UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                     

Commission file number: 001-16751

ELEVANCE HEALTH, INC.

(Exact name of registrant as specified in its charter)

Indiana	35-2145715
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

220 Virginia Avenue

Indianapolis, Indiana 46204

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (833) 401-1577

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	ELV	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒ No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of April 12, 2023, 237,055,805 shares of the Registrant’s Common Stock were outstanding.

Elevance Health, Inc.

Quarterly Report on Form 10-Q

For the Period Ended March 31, 2023

Table of Contents

		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	2
	Consolidated Statements of Income (Unaudited) for the Three Months Ended March 31, 2023 and 2022	3
	Consolidated Statements of Comprehensive Income (Unaudited) for the Three Months Ended March 31, 2023 and 2022	4
	Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2023 and 2022	5
	Consolidated Statements of Changes in Equity (Unaudited) for the Three Months Ended March 31, 2023 and 2022	6
	Notes to Consolidated Financial Statements (Unaudited)	7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	36
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	51
ITEM 4.	CONTROLS AND PROCEDURES	51
PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	51
ITEM 1A.	RISK FACTORS	51
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	52
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	52
ITEM 4.	MINE SAFETY DISCLOSURES	52
ITEM 5.	OTHER INFORMATION	52
ITEM 6.	EXHIBITS	53
SIGNATURES		54

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PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

Elevance Health, Inc.

Consolidated Balance Sheets

	March 31, 2023		December 31, 2022
(In millions, except share and per share data)	(Unaudited)		(Restated)
Assets
Current assets:
Cash and cash equivalents	$	10,142	$	7,387
Fixed maturity securities (amortized cost of $29,381 and $28,226; allowance for credit losses of $8 and $9)	27,636		25,952
Equity securities	392		953
Premium receivables	8,246		7,083
Self-funded receivables	3,786		4,663
Other receivables	4,678		4,298
Other current assets	4,943		5,281
Total current assets	59,823		55,617
Long-term investments:
Fixed maturity securities (amortized cost of $807 and $789; allowance for credit losses of $0 and $0)	783		752
Other invested assets	5,971		5,685
Property and equipment, net	4,418		4,316
Goodwill	25,273		24,383
Other intangible assets	10,915		10,315
Other noncurrent assets	1,857		1,687
Total assets	$	109,040	$	102,755
Liabilities and equity
Liabilities
Current liabilities:
Medical claims payable	$	15,728	$	15,596
Other policyholder liabilities	6,098		5,933
Unearned income	4,394		1,112
Accounts payable and accrued expenses	4,873		5,607
Short-term borrowings	265		265
Current portion of long-term debt	—		1,500
Other current liabilities	10,531		9,683
Total current liabilities	41,889		39,696
Long-term debt, less current portion	25,201		22,349
Reserves for future policy benefits	811		803
Deferred tax liabilities, net	2,029		2,015
Other noncurrent liabilities	1,650		1,562
Total liabilities	71,580		66,425
Commitments and contingencies – Note 10
Shareholders’ equity
Preferred stock, without par value, shares authorized – 100,000,000; shares issued and outstanding – none	—		—
Common stock, par value $0.01, shares authorized – 900,000,000; shares issued and outstanding – 237,114,190 and 237,958,067	2		2
Additional paid-in capital	8,697		9,084
Retained earnings	30,707		29,647
Accumulated other comprehensive loss	(2,050)		(2,490)
Total shareholders’ equity	37,356		36,243
Noncontrolling interests	104		87
Total equity	37,460		36,330
Total liabilities and equity	$	109,040	$	102,755

See accompanying notes.

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Elevance Health, Inc.

Consolidated Statements of Income

(Unaudited) 

	Three Months Ended   March 31
	2023		2022
(In millions, except per share data)			(Restated)
Revenues
Premiums	$	35,868	$	32,785
Product revenue	4,022		3,301
Service fees	2,008		1,800
Total operating revenue	41,898		37,886
Net investment income	387		360
Net losses on financial instruments	(113)		(151)
Total revenues	42,172		38,095
Expenses
Benefit expense	30,786		28,231
Cost of products sold	3,481		2,883
Operating expense	4,800		4,345
Interest expense	251		201
Amortization of other intangible assets	235		129
Total expenses	39,553		35,789
Income before income tax expense	2,619		2,306
Income tax expense	615		527
Net income	2,004		1,779
Net (income) loss attributable to noncontrolling interests	(15)		10
Shareholders’ net income	$	1,989	$	1,789
Shareholders’ net income per share
Basic	$	8.37	$	7.41
Diluted	$	8.30	$	7.32
Dividends per share	$	1.48	$	1.28

See accompanying notes.

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Elevance Health, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited) 

	Three Months Ended   March 31
(In millions)	2023		2022
			(Restated)
Net income	$	2,004	$	1,779
Other comprehensive (loss) income, net of tax:
Change in net unrealized losses/gains on investments	427		(1,069)
Change in non-credit component of impairment losses on investments	(2)		(1)
Change in net unrealized gains/losses on cash flow hedges	11		3
Change in net periodic pension and postretirement costs	2		7
Change in future policy benefits	2		9
Foreign currency translation adjustments	2		(3)
Other comprehensive income (loss)	442		(1,054)
Net (income) loss attributable to noncontrolling interests	(15)		10
Other comprehensive (income) loss attributable to noncontrolling interests	(2)		5
Total shareholders’ comprehensive income	$	2,429	$	740

See accompanying notes.

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Elevance Health, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended   March 31
	2023		2022
(In millions)			(Restated)
Operating activities
Net income	$	2,004	$	1,779
Adjustments to reconcile net income to net cash provided by operating activities:
Net losses on financial instruments	113		151
Equity in net earnings of other invested assets	30		(153)
Depreciation and amortization	462		358
Deferred income taxes	(255)		(96)
Share-based compensation	61		50
Changes in operating assets and liabilities:
Receivables, net	(29)		(1,348)
Other invested assets	(15)		7
Other assets	(348)		(350)
Policy liabilities	306		1,092
Unearned income	3,282		57
Accounts payable and other liabilities	18		428
Income taxes	839		568
Other, net	1		(2)
Net cash provided by operating activities	6,469		2,541
Investing activities
Purchases of investments	(7,443)		(5,050)
Proceeds from sale of investments	2,489		3,047
Maturities, calls and redemptions from investments	3,533		1,209
Changes in securities lending collateral	204		(441)
Purchases of subsidiaries, net of cash acquired	(1,638)		(61)
Purchases of property and equipment	(301)		(254)
Other, net	(28)		(28)
Net cash used in investing activities	(3,184)		(1,578)
Financing activities
Net proceeds from commercial paper borrowings	325		225
Proceeds from long-term borrowings	2,574		—
Repayments of long-term borrowings	(1,908)		(14)
Changes in securities lending payable	(205)		441
Changes in bank overdrafts	(291)		529
Repurchase and retirement of common stock	(622)		(545)
Cash dividends	(351)		(309)
Proceeds from issuance of common stock under employee stock plans	43		76
Taxes paid through withholding of common stock under employee stock plans	(98)		(86)
Other, net	2		5
Net cash (used in) provided by financing activities	(531)		322
Effect of foreign exchange rates on cash and cash equivalents	1		(4)
Change in cash and cash equivalents	2,755		1,281
Cash and cash equivalents at beginning of period	7,387		4,880
Cash and cash equivalents at end of period	$	10,142	$	6,161

See accompanying notes.

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Elevance Health, Inc.

Consolidated Statements of Changes in Equity

(Unaudited)

	Total Shareholders’ Equity
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Equity
(In millions)	Number of Shares	Par Value
December 31, 2022 (restated)	238.0	$	2	$	9,084	$	29,647	$	(2,490)	$	87	$	36,330
Net income	—	—		—		1,989		—		15		2,004
Other comprehensive income	—	—		—		—		440		2		442
Repurchase and retirement of common stock, including excise tax	(1.3)	—		(51)		(575)		—		—		(626)
Dividends and dividend equivalents	—	—		—		(354)		—		—		(354)
Issuance of common stock under employee stock plans, net of related tax benefits	0.4	—		6		—		—		—		6
Convertible debenture repurchases, conversions and tax adjustments	—	—		(342)		—		—		—		(342)
March 31, 2023	237.1	$	2	$	8,697	$	30,707	$	(2,050)	$	104	$	37,460

December 31, 2021 (restated)	241.8	$	2	$	9,148	$	27,142	$	(197)	$	68	$	36,163
Adoption of Accounting Standards Update 2020-06	—	—		—		(23)		—		—		(23)
January 1, 2022	241.8	2		9,148		27,119		(197)		68		36,140
Net income (loss) (restated)	—	—		—		1,789		—		(10)		1,779
Other comprehensive loss (restated)	—	—		—		—		(1,049)		(5)		(1,054)
Noncontrolling interests adjustment	—	—		—		—		—		3		3
Repurchase and retirement of common stock	(1.2)	—		(45)		(500)		—		—		(545)
Dividends and dividend equivalents	—	—		—		(312)		—		—		(312)
Issuance of common stock under employee stock plans, net of related tax benefits	0.5	—		39		—		—		—		39
Convertible debenture repurchases and conversions	—	—		9		—		—		—		9
March 31, 2022 (restated)	241.1	$	2	$	9,151	$	28,096	$	(1,246)	$	56	$	36,059

See accompanying notes.

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Elevance Health, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

March 31, 2023

(In Millions, Except Per Share Data or As Otherwise Stated Herein)

1.     Organization

References to the terms “we,” “our,” “us” or “Elevance Health” used throughout these Notes to Consolidated Financial Statements refer to Elevance Health, Inc., an Indiana corporation, and unless the context otherwise requires, its direct and indirect subsidiaries. References to the “states” include the District of Columbia and Puerto Rico unless the context otherwise requires.

Elevance Health is a health company with the purpose of improving the health of humanity. We are one of the largest health insurers in the United States in terms of medical membership, serving greater than 48 million medical members through our affiliated health plans as of March 31, 2023. We offer a broad spectrum of network-based managed care risk-based plans to Individual, Employer Group, Medicaid and Medicare markets. In addition, we provide a broad array of managed care services to fee-based customers, including claims processing, stop loss insurance, provider network access, medical management, care management, wellness programs, actuarial services and other administrative services. We provide services to the federal government in connection with our Federal Health Products & Services business, which administers the Federal Employees Health Benefits (“FEHB”) Program. We provide an array of specialty services both to customers of our subsidiary health plans and also unaffiliated health plans, including pharmacy services and dental, vision, life, disability and supplemental health insurance benefits, as well as integrated health services.

We are an independent licensee of the Blue Cross and Blue Shield Association (“BCBSA”), an association of independent health benefit plans. We serve our members as the Blue Cross licensee for California and as the Blue Cross and Blue Shield (“BCBS”) licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (with the exception of 30 counties in the Kansas City area), Nevada, New Hampshire, New York (in the New York City metropolitan area and upstate New York), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.) and Wisconsin. In a majority of these service areas, we do business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, and Empire Blue Cross Blue Shield or Empire Blue Cross. We also serve members in numerous states as Amerigroup, Freedom Health, HealthLink, HealthSun, MMM, Optimum HealthCare, Simply Healthcare, UniCare and/or Wellpoint. We also conduct business through arrangements with other BCBS licensees as well as other strategic partners. We are licensed to conduct insurance operations in all 50 states, the District of Columbia and Puerto Rico through our subsidiaries. Through various subsidiaries, we also offer pharmacy services as CarelonRx and other healthcare-related services as Carelon Services, Aspire Health, Carelon Behavioral Health and CareMore.

As we announced in 2022, over the next several years we are organizing our brand portfolio into the following core go-to-market brands:

•Anthem Blue Cross/Anthem Blue Cross and Blue Shield — represents our existing Anthem-branded and affiliated Blue Cross and/or Blue Shield licensed plans; and

•Wellpoint — we intend to unite select non-BCBSA licensed Medicare, Medicaid and commercial plans under the Wellpoint name; and

•Carelon — this brand brings together our healthcare-related brands and capabilities, including our CarelonRx and Carelon Services businesses, under a single brand name.

Our branding strategy reflects the evolution of our business from a traditional health insurance company to a lifetime, trusted health partner. Given this evolution, we reviewed and modified how we manage our business, monitor our performance and allocate our resources, and made changes to our reportable segments beginning in the first quarter of 2023. The results of our operations are now reported in the following four reportable segments: Health Benefits (aggregates our previously reported Commercial & Specialty Business and Government Business segments), CarelonRx, Carelon Services (previously included in our Other segment) and Corporate & Other (our businesses that do not individually meet the quantitative thresholds for an operating segment, as well as corporate expenses not allocated to our other reportable

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segments). In 2022, we managed and presented our operations through the following four reportable segments: Commercial & Specialty Business, Government Business, CarelonRx and Other. Previously reported information in this Form 10-Q has been reclassified to conform to the new presentation. For additional discussion regarding our segments, including the changes made, see Note 14 “Segment Information.”

2.     Basis of Presentation and Significant Accounting Policies

Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our 2022 Annual Report on Form 10-K, unless the information contained in those disclosures materially changed or is required by GAAP. In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the consolidated financial statements as of and for the three months ended March 31, 2023 and 2022 have been recorded. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2023, or any other period. The seasonal nature of portions of our health care and related benefits business, as well as competitive and other market conditions, may cause full-year results to differ from estimates based upon our interim results of operations. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2022 included in our 2022 Annual Report on Form 10-K.

Certain of our subsidiaries operate outside of the United States and have functional currencies other than the U.S. dollar (“USD”). We translate the assets and liabilities of those subsidiaries to USD using the exchange rate in effect at the end of the period. We translate the revenues and expenses of those subsidiaries to USD using the average exchange rates in effect during the period. The net effect of these translation adjustments is included in “Foreign currency translation adjustments” in our consolidated statements of comprehensive income.

Cash and Cash Equivalents: We control a number of bank accounts that are used exclusively to hold customer funds for the administration of customer benefits, and we have cash and cash equivalents on deposit to meet certain regulatory requirements. These amounts totaled $520 and $258 at March 31, 2023 and December 31, 2022, respectively, and are included in the cash and cash equivalents line on our consolidated balance sheets.

Investments: We classify fixed maturity securities in our investment portfolio as “available-for-sale” and report those securities at fair value. Certain fixed maturity securities are available to support current operations and, accordingly, we classify such investments as current assets without regard to their contractual maturity. Investments used to satisfy contractual, regulatory or other requirements are classified as long-term, without regard to contractual maturity.

If a fixed maturity security is in an unrealized loss position and we have the intent to sell the fixed maturity security, or it is more likely than not that we will have to sell the fixed maturity security before recovery of its amortized cost basis, we write down the fixed maturity security’s cost basis to fair value and record an impairment loss in our consolidated statements of income. For impaired fixed maturity securities that we do not intend to sell or if it is more likely than not that we will not have to sell such securities, but we expect that we will not fully recover the amortized cost basis, we recognize the credit component of the impairment as an allowance for credit loss in our consolidated balance sheets and record an impairment loss in our consolidated statements of income. The non-credit component of the impairment is recognized in accumulated other comprehensive loss. Furthermore, unrealized losses entirely caused by non-credit-related factors related to fixed maturity securities for which we expect to fully recover the amortized cost basis continue to be recognized in accumulated other comprehensive loss.

The credit component of an impairment is determined primarily by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security. The net present value is calculated by discounting our best estimate of projected future cash flows at the effective interest rate implicit in the fixed maturity security at the date of purchase. For mortgage-backed and asset-backed securities, cash flow estimates are based on assumptions regarding the underlying collateral, including prepayment speeds, vintage, type of underlying asset, geographic concentrations, default rates, recoveries and changes in value. For all other securities, cash flow estimates are driven by assumptions regarding

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probability of default, including changes in credit ratings and estimates regarding timing and amount of recoveries associated with a default.

For asset-backed securities included in fixed maturity securities, we recognize income using an effective yield based on anticipated prepayments and the estimated economic life of the securities. When estimates of prepayments change, the effective yield is recalculated to reflect actual payments to date and anticipated future payments. The net investment in the securities is adjusted to the amount that would have existed had the new effective yield been applied since the purchase date of the securities. Such adjustments are reported within net investment income.

The changes in fair value of our marketable equity securities are recognized in our results of operations within net gains and losses on financial instruments. Certain marketable equity securities are held to satisfy contractual obligations and are reported under the caption “Other invested assets” in our consolidated balance sheets.

We have corporate-owned life insurance policies on certain participants in our deferred compensation plans and other members of management. The cash surrender value of the corporate-owned life insurance policies is reported under the caption “Other invested assets” in our consolidated balance sheets.

We use the equity method of accounting for investments in companies in which our ownership interest may enable us to influence the operating or financial decisions of the investee company. Our proportionate share of equity in net income of these unconsolidated affiliates is reported within net investment income. The equity method investments are reported under the caption “Other invested assets” in our consolidated balance sheets.

Investment income is recorded when earned. All securities sold resulting in investment gains and losses are recorded on the trade date. Realized gains and losses are determined on the basis of the cost or amortized cost of the specific securities sold.

We participate in securities lending programs whereby marketable securities in our investment portfolio are transferred to independent brokers or dealers in exchange for cash and securities collateral. We recognize the collateral as an asset, which is reported under the caption “Other current assets” on our consolidated balance sheets, and we record a corresponding liability for the obligation to return the collateral to the borrower, which is reported under the caption “Other current liabilities.” The securities on loan are reported in the applicable investment category on our consolidated balance sheets. Unrealized gains or losses on securities lending collateral are included in accumulated other comprehensive loss as a separate component of shareholders’ equity. The market value of loaned securities and that of the collateral pledged can fluctuate in non-synchronized fashions. To the extent the loaned securities’ value appreciates faster or depreciates slower than the value of the collateral pledged, we are exposed to the risk of the shortfall. As a primary mitigating mechanism, the loaned securities and collateral pledged are marked to market on a daily basis and the shortfall, if any, is collected accordingly. Secondarily, the collateral level is set at 102% of the value of the loaned securities, which provides a cushion before any shortfall arises. The investment of the cash collateral is subject to market risk, which is managed by limiting the investments to higher quality and shorter duration instruments.

Receivables: Receivables are reported net of amounts for expected credit losses. The allowance for doubtful accounts is based on historical collection trends, future forecasts and our judgment regarding the ability to collect specific accounts.

Premium receivables include the uncollected amounts from employer risk-based groups, individuals and government programs for insurance services. Premium receivables are reported net of an allowance for doubtful accounts of $149 and $152 at March 31, 2023 and December 31, 2022, respectively.

Self-funded receivables include administrative fees, claims and other amounts due from fee-based customers for administrative services. Self-funded receivables are reported net of an allowance for doubtful accounts of $76 and $68 at March 31, 2023 and December 31, 2022, respectively.

Other receivables include pharmacy rebates, provider advances, claims recoveries, reinsurance receivables, proceeds due from brokers on investment trades, accrued investment income and other miscellaneous amounts due to us. These receivables are reported net of an allowance for doubtful accounts of $763 and $744 at March 31, 2023 and December 31, 2022, respectively.

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Revenue Recognition: For our non-risk-based contracts, we had no material contract assets, contract liabilities or deferred contract costs recorded on our consolidated balance sheet at March 31, 2023. For the three months ended March 31, 2023 and 2022, revenue recognized from performance obligations related to prior periods, such as changes in transaction price, were not material. For contracts that have an original, expected duration of greater than one year, revenue expected to be recognized in future periods related to unfulfilled contractual performance obligations and contracts with variable consideration related to undelivered performance obligations is not material.

Recently Adopted Accounting Guidance: In November 2020, the Financial Accounting Standards Board (“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 change 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 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. This standard requires us to review cash flow assumptions for our long-duration insurance contracts at least annually and recognize the effect of changes in future cash flow assumptions in net income. This standard also requires us to update discount rate assumptions quarterly and recognize the effect of changes in these assumptions in other comprehensive income. The rate used to discount our reserves for future policy benefits will be based on an estimate of the yield for an upper-medium grade fixed-income instrument with a duration profile matching that of our liabilities. In addition, this standard changes the amortization method for deferred acquisition costs. We adopted these amendments on January 1, 2023, using the modified retrospective transition method for changes to the liability for future policy benefits and deferred acquisition costs as of the transition date, January 1, 2021. While the adoption did not have an overall material impact, our prior period financial statements presented in this Form 10-Q have been restated to reflect the impacts of our adoption as required by the new standard.

There were no other new accounting pronouncements that were issued or became effective since the issuance of our 2022 Annual Report on Form 10-K that had, or are expected to have, a material impact on our consolidated financial position, results of operations or cash flows.

3.    Business Acquisitions and Divestitures

Pending Divestiture

On March 28, 2023, we announced our entrance into an agreement to sell our life and disability businesses to StanCorp Financial Group, Inc. (“The Standard”), a provider of financial protection products and services for employers and individuals. Upon closing, we and The Standard will enter into a product distribution partnership. The divestiture is expected to close by the end of the first quarter of 2024 and is subject to standard closing conditions and customary approvals. The related net assets held for sale and results of operations for the employee benefits businesses to be divested as of and for the period ending March 31, 2023 were not material.

Pending Acquisition

On January 23, 2023, we announced our entrance into an agreement to acquire Louisiana Health Service & Indemnity Company, d/b/a Blue Cross and Blue Shield of Louisiana (“BCBSLA”), an independent licensee of the BCBSA that provides healthcare plans to the Individual, Employer Group, Medicaid and Medicare markets, primarily in the State of Louisiana. This acquisition aligns with our mission to become a lifetime, trusted health partner as we bring our innovative whole-health solutions to BCBSLA’s members. The acquisition is expected to close by the end of the fourth quarter of 2023 and is subject to standard closing conditions and customary approvals.

Completed Acquisitions

On February 15, 2023, we completed our acquisition of BioPlus Parent, LLC and subsidiaries (“BioPlus”) from CarepathRx Aggregator, LLC. Prior to the acquisition, BioPlus was one of the largest independent specialty pharmacy organizations in the United States. BioPlus, which operates as part of CarelonRx, seeks to connect payors and providers of specialty pharmaceuticals to meet the medication therapy needs of patients with complex medical conditions. This acquisition aligns with our vision to be an innovative, valuable and inclusive healthcare partner by providing care management programs that improve the lives of the people we serve. As of March 31, 2023, the purchase price was allocated to the tangible and

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intangible net assets acquired based on management’s initial estimates of their fair values, of which $809 has been allocated to finite-lived intangible assets and $728 to goodwill. The majority of goodwill is not deductible for income tax purposes. As of March 31, 2023, the initial accounting for the acquisition had not been finalized. The proforma effects of this acquisition for prior periods were not material to our consolidated results of operations.

On May 5, 2022, we completed our acquisition of Integra Managed Care (“Integra”). Integra is a managed long-term care plan that serves New York state Medicaid members, enabling adults with long-term care needs and disabilities to live safely and independently in their own homes. The purchase price was allocated to tangible and intangible net assets acquired based on management's estimates of their fair values, of which $89 has been allocated to finite-lived intangible assets, $250 to indefinite-lived intangible assets, and $125 to goodwill. The majority of goodwill is deductible for income tax purposes. There were no measurement period adjustments during the quarter ended March 31, 2023, and as of March 31, 2023, the initial accounting for the acquisition had not been finalized. The proforma effects of this acquisition for prior periods were not material to our consolidated results of operations.

4.     Investments

Fixed Maturity Securities

We evaluate our available-for-sale fixed maturity securities for declines based on qualitative and quantitative factors. We have established an allowance for credit loss and recorded credit loss expense as a reflection of our expected impairment losses. We continue to review our investment portfolios under our impairment review policy. Given the inherent uncertainty of changes in market conditions and the significant judgments involved, there is a continuing risk that declines in fair value may occur and additional material impairment losses for credit losses on investments may be recorded in future periods.

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A summary of current and long-term fixed maturity securities, available-for-sale, at March 31, 2023 and December 31, 2022 is as follows:

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance For Credit Losses		Estimated Fair Value
March 31, 2023
Fixed maturity securities:
United States Government securities	$	2,053	$	8	$	(66)	$	—	$	1,995
Government sponsored securities	80		1		(3)		—		78
Foreign government securities	332		2		(43)		(1)		290
States, municipalities and political subdivisions, tax-exempt	4,339		38		(192)		—		4,185
Corporate securities	13,834		78		(956)		(5)		12,951
Residential mortgage-backed securities	3,165		15		(281)		—		2,899
Commercial mortgage-backed securities	2,243		2		(173)		(2)		2,070
Other asset-backed securities	4,142		17		(208)		—		3,951
Total fixed maturity securities	$	30,188	$	161	$	(1,922)	$	(8)	$	28,419
December 31, 2022
Fixed maturity securities:
United States Government securities	$	1,502	$	2	$	(103)	$	—	$	1,401
Government sponsored securities	82		1		(5)		—		78
Foreign government securities	321		1		(46)		(2)		274
States, municipalities and political subdivisions, tax-exempt	4,389		19		(265)		—		4,143
Corporate securities	13,721		31		(1,218)		(5)		12,529
Residential mortgage-backed securities	2,978		9		(324)		—		2,663
Commercial mortgage-backed securities	2,055		1		(176)		(2)		1,878
Other asset-backed securities	3,967		12		(241)		—		3,738
Total fixed maturity securities	$	29,015	$	76	$	(2,378)	$	(9)	$	26,704

Other asset-backed securities primarily consists of collateralized loan obligations and other debt securities.

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For fixed maturity securities in an unrealized loss position at March 31, 2023 and December 31, 2022, the following table summarizes the aggregate fair values and gross unrealized losses by length of time those securities have continuously been in an unrealized loss position: 

	Less than 12 Months					12 Months or Greater
(Securities are whole amounts)	Number of Securities	Estimated Fair Value		Gross Unrealized Loss		Number of Securities	Estimated Fair Value		Gross Unrealized Loss
March 31, 2023
Fixed maturity securities:
United States Government securities	39	$	490	$	(13)	47	$	393	$	(53)
Government sponsored securities	15	38		(1)		30	19		(2)
Foreign government securities	80	40		(3)		231	186		(40)
States, municipalities and political subdivisions, tax-exempt	468	945		(12)		967	1,689		(180)
Corporate securities	1,878	3,636		(114)		3,207	6,687		(842)
Residential mortgage-backed securities	532	579		(25)		1,224	1,730		(256)
Commercial mortgage-backed securities	260	679		(24)		558	1,298		(149)
Other asset-backed securities	364	1,067		(59)		775	2,149		(149)
Total fixed maturity securities	3,636	$	7,474	$	(251)	7,039	$	14,151	$	(1,671)
December 31, 2022
Fixed maturity securities:
United States Government securities	61	$	701	$	(40)	38	$	442	$	(63)
Government sponsored securities	39	73		(4)		6	5		(1)
Foreign government securities	150	100		(10)		198	142		(36)
States, municipalities and political subdivisions, tax-exempt	1,398	2,615		(147)		396	652		(118)
Corporate securities	3,551	7,826		(549)		2,204	3,521		(669)
Residential mortgage-backed securities	1,341	1,435		(121)		496	982		(203)
Commercial mortgage-backed securities	457	1,082		(76)		324	719		(100)
Other asset-backed securities	784	2,203		(124)		398	1,074		(117)
Total fixed maturity securities	7,781	$	16,035	$	(1,071)	4,060	$	7,537	$	(1,307)

Unrealized losses on our securities shown in the table above have not been recognized into income because, as of March 31, 2023, we do not intend to sell these investments and it is likely that we will not be required to sell these investments prior to their maturity or anticipated recovery. The declines in fair values are largely due to increasing interest rates driven by the higher rate of inflation and other market conditions.

Allowances for credit losses have been recorded in the amounts of $8 and $9 at March 31, 2023 and December 31, 2022, respectively, for declines in fair value due to unfavorable changes in the credit quality characteristics that impact our assessment of collectability of principal and interest.

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The amortized cost and fair value of fixed maturity securities at March 31, 2023, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations.

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	1,242	$	1,232
Due after one year through five years	7,892		7,557
Due after five years through ten years	9,334		8,806
Due after ten years	6,312		5,855
Mortgage-backed securities	5,408		4,969
Total fixed maturity securities	$	30,188	$	28,419

During the three months ended March 31, 2023 and 2022, we received total proceeds from sales, maturities, calls or redemptions of fixed maturity securities of $5,410 and $3,646, respectively.

In the ordinary course of business, we may sell securities at a loss for a number of reasons, including, but not limited to: (i) changes in the investment environment; (ii) expectation that the fair value could deteriorate further; (iii) desire to reduce exposure to an issuer or an industry; (iv) changes in credit quality; or (v) changes in expected cash flow.

All securities sold resulting in investment gains and losses are recorded on the trade date. Realized gains and losses are determined on the basis of the cost or amortized cost of the specific securities sold.

Equity Securities

A summary of marketable equity securities at March 31, 2023 and December 31, 2022 is as follows:

	March 31, 2023		December 31, 2022
Equity securities:
Exchange traded funds	$	288	$	822
Common equity securities	26		43
Private equity securities	78		88
Total	$	392	$	953

Other Invested Assets

Other invested assets include primarily our investments in limited partnerships, joint ventures and other non-controlled corporations, mortgage loans and the cash surrender value of corporate-owned life insurance policies. Investments in limited partnerships, joint ventures and other non-controlled corporations are carried at our share in the entities’ undistributed earnings, which approximates fair value. Financial information for certain of these investments is reported on a one or three month lag due to the timing of when we receive financial information from the companies.

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Investment Gains and Losses

Net investment (losses) gains for the three months ended March 31, 2023 and 2022 are as follows:

	Three Months Ended March 31
	2023		2022
Net (losses) gains:
Fixed maturity securities:
Gross realized gains from sales	$	10	$	20
Gross realized losses from sales	(115)		(78)
Impairment losses recognized in income	(7)		(20)
Net realized losses from sales of fixed maturity securities	(112)		(78)
Equity securities:
Unrealized losses recognized on equity securities still held at the end of the period	(1)		(71)
Net realized losses recognized on equity securities sold during the period	(1)		(14)
Net losses on equity securities	(2)		(85)
Other investments:
Gross gains	27		23
Gross losses	(