to estimate the costs of various health status conditions and to set the resulting adjustments to MA plans’ payment rates. CMS already makes other adjustments to payment rates based on a comparison of coding pattern differences between MA plans and Medicare FFS data (such as for frequency of coding for certain diagnoses in MA plan data versus the Medicare FFS program dataset). The final RADV extrapolation methodology, including the first application of extrapolated audit results to determine audit settlements, is expected to be applied to RADV contract level audits conducted for contract year 2011 and subsequent years. CMS is currently conducting RADV contract level audits for contract years 2011, 2012, and 2013 in which two, five and five of our Medicare Advantage plans are being audited, respectively. Per CMS guidance, selected MA contracts will be notified of an audit at some point after the close of the final reconciliation for the payment year being audited. Estimated audit settlements are recorded as a reduction of premiums revenue in our consolidated statements of income, based upon available information. We perform internal contract level audits based on the RADV audit methodology prescribed by CMS. Included in these internal contract level audits is an audit of our Private Fee-For Service business which we used to represent a proxy of the FFS Adjuster which has not yet been released. We based our accrual of estimated audit settlements for each contract year on the results of these internal contract level audits and update our estimates as each audit is completed. Estimates derived from these results were not material to our results of operations, financial position, or cash flows. We report the results of these internal contract level audits to CMS, including identified overpayments, if any. However, as indicated, we are awaiting additional guidance from CMS regarding the FFS Adjuster. Accordingly, we cannot determine whether such RADV audits will 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. In addition, CMS' comments in formalized guidance regarding “overpayments” to MA plans appear to be inconsistent with CMS' prior RADV audit guidance. These statements, contained in the preamble to CMS’ final rule release regarding Medicare Advantage and Part D prescription drug benefit program regulations for Contract Year 2015, appear to equate each Medicare Advantage risk adjustment data error with an “overpayment” without reconciliation to the principles underlying the FFS Adjuster referenced above. We will continue to work with CMS to ensure that MA plans are paid accurately and that payment model principles are in accordance with the requirements of the Social Security Act, which, if not implemented correctly could have a material adverse effect on our results of operations, financial position, or cash flows. At June 30, 2018, our military services business, which accounted for approximately 1% of our total premiums and services revenue for the six months ended June 30, 2018, primarily consisted of the TRICARE T2017 East Region contract. The T2017 East Region contract is a consolidation of the former T3 North and South Regions, comprising thirty-two states and approximately 5.9 million TRICARE beneficiaries, under which delivery of health care services commenced on January 1, 2018. The T2017 East Region contract is a 5-year contract set to expire on December 31, 2022 and is subject to renewals on January 1 of each year during its term at the government's option. Our state-based Medicaid business accounted for approximately 4% of our total premiums and services revenue for the six months ended June 30, 2018. In addition to our state-based Temporary Assistance for Needy Families, or TANF, Medicaid contracts in Florida and Kentucky, we have contracts in Florida for Long Term Support Services (LTSS), and in Illinois for stand-alone dual eligible demonstration programs serving individuals dually eligible for both the federal Medicare program and the applicable state-based Medicaid program. The loss of any of the contracts above or significant changes in these programs as a result of legislative or regulatory action, including reductions in premium payments to us, regulatory restrictions on profitability, including reviews by regulatory bodies that may compare our Medicare Advantage profitability to our non-Medicare Advantage business profitability, or compare the profitability of various products within our Medicare Advantage business, and require that they remain within certain ranges of each other, or increases in member benefits without corresponding increases in premium payments to us, may have a material adverse effect on our results of operations, financial position, and cash flows. Legal Proceedings and Certain Regulatory Matters As previously disclosed, the Civil Division of the United States Department of Justice provided us with an information request in December 2014, concerning our Medicare Part C risk adjustment practices. The request relates to our oversight and submission of risk adjustment data generated by providers in our Medicare Advantage network, as well as to our business and compliance practices related to risk adjustment data generated by our providers and by us, including medical record reviews conducted as part of our data and payment accuracy compliance efforts, the use of health and well-being assessments, and our fraud detection efforts. We believe that this request for information is in connection with a wider review of Medicare Risk Adjustment generally that includes a number of Medicare Advantage plans, providers and vendors. We continue to cooperate with and voluntarily respond to the information requests from the Department of Justice. These matters are expected to result in additional qui tam litigation. As previously disclosed, on January 19, 2016, an individual filed a qui tam suit captioned United States of America ex rel. Steven Scott v. Humana, Inc., in United States District Court, Central District of California, Western Division. The complaint alleges certain civil violations by us in connection with the actuarial equivalence of the plan benefits under Humana’s Basic PDP plan, a prescription drug plan offered by us under Medicare Part D. The action seeks damages and penalties on behalf of the United States under the False Claims Act. The court ordered the qui tam action unsealed on September 13, 2017, so that the relator could proceed, following notice from the U.S. Government that it was not intervening at that time. On January 29, 2018, the suit was transferred to the United States District Court, Western District of Kentucky, Louisville Division. We take seriously our obligations to comply with applicable CMS requirements and actuarial standards of practice, and we are vigorously defending against these allegations. On November 2, 2017, we filed suit against the United States of America in the United States Court of Federal Claims, on behalf of our health plans seeking recovery from the federal government of approximately $611 million in payments under the risk corridor premium stabilization program established under Health Care Reform, for years 2014, 2015 and 2016. Our case has been stayed by the Court, pending resolution of similar cases filed by other insurers. We have not recognized revenue, nor have we recorded a receivable, for any amount due from the federal government for unpaid risk corridor payments as of June 30, 2018. We have fully recognized all liabilities due to the federal government that we have incurred under the risk corridor program, and have paid all amounts due to the federal government as required. There is no assurance that we will prevail in the lawsuit. Other Lawsuits and Regulatory Matters Our current and past business practices are subject to review or other investigations by various state insurance and health care regulatory authorities and other state and federal regulatory authorities. These authorities regularly scrutinize the business practices of health insurance, health care delivery and benefits companies. These reviews focus on numerous facets of our business, including claims payment practices, statutory capital requirements, provider contracting, risk adjustment, competitive practices, commission payments, privacy issues, utilization management practices, pharmacy benefits, access to care, and sales practices, among others. Some of these reviews have historically resulted in fines imposed on us and some have required changes to some of our practices. We continue to be subject to these reviews, which could result in additional fines or other sanctions being imposed on us or additional changes in some of our practices. We also are involved in various other lawsuits that arise, for the most part, in the ordinary course of our business operations, certain of which may be styled as class-action lawsuits. Among other matters, this litigation may include employment matters, claims of medical malpractice, bad faith, nonacceptance or termination of providers, anticompetitive practices, improper rate setting, provider contract rate and payment disputes, including disputes over reimbursement rates required by statute, general contractual matters, intellectual property matters, and challenges to subrogation practices. For example, a number of hospitals and other providers have asserted that, under their network provider contracts, we are not entitled to reduce Medicare Advantage payments to these providers in connection with changes in Medicare payment systems and in accordance with the Balanced Budget and Emergency Deficit Control Act of 1985, as amended (commonly referred to as “sequestration”). Those challenges have led and could lead to arbitration demands or other litigation. Also, under state guaranty assessment laws, including those related to state cooperative failures in the industry, we may be assessed (up to prescribed limits) for certain obligations to the policyholders and claimants of insolvent insurance companies that write the same line or lines of business as we do. As a government contractor, we may also be subject to qui tam litigation brought by individuals who seek to sue on behalf of the government, alleging that the government contractor submitted false claims to the government including, among other allegations, those resulting from coding and review practices under the Medicare risk adjustment model. Qui tam litigation is filed under seal to allow the government an opportunity to investigate and to decide if it wishes to intervene and assume control of the litigation. If the government does not intervene, the individual may continue to prosecute the action on his or her own, on behalf of the government. We also are subject to other allegations of non-performance of contractual obligations to providers, members, and others, including failure to properly pay claims, improper policy terminations, challenges to our implementation of the Medicare Part D prescription drug program and other litigation. A limited number of the claims asserted against us are subject to insurance coverage. Personal injury claims, claims for extra contractual damages, care delivery malpractice, and claims arising from medical benefit denials are covered by insurance from our wholly owned captive insurance subsidiary and excess carriers, except to the extent that claimants seek punitive damages, which may not be covered by insurance in certain states in which insurance coverage for punitive damages is not permitted. In addition, insurance coverage for all or certain forms of liability has become increasingly costly and may become unavailable or prohibitively expensive in the future. We record accruals for the contingencies discussed in the sections above to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made at this time regarding the matters specifically described above because of the inherently unpredictable nature of legal proceedings, which also may be exacerbated by various factors, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; (vi) there are a large number of parties (including where it is uncertain how liability, if any, will be shared among multiple defendants); or (vii) there is a wide range of potential outcomes. The outcome of any current or future litigation or governmental or internal investigations, including the matters described above, cannot be accurately predicted, nor can we predict any resulting judgments, penalties, fines or other sanctions that may be imposed at the discretion of federal or state regulatory authorities or as a result of actions by third parties. Nevertheless, it is reasonably possible that any such outcome of litigation, judgments, penalties, fines or other sanctions could be substantial, and the outcome of these matters may have a material adverse effect on our results of operations, financial position, and cash flows, and may also affect our reputation. |
SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION We manage our business with four reportable segments: Retail, Group and Specialty, Healthcare Services and Individual Commercial. In addition, the Other Businesses category includes businesses that are not individually reportable because they do not meet the quantitative thresholds required by generally accepted accounting principles. These segments are based on a combination of the type of health plan customer and adjacent businesses centered on well-being solutions for our health plans and other customers, as described below. These segment groupings are consistent with information used by our Chief Executive Officer to assess performance and allocate resources. The Retail segment consists of Medicare benefits, marketed to individuals or directly via group accounts. In addition, the Retail segment also includes our contract with CMS to administer the Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program and contracts with various states to provide Medicaid, dual eligible, and Long-Term Support Services benefits, which we refer to collectively as our state-based contracts. The Group and Specialty segment consists of employer group commercial fully-insured medical and specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health and voluntary insurance benefits and financial protection products, as well as administrative services only, or ASO products. In addition, our Group and Specialty segment includes military services business, primarily our TRICARE T2017 East Region contract. The Healthcare Services segment includes services offered to our health plan members as well as to third parties, including pharmacy solutions, provider services, and clinical care service, such as home health and other services and capabilities to promote wellness and advance population health. The Individual Commercial segment consisted of our individual commercial fully-insured medical health insurance benefits. We report under the category of Other Businesses those businesses that do not align with the reportable segments described above, primarily our closed-block long-term care insurance policies. Our Healthcare Services intersegment revenues primarily relate to managing prescription drug coverage for members of our other segments through Humana Pharmacy Solutions®, or HPS, and includes the operations of Humana Pharmacy, Inc., our mail order pharmacy business. These revenues consist of the prescription price (ingredient cost plus dispensing fee), including the portion to be settled with the member (co-share) or with the government (subsidies), plus any associated administrative fees. Services revenues related to the distribution of prescriptions by third party retail pharmacies in our networks are recognized when the claim is processed and product revenues from dispensing prescriptions from our mail order pharmacies are recorded when the prescription or product is shipped. Our pharmacy operations, which are responsible for designing pharmacy benefits, including defining member co-share responsibilities, determining formulary listings, contracting with retail pharmacies, confirming member eligibility, reviewing drug utilization, and processing claims, act as a principal in the arrangement on behalf of members in our other segments. As principal, our Healthcare Services segment reports revenues on a gross basis, including co-share amounts from members collected by third party retail pharmacies at the point of service. In addition, our Healthcare Services intersegment revenues include revenues earned by certain owned providers derived from risk-based and non-risk-based managed care agreements with our health plans. Under risk based agreements, the provider receives a monthly capitated fee that varies depending on the demographics and health status of the member, for each member assigned to these owned providers by our health plans. The owned provider assumes the economic risk of funding the assigned members’ healthcare services. Under non risk-based agreements, our health plans retain the economic risk of funding the assigned members' healthcare services. Our Healthcare Services segment reports provider services revenues associated with risk-based agreements on a gross basis, whereby capitation fee revenue is recognized in the period in which the assigned members are entitled to receive healthcare services. Provider services revenues associated with non-risk-based agreements are presented net of associated healthcare costs. We present our consolidated results of operations from the perspective of the health plans. As a result, the cost of providing benefits to our members, whether provided via a third party provider or internally through a stand-alone subsidiary, is classified as benefits expense and excludes the portion of the cost for which the health plans do not bear responsibility, including member co-share amounts and government subsidies of $3.3 billion and $3.2 billion for the three months ended June 30, 2018 and 2017, respectively. For the six months ended June 30, 2018 and 2017 these amounts were both $6.2 billion. In addition, depreciation and amortization expense associated with certain businesses in our Healthcare Services segment delivering benefits to our members, primarily associated with our provider services and pharmacy operations, are included with benefits expense. The amount of this expense was $30 million and $27 million for the three months ended June 30, 2018 and 2017, respectively. For the six months ended June 30, 2018 and 2017, the amount of this expense was $69 million and $53 million, respectively. Other than those described previously, the accounting policies of each segment are the same and are described in Note 2 to the consolidated financial statements included in our 2017 Form 10-K. Transactions between reportable segments primarily consist of sales of services rendered by our Healthcare Services segment, primarily pharmacy, provider, and clinical care services, to our Retail, Group and Specialty, and Individual Commercial segment customers. Intersegment sales and expenses are recorded at fair value and eliminated in consolidation. Members served by our segments often use the same provider networks, enabling us in some instances to obtain more favorable contract terms with providers. Our segments also share indirect costs and assets. As a result, the profitability of each segment is interdependent. We allocate most operating expenses to our segments. Assets and certain corporate income and expenses are not allocated to the segments, including the portion of investment income not supporting segment operations, interest expense on corporate debt, and certain other corporate expenses. These items are managed at a corporate level. These corporate amounts are reported separately from our reportable segments and are included with intersegment eliminations in the tables presenting segment results below. Our segment results were as follows for the three and six months ended June 30, 2018 and 2017:
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ACQUISITIONS AND DIVESTITURES (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | The assets and liabilities of KMG that were classified as held-for-sale are as follows:
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INVESTMENT SECURITIES (Tables) |
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Schedule of Investment Securities Classified as Current and Long-Term | Investment securities classified as current and long-term were as follows at June 30, 2018 and December 31, 2017, respectively:
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Schedule of Gross Unrealized Losses and Fair Value of Securities | Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at June 30, 2018 and December 31, 2017, respectively:
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Schedule of Realized Gains (Losses) Related to Investment Securities Included Within Investment Income | The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the three and six months ended June 30, 2018 and 2017:
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Schedule of Contractual Maturity of Debt Securities Available for Sale | The contractual maturities of debt securities available for sale at June 30, 2018, 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.
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FAIR VALUE (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Assets Measured at Fair Value on Recurring Basis | The following table summarizes our fair value measurements at June 30, 2018 and December 31, 2017, respectively, for financial assets measured at fair value on a recurring basis:
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MEDICARE PART D (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Amounts Associated With Medicare Part D | The accompanying condensed consolidated balance sheets include the following amounts associated with Medicare Part D at June 30, 2018 and December 31, 2017. 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.
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HEALTH CARE REFORM (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Risk Adjustment, Reinsurance Recoverable And Risk Corridor Settlement | The accompanying condensed consolidated balance sheets include the following amounts associated with the 3Rs at June 30, 2018 and December 31, 2017.
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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Carrying Amount of Goodwill By Reportable Segments | Changes in the carrying amount of goodwill for our reportable segments for the six months ended June 30, 2018 were as follows:
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Details of Intangible Assets Included in Other Long-Term Assets | The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at June 30, 2018 and December 31, 2017.
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Schedule of Estimated Amortization Expense | The following table presents our estimate of amortization expense for 2018 and each of the five next succeeding years:
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BENEFITS PAYABLE (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in Benefits Payable | Activity in benefits payable for our Retail segment was as follows for the six months ended June 30, 2018 and 2017:
Activity in benefits payable for our Group and Specialty segment, excluding military services, was as follows for the six months ended June 30, 2018 and 2017:
Activity in benefits payable for our Individual Commercial segment was as follows for the six months ended June 30, 2018 and 2017:
On a consolidated basis, activity in benefits payable, excluding military services, was as follows for the six months ended June 30, 2018 and 2017:
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Benefit Expenses Excluded From Activity in Benefits Payable | Benefits expense excluded from the previous table was as follows for the six months ended June 30, 2018 and 2017.
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Schedule Of Benefits Payable | The reconciliation of the net incurred and paid claims development tables to benefits payable in the consolidated statement of financial position is as follows:
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EARNINGS PER COMMON SHARE COMPUTATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Details Supporting Computation of Earnings Per Share | Detail supporting the computation of basic and diluted earnings per common share was as follows for the three and six months ended June 30, 2018 and 2017:
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STOCKHOLDERS' EQUITY (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Details of Dividend Payments | The following table provides details of dividend payments, excluding dividend equivalent rights for unvested stock awards, in 2017 and 2018 under our Board approved quarterly cash dividend policy:
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Class of Treasury Stock | Excluding the 0.46 million shares received in March 2018 upon final settlement of our ASR Agreement for which no cash was paid during the period, as well as any prior year ASR activity, share repurchases were as follows during the six months ended June 30, 2018 and 2017:
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DEBT (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of carrying value of long-term debt outstanding | The carrying value of long-term debt outstanding, net of unamortized debt issuance costs, was as follows at June 30, 2018 and December 31, 2017:
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SEGMENT INFORMATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, By Segment | Our segment results were as follows for the three and six months ended June 30, 2018 and 2017:
|
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS - Acquisition of a Minority Interest (Details) - Subsequent Event $ in Millions |
Jul. 11, 2018
USD ($)
location
State
|
Jul. 02, 2018
USD ($)
|
---|---|---|
Kindred’s Homecare Business | ||
Noncontrolling Interest [Line Items] | ||
Equity method investment, ownership percentage | 40.00% | |
Payments to acquire equity method investments | $ 850 | |
Curo Health Services | ||
Noncontrolling Interest [Line Items] | ||
Equity method investment, ownership percentage | 40.00% | |
Payments to acquire equity method investments | $ 250 | |
Equity method investment, number of locations | location | 245 | |
Equity method investment, number of states | State | 22 |
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS - Workforce Optimization, Aetna Merger, and Revenue Recognition (Details) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Feb. 16, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
employee
$ / shares
|
|
Business Acquisition [Line Items] | ||||||
Number of associates impacted | employee | 3,600 | |||||
Percentage of workforce associated impacted | 7.80% | |||||
Restructuring charges | $ 148 | |||||
Restructuring charges per diluted share (in dollars per share) | $ / shares | $ 0.64 | |||||
Restructuring liability, current | $ 52 | $ 52 | $ 140 | |||
Break up fee received | $ 1,000 | 0 | $ 0 | 0 | $ (947) | |
Accounts receivable | 1,471 | 1,471 | $ 854 | |||
Services Accounts Receivable | ||||||
Business Acquisition [Line Items] | ||||||
Accounts receivable | $ 152 | $ 152 |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Revenue From Premiums and Investment Income | Revenues | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Concentration risk, percentage | 98.00% | 98.00% |
ACQUISITIONS AND DIVESTITURES - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Apr. 10, 2018 |
Mar. 01, 2018 |
Jun. 30, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Sep. 30, 2018 |
|
Business Acquisition [Line Items] | ||||||
Pretax loss on sale of subsidiary | $ 790 | $ 790 | $ 0 | |||
Goodwill, acquired during period | 614 | |||||
MCCI | ||||||
Business Acquisition [Line Items] | ||||||
Notes receivable and revolving note, related party | $ 383 | |||||
MCCI | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire business | 169 | |||||
Goodwill, acquired during period | 479 | |||||
Other intangible assets acquired | 80 | |||||
Net tangible assets acquired | $ 27 | |||||
Other intangible assets, weighted average useful life | 8 years | |||||
FPG | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire business | $ 185 | |||||
Goodwill, acquired during period | 135 | |||||
Other intangible assets acquired | 38 | |||||
Net tangible assets acquired | $ 17 | |||||
Other intangible assets, weighted average useful life | 4 years 10 months 25 days | |||||
KMG America Corporation | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||
Business Acquisition [Line Items] | ||||||
Pretax loss on sale of subsidiary | 790 | 790 | ||||
Tax benefit on sale of subsidiary | 430 | 430 | ||||
Net loss on sale of subsidiary | 360 | |||||
Disposal group, revenue | 93 | 172 | ||||
Disposal group, pretax income | 35 | $ 53 | ||||
KIC | ||||||
Business Acquisition [Line Items] | ||||||
Payments for reinsurance | $ 230 | |||||
Forecast | Subsequent Event | KMG America Corporation | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||
Business Acquisition [Line Items] | ||||||
Parent company cash contributed to sale of subsidiary | $ 200 | |||||
Transfer of statutory capital with sale of subsidiary | $ 150 |
ACQUISITIONS AND DIVESTITURES - Assets and Liabilities Held-for-sale (Details) - Disposal Group, Held-for-sale, Not Discontinued Operations - USD ($) $ in Millions |
Jun. 30, 2018 |
Jun. 30, 2017 |
---|---|---|
Assets | ||
Cash and cash equivalents | $ 779 | |
Liabilities | ||
Benefits payable | 58 | $ 0 |
KMG America Corporation | ||
Assets | ||
Cash and cash equivalents | 779 | |
Receivables, net | 2 | |
Investment securities | 1,574 | |
Other assets | 1,112 | |
Total assets held-for-sale | 3,467 | |
Liabilities | ||
Benefits payable | 58 | |
Trade accounts payable and accrued expenses | 69 | |
Future policy benefits payable | 2,567 | |
Total liabilities held-for-sale | $ 2,694 |
INVESTMENT SECURITIES - Securities Classified as Current and Long-Term (Detail) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Investment [Line Items] | ||
Amortized Cost | $ 10,073 | $ 12,104 |
Gross Unrealized Gains | 6 | 286 |
Gross Unrealized Losses | (236) | (88) |
Fair Value | 9,843 | 12,302 |
Tax-exempt municipal securities | ||
Investment [Line Items] | ||
Amortized Cost | 3,045 | 3,884 |
Gross Unrealized Gains | 3 | 33 |
Gross Unrealized Losses | (49) | (28) |
Fair Value | 2,999 | 3,889 |
Residential mortgage-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 17 | 26 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 17 | 26 |
Commercial mortgage-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 533 | 455 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | (16) | (2) |
Fair Value | 517 | 456 |
Asset-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 574 | 407 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | (2) | 0 |
Fair Value | 573 | 408 |
Corporate debt securities | ||
Investment [Line Items] | ||
Amortized Cost | 2,946 | 5,175 |
Gross Unrealized Gains | 2 | 244 |
Gross Unrealized Losses | (96) | (37) |
Fair Value | 2,852 | 5,382 |
U.S. Treasury and other U.S. government corporations and agencies | U.S. Treasury and agency obligations | ||
Investment [Line Items] | ||
Amortized Cost | 631 | 532 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (4) | (2) |
Fair Value | 627 | 531 |
U.S. Treasury and other U.S. government corporations and agencies | Mortgage-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 2,327 | 1,625 |
Gross Unrealized Gains | 0 | 4 |
Gross Unrealized Losses | (69) | (19) |
Fair Value | $ 2,258 | $ 1,610 |
INVESTMENT SECURITIES - Gross Unrealized Losses and Fair Values of Securities (Detail) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value | ||
Less than 12 months | $ 7,122 | $ 3,999 |
12 months or more | 1,718 | 2,308 |
Total | 8,840 | 6,307 |
Gross Unrealized Losses | ||
Less than 12 months | (154) | (30) |
12 months or more | (82) | (58) |
Total | (236) | (88) |
U.S. Treasury and agency obligations | U.S. Treasury and other U.S. government corporations and agencies | ||
Fair Value | ||
Less than 12 months | 437 | 273 |
12 months or more | 114 | 130 |
Total | 551 | 403 |
Gross Unrealized Losses | ||
Less than 12 months | (2) | (1) |
12 months or more | (2) | (1) |
Total | (4) | (2) |
Mortgage-backed securities | U.S. Treasury and other U.S. government corporations and agencies | ||
Fair Value | ||
Less than 12 months | 1,596 | 581 |
12 months or more | 583 | 672 |
Total | 2,179 | 1,253 |
Gross Unrealized Losses | ||
Less than 12 months | (40) | (2) |
12 months or more | (29) | (17) |
Total | (69) | (19) |
Tax-exempt municipal securities | ||
Fair Value | ||
Less than 12 months | 2,245 | 1,590 |
12 months or more | 456 | 661 |
Total | 2,701 | 2,251 |
Gross Unrealized Losses | ||
Less than 12 months | (34) | (16) |
12 months or more | (15) | (12) |
Total | (49) | (28) |
Residential mortgage-backed securities | ||
Fair Value | ||
Less than 12 months | 16 | 20 |
12 months or more | 1 | 3 |
Total | 17 | 23 |
Gross Unrealized Losses | ||
Less than 12 months | 0 | 0 |
12 months or more | 0 | 0 |
Total | 0 | 0 |
Commercial mortgage-backed securities | ||
Fair Value | ||
Less than 12 months | 457 | 131 |
12 months or more | 27 | 28 |
Total | 484 | 159 |
Gross Unrealized Losses | ||
Less than 12 months | (14) | (1) |
12 months or more | (2) | (1) |
Total | (16) | (2) |
Asset-backed securities | ||
Fair Value | ||
Less than 12 months | 334 | 107 |
12 months or more | 4 | 10 |
Total | 338 | 117 |
Gross Unrealized Losses | ||
Less than 12 months | (2) | 0 |
12 months or more | 0 | 0 |
Total | (2) | 0 |
Corporate debt securities | ||
Fair Value | ||
Less than 12 months | 2,037 | 1,297 |
12 months or more | 533 | 804 |
Total | 2,570 | 2,101 |
Gross Unrealized Losses | ||
Less than 12 months | (62) | (10) |
12 months or more | (34) | (27) |
Total | $ (96) | $ (37) |
INVESTMENT SECURITIES - Additional Information (Detail) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018
USD ($)
position
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
position
|
Jun. 30, 2017
USD ($)
|
|
Investments, Debt and Equity Securities [Abstract] | ||||
Percentage of debt securities considered to be of investment-grade | 98.00% | 98.00% | ||
Maximum percentage of any general obligation bonds in one state | 9.00% | |||
Percent of tax exempt securities insured | 2.00% | 2.00% | ||
Securities in unrealized loss positions, number of positions | 1,180 | 1,180 | ||
Number of positions | 1,480 | 1,480 | ||
Other-than-temporary impairments | $ | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 |
INVESTMENT SECURITIES - Realized Gains (Losses) Within Investment Income (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Gross realized gains | $ 63 | $ 4 | $ 94 | $ 31 |
Gross realized losses | (10) | (2) | (12) | (3) |
Net realized capital gains | $ 53 | $ 2 | $ 82 | $ 28 |
INVESTMENT SECURITIES - Contractual Maturities, Available for Sale (Detail) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Amortized Cost | ||
Due within one year | $ 722 | |
Due after one year through five years | 3,016 | |
Due after five years through ten years | 2,100 | |
Due after ten years | 784 | |
Mortgage and asset-backed securities | 3,451 | |
Amortized Cost | 10,073 | $ 12,104 |
Fair Value | ||
Due within one year | 720 | |
Due after one year through five years | 2,964 | |
Due after five years through ten years | 2,022 | |
Due after ten years | 772 | |
Mortgage and asset-backed securities | 3,365 | |
Fair Value | $ 9,843 | $ 12,302 |
FAIR VALUE - Financial Assets Measured on Recurring Basis (Detail) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 9,843 | $ 12,302 |
Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,999 | 3,889 |
Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 17 | 26 |
Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 517 | 456 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 573 | 408 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,852 | 5,382 |
U.S. Treasury and other U.S. government corporations and agencies | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 627 | 531 |
U.S. Treasury and other U.S. government corporations and agencies | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,258 | 1,610 |
Measured On Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 6,279 | 4,564 |
Debt securities | 9,843 | 12,302 |
Total invested assets | 16,122 | 16,866 |
Measured On Recurring Basis | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,999 | 3,889 |
Measured On Recurring Basis | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 17 | 26 |
Measured On Recurring Basis | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 517 | 456 |
Measured On Recurring Basis | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 573 | 408 |
Measured On Recurring Basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,852 | 5,382 |
Measured On Recurring Basis | U.S. Treasury and other U.S. government corporations and agencies | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 627 | 531 |
Measured On Recurring Basis | U.S. Treasury and other U.S. government corporations and agencies | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,258 | 1,610 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 6,279 | 4,564 |
Debt securities | 0 | 0 |
Total invested assets | 6,279 | 4,564 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | U.S. Treasury and other U.S. government corporations and agencies | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Quoted Prices in Active Markets (Level 1) | U.S. Treasury and other U.S. government corporations and agencies | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Debt securities | 9,843 | 12,301 |
Total invested assets | 9,843 | 12,301 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,999 | 3,889 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 17 | 26 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 517 | 456 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 573 | 408 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,852 | 5,381 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | U.S. Treasury and other U.S. government corporations and agencies | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 627 | 531 |
Measured On Recurring Basis | Other Observable Inputs (Level 2) | U.S. Treasury and other U.S. government corporations and agencies | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 2,258 | 1,610 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Debt securities | 0 | 1 |
Total invested assets | 0 | 1 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | Tax-exempt municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 1 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | U.S. Treasury and other U.S. government corporations and agencies | U.S. Treasury and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | 0 | 0 |
Measured On Recurring Basis | Unobservable Inputs (Level 3) | U.S. Treasury and other U.S. government corporations and agencies | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 0 | $ 0 |
FAIR VALUE - Additional Information (Detail) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt | $ 398 | $ 150 |
Commercial Paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt | 398 | 150 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying value of debt outstanding | 4,773 | 4,770 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying value of debt outstanding | $ 4,909 | $ 5,191 |
MEDICARE PART D (Detail) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Other current assets | $ 4,410 | $ 2,949 |
Trade accounts payable and accrued expenses | (6,952) | (4,069) |
Other long-term assets | 1,506 | 2,166 |
Other long-term liabilities | (321) | (237) |
Risk Corridor Settlement | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 6 | 4 |
Trade accounts payable and accrued expenses | (232) | (255) |
Net current (liability) asset | (226) | (251) |
Other long-term assets | 64 | 0 |
Other long-term liabilities | (87) | (28) |
Net long-term liability | (23) | (28) |
Total net (liability) asset | (249) | (279) |
CMS Subsidies/ Discounts | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 42 | 101 |
Trade accounts payable and accrued expenses | (2,588) | (1,085) |
Net current (liability) asset | (2,546) | (984) |
Other long-term assets | 0 | 0 |
Other long-term liabilities | 0 | 0 |
Net long-term liability | 0 | 0 |
Total net (liability) asset | $ (2,546) | $ (984) |
HEALTH CARE REFORM (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2018 |
Jun. 30, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
Nov. 02, 2017 |
|
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||||||
Litigation recoveries sought | $ 611 | |||||
Other current assets | $ 4,410 | $ 4,410 | $ 2,949 | |||
Trade accounts payable and accrued expenses | (6,952) | (6,952) | (4,069) | |||
Other long-term assets | 1,506 | 1,506 | 2,166 | |||
Other long-term liabilities | (321) | (321) | (237) | |||
Health Care Reform | ||||||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||||||
Amortization of deferred charges | 257 | 520 | ||||
Prior Coverage Years | ||||||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||||||
Proceeds from risk corridor settlements | 46 | $ 64 | ||||
Forecast | Health Care Reform | ||||||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||||||
Payment of annual health insurance industry fee | $ 1,040 | |||||
Risk Adjustment Settlement | ||||||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||||||
Total net (liability) asset | (64) | (64) | (13) | |||
Risk Adjustment Settlement | Prior Coverage Years | ||||||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||||||
Premiums receivable | 65 | 65 | 62 | |||
Other current assets | 0 | 0 | 0 | |||
Trade accounts payable and accrued expenses | (103) | (103) | (80) | |||
Other long-term assets | 1 | 1 | 5 | |||
Risk Adjustment Settlement | Current Coverage Year | ||||||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||||||
Other long-term liabilities | (27) | (27) | 0 | |||
Reinsurance Recoverables | ||||||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||||||
Total net (liability) asset | 0 | 0 | 44 | |||
Reinsurance Recoverables | Prior Coverage Years | ||||||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||||||
Premiums receivable | 0 | 0 | 0 | |||
Other current assets | 0 | 0 | 44 | |||
Trade accounts payable and accrued expenses | 0 | 0 | 0 | |||
Other long-term assets | 0 | 0 | 0 | |||
Reinsurance Recoverables | Current Coverage Year | ||||||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||||||
Other long-term liabilities | $ 0 | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill by Segments (Detail) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning balance | $ 3,281 |
Acquisitions | 614 |
Ending balance | 3,895 |
Retail | |
Goodwill [Roll Forward] | |
Beginning balance | 1,059 |
Acquisitions | 476 |
Ending balance | 1,535 |
Group and Specialty | |
Goodwill [Roll Forward] | |
Beginning balance | 261 |
Acquisitions | 0 |
Ending balance | 261 |
Healthcare Services | |
Goodwill [Roll Forward] | |
Beginning balance | 1,961 |
Acquisitions | 138 |
Ending balance | $ 2,099 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Details of Intangible Assets Included in Other Long-Term Assets (Detail) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 8 years 8 months | |
Cost | $ 832 | $ 770 |
Accumulated Amortization | 548 | 544 |
Net | $ 284 | 226 |
Customer contracts/ relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 8 years 8 months | |
Cost | $ 646 | 566 |
Accumulated Amortization | 404 | 401 |
Net | $ 242 | 165 |
Trade names and technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 6 years 5 months | |
Cost | $ 84 | 104 |
Accumulated Amortization | 80 | 84 |
Net | $ 4 | 20 |
Provider contracts | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 11 years 11 months | |
Cost | $ 68 | 68 |
Accumulated Amortization | 34 | 30 |
Net | $ 34 | 38 |
Noncompetes and other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 8 years 1 month | |
Cost | $ 34 | 32 |
Accumulated Amortization | 30 | 29 |
Net | $ 4 | $ 3 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Estimated Amortization Expense (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense for other intangible assets | $ 21 | $ 18 | $ 51 | $ 36 |
Amortization expense, trade name write-off | 12 | |||
For the years ending December 31, | ||||
2018 | 91 | 91 | ||
2019 | 72 | 72 | ||
2020 | 69 | 69 | ||
2021 | 36 | 36 | ||
2022 | 26 | 26 | ||
2023 | $ 16 | $ 16 |
BENEFITS PAYABLE - Activity in Benefits Payable (Detail) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances, beginning of period | $ 4,668 | $ 4,563 |
Less: Reinsurance recoverables | (70) | (76) |
Balances, beginning of period, net | 4,598 | 4,487 |
Incurred related to: | ||
Current year | 23,543 | 22,576 |
Prior years | (338) | (345) |
Total incurred | 23,205 | 22,231 |
Paid related to: | ||
Current year | (18,914) | (18,332) |
Prior years | (3,897) | (3,626) |
Total paid | (22,811) | (21,958) |
Reinsurance recoverable | 86 | 78 |
Balances, end of period | 5,020 | 4,838 |
Retail | ||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances, beginning of period | 3,963 | 3,507 |
Less: Reinsurance recoverables | (70) | (76) |
Balances, beginning of period, net | 3,893 | 3,431 |
Incurred related to: | ||
Current year | 21,069 | 20,010 |
Prior years | (247) | (287) |
Total incurred | 20,822 | 19,723 |
Paid related to: | ||
Current year | (17,061) | (16,385) |
Prior years | (3,327) | (2,707) |
Total paid | (20,388) | (19,092) |
Reinsurance recoverable | 86 | 78 |
Balances, end of period | 4,413 | 4,140 |
Total IBNR | 2,900 | |
Group and Specialty | ||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances, beginning of period | 568 | 578 |
Incurred related to: | ||
Current year | 2,665 | 2,629 |
Prior years | (34) | (31) |
Total incurred | 2,631 | 2,598 |
Paid related to: | ||
Current year | (2,094) | (2,117) |
Prior years | (496) | (518) |
Total paid | (2,590) | (2,635) |
Balances, end of period | 609 | 541 |
Total IBNR | 530 | |
Individual Commercial | ||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances, beginning of period | 101 | 454 |
Incurred related to: | ||
Current year | 0 | 304 |
Prior years | (55) | (26) |
Total incurred | (55) | 278 |
Paid related to: | ||
Current year | 0 | (223) |
Prior years | (31) | (378) |
Total paid | (31) | (601) |
Balances, end of period | 15 | 131 |
Total IBNR | 6 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Paid related to: | ||
Less: Held-for-sale | $ (58) | $ 0 |
BENEFITS PAYABLE - Benefit Expenses Excluded From Activity in Benefits Payable (Detail) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Total future policy benefits | $ 1 | $ (16) |
Operating Segments | Individual Commercial | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Total future policy benefits | (14) | (36) |
Other Businesses | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Total future policy benefits | $ 15 | $ 20 |
BENEFITS PAYABLE - Reconciliation to Consolidated (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | $ 4,992 | |||
Reinsurance recoverable on unpaid claims | 86 | $ 70 | $ 78 | $ 76 |
Benefits payable | 5,020 | 4,668 | 4,838 | 4,563 |
Retail | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Reinsurance recoverable on unpaid claims | 86 | 70 | 78 | 76 |
Benefits payable | 4,413 | 3,963 | 4,140 | 3,507 |
Group and Specialty | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable | 609 | 568 | 541 | 578 |
Individual Commercial | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable | 15 | $ 101 | 131 | $ 454 |
Operating Segments | Retail | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | 4,327 | |||
Operating Segments | Group and Specialty | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | 609 | |||
Operating Segments | Individual Commercial | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | 15 | |||
Other Businesses | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Benefits payable, net of reinsurance | 41 | |||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Held-for-sale | $ (58) | $ 0 |
EARNINGS PER COMMON SHARE COMPUTATION (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income available for common stockholders | $ 193 | $ 650 | $ 684 | $ 1,765 |
Weighted average outstanding shares of common stock used to compute basic earnings per common share (in shares) | 137,763 | 144,600 | 137,833 | 146,212 |
Shares used to compute diluted earnings per common share (in shares) | 138,576 | 145,634 | 138,703 | 147,253 |
Basic earnings per common share (in dollars per share) | $ 1.40 | $ 4.49 | $ 4.96 | $ 12.07 |
Diluted earnings per common share (in dollars per share) | $ 1.39 | $ 4.46 | $ 4.93 | $ 11.98 |
Number of antidilutive stock options and restricted stock excluded from computation (in shares) | 171 | 449 | 408 | 693 |
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) | 197 | 158 | 205 | 179 |
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) | 616 | 876 | 665 | 862 |
STOCKHOLDERS' EQUITY - Schedule of Details of Dividend Payments (Detail) - USD ($) $ / shares in Units, $ in Millions |
Jul. 27, 2018 |
Apr. 27, 2018 |
Jan. 26, 2018 |
Oct. 27, 2017 |
Jul. 31, 2017 |
Apr. 28, 2017 |
Jan. 27, 2017 |
---|---|---|---|---|---|---|---|
Subsequent Event [Line Items] | |||||||
Amount per Share (in dollars per share) | $ 0.50 | $ 0.40 | $ 0.40 | $ 0.40 | $ 0.40 | $ 0.29 | |
Total Amount | $ 69 | $ 55 | $ 57 | $ 58 | $ 58 | $ 43 | |
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Amount per Share (in dollars per share) | $ 0.50 | ||||||
Total Amount | $ 69 |
STOCKHOLDERS' EQUITY - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 26, 2018 |
Dec. 22, 2017 |
Mar. 26, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Aug. 01, 2018 |
Dec. 31, 2017 |
Dec. 21, 2017 |
Dec. 14, 2017 |
|
Equity, Class of Treasury Stock [Line Items] | |||||||||
Stock repurchase program, authorized amount | $ 3,000,000,000 | ||||||||
Shares | 80 | 0 | |||||||
Value of shares repurchased | $ 24,000,000 | $ 0 | |||||||
Common shares acquired in connection with employee stock plans (in shares) | 250 | 370 | |||||||
Common shares acquired in connection with employee stock plans, amount | $ 69,000,000 | $ 78,000,000 | |||||||
Treasury stock reissued (in shares) | 850 | ||||||||
Treasury stock reissued | $ 89,000,000 | ||||||||
Accumulated other comprehensive gain (loss) | (176,000,000) | $ 19,000,000 | |||||||
Net unrealized (losses) gains on investment securities | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Accumulated other comprehensive gain (loss) | $ (176,000,000) | 125,000,000 | |||||||
Additional liability that would exist on closed block of long-term care policies assuming unrealized gains on investments backing such products were realized and reinvested at current yields | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Accumulated other comprehensive gain (loss) | $ 106,000,000 | ||||||||
Subsequent Event | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Remaining authorized amount | $ 2,000,000,000 | ||||||||
December 2017 ASR | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Stock repurchase program, authorized amount | $ 1,000,000,000.0 | ||||||||
Share repurchase payment | $ 1,000,000,000 | ||||||||
Shares | 460 | 3,280 | 3,740 | ||||||
Value of shares repurchased | $ 200,000,000 | $ 800,000,000 | |||||||
Decrease in capital in excess of par value | $ 200,000,000 | ||||||||
Average cost per share (in dollars per share) | $ 267.55 |
STOCKHOLDERS' EQUITY - Share Repurchases (Details) - USD ($) shares in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 14, 2017 |
|
Equity, Class of Treasury Stock [Line Items] | |||
Purchase Not to Exceed | $ 3,000,000,000 | ||
Shares | 80 | 0 | |
Cost | $ 24,000,000 | $ 0 | |
February 2017 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Purchase Not to Exceed | $ 2,250,000,000 | ||
Shares | 0 | 0 | |
Cost | $ 0 | $ 0 | |
December 2017 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Purchase Not to Exceed | $ 3,000,000,000 | ||
Shares | 80 | 0 | |
Cost | $ 24,000,000 | $ 0 |
INCOME TAXES (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Effective income tax rate | 5.80% | 35.40% | |
Provisional income tax benefit, Tax Reform Law | $ 12.7 | ||
KMG America Corporation | Disposal Group, Held-for-sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Tax benefit on sale of subsidiary | $ 430.0 | $ 430.0 |
DEBT - Senior Notes (Details) - Senior Notes - USD ($) |
1 Months Ended | 6 Months Ended | |
---|---|---|---|
Mar. 31, 2017 |
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Debt Instrument [Line Items] | |||
Long-term debt | $ 4,773,000,000 | $ 4,770,000,000 | |
Proceeds from debt, net of discounts and offering expenses | $ 991,000,000 | ||
Redemption price, percentage | 100.00% | ||
$400 million, 2.625% due October 1, 2019 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 399,000,000 | 399,000,000 | |
Face amount | $ 400,000,000 | ||
Stated interest rate | 2.625% | ||
$400 million, 2.50% due December 15, 2020 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 398,000,000 | 397,000,000 | |
Face amount | $ 400,000,000 | ||
Stated interest rate | 2.50% | ||
$400 million, 2.90% due December 15, 2022 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 396,000,000 | 396,000,000 | |
Face amount | $ 400,000,000 | ||
Stated interest rate | 2.90% | ||
$600 million, 3.15% due December 1, 2022 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 596,000,000 | 595,000,000 | |
Face amount | $ 600,000,000 | ||
Stated interest rate | 3.15% | ||
$600 million, 3.85% due October 1, 2024 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 596,000,000 | 595,000,000 | |
Face amount | $ 600,000,000 | ||
Stated interest rate | 3.85% | ||
$600 million, 3.95% due March 15, 2027 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 595,000,000 | 594,000,000 | |
Face amount | $ 600,000,000 | $ 600,000,000 | |
Stated interest rate | 3.95% | 3.95% | |
$250 million, 8.15% due June 15, 2038 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 263,000,000 | 263,000,000 | |
Face amount | $ 250,000,000 | ||
Stated interest rate | 8.15% | ||
$400 million, 4.625% due December 1, 2042 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 396,000,000 | 396,000,000 | |
Face amount | $ 400,000,000 | ||
Stated interest rate | 4.625% | ||
$750 million, 4.95% due October 1, 2044 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 739,000,000 | 739,000,000 | |
Face amount | $ 750,000,000 | ||
Stated interest rate | 4.95% | ||
$400 million, 4.80% due March 15, 2047 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 395,000,000 | $ 396,000,000 | |
Face amount | $ 400,000,000 | $ 400,000,000 | |
Stated interest rate | 4.80% | 4.80% |
DEBT - Credit Agreement (Details) - Line of Credit |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Credit Agreement | Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 2,500,000,000 |
Debt to capitalization percentage, maximum | 50.00% |
Actual debt to capitalization percentage | 33.60% |
Uncommitted incremental loan facility | $ 500,000,000 |
Line of credit, outstanding borrowings | 0 |
Credit Agreement | Letter of Credit | |
Line of Credit Facility [Line Items] | |
Line of credit, outstanding borrowings | $ 0 |
Credit Agreement | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Interest rate spread | 1.10% |
Facility fee (percentage) | 0.15% |
Credit Agreement | Minimum | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Interest rate spread | 0.91% |
Facility fee (percentage) | 0.09% |
Credit Agreement | Maximum | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Interest rate spread | 1.50% |
Facility fee (percentage) | 0.25% |
Unsecured Revolving Credit Agreement, Expires May 2022 | Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Term | 5 years |
Maximum borrowing capacity | $ 2,000,000,000 |
Remaining borrowing capacity | $ 2,000,000,000 |
DEBT - Commercial Paper (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Short-term Debt [Line Items] | ||
Outstanding borrowings | $ 398,000,000 | $ 150,000,000 |
Commercial Paper | ||
Short-term Debt [Line Items] | ||
Maximum borrowing capacity | 2,000,000,000 | |
Maximum amount outstanding during period | 442,000,000 | |
Outstanding borrowings | $ 398,000,000 | $ 150,000,000 |
GUARANTEES AND CONTINGENCIES (Detail) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Nov. 02, 2017 |
|
Loss Contingencies [Line Items] | ||
Litigation recoveries sought | $ 611 | |
Medicare | ||
Loss Contingencies [Line Items] | ||
Percentage of premiums and services revenue | 80.00% | |
Medicaid | ||
Loss Contingencies [Line Items] | ||
Percentage of premiums and services revenue | 4.00% | |
Military service | ||
Loss Contingencies [Line Items] | ||
Percentage of premiums and services revenue | 1.00% |
SEGMENT INFORMATION - Additional Information (Detail) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
Segment
|
Jun. 30, 2017
USD ($)
|
|
Segment Reporting [Abstract] | ||||
Number of reportable segments | Segment | 4 | |||
Member co-share amounts and government subsidies | $ 3,300 | $ 3,200 | $ 6,200 | $ 6,200 |
Depreciation and amortization classified as benefit expense | $ 30 | $ 27 | $ 69 | $ 53 |
SEGMENT INFORMATION - Reconciliation (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Feb. 16, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Segment Reporting Information [Line Items] | |||||
Premiums | $ 13,713 | $ 13,203 | $ 27,524 | $ 26,601 | |
Services revenue | 382 | 230 | 709 | 483 | |
Investment income | 164 | 101 | 305 | 212 | |
Total revenues | 14,259 | 13,534 | 28,538 | 27,296 | |
Benefits | 11,536 | 10,889 | 23,206 | 22,215 | |
Operating costs | 1,761 | 1,453 | 3,510 | 3,006 | |
Merger termination fee and related costs, net | $ 1,000 | 0 | 0 | 0 | (947) |
Depreciation and amortization | 100 | 92 | 200 | 184 | |
Total operating expenses | 13,397 | 12,434 | 26,916 | 24,458 | |
Income (loss) from operations | 862 | 1,100 | 1,622 | 2,838 | |
Loss on business held-for-sale | (790) | (790) | 0 | ||
Interest expense | 53 | 58 | 106 | 107 | |
Income (loss) before income taxes | 19 | 1,042 | 726 | 2,731 | |
Individual Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 8,908 | 8,282 | 17,878 | 16,658 | |
Group Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 1,509 | 1,277 | 3,033 | 2,595 | |
Medicare stand-alone PDP | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 914 | 925 | 1,810 | 1,866 | |
Total Medicare | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 11,331 | 10,484 | 22,721 | 21,119 | |
Fully-insured | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 1,481 | 1,715 | 2,993 | 3,494 | |
Specialty | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 342 | 323 | 689 | 645 | |
Medicaid and other | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 559 | 681 | 1,121 | 1,343 | |
Total revenues - external customers | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 14,095 | 13,433 | 28,233 | 27,084 | |
Services | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 382 | 230 | 709 | 483 | |
Services | Provider | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 112 | 63 | 177 | 133 | |
Services | ASO and other | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 213 | 147 | 436 | 312 | |
Services | Pharmacy | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 57 | 20 | 96 | 38 | |
Operating Segments | Retail | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 12,006 | 11,273 | 24,074 | 22,679 | |
Investment income | 30 | 24 | 67 | 49 | |
Total revenues | 12,039 | 11,299 | 24,146 | 22,732 | |
Benefits | 10,270 | 9,672 | 20,822 | 19,723 | |
Operating costs | 1,210 | 963 | 2,432 | 1,917 | |
Merger termination fee and related costs, net | 0 | ||||
Depreciation and amortization | 66 | 57 | 132 | 115 | |
Total operating expenses | 11,546 | 10,692 | 23,386 | 21,755 | |
Income (loss) from operations | 493 | 607 | 760 | 977 | |
Loss on business held-for-sale | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | 0 | |
Income (loss) before income taxes | 493 | 607 | 760 | 977 | |
Operating Segments | Retail | Individual Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 8,908 | 8,282 | 17,878 | 16,658 | |
Operating Segments | Retail | Group Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 1,509 | 1,277 | 3,033 | 2,595 | |
Operating Segments | Retail | Medicare stand-alone PDP | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 914 | 925 | 1,810 | 1,866 | |
Operating Segments | Retail | Total Medicare | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 11,331 | 10,484 | 22,721 | 21,119 | |
Operating Segments | Retail | Fully-insured | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 125 | 118 | 250 | 236 | |
Operating Segments | Retail | Specialty | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Retail | Medicaid and other | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 550 | 671 | 1,103 | 1,324 | |
Operating Segments | Retail | Total revenues - external customers | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 12,009 | 11,275 | 24,079 | 22,683 | |
Operating Segments | Retail | Services | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 3 | 2 | 5 | 4 | |
Operating Segments | Retail | Services | Provider | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | 0 | 0 | |
Operating Segments | Retail | Services | ASO and other | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 3 | 2 | 5 | 4 | |
Operating Segments | Retail | Services | Pharmacy | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | 0 | 0 | |
Operating Segments | Group and Specialty | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 1,688 | 1,673 | 3,427 | 3,373 | |
Investment income | 6 | 7 | 13 | 18 | |
Total revenues | 1,906 | 1,828 | 3,876 | 3,705 | |
Benefits | 1,357 | 1,312 | 2,630 | 2,598 | |
Operating costs | 447 | 394 | 910 | 793 | |
Merger termination fee and related costs, net | 0 | ||||
Depreciation and amortization | 22 | 21 | 45 | 42 | |
Total operating expenses | 1,826 | 1,727 | 3,585 | 3,433 | |
Income (loss) from operations | 80 | 101 | 291 | 272 | |
Loss on business held-for-sale | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | 0 | |
Income (loss) before income taxes | 80 | 101 | 291 | 272 | |
Operating Segments | Group and Specialty | Individual Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Group and Specialty | Group Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Group and Specialty | Medicare stand-alone PDP | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Group and Specialty | Total Medicare | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Group and Specialty | Fully-insured | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 1,346 | 1,350 | 2,738 | 2,728 | |
Operating Segments | Group and Specialty | Specialty | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 342 | 323 | 689 | 645 | |
Operating Segments | Group and Specialty | Medicaid and other | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Group and Specialty | Total revenues - external customers | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 1,896 | 1,816 | 3,854 | 3,677 | |
Operating Segments | Group and Specialty | Services | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 208 | 143 | 427 | 304 | |
Operating Segments | Group and Specialty | Services | Provider | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | 0 | 0 | |
Operating Segments | Group and Specialty | Services | ASO and other | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 208 | 143 | 427 | 304 | |
Operating Segments | Group and Specialty | Services | Pharmacy | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | 0 | 0 | |
Operating Segments | Healthcare Services | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Investment income | 17 | 8 | 23 | 16 | |
Total revenues | 5,991 | 5,982 | 11,654 | 11,940 | |
Benefits | 0 | 0 | 0 | 0 | |
Operating costs | 5,749 | 5,677 | 11,190 | 11,357 | |
Merger termination fee and related costs, net | 0 | ||||
Depreciation and amortization | 36 | 35 | 85 | 69 | |
Total operating expenses | 5,785 | 5,712 | 11,275 | 11,426 | |
Income (loss) from operations | 206 | 270 | 379 | 514 | |
Loss on business held-for-sale | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | 0 | |
Income (loss) before income taxes | 206 | 270 | 379 | 514 | |
Operating Segments | Healthcare Services | Individual Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Healthcare Services | Group Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Healthcare Services | Medicare stand-alone PDP | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Healthcare Services | Total Medicare | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Healthcare Services | Fully-insured | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Healthcare Services | Specialty | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Healthcare Services | Medicaid and other | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Healthcare Services | Total revenues - external customers | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 169 | 83 | 273 | 171 | |
Operating Segments | Healthcare Services | Services | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 169 | 83 | 273 | 171 | |
Operating Segments | Healthcare Services | Services | Provider | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 112 | 63 | 177 | 133 | |
Operating Segments | Healthcare Services | Services | ASO and other | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | 0 | 0 | |
Operating Segments | Healthcare Services | Services | Pharmacy | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 57 | 20 | 96 | 38 | |
Operating Segments | Individual Commercial | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 10 | 247 | 5 | 530 | |
Investment income | 0 | 1 | 0 | 2 | |
Total revenues | 10 | 248 | 5 | 532 | |
Benefits | (9) | 86 | (69) | 242 | |
Operating costs | 1 | 40 | 3 | 102 | |
Merger termination fee and related costs, net | 0 | ||||
Depreciation and amortization | 0 | 4 | 0 | 7 | |
Total operating expenses | (8) | 130 | (66) | 351 | |
Income (loss) from operations | 18 | 118 | 71 | 181 | |
Loss on business held-for-sale | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | 0 | |
Income (loss) before income taxes | 18 | 118 | 71 | 181 | |
Operating Segments | Individual Commercial | Individual Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Individual Commercial | Group Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Individual Commercial | Medicare stand-alone PDP | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Individual Commercial | Total Medicare | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Individual Commercial | Fully-insured | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 10 | 247 | 5 | 530 | |
Operating Segments | Individual Commercial | Specialty | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Individual Commercial | Medicaid and other | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Operating Segments | Individual Commercial | Total revenues - external customers | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 10 | 247 | 5 | 530 | |
Operating Segments | Individual Commercial | Services | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | 0 | 0 | |
Operating Segments | Individual Commercial | Services | Provider | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | 0 | 0 | |
Operating Segments | Individual Commercial | Services | ASO and other | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | 0 | 0 | |
Operating Segments | Individual Commercial | Services | Pharmacy | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | 0 | 0 | |
Intersegment revenues | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | (5,809) | (5,896) | (11,367) | (11,763) | |
Intersegment revenues | Services | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | (4,198) | (4,314) | (8,221) | (8,629) | |
Intersegment revenues | Products | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | (1,611) | (1,582) | (3,146) | (3,134) | |
Intersegment revenues | Retail | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Intersegment revenues | Retail | Services | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Intersegment revenues | Retail | Products | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Intersegment revenues | Group and Specialty | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 4 | 5 | 9 | 10 | |
Intersegment revenues | Group and Specialty | Services | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 4 | 5 | 9 | 10 | |
Intersegment revenues | Group and Specialty | Products | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Intersegment revenues | Healthcare Services | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 5,805 | 5,891 | 11,358 | 11,753 | |
Intersegment revenues | Healthcare Services | Services | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 4,194 | 4,309 | 8,212 | 8,619 | |
Intersegment revenues | Healthcare Services | Products | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 1,611 | 1,582 | 3,146 | 3,134 | |
Intersegment revenues | Individual Commercial | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Intersegment revenues | Individual Commercial | Services | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Intersegment revenues | Individual Commercial | Products | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Other Businesses | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 9 | 10 | 18 | 19 | |
Investment income | 65 | 21 | 100 | 42 | |
Total revenues | 76 | 33 | 122 | 65 | |
Benefits | 39 | 32 | 65 | 61 | |
Operating costs | 2 | 2 | 4 | 6 | |
Merger termination fee and related costs, net | 0 | ||||
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Total operating expenses | 41 | 34 | 69 | 67 | |
Income (loss) from operations | 35 | (1) | 53 | (2) | |
Loss on business held-for-sale | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | 0 | |
Income (loss) before income taxes | 35 | (1) | 53 | (2) | |
Other Businesses | Individual Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Other Businesses | Group Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Other Businesses | Medicare stand-alone PDP | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Other Businesses | Total Medicare | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Other Businesses | Fully-insured | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Other Businesses | Specialty | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | 0 | 0 | |
Other Businesses | Medicaid and other | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 9 | 10 | 18 | 19 | |
Other Businesses | Total revenues - external customers | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 11 | 12 | 22 | 23 | |
Other Businesses | Services | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 2 | 2 | 4 | 4 | |
Other Businesses | Services | Provider | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | 0 | 0 | |
Other Businesses | Services | ASO and other | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 2 | 2 | 4 | 4 | |
Other Businesses | Services | Pharmacy | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | 0 | 0 | |
Eliminations/ Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | |||
Investment income | 46 | 40 | 102 | 85 | |
Total revenues | (5,763) | (5,856) | (11,265) | (11,678) | |
Benefits | (121) | (213) | (242) | (409) | |
Operating costs | (5,648) | (5,623) | (11,029) | (11,169) | |
Merger termination fee and related costs, net | (947) | ||||
Depreciation and amortization | (24) | (25) | (62) | (49) | |
Total operating expenses | (5,793) | (5,861) | (11,333) | (12,574) | |
Income (loss) from operations | 30 | 5 | 68 | 896 | |
Loss on business held-for-sale | (790) | (790) | |||
Interest expense | 53 | 58 | 106 | 107 | |
Income (loss) before income taxes | (813) | (53) | $ (828) | $ 789 | |
Eliminations/ Corporate | Individual Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | |||
Eliminations/ Corporate | Group Medicare Advantage | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | |||
Eliminations/ Corporate | Medicare stand-alone PDP | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | |||
Eliminations/ Corporate | Total Medicare | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | |||
Eliminations/ Corporate | Fully-insured | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | |||
Eliminations/ Corporate | Specialty | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | |||
Eliminations/ Corporate | Medicaid and other | |||||
Segment Reporting Information [Line Items] | |||||
Premiums | 0 | 0 | |||
Eliminations/ Corporate | Total revenues - external customers | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 0 | 0 | |||
Eliminations/ Corporate | Services | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | |||
Eliminations/ Corporate | Services | Provider | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | |||
Eliminations/ Corporate | Services | ASO and other | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | 0 | 0 | |||
Eliminations/ Corporate | Services | Pharmacy | |||||
Segment Reporting Information [Line Items] | |||||
Services revenue | $ 0 | $ 0 |