SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

We manage our business with three reportable segments: Retail, Group and Specialty, and Healthcare Services. The reportable segments are based on a combination of the type of health plan customer and adjacent businesses centered on well-being solutions for our health plans and other customers, as described below. These segment groupings are consistent with information used by our Chief Executive Officer, the Chief Operating Decision Maker, to assess performance and allocate resources.

The Retail segment consists of Medicare benefits, marketed to individuals or directly via group Medicare accounts. In addition, the Retail segment also includes our contract with CMS to administer the Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program and contracts with various states to provide Medicaid, dual eligible demonstration, and Long-Term Support Services benefits, which we refer to collectively as our state-based contracts. The Group and Specialty segment consists of employer group commercial fully-insured medical and specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health benefits, as well as administrative services only, or ASO products. In addition, our Group and Specialty segment includes our military services business, primarily our TRICARE T2017 East Region contract. The Healthcare Services segment includes pharmacy, provider, and home services, along with other services and capabilities to promote wellness and advance population health. The operations of the recently acquired full ownership of Kindred at Home, as well as the company's strategic partnership with Welsh, Carson, Anderson & Stowe (WCAS) to develop and operate senior-focused, payor-agnostic, primary care centers are also included in the Healthcare Services segment.

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 $18.1 billion in 2021, $16.5 billion in 2020, and $14.9 billion in 2019. 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 $108 million in 2021, $127 million in 2020, and $117 million in 2019.

Other than those described previously, the accounting policies of each segment are the same and are described in Note 2. Transactions between reportable segments primarily consist of sales of services rendered by our Healthcare Services segment, primarily pharmacy, provider, and home services, to our Retail and Group and Specialty segment customers. Intersegment sales and expenses are recorded at fair value and eliminated in consolidation. Members served by our segments often use the same provider networks, enabling us in some instances to obtain more favorable contract terms with providers. Our segments also share indirect costs and assets. As a result, the profitability of each segment is interdependent. We allocate most operating expenses to our segments. Assets and certain corporate income and expenses are not allocated to the segments, including the portion of investment income not supporting segment operations, interest expense on corporate debt, and certain other corporate expenses. These items are managed at a corporate level. These corporate amounts are reported separately from our reportable segments and are included with intersegment eliminations in the tables presenting segment results below.

Premium and services revenues derived from our contracts with the federal government, as a percentage of our total premium and services revenues, were approximately 83% for 2021, 83% for 2020 and 82% for 2019.

	Retail		Group and Specialty		Healthcare Services		Eliminations/ Corporate		Consolidated
	(in millions)
2021
External revenues
Premiums:
Individual Medicare Advantage	$	58,654	$	—	$	—	$	—	$	58,654
Group Medicare Advantage	6,955		—		—		—		6,955
Medicare stand-alone PDP	2,371		—		—		—		2,371
Total Medicare	67,980		—		—		—		67,980
Fully-insured	731		4,271		—		—		5,002
Specialty	—		1,731		—		—		1,731
Medicaid and other	5,109		—		—		—		5,109
Total premiums	73,820		6,002		—		—		79,822
Services revenue:
Home Solutions	—		—		1,166		—		1,166
Provider	—		—		413		—		413
ASO and other	23		816		—		—		839
Pharmacy	—		—		637		—		637
Total services revenue	23		816		2,216		—		3,055
Total external revenues	73,843		6,818		2,216		—		82,877
Intersegment revenues
Services	1		40		19,998		(20,039)		—
Products	—		—		9,024		(9,024)		—
Total intersegment revenues	1		40		29,022		(29,063)		—
Investment income	200		14		4		(31)		187
Total revenues	74,044		6,872		31,242		(29,094)		83,064
Operating expenses:
Benefits	64,907		4,951		—		(659)		69,199
Operating costs	6,764		1,687		29,801		(28,131)		10,121
Depreciation and amortization	436		85		177		(102)		596
Total operating expenses	72,107		6,723		29,978		(28,892)		79,916
Income (loss) from operations	1,937		149		1,264		(202)		3,148
Interest expense	—		—		—		326		326
Other income, net	—		—		—		(532)		(532)
Income before income taxes and equity in net earnings	1,937		149		1,264		4		3,354
Equity in net earnings	—		—		65		—		65
Segment earnings	$	1,937	$	149	$	1,329	$	4	$	3,419
Less: noncontrolling interests	—		—		(1)		—		(1)
Segment earnings attributable to Humana	$	1,937	$	149	$	1,328	$	4	$	3,418

	Retail		Group and Specialty		Healthcare Services		Eliminations/ Corporate		Consolidated
	(in millions)
2020
External revenues
Premiums:
Individual Medicare Advantage	$	51,697	$	—	$	—	$	—	$	51,697
Group Medicare Advantage	7,774		—		—		—		7,774
Medicare stand-alone PDP	2,742		—		—		—		2,742
Total Medicare	62,213		—		—		—		62,213
Fully-insured	688		4,761		—		602		6,051
Specialty	—		1,699		—		—		1,699
Medicaid and other	4,223		—		—		—		4,223
Total premiums	67,124		6,460		—		602		74,186
Services revenue:
Home Solutions	—		—		107		—		107
Provider	—		—		328		—		328
ASO and other	19		780		—		—		799
Pharmacy	—		—		581		—		581
Total services revenue	19		780		1,016		—		1,815
Total external revenues	67,143		7,240		1,016		602		76,001
Intersegment revenues
Services	—		29		19,491		(19,520)		—
Products	—		—		7,928		(7,928)		—
Total intersegment revenues	—		29		27,419		(27,448)		—
Investment income	155		16		13		970		1,154
Total revenues	67,298		7,285		28,448		(25,876)		77,155
Operating expenses:
Benefits	56,537		5,529		—		(438)		61,628
Operating costs	7,402		1,818		27,395		(26,563)		10,052
Depreciation and amortization	342		81		183		(117)		489
Total operating expenses	64,281		7,428		27,578		(27,118)		72,169
Income (loss) from operations	3,017		(143)		870		1,242		4,986
Interest expense	—		—		—		283		283
Other expense, net	—		—		—		103		103
Income (loss) before income taxes and equity in net earnings	3,017		(143)		870		856		4,600
Equity in net earnings	—		—		74		—		74
Segment earnings (loss)	$	3,017	$	(143)	$	944	$	856	$	4,674

	Retail		Group and Specialty		Healthcare Services		Eliminations/ Corporate		Consolidated
	(in millions)
2019
External revenues
Premiums:
Individual Medicare Advantage	$	43,128	$	—	$	—	$	—	$	43,128
Group Medicare Advantage	6,475		—		—		—		6,475
Medicare stand-alone PDP	3,165		—		—		—		3,165
Total Medicare	52,768		—		—		—		52,768
Fully-insured	588		5,123		—		—		5,711
Specialty	—		1,571		—		—		1,571
Medicaid and other	2,898		—		—		—		2,898
Total premiums	56,254		6,694		—		—		62,948
Services revenue:
Home Solutions	—		—		140		—		140
Provider	—		—		306		—		306
ASO and other	17		790		—		—		807
Pharmacy	—		—		186		—		186
Total services revenue	17		790		632		—		1,439
Total external revenues	56,271		7,484		632		—		64,387
Intersegment revenues
Services	—		18		18,255		(18,273)		—
Products	—		—		6,894		(6,894)		—
Total intersegment revenues	—		18		25,149		(25,167)		—
Investment income	195		23		2		281		501
Total revenues	56,466		7,525		25,783		(24,886)		64,888
Operating expenses:
Benefits	48,602		5,758		—		(503)		53,857
Operating costs	5,306		1,651		24,852		(24,428)		7,381
Depreciation and amortization	323		88		156		(109)		458
Total operating expenses	54,231		7,497		25,008		(25,040)		61,696
Income from operations	2,235		28		775		154		3,192
Interest expense	—		—		—		242		242
Other income, net	—		—		—		(506)		(506)
Income before income taxes and equity in net earnings	2,235		28		775		418		3,456
Equity in net earnings	—		—		14		—		14
Segment earnings	$	2,235	$	28	$	789	$	418	$	3,470