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 |
(Exact name of registrant as specified in its charter) | ||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Class of Common Stock | Outstanding at September 30, 2023 | ||||
$0.16 2/3 par value |
Page | ||||||||
Part I: Financial Information | ||||||||
Item 1. | Financial Statements | |||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Certifications |
September 30, 2023 | December 31, 2022 | ||||||||||
(in millions, except share amounts) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Investment securities | |||||||||||
Receivables, net of allowances of $ and $ | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Long-term investment securities | |||||||||||
Equity method investments | |||||||||||
Goodwill | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Benefits payable | $ | $ | |||||||||
Trade accounts payable and accrued expenses | |||||||||||
Book overdraft | |||||||||||
Unearned revenues | |||||||||||
Short-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $0.16 2/3 par; | |||||||||||
Capital in excess of par value | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Three months ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(in millions, except per share results) | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Premiums | $ | $ | $ | $ | |||||||||||||||||||
Investment income | |||||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Benefits | |||||||||||||||||||||||
Operating costs | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Gain on sale of Gentiva Hospice | ( | ( | |||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Other (income) expense, net | ( | ( | |||||||||||||||||||||
Income before income taxes and equity in net losses | |||||||||||||||||||||||
Provision for income taxes | |||||||||||||||||||||||
Equity in net (losses) earnings | ( | ( | |||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Net loss attributable to noncontrolling interests | |||||||||||||||||||||||
Net income attributable to Humana | $ | $ | $ | $ | |||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ |
Three months ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Net income attributable to Humana | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Change in gross unrealized investment losses | ( | ( | ( | ( | |||||||||||||||||||
Effect of income taxes | |||||||||||||||||||||||
Total change in unrealized investment losses, net of tax | ( | ( | ( | ( | |||||||||||||||||||
Reclassification adjustment for net realized losses | |||||||||||||||||||||||
Effect of income taxes | ( | ( | ( | ||||||||||||||||||||
Total reclassification adjustment, net of tax | |||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive income attributable to Humana | $ | $ | $ | $ |
Common Stock | Capital In Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Stockholders' Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Issued Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions, share amounts in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, June 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock repurchases | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and dividend equivalents | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock unit vesting | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Balances, September 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, June 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Distribution from noncontrolling interest holders, net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Sale of Gentiva Hospice | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock repurchases | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and dividend equivalents | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock unit vesting | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, September 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ |
Common Stock | Capital In Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive (Loss) income | Treasury Stock | Total Stockholders' Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Issued Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions, share amounts in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Distribution from noncontrolling interest holders, net | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock repurchases | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and dividend equivalents | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock unit vesting | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, September 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, December 31, 2021 | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Distribution to noncontrolling interest holders, net | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Sale of Gentiva Hospice | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock repurchases | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and dividend equivalents | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock unit vesting | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, September 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ |
For the nine months ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(in millions) | |||||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Gain on sale of Gentiva Hospice | ( | ||||||||||
Loss on investment securities, net | |||||||||||
Equity in net losses (earnings) | ( | ||||||||||
Stock-based compensation | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Impairment of property and equipment | |||||||||||
Deferred income taxes | ( | ||||||||||
Changes in operating assets and liabilities, net of effect of businesses acquired and disposed: | |||||||||||
Receivables | ( | ||||||||||
Other assets | ( | ( | |||||||||
Benefits payable | |||||||||||
Other liabilities | ( | ||||||||||
Unearned revenues | |||||||||||
Other | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities | |||||||||||
Proceeds from sale of Gentiva Hospice, net | |||||||||||
Acquisitions, net of cash and cash equivalents acquired | ( | ( | |||||||||
Purchases of property and equipment, net | ( | ( | |||||||||
Purchases of investment securities | ( | ( | |||||||||
Proceeds from maturities of investment securities | |||||||||||
Proceeds from sales of investment securities | |||||||||||
Net cash (used in) provided by investing activities | ( | ||||||||||
Cash flows from financing activities | |||||||||||
Receipts from contract deposits, net | |||||||||||
Proceeds from issuance of senior notes, net | |||||||||||
Repayments of senior notes | ( | ||||||||||
Proceeds from issuance (repayments) of commercial paper, net | ( | ||||||||||
Repayment of term loan | ( | ( | |||||||||
Debt issue costs | ( | ( | |||||||||
Change in book overdraft | ( | ( | |||||||||
Common stock repurchases | ( | ( | |||||||||
Dividends paid | ( | ( | |||||||||
Other | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Increase in cash and cash equivalents | |||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ |
For the nine months ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(in millions) | |||||||||||
Supplemental cash flow disclosures: | |||||||||||
Interest payments | $ | $ | |||||||||
Income tax payments, net | $ | $ | |||||||||
Details of businesses acquired in purchase transactions: | |||||||||||
Fair value of assets acquired, net of cash and cash equivalents acquired | $ | $ | |||||||||
Less: Fair value of liabilities assumed | ( | ( | |||||||||
Less: Noncontrolling interests acquired | ( | ||||||||||
Cash paid for acquired businesses, net of cash and cash equivalents acquired | $ | $ |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
September 30, 2023 | |||||||||||||||||||||||
U.S. Treasury and other U.S. government corporations and agencies: | |||||||||||||||||||||||
U.S. Treasury and agency obligations | $ | $ | $ | ( | $ | ||||||||||||||||||
Mortgage-backed securities | ( | ||||||||||||||||||||||
Tax-exempt municipal securities | ( | ||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Residential | ( | ||||||||||||||||||||||
Commercial | ( | ||||||||||||||||||||||
Asset-backed securities | ( | ||||||||||||||||||||||
Corporate debt securities | ( | ||||||||||||||||||||||
Total debt securities | $ | $ | $ | ( | |||||||||||||||||||
Common stock | |||||||||||||||||||||||
Total investment securities | $ | ||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||
U.S. Treasury and other U.S. government corporations and agencies: | |||||||||||||||||||||||
U.S. Treasury and agency obligations | $ | $ | $ | ( | $ | ||||||||||||||||||
Mortgage-backed securities | ( | ||||||||||||||||||||||
Tax-exempt municipal securities | ( | ||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Residential | ( | ||||||||||||||||||||||
Commercial | ( | ||||||||||||||||||||||
Asset-backed securities | ( | ||||||||||||||||||||||
Corporate debt securities | ( | ||||||||||||||||||||||
Total debt securities | $ | $ | $ | ( | |||||||||||||||||||
Common stock | |||||||||||||||||||||||
Total investment securities | $ |
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) | |||||||||||||||||||||||||||||||||||
September 30, 2023 | |||||||||||||||||||||||||||||||||||
U.S. Treasury and other U.S. government corporations and agencies: | |||||||||||||||||||||||||||||||||||
U.S. Treasury and agency obligations | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Mortgage-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Tax-exempt municipal securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||||||||||
Residential | ( | ( | ( | ||||||||||||||||||||||||||||||||
Commercial | ( | ( | |||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Corporate debt securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total debt securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||||||||
U.S. Treasury and other U.S. government corporations and agencies: | |||||||||||||||||||||||||||||||||||
U.S. Treasury and agency obligations | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Mortgage-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Tax-exempt municipal securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||||||||||
Residential | ( | ( | ( | ||||||||||||||||||||||||||||||||
Commercial | ( | ( | ( | ||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Corporate debt securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total debt securities | $ | $ | ( | $ | $ | ( | $ | $ | ( |
Three months ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(in millions) | (in millions) | ||||||||||||||||||||||
Gross gains on investment securities | $ | $ | $ | $ | |||||||||||||||||||
Gross losses on investment securities | ( | ( | ( | ( | |||||||||||||||||||
Gross gains on equity securities | |||||||||||||||||||||||
Gross losses on equity securities | ( | ||||||||||||||||||||||
Net recognized (losses) gains on investment securities | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Three months ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(in millions) | (in millions) | ||||||||||||||||||||||
Net gains (losses) recognized on equity securities during the period | $ | $ | $ | $ | ( | ||||||||||||||||||
Less: Net gains (losses) recognized on equity securities sold during the period | ( | ||||||||||||||||||||||
Unrealized gains (losses) recognized on equity securities still held at the end of the period | $ | $ | $ | $ | ( | ||||||||||||||||||
Amortized Cost | Fair Value | ||||||||||
(in millions) | |||||||||||
Due within one year | $ | $ | |||||||||
Due after one year through five years | |||||||||||
Due after five years through ten years | |||||||||||
Due after ten years | |||||||||||
Mortgage and asset-backed securities | |||||||||||
Total debt securities | $ | $ |
Fair Value Measurements Using | |||||||||||||||||||||||
Fair Value | Quoted Prices in Active Markets (Level 1) | Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
September 30, 2023 | |||||||||||||||||||||||
Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Debt securities: | |||||||||||||||||||||||
U.S. Treasury and other U.S. government corporations and agencies: | |||||||||||||||||||||||
U.S. Treasury and agency obligations | |||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
Tax-exempt municipal securities | |||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Residential | |||||||||||||||||||||||
Commercial | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
Total debt securities | |||||||||||||||||||||||
Total invested assets | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||
Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Debt securities: | |||||||||||||||||||||||
U.S. Treasury and other U.S. government corporations and agencies: | |||||||||||||||||||||||
U.S. Treasury and agency obligations | |||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
Tax-exempt municipal securities | |||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Residential | |||||||||||||||||||||||
Commercial | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
Total debt securities | |||||||||||||||||||||||
Common stock | |||||||||||||||||||||||
Total invested assets | $ | $ | $ | $ |
For the nine months ended September 30, 2023 | For the nine months ended September 30, 2022 | |||||||
Private Placements | ||||||||
(in millions) | ||||||||
Beginning balance at January 1 | $ | $ | ||||||
Total gains or losses: | ||||||||
Realized in earnings | ||||||||
Unrealized in other comprehensive income | ( | |||||||
Purchases | ( | |||||||
Sales | ||||||||
Maturities | ( | |||||||
Transfer out | ( | |||||||
Balance at September 30 | $ | $ |
September 30, 2023 | December 31, 2022 | |||||||
Annualized volatility | ||||||||
Credit spread | ||||||||
Revenue exit multiple | ||||||||
Weighted average cost of capital | ||||||||
Long term growth rate | % | % | ||||||
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Risk Corridor Settlement | CMS Subsidies/ Discounts | Risk Corridor Settlement | CMS Subsidies/ Discounts | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Other current assets | $ | $ | $ | $ | |||||||||||||||||||
Trade accounts payable and accrued expenses | ( | ( | ( | ( | |||||||||||||||||||
Net current (liability) asset | ( | ( | ( | ||||||||||||||||||||
Other long-term assets | |||||||||||||||||||||||
Other long-term liabilities | ( | ( | |||||||||||||||||||||
Net long-term asset (liability) | ( | ||||||||||||||||||||||
Total net asset (liability) | $ | $ | ( | $ | $ | ( |
Insurance | CenterWell | Total | |||||||||||||||
(in millions) | |||||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | ||||||||||||||
Acquisitions | |||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||
Weighted Average Life | Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | |||||||||||||||||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||||||||||||||||||
Other intangible assets: | |||||||||||||||||||||||||||||||||||||||||
Certificates of need | Indefinite | $ | $ | — | $ | $ | $ | — | $ | ||||||||||||||||||||||||||||||||
Medicare licenses | Indefinite | — | — | ||||||||||||||||||||||||||||||||||||||
Customer contracts/ relationships | |||||||||||||||||||||||||||||||||||||||||
Trade names and technology | |||||||||||||||||||||||||||||||||||||||||
Provider contracts | |||||||||||||||||||||||||||||||||||||||||
Noncompetes and other | |||||||||||||||||||||||||||||||||||||||||
Total other intangible assets | $ | $ | $ | $ | $ | $ |
(in millions) | |||||
For the years ending December 31, | |||||
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 |
For the nine months ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
(in millions) | ||||||||||||||
Balances, beginning of period | $ | $ | ||||||||||||
Acquisitions | ||||||||||||||
Incurred related to: | ||||||||||||||
Current year | ||||||||||||||
Prior years | ( | ( | ||||||||||||
Total incurred | ||||||||||||||
Paid related to: | ||||||||||||||
Current year | ( | ( | ||||||||||||
Prior years | ( | ( | ||||||||||||
Total paid | ( | ( | ||||||||||||
Balances, end of period | $ | $ |
Three months ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(dollars in millions, except per common share results; number of shares in thousands) | |||||||||||||||||||||||
Net income available for common stockholders | $ | $ | $ | $ | |||||||||||||||||||
Weighted average outstanding shares of common stock used to compute basic earnings per common share | |||||||||||||||||||||||
Dilutive effect of: | |||||||||||||||||||||||
Employee stock options | |||||||||||||||||||||||
Restricted stock | |||||||||||||||||||||||
Shares used to compute diluted earnings per common share | |||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Number of antidilutive stock options and restricted stock excluded from computation |
Record Date | Payment Date | Amount per Share | Total Amount | |||||||||||||||||
(in millions) | ||||||||||||||||||||
12/30/2022 | 1/27/2023 | $ | $ | |||||||||||||||||
03/31/2023 | 04/28/2023 | $ | $ | |||||||||||||||||
06/30/2023 | 07/28/2023 | $ | $ | |||||||||||||||||
9/29/2023 | 10/27/2023 | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
(in millions) | |||||||||||
Short-term debt: | |||||||||||
Commercial paper | $ | $ | |||||||||
Senior notes: | |||||||||||
$ | |||||||||||
Total senior notes | |||||||||||
Total short-term debt | $ | $ | |||||||||
Long-term debt: | |||||||||||
Senior notes: | |||||||||||
$ | $ | $ | |||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
Total senior notes | |||||||||||
Term loans: | |||||||||||
Delayed draw term loan, due May 28, 2024 | |||||||||||
Total term loans | |||||||||||
Total long-term debt | $ | $ |
Insurance | CenterWell | Eliminations/ Corporate | Consolidated | ||||||||||||||||||||
Three months ended September 30, 2023 | (in millions) | ||||||||||||||||||||||
External revenues | |||||||||||||||||||||||
Premiums: | |||||||||||||||||||||||
Individual Medicare Advantage | $ | $ | $ | — | $ | ||||||||||||||||||
Group Medicare Advantage | — | ||||||||||||||||||||||
Medicare stand-alone PDP | — | ||||||||||||||||||||||
Total Medicare | — | ||||||||||||||||||||||
Commercial fully-insured | — | ||||||||||||||||||||||
Specialty benefits | — | ||||||||||||||||||||||
Medicare Supplement | — | ||||||||||||||||||||||
State-based contracts and other | — | ||||||||||||||||||||||
Total premiums | — | ||||||||||||||||||||||
Services revenue: | |||||||||||||||||||||||
Home solutions | — | ||||||||||||||||||||||
Primary care | — | ||||||||||||||||||||||
Commercial ASO | — | ||||||||||||||||||||||
Military and other | — | ||||||||||||||||||||||
Pharmacy solutions | — | ||||||||||||||||||||||
Total services revenue | — | ||||||||||||||||||||||
Total external revenues | — | ||||||||||||||||||||||
Intersegment revenues | |||||||||||||||||||||||
Services | ( | — | |||||||||||||||||||||
Products | ( | — | |||||||||||||||||||||
Total intersegment revenues | ( | — | |||||||||||||||||||||
Investment income | |||||||||||||||||||||||
Total revenues | ( | ||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Benefits | ( | ||||||||||||||||||||||
Operating costs | ( | ||||||||||||||||||||||
Depreciation and amortization | ( | ||||||||||||||||||||||
Total operating expenses | ( | ||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Other income, net | ( | ( | |||||||||||||||||||||
Income (loss) before income taxes and equity in net earnings | ( | ||||||||||||||||||||||
Equity in net losses | ( | ( | |||||||||||||||||||||
Segment earnings (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
Net loss (income) attributable to noncontrolling interests | ( | ||||||||||||||||||||||
Segment earnings (loss) attributable to Humana | $ | $ | $ | ( | $ |
Insurance | CenterWell | Eliminations/ Corporate | Consolidated | ||||||||||||||||||||
Three months ended September 30, 2022 | (in millions) | ||||||||||||||||||||||
External revenues | |||||||||||||||||||||||
Premiums: | |||||||||||||||||||||||
Individual Medicare Advantage | $ | $ | $ | — | $ | ||||||||||||||||||
Group Medicare Advantage | — | ||||||||||||||||||||||
Medicare stand-alone PDP | — | ||||||||||||||||||||||
Total Medicare | — | ||||||||||||||||||||||
Commercial fully-insured | — | ||||||||||||||||||||||
Specialty benefits | — | ||||||||||||||||||||||
Medicare Supplement | — | ||||||||||||||||||||||
State-based contracts and other | — | ||||||||||||||||||||||
Total premiums | — | ||||||||||||||||||||||
Services revenue: | |||||||||||||||||||||||
Home solutions | — | ||||||||||||||||||||||
Primary care | — | ||||||||||||||||||||||
Commercial ASO | — | ||||||||||||||||||||||
Military and other | — | ||||||||||||||||||||||
Pharmacy solutions | — | ||||||||||||||||||||||
Total services revenue | — | ||||||||||||||||||||||
Total external revenues | — | ||||||||||||||||||||||
Intersegment revenues | |||||||||||||||||||||||
Services | ( | — | |||||||||||||||||||||
Products | ( | — | |||||||||||||||||||||
Total intersegment revenues | ( | — | |||||||||||||||||||||
Investment income | |||||||||||||||||||||||
Total revenues | ( | ||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Benefits | ( | ||||||||||||||||||||||
Operating costs | ( | ||||||||||||||||||||||
Depreciation and amortization | ( | ||||||||||||||||||||||
Total operating expenses | ( | ||||||||||||||||||||||
Income (loss) from operations | ( | ||||||||||||||||||||||
Gain on sale of Gentiva Hospice | ( | ( | |||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Other expense, net | |||||||||||||||||||||||
Income (loss) before income taxes and equity in net earnings | ( | ||||||||||||||||||||||
Equity in net earnings (losses) | ( | ||||||||||||||||||||||
Segment earnings (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
Net loss attributable to noncontrolling interests | |||||||||||||||||||||||
Segment earnings (loss) attributable to Humana | $ | $ | $ | ( | $ |
Insurance | CenterWell | Eliminations/ Corporate | Consolidated | ||||||||||||||||||||
Nine months ended September 30, 2023 | (in millions) | ||||||||||||||||||||||
External revenues | |||||||||||||||||||||||
Premiums: | |||||||||||||||||||||||
Individual Medicare Advantage | $ | $ | $ | — | $ | ||||||||||||||||||
Group Medicare Advantage | — | ||||||||||||||||||||||
Medicare stand-alone PDP | — | ||||||||||||||||||||||
Total Medicare | — | ||||||||||||||||||||||
Commercial fully-insured | — | ||||||||||||||||||||||
Specialty benefits | — | ||||||||||||||||||||||
Medicare Supplement | — | ||||||||||||||||||||||
State-based contracts and other | — | ||||||||||||||||||||||
Total premiums | — | ||||||||||||||||||||||
Services revenue: | |||||||||||||||||||||||
Home solutions | — | ||||||||||||||||||||||
Primary care | — | ||||||||||||||||||||||
Commercial ASO | — | ||||||||||||||||||||||
Military and other | — | ||||||||||||||||||||||
Pharmacy solutions | — | ||||||||||||||||||||||
Total services revenue | — | ||||||||||||||||||||||
Total external revenues | — | ||||||||||||||||||||||
Intersegment revenues | |||||||||||||||||||||||
Services | ( | — | |||||||||||||||||||||
Products | ( | — | |||||||||||||||||||||
Total intersegment revenues | ( | — | |||||||||||||||||||||
Investment income | |||||||||||||||||||||||
Total revenues | ( | ||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Benefits | ( | ||||||||||||||||||||||
Operating costs | ( | ||||||||||||||||||||||
Depreciation and amortization | ( | ||||||||||||||||||||||
Total operating expenses | ( | ||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Other expense, net | |||||||||||||||||||||||
Income (loss) before income taxes and equity in net losses | ( | ||||||||||||||||||||||
Equity in net losses | ( | ( | ( | ||||||||||||||||||||
Segment earnings (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
Net loss (income) attributable to noncontrolling interests | ( | ||||||||||||||||||||||
Segment earnings (loss) attributable to Humana | $ | $ | $ | ( | $ |
Insurance | CenterWell | Eliminations/ Corporate | Consolidated | ||||||||||||||||||||
Nine months ended September 30, 2022 | (in millions) | ||||||||||||||||||||||
External Revenues | |||||||||||||||||||||||
Premiums: | |||||||||||||||||||||||
Individual Medicare Advantage | $ | $ | $ | — | $ | ||||||||||||||||||
Group Medicare Advantage | — | ||||||||||||||||||||||
Medicare stand-alone PDP | — | ||||||||||||||||||||||
Total Medicare | — | ||||||||||||||||||||||
Commercial fully-insured | — | ||||||||||||||||||||||
Specialty benefits | — | ||||||||||||||||||||||
Medicare Supplement | — | ||||||||||||||||||||||
State-based contracts and other | — | ||||||||||||||||||||||
Total premiums | — | ||||||||||||||||||||||
Services revenue: | |||||||||||||||||||||||
Home solutions | — | ||||||||||||||||||||||
Primary care | — | ||||||||||||||||||||||
Commercial ASO | — | ||||||||||||||||||||||
Military and other | — | ||||||||||||||||||||||
Pharmacy solutions | — | ||||||||||||||||||||||
Total services revenue | — | ||||||||||||||||||||||
Total external revenues | — | ||||||||||||||||||||||
Intersegment revenues | |||||||||||||||||||||||
Services | ( | — | |||||||||||||||||||||
Products | ( | — | |||||||||||||||||||||
Total intersegment revenues | ( | — | |||||||||||||||||||||
Investment income | |||||||||||||||||||||||
Total revenues | ( | ||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Benefits | ( | ||||||||||||||||||||||
Operating costs | ( | ||||||||||||||||||||||
Depreciation and amortization | ( | ||||||||||||||||||||||
Total operating expenses | ( | ||||||||||||||||||||||
Income (loss) from operations | ( | ||||||||||||||||||||||
Gain on sale of Gentiva Hospice | ( | ( | |||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Other income, net | ( | ( | |||||||||||||||||||||
Income (loss) before income taxes and equity in net losses | ( | ||||||||||||||||||||||
Equity in net earnings (losses) | ( | ||||||||||||||||||||||
Segment earnings (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
Net loss (income) attributable to noncontrolling interests | ( | ||||||||||||||||||||||
Segment earnings (loss) attributable to Humana | $ | $ | $ | ( | $ |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Consolidated income before income taxes and equity in net earnings: | |||||||||||||||||||||||
Gain on sale of Gentiva Hospice | $ | — | $ | (240) | $ | — | $ | (240) | |||||||||||||||
Put/call valuation adjustments associated with our non consolidating minority interest investments | 35 | 13 | 141 | (16) | |||||||||||||||||||
Transaction and integration costs | — | 17 | (47) | 70 | |||||||||||||||||||
Change in the fair value of publicly-traded equity securities | — | (51) | (1) | 119 | |||||||||||||||||||
Value creation initiatives | 52 | 82 | 52 | 285 | |||||||||||||||||||
Accrual related to certain anticipated litigation expenses | 15 | — | 105 | — | |||||||||||||||||||
Total | $ | 102 | $ | (179) | $ | 250 | $ | 218 | |||||||||||||||
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Diluted earnings per common share: | |||||||||||||||||||||||
Gain on sale of Gentiva Hospice | $ | — | $ | (1.89) | $ | — | $ | (1.89) | |||||||||||||||
Put/call valuation adjustments associated with our non consolidating minority interest investments | 0.28 | 0.10 | 1.13 | (0.13) | |||||||||||||||||||
Transaction and integration costs | — | 0.13 | (0.38) | 0.55 | |||||||||||||||||||
Change in the fair value of publicly-traded equity securities | — | (0.40) | (0.01) | 0.94 | |||||||||||||||||||
Value creation initiatives | 0.42 | 0.65 | 0.42 | 2.24 | |||||||||||||||||||
Accrual related to certain anticipated litigation expenses | 0.12 | — | 0.84 | — | |||||||||||||||||||
Net tax impact of transactions | (0.18) | (1.25) | $ | (0.57) | $ | (0.66) | |||||||||||||||||
Total | $ | 0.64 | $ | (2.66) | $ | 1.43 | $ | 1.05 |
Change | |||||||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine Months Ended September 30, | Three months ended September 30, 2023 vs 2022 | Nine Months Ended September 30, 2023 vs 2022 | ||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||
($ in millions, except per common share results) | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Insurance premiums | $ | 25,099 | $ | 21,468 | $ | 76,144 | $ | 66,437 | $ | 3,631 | 16.9 | % | $ | 9,707 | 14.6 | % | |||||||||||||||||||||||||||||||
Services: | |||||||||||||||||||||||||||||||||||||||||||||||
Insurance | 257 | 210 | 730 | 620 | 47 | 22.4 | % | 110 | 17.7 | % | |||||||||||||||||||||||||||||||||||||
CenterWell | 759 | 949 | 2,263 | 3,152 | (190) | (20.0) | % | (889) | (28.2) | % | |||||||||||||||||||||||||||||||||||||
Total services revenue | 1,016 | 1,159 | 2,993 | 3,772 | (143) | (12.3) | % | (779) | (20.7) | % | |||||||||||||||||||||||||||||||||||||
Investment income | 308 | 172 | 775 | 222 | 136 | 79.1 | % | 553 | 249.1 | % | |||||||||||||||||||||||||||||||||||||
Total revenues | 26,423 | 22,799 | 79,912 | 70,431 | 3,624 | 15.9 | % | 9,481 | 13.5 | % | |||||||||||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
Benefits | 21,745 | 18,384 | 65,612 | 57,108 | 3,361 | 18.3 | % | 8,504 | 14.9 | % | |||||||||||||||||||||||||||||||||||||
Operating costs | 3,271 | 3,061 | 9,361 | 9,120 | 210 | 6.9 | % | 241 | 2.6 | % | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 201 | 182 | 578 | 527 | 19 | 10.4 | % | 51 | 9.7 | % | |||||||||||||||||||||||||||||||||||||
Total operating expenses | 25,217 | 21,627 | 75,551 | 66,755 | 3,590 | 16.6 | % | 8,796 | 13.2 | % | |||||||||||||||||||||||||||||||||||||
Income from operations | 1,206 | 1,172 | 4,361 | 3,676 | 34 | 2.9 | % | 685 | 18.6 | % | |||||||||||||||||||||||||||||||||||||
Gain on sale of Gentiva Hospice | — | (240) | — | (240) | (240) | (100.0) | % | (240) | (100.0) | % | |||||||||||||||||||||||||||||||||||||
Interest expense | 114 | 102 | 347 | 293 | 12 | 11.8 | % | 54 | 18.4 | % | |||||||||||||||||||||||||||||||||||||
Other (income) expense, net | (6) | 13 | 40 | (16) | 19 | 146.2 | % | 56 | 350.0 | % | |||||||||||||||||||||||||||||||||||||
Income before income taxes and equity in net earnings | 1,098 | 1,297 | 3,974 | 3,639 | (199) | (15.3) | % | 335 | 9.2 | % | |||||||||||||||||||||||||||||||||||||
Provision for income taxes | 256 | 107 | 911 | 820 | 149 | 139.3 | % | 91 | 11.1 | % | |||||||||||||||||||||||||||||||||||||
Equity in net (losses) earnings | (12) | 3 | (39) | 1 | 15 | 500.0 | % | 40 | nm | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 830 | $ | 1,193 | $ | 3,024 | $ | 2,820 | $ | (363) | (30.4) | % | $ | 204 | 7.2 | % | |||||||||||||||||||||||||||||||
Diluted earnings per common share | $ | 6.71 | $ | 9.39 | $ | 24.26 | $ | 22.16 | $ | (2.68) | (28.5) | % | $ | 2.10 | 9.5 | % | |||||||||||||||||||||||||||||||
Benefit ratio (a) | 86.6 | % | 85.6 | % | 86.2 | % | 86.0 | % | 1.0 | % | 0.2 | % | |||||||||||||||||||||||||||||||||||
Operating cost ratio (b) | 12.5 | % | 13.5 | % | 11.8 | % | 13.0 | % | (1.0) | % | (1.2) | % | |||||||||||||||||||||||||||||||||||
Effective tax rate | 23.5 | % | 8.2 | % | 23.1 | % | 22.5 | % | 15.3 | % | 0.6 | % |
September 30, | Change | ||||||||||||||||||||||
2023 | 2022 | Members | % | ||||||||||||||||||||
Membership: | |||||||||||||||||||||||
Individual Medicare Advantage | 5,374,400 | 4,564,200 | 810,200 | 17.8 | % | ||||||||||||||||||
Group Medicare Advantage | 510,300 | 564,600 | (54,300) | (9.6) | % | ||||||||||||||||||
Medicare stand-alone PDP | 2,885,800 | 3,569,100 | (683,300) | (19.1) | % | ||||||||||||||||||
Total Medicare | 8,770,500 | 8,697,900 | 72,600 | 0.8 | % | ||||||||||||||||||
Medicare Supplement | 299,400 | 316,500 | (17,100) | (5.4) | % | ||||||||||||||||||
Commercial fully-insured | 409,300 | 574,500 | (165,200) | (28.8) | % | ||||||||||||||||||
State-based contracts and other | 1,264,600 | 1,098,900 | 165,700 | 15.1 | % | ||||||||||||||||||
Military | 5,935,400 | 5,977,900 | (42,500) | (0.7) | % | ||||||||||||||||||
Commercial ASO | 284,300 | 438,600 | (154,300) | (35.2) | % | ||||||||||||||||||
Total Medical Membership | 16,963,500 | 17,104,300 | (140,800) | (0.8) | % | ||||||||||||||||||
Total Specialty Membership (a) | 4,964,300 | 5,210,100 | (245,800) | (4.7) | % |
Change | |||||||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine Months Ended September 30, | Three months ended September 30, 2023 vs 2022 | Nine Months Ended September 30, 2023 vs 2022 | ||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Premiums and Services Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
Premiums: | |||||||||||||||||||||||||||||||||||||||||||||||
Individual Medicare Advantage | $ | 19,637 | $ | 16,007 | $ | 59,195 | $ | 49,751 | $ | 3,630 | 22.7 | % | $ | 9,444 | 19.0 | % | |||||||||||||||||||||||||||||||
Group Medicare Advantage | 1,695 | 1,792 | 5,192 | 5,524 | (97) | (5.4) | % | (332) | (6.0) | % | |||||||||||||||||||||||||||||||||||||
Medicare stand-alone PDP | 493 | 534 | 1,677 | 1,779 | (41) | (7.7) | % | (102) | (5.7) | % | |||||||||||||||||||||||||||||||||||||
Total Medicare | 21,825 | 18,333 | 66,064 | 57,054 | 3,492 | 19.0 | % | 9,010 | 15.8 | % | |||||||||||||||||||||||||||||||||||||
Commercial fully-insured | 842 | 1,075 | 2,810 | 3,324 | (233) | (21.7) | % | (514) | (15.5) | % | |||||||||||||||||||||||||||||||||||||
Specialty benefits | 252 | 262 | 758 | 784 | (10) | (3.8) | % | (26) | (3.3) | % | |||||||||||||||||||||||||||||||||||||
Medicare Supplement | 185 | 188 | 546 | 555 | (3) | (1.6) | % | (9) | (1.6) | % | |||||||||||||||||||||||||||||||||||||
State-based contracts and other | 1,995 | 1,610 | 5,966 | 4,720 | 385 | 23.9 | % | 1,246 | 26.4 | % | |||||||||||||||||||||||||||||||||||||
Total premiums revenue | 25,099 | 21,468 | 76,144 | 66,437 | 3,631 | 16.9 | % | 9,707 | 14.6 | % | |||||||||||||||||||||||||||||||||||||
Commercial ASO | 55 | 73 | 190 | 225 | (18) | (24.7) | % | (35) | (15.6) | % | |||||||||||||||||||||||||||||||||||||
Military and other | 202 | 137 | 540 | 395 | 65 | 47.4 | % | 145 | 36.7 | % | |||||||||||||||||||||||||||||||||||||
Services revenue | 257 | 210 | 730 | 620 | 47 | 22.4 | % | 110 | 17.7 | % | |||||||||||||||||||||||||||||||||||||
Total premiums and services revenue | $ | 25,356 | $ | 21,678 | $ | 76,874 | $ | 67,057 | $ | 3,678 | 17.0 | % | $ | 9,817 | 14.6 | % | |||||||||||||||||||||||||||||||
Income from operations | $ | 722 | $ | 873 | $ | 3,080 | $ | 2,976 | $ | (151) | (17.3) | % | $ | 104 | 3.5 | % | |||||||||||||||||||||||||||||||
Benefit ratio | 87.6 | % | 85.8 | % | 86.8 | % | 86.3 | % | 1.8 | % | 0.5 | % | |||||||||||||||||||||||||||||||||||
Operating cost ratio | 10.4 | % | 10.6 | % | 9.9 | % | 9.7 | % | (0.2) | % | 0.2 | % |
Change | |||||||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine Months Ended September 30, | Three months ended September 30, 2023 vs 2022 | Nine Months Ended September 30, 2023 vs 2022 | ||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Services: | |||||||||||||||||||||||||||||||||||||||||||||||
Home solutions | $ | 342 | $ | 519 | $ | 997 | $ | 1,997 | $ | (177) | (34.1) | % | $ | (1,000) | (50.1) | % | |||||||||||||||||||||||||||||||
Pharmacy solutions | 203 | 271 | 661 | 746 | (68) | (25.1) | % | (85) | (11.4) | % | |||||||||||||||||||||||||||||||||||||
Primary care | 214 | 159 | 605 | 409 | 55 | 34.6 | % | 196 | 47.9 | % | |||||||||||||||||||||||||||||||||||||
Total services revenue | 759 | 949 | 2,263 | 3,152 | (190) | (20.0) | % | (889) | (28.2) | % | |||||||||||||||||||||||||||||||||||||
Intersegment revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Home solutions | 453 | 126 | 1,088 | 352 | 327 | 259.5 | % | 736 | 209.1 | % | |||||||||||||||||||||||||||||||||||||
Pharmacy solutions | 2,594 | 2,459 | 7,848 | 7,394 | 135 | 5.5 | % | 454 | 6.1 | % | |||||||||||||||||||||||||||||||||||||
Primary care | 854 | 737 | 2,496 | 2,262 | 117 | 15.9 | % | 234 | 10.3 | % | |||||||||||||||||||||||||||||||||||||
Total intersegment revenues | 3,901 | 3,322 | 11,432 | 10,008 | 579 | 17.4 | % | 1,424 | 14.2 | % | |||||||||||||||||||||||||||||||||||||
Total services and intersegment revenues | $ | 4,660 | $ | 4,271 | $ | 13,695 | $ | 13,160 | $ | 389 | 9.1 | % | $ | 535 | 4.1 | % | |||||||||||||||||||||||||||||||
Income from operations | $ | 400 | $ | 300 | $ | 1,017 | $ | 1,028 | $ | 100 | 33.3 | % | $ | (11) | (1.1) | % | |||||||||||||||||||||||||||||||
Operating cost ratio | 90.3 | % | 92.0 | % | 91.5 | % | 91.2 | % | (1.7) | % | 0.3 | % |
Nine Months Ended | |||||||||||
2023 | 2022 | ||||||||||
(in millions) | |||||||||||
Net cash provided by operating activities | $ | 11,115 | $ | 9,714 | |||||||
Net cash (used in) provided by investing activities | (2,610) | 6 | |||||||||
Net cash provided by financing activities | 1,582 | 444 | |||||||||
Increase in cash and cash equivalents | $ | 10,087 | $ | 10,164 |
September 30, 2023 | December 31, 2022 | 2023 Period Change | 2022 Period Change | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Medicare | $ | 1,293 | $ | 1,260 | $ | 33 | $ | 4 | |||||||||||||||
Commercial and other | 479 | 383 | 96 | (225) | |||||||||||||||||||
Military | 125 | 101 | 24 | 4 | |||||||||||||||||||
Allowances | (73) | (70) | (3) | 12 | |||||||||||||||||||
Total net receivables | $ | 1,824 | $ | 1,674 | $ | 150 | $ | (205) | |||||||||||||||
Reconciliation to cash flow statement: | |||||||||||||||||||||||
Receivables from acquisition | (24) | — | |||||||||||||||||||||
Receivables disposed | — | 194 | |||||||||||||||||||||
Change in receivables per cash flow statement | $ | 126 | $ | (11) |
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) (2) | |||||||||||||||||||
July 2023 | 368,823 | $ | 442.65 | 368,823 | $ | 2,241,914,412 | |||||||||||||||||
August 2023 | 287,179 | 484.30 | 287,179 | 2,102,834,796 | |||||||||||||||||||
September 2023 | 154,886 | 473.51 | 154,886 | 2,029,494,351 | |||||||||||||||||||
Total | 810,888 | $ | — | 810,888 |
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). | ||||
Humana Inc. Amended and Restated By-laws, effective as of December 8, 2022 (incorporated herein by reference to Exhibit 3(b) to Humana Inc.’s Current Report on Form 8-K filed on December 8, 2022). | |||||
Principal Executive Officer certification pursuant to Section 302 of Sarbanes–Oxley Act of 2002. | |||||
Principal Financial Officer certification pursuant to Section 302 of Sarbanes–Oxley Act of 2002. | |||||
Principal Executive Officer and Principal Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||
101 | The following materials from Humana Inc.'s Quarterly Report on Form 10-Q formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022; (ii) the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2023 and 2022; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022; (iv) the Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2023 and 2022; (v) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022; and (vi) Notes to Condensed Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
104 | Cover Page Interactive Data File formatted in Inline XBRL and contained in Exhibit 101. |
HUMANA INC. | |||||||||||
(Registrant) | |||||||||||
Date: | November 1, 2023 | By: | /s/ JOHN-PAUL W. FELTER | ||||||||
John-Paul W. Felter | |||||||||||
Senior Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) | |||||||||||
Date: | November 1, 2023 | ||||
Signature: | /s/ Bruce D. Broussard | ||||
Bruce D. Broussard Principal Executive Officer |
Date: | November 1, 2023 | |||||||
Signature: | /s/ Susan M. Diamond | |||||||
Susan M. Diamond Principal Financial Officer |
/s/ Bruce D. Broussard | ||
Bruce D. Broussard Principal Executive Officer | ||
November 1, 2023 | ||
/s/ Susan M. Diamond | ||
Susan M. Diamond Principal Financial Officer | ||
November 1, 2023 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Receivables, net of allowances | $ 73 | $ 70 |
Preferred stock, par (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par (in dollars per share) | $ 0.1667 | $ 0.1667 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 198,690,082 | 198,666,598 |
Treasury stock, shares (in shares) | 75,579,362 | 73,691,955 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Statement [Abstract] | ||||
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Health Care [Member] | Health Care [Member] | Health Care [Member] | Health Care [Member] |
Revenues: | ||||
Premiums | $ 25,099 | $ 21,468 | $ 76,144 | $ 66,437 |
Services | 1,016 | 1,159 | 2,993 | 3,772 |
Investment income | 308 | 172 | 775 | 222 |
Total revenues | 26,423 | 22,799 | 79,912 | 70,431 |
Operating expenses: | ||||
Benefits | 21,745 | 18,384 | 65,612 | 57,108 |
Operating costs | 3,271 | 3,061 | 9,361 | 9,120 |
Depreciation and amortization | 201 | 182 | 578 | 527 |
Total operating expenses | 25,217 | 21,627 | 75,551 | 66,755 |
Income (loss) from operations | 1,206 | 1,172 | 4,361 | 3,676 |
Gain on sale of Gentiva Hospice | 0 | (240) | 0 | (240) |
Interest expense | 114 | 102 | 347 | 293 |
Other (income) expense, net | (6) | 13 | 40 | (16) |
Income (loss) before income taxes and equity in net losses | 1,098 | 1,297 | 3,974 | 3,639 |
Provision for income taxes | 256 | 107 | 911 | 820 |
Equity in net (losses) earnings | (12) | 3 | (39) | 1 |
Net income | 830 | 1,193 | 3,024 | 2,820 |
Net loss attributable to noncontrolling interests | 2 | 2 | 6 | 1 |
Net income attributable to Humana | $ 832 | $ 1,195 | $ 3,030 | $ 2,821 |
Basic earnings per common share (in dollars per share) | $ 6.74 | $ 9.45 | $ 24.37 | $ 22.27 |
Diluted earnings per common share (in dollars per share) | $ 6.71 | $ 9.39 | $ 24.26 | $ 22.16 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income attributable to Humana | $ 832 | $ 1,195 | $ 3,030 | $ 2,821 |
Other comprehensive income (loss): | ||||
Change in gross unrealized investment losses | (365) | (590) | (314) | (1,982) |
Effect of income taxes | 85 | 135 | 73 | 455 |
Total change in unrealized investment losses, net of tax | (280) | (455) | (241) | (1,527) |
Reclassification adjustment for net realized losses | 3 | 50 | 56 | 23 |
Effect of income taxes | 0 | (11) | (14) | (5) |
Total reclassification adjustment, net of tax | 3 | 39 | 42 | 18 |
Other comprehensive loss, net of tax | (277) | (416) | (199) | (1,509) |
Comprehensive income attributable to Humana | $ 555 | $ 779 | $ 2,831 | $ 1,312 |
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS | BASIS OF PRESENTATION AND SIGNIFICANT EVENTS The accompanying unaudited condensed consolidated financial statements are presented in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America, or GAAP, or those normally made in an Annual Report on Form 10-K. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. For further information, the reader of this Form 10-Q should refer to our Form 10-K for the year ended December 31, 2022, that was filed with the Securities and Exchange Commission, or the SEC, on February 16, 2023. We refer to this Form 10-K as the “2022 Form 10-K” in this document. References throughout this document to “we,” “us,” “our,” “Company,” and “Humana” mean Humana Inc. and its subsidiaries. The preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill and indefinite-lived intangible assets. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. For additional information regarding accounting policies considered in preparing our consolidated financial statements, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. The financial information has been prepared in accordance with our customary accounting practices and has not been audited. In our opinion, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature. Employer Group Commercial Medical Products Business Exit In February 2023, we announced our planned exit from the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs. No other Humana health plan offerings are materially affected. Following a strategic review, we determined the Employer Group Commercial Medical Products business was no longer positioned to sustainably meet the needs of commercial members over the long term or support our long-term strategic plans. The exit from this line of business will be phased over the 18 to 24 months following our February 2023 announcement. Value Creation Initiatives During 2022, in order to create capacity to fund growth and investment in our Medicare Advantage business and further expansion of our healthcare services capabilities beginning in 2023, we committed to drive additional value for the enterprise through cost saving, productivity initiatives, and value acceleration from previous investments. As a result of these initiatives, during the three and nine months ended September 30, 2022, we recorded charges of $82 million and $285 million, respectively. For the three and nine months ended September 30, 2022, these charges primarily relate to $4 million and $144 million, respectively, in asset impairments, including software and abandonment, and $44 million and $65 million, respectively, of severance charges in connection with workforce optimization. The remainder of the charges primarily relate to external consulting fees. During the three months ended September 30, 2023, we recorded charges of $52 million primarily in asset impairments relating to software and abandonment. In connection with these initiatives, we expect to incur additional charges through the end of 2024. These charges are recorded at the corporate level and not allocated to the segments. COVID-19 The emergence and spread of the novel coronavirus, or COVID-19, beginning in the first quarter of 2020 has impacted our business. Initially during periods of increased incidences of COVID-19, a reduction in non-COVID-19 hospital admissions for non-emergent and elective medical care have resulted in lower overall healthcare system utilization. At the same time, COVID-19 treatment and testing costs increased utilization. During 2022, we experienced lower overall utilization of the healthcare system than anticipated, as the reduction in COVID-19 utilization following the increased incidence associated with the Omicron variant outpaced the increase in non-COVID-19 utilization. The significant disruption in utilization during 2020 also impacted our ability to implement clinical initiatives to manage health care costs and chronic conditions of our members, and appropriately document their risk profiles, and, as such, significantly affected our 2021 revenue under the risk adjustment payment model for Medicare Advantage plans. Finally, changes in utilization patterns and actions taken in 2021 as a result of the COVID-19 pandemic, including the suspension of certain financial recovery programs for a period of time and shifting the timing of claim payments and provider capitation surplus payments, impacted our claim reserve development and operating cash flows for 2021. The COVID-19 National Emergency declared in 2020 was terminated on April 10, 2023 and the Public Health Emergency expired on May 11, 2023. Revenue Recognition Our revenues include premiums and services revenue. Services revenue includes administrative service fees that are recorded based upon established per member per month rates and the number of members for the month and are recognized as services are provided for the month. Additionally, services revenue includes net patient services revenue that are recorded based upon established billing rates, less allowances for contractual adjustments, and are recognized as services are provided. For additional information regarding our revenues, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. For additional information regarding disaggregation of revenue by segment and type, refer to Note 14 to the unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, "Financial Statements" of this Form 10-Q. At September 30, 2023, accounts receivable related to services were $322 million. For the three and nine months ended September 30, 2023, we had no material bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the condensed consolidated balance sheet at September 30, 2023. For the three and nine months ended September 30, 2023, services revenue recognized from performance obligations related to prior periods, such as due to changes in transaction price, was not material. Further, services revenue expected to be recognized in any future year related to remaining performance obligations was not material.
|
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTSIn November 2020, the FASB issued Accounting Standards Update No. 2020-11, Financial Services—Insurance (Topic 944): Effective Date and Early Application (“ASU 2020-11”). The amendments in ASU 2020-11 make changes to the effective date and early application of Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (“ASU 2018-12”), which was issued in November 2018. The amendments in ASU 2020-11 have extended the original effective date by one year, and now the amendments are required for our interim and annual reporting periods beginning after December 15, 2022. The new guidance relates to accounting for long-duration contracts of insurers which revises key elements of the measurement models and disclosure requirements for long-duration contracts issued by insurers, including the amortization of deferred contract acquisition costs and the measurement of liabilities for future policy benefits using current, rather than locked-in, assumptions. The new guidance, limited to our Medicare Supplement product which represents less than 1% of consolidated premiums and services revenue, became effective for us beginning January 1, 2023 and is to be applied to contracts in force on the basis of their existing carrying value amounts at the beginning of the earliest period presented. The adoption of the new standard in 2023 did not have a material impact on our consolidated results of operations, financial position or cash flows. There are no other recently issued accounting standards that apply to us or that are expected to have a material impact on our results of operations, financial condition, or cash flows.
|
ACQUISITIONS AND DIVESTITURES |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES On August 11, 2022, we completed the sale of a 60% interest in Gentiva (formerly Kindred) Hospice to Clayton, Dubilier & Rice, or CD&R, for cash proceeds of approximately $2.7 billion, net of cash disposed, including debt repayments from Gentiva Hospice to Humana of $1.9 billion. In connection with the sale we recognized a pre-tax gain, net of transaction costs, of $240 million. For the three and nine months ended September 30, 2022, the accompanying condensed consolidated statement of income includes revenues related to Gentiva Hospice of $177 million and $958 million, respectively, and pretax earnings of $24 million and $150 million, respectively. During 2023 and 2022, we acquired various health and wellness related businesses which, individually or in the aggregate, have not had a material impact on our results of operations, financial condition, or cash flows. The results of operations and financial condition of these businesses acquired in 2023 and 2022 have been included in our condensed consolidated statements of income and condensed consolidated balance sheets from the respective acquisition dates. Acquisition-related costs recognized in 2023 and 2022 were not material to our results of operations. For asset acquisitions, the goodwill acquired is partially amortizable as deductible expenses for tax purposes. The pro forma financial information assuming the acquisitions had occurred as of the beginning of the calendar year prior to the year of acquisition, as well as the revenues and earnings generated during the year of acquisition, were not material for disclosure purposes.
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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 September 30, 2023 and December 31, 2022, respectively:
We held certain corporate debt securities of Gentiva Hospice at September 30, 2023 with amortized cost and fair value of approximately $281 million and $295 million, respectively. Gross unrealized losses and fair values aggregated by investment category and length of time of individual debt securities that have been in a continuous unrealized loss position for which no allowances for credit loss has been recorded were as follows at September 30, 2023 and December 31, 2022, 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 September 30, 2023. Most of the debt securities that were below investment-grade were rated BB-, the higher end of the below investment-grade rating scale. Tax-exempt municipal securities were diversified among general obligation bonds of states and local municipalities in the United States as well as special revenue bonds issued by municipalities to finance specific public works projects such as utilities, water and sewer, transportation, or education. Our general obligation bonds are diversified across the United States with no individual state exceeding approximately 1% of our total debt securities. Our investment policy limits investments in a single issuer and requires diversification among various asset types. Our unrealized losses from all debt securities were generated from approximately 1,790 positions out of a total of approximately 2,070 positions at September 30, 2023. All issuers of debt securities we own that were trading at an unrealized loss at September 30, 2023 remain current on all contractual payments. After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets since the time these debt securities were purchased. At September 30, 2023, we did not intend to sell any debt securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these debt securities before recovery of their amortized cost basis. Additionally, we did not record any material credit allowances for debt securities that were in an unrealized loss position for the three and nine months ended September 30, 2023 or 2022. The detail of gains (losses) related to investment securities and included within investment income was as follows for the three and nine months ended September 30, 2023 and 2022:
The gains and losses related to equity securities for the three and nine months ended September 30, 2023 and 2022 was as follows:
The contractual maturities of debt securities available for sale at September 30, 2023, regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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FAIR VALUE |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | FAIR VALUE Financial Assets The following table summarizes our fair value measurements at September 30, 2023 and December 31, 2022, respectively, for financial assets measured at fair value on a recurring basis:
Our Level 3 assets had a fair value of $105 million at September 30, 2023, or 0.3% of our total invested assets. During the nine months ended September 30, 2023 and 2022, the changes in the fair value of the assets measured using significant unobservable inputs (Level 3) were comprised of the following:
Interest Rate Swaps During the third quarter of 2023, we entered into interest-rate swap agreements with major financial institutions to convert our interest-rate exposure on our $750 million of 5.875% senior notes and our $750 million of 5.500% senior notes from fixed rates to variable rates to align interest costs more closely with floating interest rates received on our cash equivalents and investment securities. Our swap agreements, which are considered derivative instruments, exchange the fixed interest rate under our 5.875% and 5.500% senior notes for a variable interest rate based on SOFR. Interest rate swaps with notional amounts of $650 million, maturing September 1, 2032, and $250 million, maturing March 15, 2033, were outstanding on our 5.875% and 5.500% senior notes, respectively, at September 30, 2023. These swap agreements were qualified and designated as a fair value hedge. The swap liability, included within other long-term liabilities on our condensed consolidated balance sheet, was not material at September 30, 2023. We include the gain or loss on the swap agreements in interest expense on our condensed consolidated income statement, the same line item as the offsetting loss or gain on the related senior notes. The gain or loss due to hedge ineffectiveness was not material for the three and nine months ended September 30, 2023. 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 $9.5 billion at September 30, 2023 and $10.0 billion at December 31, 2022. The fair value of our senior notes debt was $8.7 billion at September 30, 2023 and $9.4 billion at December 31, 2022. The fair value of our senior notes debt is determined based on Level 2 inputs, including quoted market prices for the same or similar debt, or if no quoted market prices are available, on the current prices estimated to be available to us for debt with similar terms and remaining maturities. Carrying value approximates fair value for our term loans and commercial paper borrowings. The commercial paper borrowings were $2.2 billion at September 30, 2023. The term loans and commercial paper borrowings were $1.1 billion at December 31, 2022. Put and Call Options Measured at Fair Value Our put and call options associated with our equity method investments are measured at fair value each period using a Monte Carlo simulation. The put and call options fair values associated with our Primary Care Organization strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, which are exercisable at a fixed revenue exit multiple and provide a minimum return on WCAS' investment if exercised, are measured at fair value each reporting period using a Monte Carlo simulation. The put and call options fair values, derived from the Monte Carlo simulation, were $410 million and $12 million, respectively, at September 30, 2023. The put and call options fair values, derived from the Monte Carlo simulation, were $267 million and $10 million, respectively, at December 31, 2022. The put liability and call asset are included within other long-term liabilities and other long-term assets, respectively, within our condensed consolidated balance sheets. The significant unobservable inputs utilized in these Level 3 fair value measurements (and selected values) include the enterprise value, annualized volatility and credit spread. Enterprise value was derived from a discounted cash flow model, which utilized significant unobservable inputs for long-term revenue, to measure underlying cash flows, weighted average cost of capital and long term growth rate. The table below presents the assumptions used for each reporting period.
The assumptions used for annualized volatility, credit spread and weighted average cost of capital reflect the lowest and highest values where they differ significantly across the series of put and call options due to their expected exercise dates. Other Assets and Liabilities Measured at Fair Value Certain assets and liabilities are measured at fair value on a non-recurring basis subject to fair value adjustment only in certain circumstances. As disclosed in Note 3, we acquired various health and wellness related businesses during 2023. The net assets acquired and resulting goodwill and other intangible assets were recorded at fair value primarily using Level 3 inputs. The net tangible assets including receivables and accrued liabilities were recorded at their carrying value which approximated their fair value due to their short term nature. The fair value of goodwill and other intangible assets were internally estimated based primarily on the income approach. The income approach estimates fair value based on the present value of cash flow that the assets could be expected to generate in the future. We developed internal estimates for expected cash flows in the present value calculation using inputs and significant assumptions that include historical revenues and earnings, revenue growth rates, the amount and timing of future cash flows, discount rates, contributory asset charges and future tax rates, among others. The excess purchase price over the fair value of assets and liabilities acquired is recorded as goodwill. As disclosed in Note 3, we completed the sale of Gentiva Hospice on August 11, 2022. The carrying value of the assets and liabilities of Gentiva Hospice disposed approximates fair value. The amount of goodwill included in the carrying value is based on the relative fair value of the Home Solutions reporting unit included within the CenterWell segment. Other than the assets and liabilities acquired during 2023, there were no other material assets or liabilities measured at fair value on a recurring or nonrecurring basis during 2023. For additional information regarding our fair value measurements, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K.
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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. The accompanying condensed consolidated balance sheets include the following amounts associated with Medicare Part D at September 30, 2023 and December 31, 2022. CMS subsidies/discounts in the table below include the reinsurance and low-income cost subsidies funded by CMS for which we assume no risk as well as brand name prescription drug discounts for Part D plan participants in the coverage gap funded by CMS and pharmaceutical manufacturers. For additional information regarding our prescription drug benefits coverage in accordance with Medicare Part D, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K.
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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 nine months ended September 30, 2023 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 September 30, 2023 and December 31, 2022:
For the three months ended September 30, 2023 and 2022, amortization expense for other intangible assets was approximately $17 million and $25 million, respectively. For the nine months ended September 30, 2023 and 2022, amortization expense for other intangible assets was approximately $51 million and $61 million, respectively. The following table presents our estimate of amortization expense remaining for 2023 and each of the next five succeeding years at September 30, 2023:
For additional information regarding our goodwill and intangible assets, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K.
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BENEFITS PAYABLE |
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Insurance [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BENEFITS PAYABLE | BENEFITS PAYABLE On a consolidated basis, which represents our Insurance segment net of eliminations, activity in benefits payable was as follows for the nine months ended September 30, 2023 and 2022:
The total estimate of benefits payable for claims incurred but not reported, or IBNR, is included within the net incurred claims amounts. At September 30, 2023, benefits payable included IBNR of approximately $6.4 billion, primarily associated with claims incurred in 2023. Amounts incurred related to prior periods vary from previously estimated liabilities as the claims ultimately are settled. Negative amounts reported for incurred related to prior years result from claims being ultimately settled for amounts less than originally estimated (favorable development). Our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for claims. Actuarial standards require the use of assumptions based on moderately adverse experience, which generally results in favorable reserve development, or reserves that are considered redundant. For additional information regarding our benefits payable and benefits expense recognition, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K.
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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 nine months ended September 30, 2023 and 2022:
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STOCKHOLDERS' EQUITY |
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STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Dividends The following table provides details of dividend payments, excluding dividend equivalent rights for unvested stock awards, during 2023 under our Board approved quarterly cash dividend policy:
In October 2023, the Board declared a cash dividend of $0.885 per share payable on January 26, 2024 to stockholders of record as of the close of business on December 29, 2023. Declaration and payment of future quarterly dividends are at the discretion of our Board and may be adjusted as business needs or market conditions change. Stock Repurchases Our Board of Directors may authorize the purchase of our common stock shares. Under the share repurchase authorization, shares may be purchased from time to time at prevailing prices in the open market, by block purchases, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or in privately-negotiated transactions, including pursuant to accelerated share repurchase agreements with investment banks, subject to certain regulatory restrictions on volume, pricing, and timing. On February 15, 2023, the Board of Directors replaced the previous share repurchase authorization of up to $3 billion (of which approximately $1 billion remained unused) with a new authorization for repurchases of up to $3 billion of our common shares exclusive of shares repurchased in connection with employee stock plans, expiring as of February 15, 2026. During the nine months ended September 30, 2023, we repurchased 2.0 million shares in open market transactions for $980 million at an average price of $478.20 under the current share repurchase authorization. During the nine months ended September 30, 2022, we did not repurchase shares in open market transactions. Our remaining repurchase authorization was $1.9 billion as of October 31, 2023. In connection with employee stock plans, we acquired 0.06 million common shares for $31 million and 0.07 million common shares for $32 million during the nine months ended September 30, 2023 and 2022, respectively. For additional information regarding our stockholders' equity, refer to Note 16 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K.
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INCOME TAXES |
9 Months Ended |
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Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective income tax rate was 23.5% and 23.1% for the three and nine months ended September 30, 2023, respectively, and 8.2% and 22.5% for the three and nine months ended September 30, 2022, respectively. The year-over-year increase in the effective income tax rate is primarily due to the August 2022 disposition of our 60% interest in Gentiva Hospice, which resulted in an increase to our tax basis in both the shares sold and the shares retained, thereby reducing the effective income tax rate for the three and nine months ended September 30, 2022. For additional information regarding income taxes, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K.
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DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT The carrying value of debt outstanding, net of unamortized debt issuance costs, was as follows at September 30, 2023 and December 31, 2022:
Senior Notes In March 2023, we issued $500 million of 5.700% unsecured senior notes due March 13, 2026 and $750 million of 5.500% unsecured senior notes due March 15, 2053. Our net proceeds, reduced for the underwriters' discounts and commissions paid, were $1.2 billion. We used the net proceeds to repay outstanding amounts under our $500 million Delayed Draw Term Loan. The remaining net proceeds will be used for general corporate purposes, which include the repayment of existing indebtedness, including borrowings under our commercial paper program. In August 2023, we entered into a Rule 10b5-1 Repurchase Plan to repurchase a portion of our $750 million aggregate principal amount of 1.350% senior notes maturing in February 2027, our $600 million aggregate principal amount of 3.950% senior notes maturing in March 2027, our $750 million aggregate principal amount of 3.700% senior notes maturing in March 2029, and our $500 million aggregate principal amount of 3.125% senior notes maturing in August 2029 during the period beginning on August 7, 2023 and ending on November 15, 2023. For the three months ended September 30, 2023, we repurchased $213 million principal amount of these senior notes for approximately $196 million cash. In March 2023, we entered into a Rule 10b5-1 Repurchase Plan to repurchase a portion of our $1.5 billion aggregate principal amount of 0.650% senior notes maturing in August 2023 and our $600 million aggregate principal amount of 3.850% senior notes maturing in October 2024 during the period beginning on March 13, 2023 and ending on July 21, 2023. For the nine months ended September 30, 2023, we repurchased $361 million principal amount of these senior notes for approximately $358 million cash. In August 2023, we repaid the remaining $1.2 billion aggregate principal amount of our 0.650% senior notes due on their maturity date of August 3, 2023. During the third quarter of 2023, we entered into interest rate swap agreements to exchange the fixed interest rate under our 5.875% and 5.500% senior notes for a variable interest rate based on SOFR, as further described in Note 5. As a result, the carrying value of these senior notes has been adjusted to reflect changes in value caused by an increase or decrease in interest rates. The cumulative, aggregate adjustment to the carrying value of the 5.875% and 5.500% senior notes was $26 million and $5 million, respectively, at September 30, 2023. For additional information regarding our Senior Notes, refer to Note 13 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. Revolving Credit Agreements In June 2023, we entered into an amended and restated 5-year, $2.5 billion unsecured revolving credit agreement (replacing the 5-year, $2.5 billion unsecured revolving credit agreement entered in June 2021) and entered into a 364-day $1.5 billion unsecured revolving credit agreement (replacing the 364-day $1.5 billion unsecured revolving credit agreement entered in June 2022, which expired in accordance with its terms). Under the credit agreements, at our option, we can borrow on either a competitive advance basis or a revolving credit basis. The revolving credit portion bears interest at Term SOFR or the base rate plus a spread. 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 Term SOFR, at our option. The SOFR spread, currently 103.5 basis points under the 5-year revolving credit agreement and 105.5 basis points under the 364-day revolving credit agreement, varies depending on our credit ratings ranging from 92.0 to 130.0 basis points under the 5-year revolving credit agreement and from 94.0 to 135.0 basis points under the 364-day revolving credit agreement. We also pay an annual facility fee regardless of utilization. This facility fee, currently 9.0 basis points, under the 5-year revolving credit agreement and 7.0 basis points under the 364-day revolving agreement, varies depending on our credit ratings ranging from 8.0 to 20.0 basis points under the 5-year revolving credit agreement and from 6.0 to 15.0 basis points under the 364-day revolving credit agreement. Our credit agreements contain customary restrictive covenants and a financial covenant regarding maximum debt to capitalization of 60%, as well as customary events of default. We are in compliance with this financial covenant, with actual debt to capitalization of 41.1% as measured in accordance with the revolving credit agreements as of September 30, 2023. At September 30, 2023, we had no borrowings and approximately $18 million of letters of credit outstanding under the revolving credit agreements. Accordingly, as of September 30, 2023, we had $2.482 billion of remaining borrowing capacity under the 5-year revolving credit agreement and $1.5 billion of remaining borrowing capacity under the 364-day revolving credit agreement (which excludes the uncommitted $750 million of incremental loan facilities), none of which would be restricted by our financial covenant compliance requirement. For additional information regarding our Revolving Credit Agreements, refer to Note 13 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. Commercial Paper Under our commercial paper program we may issue short-term, unsecured commercial paper notes privately placed on a discount basis through certain broker dealers at any time. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The net proceeds of issuances have been and are expected to be used for general corporate purposes. The maximum principal amount outstanding at any one time during the nine months ended September 30, 2023 was $2.3 billion, with $2.2 billion outstanding at September 30, 2023 compared to $0.6 billion outstanding at December 31, 2022. The outstanding commercial paper at September 30, 2023 had a weighted average annual interest rate of 5.58%. For additional information regarding our Commercial Paper refer to Note 13 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. Other Short-term Borrowings We are a member, through one subsidiary, of the Federal Home Loan Bank of Cincinnati, or FHLB. As a member we have the ability to obtain short-term cash advances, subject to certain minimum collateral requirements. At September 30, 2023 we had no outstanding short-term FHLB borrowings.
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COMMITMENTS, GUARANTEES AND CONTINGENCIES |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, GUARANTEES AND CONTINGENCIES | COMMITMENTS, GUARANTEES AND CONTINGENCIES Government Contracts Our Medicare products, which accounted for approximately 83% of our total premiums and services revenue for the nine months ended September 30, 2023, primarily consisted of products covered under the Medicare Advantage and Medicare Part D Prescription Drug Plan contracts with the federal government. These contracts are renewed generally for a calendar year term unless CMS notifies us of its decision not to renew by May 1 of the calendar year in which the contract would end, or we notify CMS of our decision not to renew by the first Monday in June of the calendar year in which the contract would end. All material contracts between Humana and CMS relating to our Medicare products have been renewed for 2023, and all of our product offerings filed with CMS for 2023 have been approved. CMS uses a risk-adjustment model which adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members. The risk-adjustment model, which CMS implemented pursuant to the Balanced Budget Act of 1997, or BBA, and the Benefits Improvement and Protection Act of 2000, or BIPA, generally pays more where a plan's membership has higher expected costs. Under this model, rates paid to MA plans are based on actuarially determined bids, which include a process whereby our prospective payments are based on our estimated cost of providing standard Medicare-covered benefits to an enrollee with a "national average risk profile." That baseline payment amount is adjusted to account for certain demographic characteristics and health status of our enrolled members. Under the risk-adjustment methodology, all MA plans must collect from providers and submit the necessary diagnosis code information to CMS within prescribed deadlines. The CMS risk-adjustment model uses the diagnosis data, collected from providers, to calculate the health status-related risk-adjusted premium payment to MA plans, which CMS further adjusts for coding pattern differences between the health plans and the government fee-for-service, or FFS, program. We generally rely on providers, including certain providers in our network who are our employees, to code their claim submissions with appropriate diagnoses, which we send to CMS as the basis for our health status-adjusted payment received from CMS under the actuarial risk-adjustment model. We also rely on these providers to document appropriately all medical data, including the diagnosis data submitted with claims. In addition, we conduct medical record reviews as part of our data and payment accuracy compliance efforts, to more accurately reflect diagnosis conditions under the risk adjustment model. CMS and the Office of the Inspector General of Health and Human Services, or HHS-OIG, perform audits of various companies’ risk adjustment diagnosis data submissions. We refer to these audits as Risk-Adjustment Data Validation Audits, or RADV audits. RADV audits review medical records in an attempt to validate provider medical record documentation and coding practices that influence the calculation of health status-related premium payments to MA plans. In 2012, CMS released an MA contract-level RADV methodology that would extrapolate the results of each CMS RADV audit sample to the audited MA contract’s entire health status-related risk adjusted premium amount for the year under audit. In doing so, CMS recognized “that the documentation standard used in RADV audits to determine a contract’s payment error (medical records) is different from the documentation standard used to develop the Part C risk-adjustment model (FFS claims).” To correct for this difference, CMS stated that it would apply a “Fee-for-Service Adjuster (FFS Adjuster)” as “an offset to the preliminary recovery amount.” This adjuster would be “calculated by CMS based on a RADV-like review of records submitted to support FFS claims data.” CMS stated that this methodology would apply to audits beginning with PY 2011. Humana relied on CMS’s 2012 guidance in submitting MA bids to CMS. Humana also launched a “Self-Audits” program in 2013 that applied CMS’s 2012 RADV audit methodology and included an estimated FFS Adjuster. Humana completed Self-Audits for PYs 2011-2016 and reported results to CMS. In October 2018, however, CMS issued a proposed rule announcing possible changes to the RADV audit methodology, including elimination of the FFS Adjuster. CMS proposed applying its revised methodology, including extrapolated recoveries without application of a FFS Adjuster, to RADV audits dating back to PY 2011. On January 30, 2023, CMS published a final rule related to the RADV audit methodology (Final RADV Rule). The Final RADV Rule confirmed CMS’s decision to eliminate the FFS Adjuster. The Final RADV Rule states CMS’s intention to extrapolate results from CMS and HHS-OIG RADV audits beginning with PY 2018, rather than PY 2011 as proposed. However, CMS’s Final RADV Rule does not adopt a specific sampling, extrapolation or audit methodology. CMS instead stated its general plan to rely on “any statistically valid method . . . that is determined to be well-suited to a particular audit.” We believe that the Final RADV Rule fails to address adequately the statutory requirement of actuarial equivalence and violates the Administrative Procedure Act (“APA”). CMS failed to meet its legal obligations in the federal rulemaking process to give a reasoned justification for the rule or provide a meaningful opportunity for public comment. They also chose to apply the rule retroactively rather than prospectively, as required by law. Humana’s actuarially certified bids through PY 2023 preserved Humana’s position that CMS should apply an FFS Adjuster in any RADV audit that CMS intends to extrapolate. We expect CMS to apply the Final RADV Rule, including the first application of extrapolated audit results to determine audit settlements without a FFS Adjuster, to CMS and HHS-OIG RADV audits conducted for PY 2018 and subsequent years. The Final RADV Rule, including the lack of a FFS Adjuster, and any related regulatory, industry or company reactions, could have a material adverse effect on our results of operations, financial position, or cash flows. In addition, as part of our internal compliance efforts, we routinely perform ordinary course reviews of our internal business processes related to, among other things, our risk coding and data submissions in connection with the risk adjustment model. These reviews may also result in the identification of errors and the submission of corrections to CMS that may, either individually or in the aggregate, be material. As such, the result of these reviews may have a material adverse effect on our results of operations, financial position, or cash flows. On September 1, 2023, Humana Inc. and Humana Benefit Plan of Texas, Inc. filed suit against the United States Department of Health and Human Services, and Xavier Becerra in his official capacity as Secretary, in the United States District Court, Northern District of Texas, Fort Worth Division seeking a determination that the Final RADV Rule violates the APA and should be set aside. We remain committed to working alongside CMS to promote the integrity of the MA program as well as affordability and cost certainty for our members. It is critical that MA plans are paid accurately and that payment model principles, including the application of a FFS Adjuster, are in accordance with the requirements of the Social Security Act, which, if not implemented correctly could have a material adverse effect on our results of operations, financial position, or cash flows. Our state-based Medicaid business, which accounted for approximately 7% of our total premiums and services revenue for the nine months ended September 30, 2023 primarily consisted of serving members enrolled in Medicaid, and in certain circumstances members who qualify for both Medicaid and Medicare, under contracts with various states. At September 30, 2023, our Military business, which accounted for approximately 1% of our total premiums and services revenue for the nine months ended September 30, 2023, primarily consisted of the TRICARE T2017 East Region contract. The T2017 East Region contract comprises 32 states and approximately 6 million TRICARE beneficiaries, under which delivery of health care services commenced on January 1, 2018. The T2017 East Region contract, which was originally set to expire on December 31, 2022, was subsequently extended by the DoD and is currently scheduled to expire on December 31, 2023, unless further extended. In December 2022, we were awarded the next generation of TRICARE Managed Care Support Contracts, or T-5, for the TRICARE East Region by the Defense Health Agency of the DoD. The contract is expected to go into effect in 2024. Until then the T2017 contract remains in place. Under the terms of the award, our service area covers approximately 4.6 million beneficiaries in a region consisting of 24 states and Washington, D.C. The length of the contract is base year with eight annual option periods, which, if all options are exercised, would result in a total contract length of nine years. The loss of any of the contracts above or significant changes in these programs as a result of legislative or regulatory action, including reductions in premium payments to us, regulatory restrictions on profitability, including reviews by regulatory bodies that may compare our Medicare Advantage profitability to our non-Medicare Advantage business profitability, or compare the profitability of various products within our Medicare Advantage business, and require that they remain within certain ranges of each other, or increases in member benefits or member eligibility criteria without corresponding increases in premium payments to us, may have a material adverse effect on our results of operations, financial position, and cash flows. Legal Proceedings and Certain Regulatory Matters As previously disclosed, the Civil Division of the United States Department of Justice provided us with an information request in December 2014, concerning our Medicare Part C risk adjustment practices. The request relates to our oversight and submission of risk adjustment data generated by providers in our Medicare Advantage network, as well as to our business and compliance practices related to risk adjustment data generated by our providers and by us, including medical record reviews conducted as part of our data and payment accuracy compliance efforts, the use of health and well-being assessments, and our fraud detection efforts. We believe that this request for information is in connection with a wider review of Medicare Risk Adjustment generally that includes a number of Medicare Advantage plans, providers and vendors. We cooperated with the Department of Justice, and we have not heard from the Department of Justice on this matter since 2020. As previously disclosed, on January 19, 2016, an individual filed a qui tam suit captioned United States of America ex rel. Steven Scott v. Humana Inc., currently pending in United States District Court, Western District of Kentucky, Louisville 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 March 31, 2022, the Court denied the parties' Motions for Summary Judgement. We take seriously our obligations to comply with applicable CMS requirements and actuarial standards of practice, and continue to vigorously defend against these allegations. As of September 30, 2023, we have accrued certain anticipated expenses in connection with this matter. On September 1, 2023, Humana Inc. and Humana Benefit Plan of Texas, Inc. filed suit against the United States Department of Health and Human Services, and Xavier Becerra in his official capacity as Secretary, in the United States District Court, Northern District of Texas, Fort Worth Division seeking a determination that the Final RADV Rule violates the APA and should be set aside. There is no assurance that we will prevail in the lawsuit. See “Government Contracts” in this footnote to the unaudited Consolidated Financial Statements of this Form 10-Q for additional information regarding this matter. Other Lawsuits and Regulatory Matters Our current and past business practices are subject to review or other investigations by various state insurance and health care regulatory authorities and other state and federal regulatory authorities. These authorities regularly scrutinize the business practices of health insurance, health care delivery and benefits companies. These reviews focus on numerous facets of our business, including claims payment practices, statutory capital requirements, provider contracting, risk adjustment, competitive practices, commission payments, privacy issues, utilization management practices, pharmacy benefits, access to care, sales practices, and provision of care by our healthcare services businesses, among others. Some of these reviews have historically resulted in fines imposed on us and some have required changes to some of our practices. We continue to be subject to these reviews, which could result in additional fines or other sanctions being imposed on us or additional changes in some of our practices. We also are involved in various other lawsuits that arise, for the most part, in the ordinary course of our business operations, certain of which may be styled as class-action lawsuits. Among other matters, this litigation may include employment matters, claims of medical malpractice, bad faith, nonacceptance or termination of providers, anticompetitive practices, improper rate setting, provider contract rate and payment disputes, including disputes over reimbursement rates required by statute, disputes arising from competitive procurement process, general contractual matters, intellectual property matters, and challenges to subrogation practices. Under state guaranty assessment laws, including those related to state cooperative failures in the industry, we may be assessed (up to prescribed limits) for certain obligations to the policyholders and claimants of insolvent insurance companies that write the same line or lines of business as we do. As a government contractor, we may also be subject to false claims litigation, such as qui tam lawsuits brought by individuals who seek to sue on behalf of the government, alleging that the government contractor submitted false claims to the government or related overpayments from the government, including, among other allegations, those resulting from coding and review practices under the Medicare risk adjustment model. Qui tam litigation is filed under seal to allow the government an opportunity to investigate and to decide if it wishes to intervene and assume control of the litigation. If the government does not intervene, the individual may continue to prosecute the action on his or her own, on behalf of the government. We also are subject to other allegations of nonperformance of contractual obligations to providers, members, and others, including failure to properly pay claims, improper policy terminations, challenges to our implementation of the Medicare Part D prescription drug program and other litigation. A limited number of the claims asserted against us are subject to insurance coverage. Personal injury claims, claims for extra contractual damages, care delivery malpractice, and claims arising from medical benefit denials are covered by insurance from our wholly owned captive insurance subsidiary and excess carriers, except to the extent that claimants seek punitive damages, which may not be covered by insurance in certain states in which insurance coverage for punitive damages is not permitted. In addition, insurance coverage for all or certain forms of liability has become increasingly costly and may become unavailable or prohibitively expensive in the future. We record accruals for the contingencies discussed in the sections above to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made at this time regarding the matters specifically described above because of the inherently unpredictable nature of legal proceedings, which also may be exacerbated by various factors, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; (vi) there are a large number of parties (including where it is uncertain how liability, if any, will be shared among multiple defendants); or (vii) there is a wide range of potential outcomes. The outcome of any current or future litigation or governmental or internal investigations, including the matters described above, cannot be accurately predicted, nor can we predict any resulting judgments, penalties, fines or other sanctions that may be imposed at the discretion of federal or state regulatory authorities or as a result of actions by third parties. Nevertheless, it is reasonably possible that any such outcome of litigation, judgments, penalties, fines or other sanctions could be substantial, and the outcome of these matters may have a material adverse effect on our results of operations, financial position, and cash flows, and may also affect our reputation.
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SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION During December 2022, we realigned our businesses into two distinct segments: Insurance and CenterWell. The Insurance segment includes the businesses that were previously included in the Retail and Group and Specialty segments, as well as the Pharmacy Benefit Manager, or PBM, business which was previously included in the Healthcare Services segment. The CenterWell segment (formerly Healthcare Services) represents our payor-agnostic healthcare services offerings, including pharmacy dispensing services, primary care, and home services. In addition to the new segment classifications being utilized to assess performance and allocate resources, we believe this simpler structure will create greater collaboration across the Insurance and CenterWell businesses and will accelerate work that is underway to centralize and integrate operations within the organization. Prior period segment financial information has been recast to conform to the 2023 presentation. Our two reportable segments, Insurance and CenterWell, are based on a combination of the type of health plan customer and adjacent businesses centered on well-being solutions for our health plans and other customers, as described below. These segment groupings are consistent with information used by our Chief Executive Officer, the Chief Operating Decision Maker, to assess performance and allocate resources. The Insurance segment consists of Medicare benefits, marketed to individuals or directly via group Medicare accounts, as well as our contract with CMS to administer the Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program and contracts with various states to provide Medicaid, dual eligible demonstration, and Long-Term Support Services benefits, which we refer to collectively as our state-based contracts. This segment also includes products consisting of employer group commercial fully-insured medical and specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health benefits, as well as administrative services only, or ASO. In addition, our Insurance segment includes our Military business, primarily our T-2017 East Region contract, as well as the operations of our PBM business. The CenterWell segment includes our pharmacy, primary care, and home solutions operations. The segment also includes our strategic partnerships with WCAS to develop and operate senior-focused, payor-agnostic, primary care centers, as well as our minority ownership interest in hospice operations. Services offered by this segment are designed to enhance the overall healthcare experience. These services may lead to lower utilization associated with improved member health and/or lower drug costs. Our CenterWell intersegment revenues primarily relate to the operations of CenterWell Pharmacy (our mail- order pharmacy business), CenterWell Specialty Pharmacy, and retail pharmacies jointly located within CenterWell Senior Primary Care clinics. In addition, our CenterWell intersegment revenues include revenues earned by certain owned providers derived from certain value-based arrangements with our health plans. Under these value-based arrangements, our owned providers enter into agreements with our health plans to stand ready to deliver, integrate, direct and control the administration and management of certain health care services for our members. In exchange, the owned provider receives a premium that is typically paid on a per-member per-month basis. These value-based arrangements represent a single performance obligation where revenues are recognized in the period in which we are obligated to provide integrated health care services to our members. Fee-for-service revenue is recognized at agreed upon rates, net of contractual allowances, as the performance obligation is completed on the date of service. We present our condensed consolidated results of operations from the perspective of the health plans. As a result, the cost of providing benefits to our members, whether provided via a third party provider or internally through a stand-alone subsidiary, is classified as benefits expense and excludes the portion of the cost for which the health plans do not bear responsibility, including member co-share amounts and government subsidies of $5.7 billion and $5.4 billion for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022 these amounts were $14.7 billion and $14.2 billion, respectively. In addition, depreciation and amortization expense associated with certain businesses delivering benefits to our members, primarily associated with our primary care and pharmacy operations, are included with benefits expense. The amount of this expense was $35 million and $30 million for the three months ended September 30, 2023 and 2022, respectively, and $102 million and $89 million for the nine months ended September 30, 2023 and 2022, respectively. Other than those described previously, the accounting policies of each segment are the same. For additional information regarding our accounting policies refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. Transactions between reportable segments primarily consist of sales of products and services rendered by our CenterWell segment, primarily pharmacy, primary care, and home services, to our Insurance segment customers. Intersegment sales and expenses are recorded at fair value and eliminated in consolidation. Members served by our segments often use the same provider networks, enabling us in some instances to obtain more favorable contract terms with providers. Our segments also share indirect costs and assets. As a result, the profitability of each segment is interdependent. We allocate most operating expenses to our segments. Assets and certain corporate income and expenses are not allocated to the segments, including the portion of investment income not supporting segment operations, interest expense on corporate debt, and certain other corporate expenses. These items are managed at a corporate level. These corporate amounts are reported separately from our reportable segments and are included with intersegment eliminations in the tables presenting segment results below. Our segment results were as follows for the three and nine months ended September 30, 2023 and 2022:
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Pay vs Performance Disclosure - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Pay vs Performance Disclosure | ||||
Net income attributable to Humana | $ 832 | $ 1,195 | $ 3,030 | $ 2,821 |
Insider Trading Arrangements |
3 Months Ended |
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Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements are presented in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America, or GAAP, or those normally made in an Annual Report on Form 10-K. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. For further information, the reader of this Form 10-Q should refer to our Form 10-K for the year ended December 31, 2022, that was filed with the Securities and Exchange Commission, or the SEC, on February 16, 2023. We refer to this Form 10-K as the “2022 Form 10-K” in this document. References throughout this document to “we,” “us,” “our,” “Company,” and “Humana” mean Humana Inc. and its subsidiaries. The preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill and indefinite-lived intangible assets. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. For additional information regarding accounting policies considered in preparing our consolidated financial statements, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. The financial information has been prepared in accordance with our customary accounting practices and has not been audited. In our opinion, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature. Employer Group Commercial Medical Products Business Exit In February 2023, we announced our planned exit from the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs. No other Humana health plan offerings are materially affected. Following a strategic review, we determined the Employer Group Commercial Medical Products business was no longer positioned to sustainably meet the needs of commercial members over the long term or support our long-term strategic plans. The exit from this line of business will be phased over the 18 to 24 months following our February 2023 announcement. Value Creation Initiatives During 2022, in order to create capacity to fund growth and investment in our Medicare Advantage business and further expansion of our healthcare services capabilities beginning in 2023, we committed to drive additional value for the enterprise through cost saving, productivity initiatives, and value acceleration from previous investments. As a result of these initiatives, during the three and nine months ended September 30, 2022, we recorded charges of $82 million and $285 million, respectively. For the three and nine months ended September 30, 2022, these charges primarily relate to $4 million and $144 million, respectively, in asset impairments, including software and abandonment, and $44 million and $65 million, respectively, of severance charges in connection with workforce optimization. The remainder of the charges primarily relate to external consulting fees. During the three months ended September 30, 2023, we recorded charges of $52 million primarily in asset impairments relating to software and abandonment. In connection with these initiatives, we expect to incur additional charges through the end of 2024. These charges are recorded at the corporate level and not allocated to the segments.
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Revenue Recognition | Revenue Recognition Our revenues include premiums and services revenue. Services revenue includes administrative service fees that are recorded based upon established per member per month rates and the number of members for the month and are recognized as services are provided for the month. Additionally, services revenue includes net patient services revenue that are recorded based upon established billing rates, less allowances for contractual adjustments, and are recognized as services are provided. For additional information regarding our revenues, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K. For additional information regarding disaggregation of revenue by segment and type, refer to Note 14 to the unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, "Financial Statements" of this Form 10-Q.
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Recently Issued Accounting Pronouncements | In November 2020, the FASB issued Accounting Standards Update No. 2020-11, Financial Services—Insurance (Topic 944): Effective Date and Early Application (“ASU 2020-11”). The amendments in ASU 2020-11 make changes to the effective date and early application of Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (“ASU 2018-12”), which was issued in November 2018. The amendments in ASU 2020-11 have extended the original effective date by one year, and now the amendments are required for our interim and annual reporting periods beginning after December 15, 2022. The new guidance relates to accounting for long-duration contracts of insurers which revises key elements of the measurement models and disclosure requirements for long-duration contracts issued by insurers, including the amortization of deferred contract acquisition costs and the measurement of liabilities for future policy benefits using current, rather than locked-in, assumptions. The new guidance, limited to our Medicare Supplement product which represents less than 1% of consolidated premiums and services revenue, became effective for us beginning January 1, 2023 and is to be applied to contracts in force on the basis of their existing carrying value amounts at the beginning of the earliest period presented. The adoption of the new standard in 2023 did not have a material impact on our consolidated results of operations, financial position or cash flows. There are no other recently issued accounting standards that apply to us or that are expected to have a material impact on our results of operations, financial condition, or cash flows.
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INVESTMENT SECURITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investment Securities Classified as Current and Long-Term | Investment securities classified as current and long-term were as follows at September 30, 2023 and December 31, 2022, 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 of individual debt securities that have been in a continuous unrealized loss position for which no allowances for credit loss has been recorded were as follows at September 30, 2023 and December 31, 2022, respectively:
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Schedule of Realized Gains (Losses) Related to Investment Securities Included Within Investment Income | The detail of gains (losses) related to investment securities and included within investment income was as follows for the three and nine months ended September 30, 2023 and 2022:
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Schedule of Gain (Loss) on Equity Securities | The gains and losses related to equity securities for the three and nine months ended September 30, 2023 and 2022 was as follows:
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Schedule of Contractual Maturity of Debt Securities Available for Sale | The contractual maturities of debt securities available for sale at September 30, 2023, regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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FAIR VALUE (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Assets Measured at Fair Value on Recurring Basis | The following table summarizes our fair value measurements at September 30, 2023 and December 31, 2022, respectively, for financial assets measured at fair value on a recurring basis:
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Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | During the nine months ended September 30, 2023 and 2022, the changes in the fair value of the assets measured using significant unobservable inputs (Level 3) were comprised of the following:
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Schedule of Assumptions Used For Inputs In Fair Value Measurement | The table below presents the assumptions used for each reporting period.
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MEDICARE PART D (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Balance Sheet Amounts Associated With Medicare Part D | The accompanying condensed consolidated balance sheets include the following amounts associated with Medicare Part D at September 30, 2023 and December 31, 2022. CMS subsidies/discounts in the table below include the reinsurance and low-income cost subsidies funded by CMS for which we assume no risk as well as brand name prescription drug discounts for Part D plan participants in the coverage gap funded by CMS and pharmaceutical manufacturers. For additional information regarding our prescription drug benefits coverage in accordance with Medicare Part D, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2022 Form 10-K.
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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Carrying Amount of Goodwill By Reportable Segments | Changes in the carrying amount of goodwill for our reportable segments for the nine months ended September 30, 2023 were as follows:
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Schedule of Other Intangible Assets, Indefinite-Lived | The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at September 30, 2023 and December 31, 2022:
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Schedule of Other Intangible Assets, Amortizable | The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at September 30, 2023 and December 31, 2022:
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Schedule of Estimated Amortization Expense | The following table presents our estimate of amortization expense remaining for 2023 and each of the next five succeeding years at September 30, 2023:
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BENEFITS PAYABLE (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Activity in Benefits Payable | On a consolidated basis, which represents our Insurance segment net of eliminations, activity in benefits payable was as follows for the nine months ended September 30, 2023 and 2022:
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EARNINGS PER COMMON SHARE COMPUTATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Details Supporting Computation of Earnings Per Share | Detail supporting the computation of basic and diluted earnings per common share was as follows for the three and nine months ended September 30, 2023 and 2022:
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STOCKHOLDERS' EQUITY (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Details of Dividend Payments | The following table provides details of dividend payments, excluding dividend equivalent rights for unvested stock awards, during 2023 under our Board approved quarterly cash dividend policy:
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DEBT (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Value of Debt Outstanding | The carrying value of debt outstanding, net of unamortized debt issuance costs, was as follows at September 30, 2023 and December 31, 2022:
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SEGMENT INFORMATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Results | Our segment results were as follows for the three and nine months ended September 30, 2023 and 2022:
|
BASIS OF PRESENTATION AND SIGNIFICANT EVENTS (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2022 |
|
Services | |||
Receivables and Other [Line Items] | |||
Accounts receivable | $ 322 | ||
Value Creation Initiatives | |||
Receivables and Other [Line Items] | |||
Restructuring and impairment charge | $ 82 | $ 285 | |
Assets held for abandonment | $ 52 | 4 | 144 |
Severance costs | $ 44 | $ 65 |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Product Concentration Risk | Revenue Benchmark | Medicare Supplement | |
Concentration Risk [Line Items] | |
Concentration risk, less than (percent) | 1.00% |
ACQUISITIONS AND DIVESTITURES (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Gentiva Hospice - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Aug. 11, 2022 |
Sep. 30, 2022 |
Sep. 30, 2022 |
|
Business Acquisition [Line Items] | |||
Equity interest sold | 60.00% | ||
Consideration to be received | $ 2,700 | ||
Pre-tax gain, net of transaction costs | 240 | ||
Revenue | $ 177 | $ 958 | |
Pretax earnings | $ 24 | $ 150 | |
Term Loan Due October 2023 | Term Loan | |||
Business Acquisition [Line Items] | |||
Repayment of debt | $ 1,900 |
INVESTMENT SECURITIES - Narrative (Details) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2023
USD ($)
position
|
Dec. 31, 2022
USD ($)
|
|
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Book value | $ 17,466 | $ 15,946 |
Fair value | $ 15,515 | $ 14,254 |
Maximum individual state general bond obligation as a percentage of total debt securities (percent) | 1.00% | |
Securities in unrealized loss positions, number of positions | position | 1,790 | |
Securities, number of positions | position | 2,070 | |
Standard & Poor's, AA Rating | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Percentage of debt securities considered to be of investment-grade (percent) | 98.00% | |
Dispositions | Gentiva Hospice | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Book value | $ 281 | |
Fair value | $ 295 |
INVESTMENT SECURITIES - Gains (Losses) Within Investment Income (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Gross gains on investment securities | $ 0 | $ 2 | $ 15 | $ 41 |
Gross losses on investment securities | (4) | (52) | (65) | (58) |
Gross gains on equity securities | 0 | 51 | 1 | 51 |
Gross losses on equity securities | 0 | 0 | 0 | (170) |
Net recognized (losses) gains on investment securities | $ (4) | $ 1 | $ (49) | $ (136) |
INVESTMENT SECURITIES - Gains and Losses Related to Equity Securities (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Net gains (losses) recognized on equity securities during the period | $ 0 | $ 51 | $ 1 | $ (119) |
Less: Net gains (losses) recognized on equity securities sold during the period | 0 | 47 | 0 | (105) |
Unrealized gains (losses) recognized on equity securities still held at the end of the period | $ 0 | $ 4 | $ 1 | $ (14) |
INVESTMENT SECURITIES - Contractual Maturities of Debt Securities Available for Sale (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Amortized Cost | ||
Due within one year | $ 659 | |
Due after one year through five years | 4,850 | |
Due after five years through ten years | 3,017 | |
Due after ten years | 1,229 | |
Mortgage and asset-backed securities | 7,711 | |
Amortized Cost | 17,466 | $ 15,946 |
Fair Value | ||
Due within one year | 654 | |
Due after one year through five years | 4,565 | |
Due after five years through ten years | 2,573 | |
Due after ten years | 954 | |
Mortgage and asset-backed securities | 6,769 | |
Fair Value | $ 15,515 | $ 14,254 |
FAIR VALUE - Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance at January 1 | $ 101 | $ 68 |
Total gains or losses: | ||
Realized in earnings | 0 | 0 |
Unrealized in other comprehensive income | (1) | 0 |
Purchases | 13 | (12) |
Sales | 0 | 44 |
Maturities | (4) | 0 |
Transfer out | (4) | |
Balance at September 30 | $ 105 | $ 100 |
MEDICARE PART D (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Other current assets | $ 6,136 | $ 5,567 |
Trade accounts payable and accrued expenses | (7,600) | (5,238) |
Other long-term assets | 3,638 | 3,380 |
Other long-term liabilities | (1,595) | (1,473) |
Risk Corridor Settlement | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 131 | 240 |
Trade accounts payable and accrued expenses | (150) | (166) |
Net current (liability) asset | (19) | 74 |
Other long-term assets | 235 | 19 |
Other long-term liabilities | (123) | (78) |
Net long-term asset (liability) | 112 | (59) |
Total net asset (liability) | 93 | 15 |
CMS Subsidies/ Discounts | ||
Segment Reporting Information [Line Items] | ||
Other current assets | 517 | 696 |
Trade accounts payable and accrued expenses | (3,566) | (1,236) |
Net current (liability) asset | (3,049) | (540) |
Other long-term assets | 0 | 0 |
Other long-term liabilities | 0 | 0 |
Net long-term asset (liability) | 0 | 0 |
Total net asset (liability) | $ (3,049) | $ (540) |
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill by Segments (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Goodwill | |
Goodwill, beginning balance | $ 9,142 |
Acquisitions | 398 |
Goodwill, ending balance | 9,540 |
Insurance | |
Goodwill | |
Goodwill, beginning balance | 2,472 |
Acquisitions | 191 |
Goodwill, ending balance | 2,663 |
CenterWell | |
Goodwill | |
Goodwill, beginning balance | 6,670 |
Acquisitions | 207 |
Goodwill, ending balance | $ 6,877 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization | $ 17 | $ 25 | $ 51 | $ 61 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization and Estimated Future Amortization Expense (Details) $ in Millions |
Sep. 30, 2023
USD ($)
|
---|---|
For the years ending December 31, | |
2023 | $ 15 |
2024 | 60 |
2025 | 58 |
2026 | 44 |
2027 | 34 |
2028 | $ 29 |
BENEFITS PAYABLE - Activity in Benefits Payable (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances, beginning of period | $ 9,264 | $ 8,289 |
Acquisitions | 62 | 0 |
Incurred related to: | ||
Current year | 66,370 | 57,512 |
Prior years | (758) | (404) |
Total incurred | 65,612 | 57,108 |
Paid related to: | ||
Current year | (56,700) | (48,835) |
Prior years | (8,042) | (7,325) |
Total paid | (64,742) | (56,160) |
Balances, end of period | 10,196 | $ 9,237 |
Total IBNR included in benefits payable | $ 6,400 |
STOCKHOLDERS' EQUITY - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions |
Oct. 27, 2023 |
Jul. 28, 2023 |
Apr. 28, 2023 |
Jan. 27, 2023 |
---|---|---|---|---|
Equity, Class of Treasury Stock [Line Items] | ||||
Amount per Share (in dollars per share) | $ 0.8850 | $ 0.8850 | $ 0.7875 | |
Total Amount | $ 110 | $ 111 | $ 98 | |
Subsequent Event | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Amount per Share (in dollars per share) | $ 0.8850 | |||
Total Amount | $ 109 |
INCOME TAXES (Details) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Aug. 11, 2022 |
|
Income Tax Examination [Line Items] | |||||
Effective income tax rate (percent) | 23.50% | 8.20% | 23.10% | 22.50% | |
Dispositions | Gentiva Hospice | |||||
Income Tax Examination [Line Items] | |||||
Equity interest sold | 60.00% |
DEBT - Commercial Paper and Other Short-term Borrowings (Details) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Commercial paper | ||
Short-term Debt [Line Items] | ||
Maximum amount outstanding during period | $ 2,300,000,000 | |
Short-term debt outstanding | $ 2,245,000,000 | $ 595,000,000 |
Weighted average annual interest rate (percent) | 5.58% | |
FHLB borrowings | ||
Short-term Debt [Line Items] | ||
Short-term debt outstanding | $ 0 |
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Details) |
1 Months Ended | 9 Months Ended |
---|---|---|
Dec. 31, 2022
state
option_period
beneficiary
|
Sep. 30, 2023
beneficiary
state
|
|
T2017 East Region | ||
Loss Contingencies [Line Items] | ||
Number of states comprising TRICARE beneficiaries | state | 32 | |
Number of TRICARE beneficiaries | beneficiary | 6,000,000 | |
T-5, Effective 2024 | ||
Loss Contingencies [Line Items] | ||
Number of TRICARE managed care support contract beneficiaries | beneficiary | 4,600,000 | |
Number of states comprising of TRICARE managed care support contract beneficiaries | state | 24 | |
Contract base term | 1 year | |
Annual option periods | option_period | 8 | |
Contract term with exercises | 9 years | |
Medicare | ||
Loss Contingencies [Line Items] | ||
Percentage of premiums and services revenue | 83.00% | |
Medicaid | ||
Loss Contingencies [Line Items] | ||
Percentage of premiums and services revenue | 7.00% | |
Military services | T2017 East Region | ||
Loss Contingencies [Line Items] | ||
Percentage of premiums and services revenue | 1.00% |
SEGMENT INFORMATION - Narrative (Details) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2022
segment
|
Sep. 30, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
segment
|
Sep. 30, 2022
USD ($)
|
|
Segment Reporting [Abstract] | |||||
Number of reportable segments | segment | 2 | 2 | |||
Member co-share amounts and government subsidies | $ 5,700 | $ 5,400 | $ 14,700 | $ 14,200 | |
Depreciation and amortization classified as benefit expense | $ 35 | $ 30 | $ 102 | $ 89 |
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