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 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
ITEM NUMBER | Page | |
PART I | ||
1. | ||
2. | ||
3. | ||
4. | ||
PART II | ||
1. | ||
1A. | ||
2. | ||
3. | Defaults Upon Senior Securities | Not Applicable. |
4. | Mine Safety Disclosures | Not Applicable. |
5. | Other Information | Not Applicable. |
6. | ||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(In millions, except per-share amounts) (Unaudited) | |||||||
Revenue: | |||||||
Premium revenue | $ | $ | |||||
Premium tax revenue | |||||||
Health insurer fees reimbursed | |||||||
Investment income and other revenue | |||||||
Total revenue | |||||||
Operating expenses: | |||||||
Medical care costs | |||||||
General and administrative expenses | |||||||
Premium tax expenses | |||||||
Health insurer fees | |||||||
Depreciation and amortization | |||||||
Other | |||||||
Total operating expenses | |||||||
Operating income | |||||||
Other expenses, net: | |||||||
Interest expense | |||||||
Other income, net | ( | ) | |||||
Total other expenses, net | |||||||
Income before income tax expense | |||||||
Income tax expense | |||||||
Net income | $ | $ | |||||
Net income per share - Basic | $ | $ | |||||
Net income per share - Diluted | $ | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(In millions) (Unaudited) | |||||||
Net income | $ | $ | |||||
Other comprehensive (loss) income: | |||||||
Unrealized investment (loss) income | ( | ) | |||||
Less: effect of income taxes | ( | ) | |||||
Other comprehensive (loss) income, net of tax | ( | ) | |||||
Comprehensive income | $ | $ |
March 31, 2020 | December 31, 2019 | ||||||
(Dollars in millions, except per-share amounts) | |||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Investments | |||||||
Receivables | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Property, equipment, and capitalized software, net | |||||||
Goodwill and intangible assets, net | |||||||
Restricted investments | |||||||
Deferred income taxes | |||||||
Other assets | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Medical claims and benefits payable | $ | $ | |||||
Amounts due government agencies | |||||||
Accounts payable, accrued liabilities and other | |||||||
Deferred revenue | |||||||
Current portion of long-term debt | |||||||
Total current liabilities | |||||||
Long-term debt | |||||||
Finance lease liabilities | |||||||
Other long-term liabilities | |||||||
Total liabilities | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value, 150 million shares authorized; outstanding: 59 million shares at March 31, 2020, and 62 million shares at December 31, 2019 | |||||||
Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding | |||||||
Additional paid-in capital | |||||||
Accumulated other comprehensive (loss) income | ( | ) | |||||
Retained earnings | |||||||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total | ||||||||||||||||||
Outstanding | Amount | |||||||||||||||||||||
(In millions) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ | |||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||
Common stock purchases | ( | ) | — | ( | ) | — | ( | ) | ( | ) | ||||||||||||
Termination of warrants | — | — | ( | ) | — | — | ( | ) | ||||||||||||||
Other comprehensive loss, net | — | — | — | ( | ) | — | ( | ) | ||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | ( | ) | $ | $ |
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total | ||||||||||||||||||
Outstanding | Amount | |||||||||||||||||||||
(In millions) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||
Adoption of new accounting standard | — | — | — | — | ||||||||||||||||||
Partial termination of warrants | — | — | ( | ) | — | — | ( | ) | ||||||||||||||
Other comprehensive income, net | — | — | — | — | ||||||||||||||||||
Share-based compensation | — | — | — | |||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | ( | ) | $ | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(In millions) (Unaudited) | |||||||
Operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | |||||||
Deferred income taxes | |||||||
Share-based compensation | |||||||
Gain on debt repayment | ( | ) | |||||
Other, net | ( | ) | |||||
Changes in operating assets and liabilities: | |||||||
Receivables | ( | ) | ( | ) | |||
Prepaid expenses and other current assets | ( | ) | |||||
Medical claims and benefits payable | |||||||
Amounts due government agencies | ( | ) | |||||
Accounts payable, accrued liabilities and other | ( | ) | |||||
Deferred revenue | ( | ) | ( | ) | |||
Income taxes | |||||||
Net cash provided by operating activities | |||||||
Investing activities: | |||||||
Purchases of investments | ( | ) | ( | ) | |||
Proceeds from sales and maturities of investments | |||||||
Purchases of property, equipment and capitalized software | ( | ) | ( | ) | |||
Other, net | ( | ) | |||||
Net cash (used in) provided by investing activities | ( | ) | |||||
Financing activities: | |||||||
Common stock purchases | ( | ) | |||||
Proceeds from borrowings under term loan facility | |||||||
Cash paid for partial termination of warrants | ( | ) | ( | ) | |||
Cash paid for partial settlement of conversion option | ( | ) | ( | ) | |||
Cash received for partial settlement of call option | |||||||
Repayment of principal amount of convertible senior notes | ( | ) | ( | ) | |||
Other, net | ( | ) | |||||
Net cash used in financing activities | ( | ) | ( | ) | |||
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | ( | ) | |||||
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | |||||||
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | $ | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(In millions) (Unaudited) | |||||||
Supplemental cash flow information: | |||||||
Schedule of non-cash investing and financing activities: | |||||||
Common stock used for share-based compensation | $ | ( | ) | $ | ( | ) | |
Details of change in fair value of derivatives, net: | |||||||
(Loss) gain on call option | $ | ( | ) | $ | |||
Gain (loss) on conversion option | ( | ) | |||||
Change in fair value of derivatives, net | $ | $ |
• | The determination of medical claims and benefits payable of our Health Plans segment; |
• | Health Plans segment contractual provisions that may limit revenue recognition based upon the costs incurred or the profits realized under a specific contract; |
• | Health Plans segment quality incentives that allow us to recognize incremental revenue if certain quality standards are met; |
• | Settlements under risk or savings sharing programs; |
• | The assessment of long-lived and intangible assets, and goodwill for impairment; |
• | The determination of reserves for potential absorption of claims unpaid by insolvent providers; |
• | The determination of reserves for the outcome of litigation; |
• | The determination of valuation allowances for deferred tax assets; and |
• |
March 31, | |||||||
2020 | 2019 | ||||||
(In millions) | |||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash and cash equivalents | |||||||
Total cash, cash equivalents, and restricted cash and cash equivalents presented in the consolidated statements of cash flows | $ | $ |
March 31, 2020 | December 31, 2019 | ||||||
(In millions) | |||||||
Medicaid program: | |||||||
Medical cost floors and corridors | $ | $ | |||||
Other amounts due to states | |||||||
Marketplace program: | |||||||
Risk adjustment | |||||||
Other | |||||||
Total amounts due government agencies | $ | $ |
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
(In millions) | ||||||||
Maximum available quality incentive premium - current period | $ | $ | ||||||
Quality incentive premium revenue recognized in current period: | ||||||||
Earned current period | $ | $ | ||||||
Earned prior periods | ||||||||
Total | $ | |||||||
Quality incentive premium revenue recognized as a percentage of total premium revenue | % | % |
March 31, 2020 | December 31, 2019 | ||||||
(In millions) | |||||||
Government receivables | $ | $ | |||||
Pharmacy rebate receivables | |||||||
Health insurer fee reimbursement receivables | |||||||
Other | |||||||
Total | $ | $ |
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
(In millions, except net income per share) | ||||||||
Numerator: | ||||||||
Net income | $ | $ | ||||||
Denominator: | ||||||||
Shares outstanding at the beginning of the period | ||||||||
Weighted-average number of shares issued: | ||||||||
Stock purchases | ( | ) | ||||||
Stock-based compensation | ||||||||
Denominator for basic net income per share | ||||||||
Effect of dilutive securities: (1) | ||||||||
Warrants | ||||||||
Stock-based compensation | ||||||||
Denominator for diluted net income per share | ||||||||
Net income per share - Basic (2) | $ | $ | ||||||
Net income per share - Diluted (2) | $ | $ |
(1) | The dilutive effect of all potentially dilutive common shares is calculated using the treasury stock method. Approximately |
(2) | Source data for calculations in thousands. |
Total | Observable Inputs (Level 1) | Directly or Indirectly Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||
(In millions) | |||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||
Mortgage-backed securities | |||||||||||||||
Asset-backed securities | |||||||||||||||
Municipal securities | |||||||||||||||
Certificates of deposit | |||||||||||||||
Government-sponsored enterprise securities (“GSEs”) | |||||||||||||||
U.S. Treasury notes | |||||||||||||||
Total assets | $ | $ | $ | $ |
Total | Observable Inputs (Level 1) | Directly or Indirectly Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||
(In millions) | |||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||
Mortgage-backed securities | |||||||||||||||
Asset-backed securities | |||||||||||||||
Municipal securities | |||||||||||||||
Certificates of deposit | |||||||||||||||
GSEs | |||||||||||||||
U.S. Treasury notes | |||||||||||||||
Foreign securities | |||||||||||||||
Subtotal | |||||||||||||||
Call option derivative asset | |||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||
Conversion option derivative liability | $ | $ | $ | $ | |||||||||||
Total liabilities | $ | $ | $ | $ |
Balance Sheet Location | March 31, 2020 | December 31, 2019 | |||||||
(In millions) | |||||||||
Derivative asset: | |||||||||
Call option | Current assets: Prepaid expenses and other current assets | $ | $ | ||||||
Derivative liability: | |||||||||
Conversion option | Current liabilities: Accounts payable, accrued liabilities and other | $ | $ |
March 31, 2020 | December 31, 2019 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
(In millions) | |||||||||||||||
5.375% Notes | $ | $ | $ | $ | |||||||||||
4.875% Notes | |||||||||||||||
Term Loan Facility | |||||||||||||||
1.125% Convertible Notes (1) | |||||||||||||||
Totals | $ | $ | $ | $ |
(1) | For more information on debt repayments, refer to Note 7, “Debt.” |
March 31, 2020 | |||||||||||||||
Amortized | Gross Unrealized | Estimated Fair | |||||||||||||
Cost | Gains | Losses | Value | ||||||||||||
(In millions) | |||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||
Mortgage-backed securities | |||||||||||||||
Asset-backed securities | |||||||||||||||
Municipal securities | |||||||||||||||
Certificates of deposit | |||||||||||||||
GSEs | |||||||||||||||
U.S. Treasury notes | |||||||||||||||
Totals | $ | $ | $ | $ |
December 31, 2019 | |||||||||||||||
Amortized | Gross Unrealized | Estimated Fair | |||||||||||||
Cost | Gains | Losses | Value | ||||||||||||
(In millions) | |||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||
Mortgage-backed securities | |||||||||||||||
Asset-backed securities | |||||||||||||||
Municipal securities | |||||||||||||||
Certificates of deposit | |||||||||||||||
GSEs | |||||||||||||||
U.S. Treasury notes | |||||||||||||||
Foreign securities | |||||||||||||||
Totals | $ | $ | $ | $ |
Amortized Cost | Estimated Fair Value | ||||||
(In millions) | |||||||
Due in one year or less | $ | $ | |||||
Due after one year through five years | |||||||
Due after five years through ten years | |||||||
Due after ten years | |||||||
Totals | $ | $ |
In a Continuous Loss Position for Less than 12 Months | In a Continuous Loss Position for 12 Months or More | ||||||||||||||||||||
Estimated Fair Value | Unrealized Losses | Total Number of Positions | Estimated Fair Value | Unrealized Losses | Total Number of Positions | ||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||
Totals | $ | $ | $ | $ |
In a Continuous Loss Position for Less than 12 Months | In a Continuous Loss Position for 12 Months or More | ||||||||||||||||||||
Estimated Fair Value | Unrealized Losses | Total Number of Positions | Estimated Fair Value | Unrealized Losses | Total Number of Positions | ||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||
Totals | $ | $ | $ | $ |
March 31, 2020 | December 31, 2019 | ||||||
(In millions) | |||||||
Fee-for-service claims incurred but not paid (“IBNP”) | $ | $ | |||||
Pharmacy payable | |||||||
Capitation payable | |||||||
Other | |||||||
$ | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(In millions) | |||||||
Medical claims and benefits payable, beginning balance | $ | $ | |||||
Components of medical care costs related to: | |||||||
Current period | |||||||
Prior periods | ( | ) | ( | ) | |||
Total medical care costs | |||||||
Change in non-risk and other provider payables | ( | ) | |||||
Payments for medical care costs related to: | |||||||
Current period | |||||||
Prior periods | |||||||
Total paid | |||||||
Medical claims and benefits payable, ending balance | $ | $ |
March 31, 2020 | December 31, 2019 | ||||||
(In millions) | |||||||
Current portion of long-term debt: | |||||||
Term Loan Facility | $ | $ | |||||
1.125% Convertible Notes, net of unamortized discount | |||||||
Total | $ | $ | |||||
Non-current portion of long-term debt: | |||||||
5.375% Notes due 2022 | $ | $ | |||||
4.875% Notes due 2025 | |||||||
Term Loan Facility | |||||||
Debt issuance costs | ( | ) | ( | ) | |||
Total | $ | $ |
RSAs | PSUs | Total | Weighted Average Grant Date Fair Value | |||||||||
Unvested balance, December 31, 2019 | $ | |||||||||||
Granted | ||||||||||||
Vested | ( | ) | ( | ) | ( | ) | ||||||
Forfeited | ( | ) | ( | ) | ( | ) | ||||||
Unvested balance, March 31, 2020 | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(In millions) | |||||||
Granted: | |||||||
RSAs | $ | $ | |||||
PSUs | |||||||
Total granted | $ | $ | |||||
Vested: | |||||||
RSAs | $ | $ | |||||
PSUs | |||||||
Total vested | $ | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(In millions) | |||||||
Total revenue: | |||||||
Health Plans | $ | $ | |||||
Other | |||||||
Consolidated | $ | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(In millions) | |||||||
Margin: | |||||||
Health Plans | $ | $ | |||||
Add: other operating revenues (1) | |||||||
Less: other operating expenses (2) | ( | ) | ( | ) | |||
Operating income | |||||||
Other expenses, net | |||||||
Income before income tax expense | $ | $ |
(1) | Other operating revenues include premium tax revenue, health insurer fees reimbursed, and investment income and other revenue. |
(2) | Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fees, depreciation and amortization, and other costs. |
• | the impact of the COVID-19 pandemic on our operations and financial results; |
• | the numerous political, judicial, and market-based uncertainties associated with the Affordable Care Act (the “ACA”) or “Obamacare,” including the ultimate outcome of the Texas et al. v. U.S. et al. matter; |
• | the market dynamics surrounding the ACA Marketplaces, including but not limited to uncertainties associated with the elasticity of demand for our products based on our pricing, risk adjustment requirements, the potential for disproportionate enrollment of higher acuity members, and the discontinuation of premium tax credits; |
• | subsequent adjustments to reported premium revenue based upon subsequent developments or new information, including changes to estimated amounts payable or receivable related to Marketplace risk adjustment; |
• | the availability of adequate financing on acceptable terms to fund and capitalize our expansion and growth, repay our outstanding indebtedness at maturity, and meet our general liquidity needs; |
• | our ability to consummate, integrate, and realize benefits from acquisitions including the announced acquisition of Magellan Complete Care; |
• | effective management of our medical costs; |
• | our ability to predict with a reasonable degree of accuracy utilization rates, including utilization rates associated with the flu or coronavirus; |
• | significant budget pressures on state governments from diminished tax revenues and their potential inability to maintain current rates, to implement expected rate increases, or to maintain existing benefit packages or membership eligibility thresholds or criteria; |
• | the full reimbursement of the ACA health insurer fee, or HIF; |
• | the success of our efforts to retain existing or awarded government contracts, and the success of any requests for proposal, including protest filings or defenses; |
• | the ability to manage our operations, including maintaining and creating adequate internal systems and controls relating to authorizations, approvals, provider payments, and the overall success of our care management initiatives; |
• | our receipt of adequate premium rates to support increasing pharmacy costs, including costs associated with specialty drugs and costs resulting from formulary changes that allow the option of higher-priced non-generic drugs; |
• | our ability to operate profitably in an environment where the trend in premium rate increases lags behind the trend in increasing medical costs; |
• | the interpretation and implementation of federal or state medical cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit-sharing arrangements, and risk adjustment provisions and requirements; |
• | our estimates of amounts owed for such cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit-sharing arrangements, and risk adjustment provisions; |
• | the Medicaid expansion medical cost corridor, and any other retroactive adjustment to revenue where methodologies and procedures are subject to interpretation or dependent upon information about the health status of participants other than Molina members; |
• | the interpretation and implementation of at-risk premium rules and state contract performance requirements regarding the achievement of certain quality measures, and our ability to recognize revenue amounts associated therewith; |
• | cyber-attacks, ransomware attacks, or other privacy or data security incidents resulting in an inadvertent unauthorized disclosure of protected health information; |
• | our expected exit from Puerto Rico, including the successful transfer of our members to alternative health plans, the effective run-out of claims, and the return of capital; |
• | the success and renewal of our duals demonstration programs in California, Illinois, Michigan, Ohio, South Carolina, and Texas; |
• | the accurate estimation of incurred but not reported or paid medical costs across our health plans; |
• | efforts by states to recoup previously paid and recognized premium amounts; |
• | complications, member confusion, eligibility re-determinations, or enrollment backlogs related to the renewal of Medicaid coverage, as well as the chilling effect of the new so-called public charge rule; |
• | government audits, reviews, comment letters, or potential investigations, and any fine, sanction, enrollment freeze, monitoring program, or premium recovery that may result therefrom; |
• | changes with respect to our provider contracts and the loss of providers; |
• | approval by state regulators of dividends and distributions by our health plan subsidiaries; |
• | changes in funding under our contracts as a result of regulatory changes, programmatic adjustments, or other reforms; |
• | high dollar claims related to catastrophic illness; |
• | the favorable resolution of litigation, arbitration, or administrative proceedings, including litigation involving the ACA to which we are not a direct party; |
• | the relatively small number of states in which we operate health plans, including the greater scale and revenues of our California, Ohio, Texas, and Washington health plans; |
• | the failure to comply with the financial or other covenants in our credit agreement or the indentures governing our outstanding notes; |
• | the sufficiency of funds on hand to pay the amounts due upon maturity of our outstanding notes; |
• | the failure of a state in which we operate to renew its federal Medicaid waiver; |
• | changes generally affecting the managed care industry; |
• | increases in government surcharges, taxes, and assessments; |
• | the unexpected loss of the leadership of one or more of our senior executives; and |
• | increasing competition and consolidation in the Medicaid industry. |
• | Premium revenue was $4.3 billion. |
• | The consolidated medical care ratio (“MCR”) for the first quarter of 2020 increased to 86.3% compared with 85.3% in the first quarter of 2019, reflecting an increase in the Marketplace MCR. |
• | Given the timing of the COVID-19 outbreak and related progression, the impact of COVID-19 on the MCR was limited in the quarter. |
• | The prior period reserve development in the first quarter of 2020 was negligible. The first quarter of 2019 was positively impacted by approximately 140 basis points of favorable reserve development, primarily in the Medicaid line of business. |
• | The general and administrative expense (“G&A”) ratio was 7.0%, which was lower than 2019 due to increased revenues. The current quarter also reflects incremental expense associated with the mobilization of our workforce to work at home and other new operational protocols related to COVID-19. |
• | While net investment income during the quarter was on plan, the steep drop in interest rates will certainly impact future quarters. |
• | The total company after-tax margin of 3.9% was in line with our expectations. |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in millions, except per-share amounts) | |||||||
Premium revenue | $ | 4,304 | $ | 3,952 | |||
Premium tax revenue | 150 | 138 | |||||
Health insurer fees reimbursed | 66 | — | |||||
Investment income and other revenue | 29 | 29 | |||||
Medical care costs | $ | 3,716 | $ | 3,371 | |||
General and administrative expenses | 317 | 302 | |||||
Premium tax expenses | 150 | 138 | |||||
Health insurer fees | 68 | — | |||||
Operating income | 274 | 280 | |||||
Interest expense | $ | 21 | $ | 23 | |||
Other income, net | — | (3 | ) | ||||
Income before income tax expense | 253 | 260 | |||||
Income tax expense | 75 | 62 | |||||
Net income | 178 | 198 | |||||
Net income per share - Diluted | $ | 2.92 | $ | 2.99 | |||
Operating Statistics: | |||||||
Ending total membership | 3,404,000 | 3,393,000 | |||||
MCR (1) | 86.3 | % | 85.3 | % | |||
G&A ratio (2) | 7.0 | % | 7.3 | % | |||
Premium tax ratio (1) | 3.4 | % | 3.4 | % | |||
Effective income tax rate | 29.8 | % | 23.8 | % | |||
After-tax margin (2) | 3.9 | % | 4.8 | % |
(1) | MCR represents medical care costs as a percentage of premium revenue; premium tax ratio represents premium tax expenses as a percentage of premium revenue plus premium tax revenue. |
(2) | G&A ratio represents general and administrative expenses as a percentage of total revenue. After-tax margin represents net income as a percentage of total revenue. |
• | Providing supplemental telemedicine for our members through our partnership with Teladoc; |
• | Continuing to monitor and update all other tele-health services based on Medicaid agency updates; and |
• | Outreaching to and educating members on community resources as well as their ability to receive free home delivery of prescriptions through CVS Pharmacy. |
March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
Ending Membership by Government Program: | ||||||||
Medicaid | 2,970,000 | 2,956,000 | 2,964,000 | |||||
Medicare | 105,000 | 101,000 | 97,000 | |||||
Marketplace | 329,000 | 274,000 | 332,000 | |||||
Total | 3,404,000 | 3,331,000 | 3,393,000 | |||||
Ending Membership by Health Plan: | ||||||||
California | 550,000 | 565,000 | 600,000 | |||||
Florida | 123,000 | 132,000 | 144,000 | |||||
Illinois | 230,000 | 224,000 | 219,000 | |||||
Michigan | 367,000 | 362,000 | 369,000 | |||||
Ohio | 300,000 | 288,000 | 295,000 | |||||
Puerto Rico | 170,000 | 176,000 | 207,000 | |||||
South Carolina | 136,000 | 131,000 | 126,000 | |||||
Texas | 345,000 | 341,000 | 377,000 | |||||
Washington | 878,000 | 832,000 | 815,000 | |||||
Other (1) | 305,000 | 280,000 | 241,000 | |||||
Total | 3,404,000 | 3,331,000 | 3,393,000 |
(1) | “Other” includes the Idaho, Mississippi, New Mexico, New York, Utah and Wisconsin health plans, which are not individually significant to our consolidated operating results. |
Three Months Ended March 31, | |||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||
Premium Revenue | Medical Margin | MCR | Premium Revenue | Medical Margin | MCR | ||||||||||||||||
California | $ | 551 | $ | 85 | 84.5 | % | $ | 555 | $ | 74 | 86.7 | % | |||||||||
Florida | 154 | 30 | 80.4 | 223 | 70 | 68.4 | |||||||||||||||
Illinois | 308 | 34 | 89.1 | 227 | 42 | 81.2 | |||||||||||||||
Michigan | 411 | 74 | 82.0 | 405 | 74 | 81.7 | |||||||||||||||
Ohio | 720 | 83 | 88.5 | 620 | 68 | 89.2 | |||||||||||||||
Puerto Rico | 105 | (2 | ) | 101.5 | 102 | 12 | 88.1 | ||||||||||||||
South Carolina | 157 | 19 | 87.8 | 136 | 21 | 85.1 | |||||||||||||||
Texas | 743 | 91 | 87.7 | 747 | 106 | 85.9 | |||||||||||||||
Washington | 773 | 113 | 85.5 | 661 | 46 | 93.0 | |||||||||||||||
Other (1) | 382 | 61 | 83.9 | 276 | 68 | 75.2 | |||||||||||||||
Total | $ | 4,304 | $ | 588 | 86.3 | % | $ | 3,952 | $ | 581 | 85.3 | % |
(1) | “Other” includes the Idaho, Mississippi, New Mexico, New York, Utah and Wisconsin health plans, which are not individually significant to our consolidated operating results. |
Three Months Ended March 31, | |||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||
Premium Revenue | Medical Margin | MCR | Premium Revenue | Medical Margin | MCR | ||||||||||||||||
Medicaid | $ | 3,286 | $ | 365 | 88.9 | % | 3,004 | 346 | 88.5 | % | |||||||||||
Medicare | 634 | 117 | 81.7 | 551 | 85 | 84.7 | |||||||||||||||
Marketplace | 384 | 106 | 72.3 | 397 | 150 | 62.2 | |||||||||||||||
$ | 4,304 | $ | 588 | 86.3 | % | $ | 3,952 | $ | 581 | 85.3 | % |
Three Months Ended March 31, | |||||||||||
2020 | 2019 | Change | |||||||||
(In millions) | |||||||||||
Net cash provided by operating activities | $ | 136 | $ | 249 | $ | (113 | ) | ||||
Net cash (used in) provided by investing activities | (103 | ) | 171 | (274 | ) | ||||||
Net cash used in financing activities | (118 | ) | (48 | ) | (70 | ) | |||||
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | $ | (85 | ) | $ | 372 | $ | (457 | ) |
Credit Agreement Financial Covenants | Required Per Agreement | As of March 31, 2020 | |
Net leverage ratio | < 2.5x | 1.4x | |
Interest coverage ratio | > 3.5x | 13.5x |
• | Medical claims and benefits payable. Refer to Notes to Consolidated Financial Statements, Note 6, “Medical Claims and Benefits Payable,” for a table that presents the components of the change in medical claims and benefits payable, and for additional information regarding the factors used to determine our changes in estimates for all periods presented in the accompanying consolidated financial statements. Other than the discussion as noted above, there have been no significant changes during the three months ended March 31, 2020, to our disclosure reported in “Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2019. |
• | Contractual provisions that may adjust or limit revenue or profit. For a discussion of this topic, including amounts recorded in our consolidated financial statements, refer to Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies.” |
• | Quality incentives. For a discussion of this topic, including amounts recorded in our consolidated financial statements, refer to Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies.” |
• | Goodwill and intangible assets, net. There have been no significant changes, during the three months ended March 31, 2020, to our disclosure reported in “Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2019. |
• | It will have an adverse impact on the health of an indeterminate number of our members in the states in which we operate, resulting in increases in medical care costs associated with those impacted members; |
• | The reduced demand for certain routine and non-critical medical services has created financial stress for certain Medicaid providers and could result in the insolvency of such providers, and/or demands that we make direct payments or loans to them; |
• | It has created, and may continue to create, volatility in the capital markets and such volatility could have a negative impact on our ability to access those markets on acceptable terms, or at all; |
• | State tax revenues may decline significantly, threatening the ability of certain states to continue to make timely monthly capitation payments to us; |
• | We will incur increased costs associated with the measures we are currently implementing and planning to implement to mitigate the implications of the COVID-19 pandemic and to transfer our workforce to work-from-home status; and |
• | It may impact the ability of our outsourced information technology service providers, and other third-party vendors, to perform contracted services. |
Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
January 1 - January 31 | 980 | $ | 143.27 | 1,190,088 | $ | 286,000,000 | |||||||
February 1 - February 29 | — | $ | — | 1,015,529 | $ | 153,000,000 | |||||||
March 1 - March 31 | 59,947 | $ | 122.55 | 1,161,066 | $ | — | |||||||
Total | 60,927 | $ | 122.88 | 3,366,683 |
(1) | During the three months ended March 31, 2020, we withheld 60,927 shares of common stock, to settle employee income tax obligations, for releases of awards granted under the Molina Healthcare, Inc. 2019 Equity Incentive Plan. For further information refer to Note 8, “Stockholders' Equity.” |
Exhibit No. | Title | Method of Filing | ||
Certificate of Incorporation.* | Filed as Exhibit 3.2 to registrant’s Registration Statement on Form S-1 filed December 30, 2002 | |||
Section 302 Certification of Chief Executive Officer | Filed herewith. | |||
Section 302 Certification of Chief Financial Officer | Filed herewith. | |||
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Filed herewith. | |||
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Filed herewith. | |||
101.INS | XBRL Taxonomy Instance Document. | Filed herewith. | ||
101.SCH | XBRL Taxonomy Extension Schema Document. | Filed herewith. | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | Filed herewith. | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | Filed herewith. | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | Filed herewith. | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith. |
MOLINA HEALTHCARE, INC. | |||
(Registrant) | |||
Dated: | May 1, 2020 | /s/ JOSEPH M. ZUBRETSKY | |
Joseph M. Zubretsky | |||
Chief Executive Officer | |||
(Principal Executive Officer) | |||
Dated: | May 1, 2020 | /s/ THOMAS L. TRAN | |
Thomas L. Tran | |||
Chief Financial Officer and Treasurer | |||
(Principal Financial Officer) |
Dated: May 1, 2020 | /s/ Joseph M. Zubretsky | |
Joseph M. Zubretsky | ||
Chief Executive Officer, President and Director |
Dated: May 1, 2020 | /s/ Thomas L. Tran | |
Thomas L. Tran | ||
Chief Financial Officer and Treasurer |
Dated: May 1, 2020 | /s/ Joseph M. Zubretsky | |
Joseph M. Zubretsky | ||
Chief Executive Officer, President and Director |
Dated: May 1, 2020 | /s/ Thomas L. Tran | |
Thomas L. Tran | ||
Chief Financial Officer and Treasurer |
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Subsequent Events (Notes) |
3 Months Ended |
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Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Acquisition of Magellan Complete Care On April 30, 2020, we entered into a definitive agreement to acquire the Magellan Complete Care (“MCC”) line of business of Magellan Health, Inc. The purchase price for the transaction is approximately $820 million, net of certain tax benefits, which we intend to fund with cash on hand. MCC is a managed care organization serving members in six states, including Medicaid members in Arizona and statewide in Virginia. Through its Senior Whole Health branded plans, MCC provides fully integrated plans for Medicaid and Medicare dual beneficiaries in Massachusetts, as well as Managed Long Term Care (“MLTC,” commonly known nationally as “MLTSS”) in New York. As of December 31, 2019, MCC served approximately 155,000 members, with full year 2019 revenues greater than $2.7 billion. The transaction is subject to federal and state regulatory approvals, and other customary closing conditions, and is expected to close in the first quarter of 2021. In connection with this transaction, Magellan Health, Inc. has agreed to provide certain transition services following the closing. In connection with the MCC acquisition, we entered into a commitment letter on April 30, 2020, pursuant to which, among other things, the lenders have committed to provide us with debt financing in the aggregate principal amount of up to $400 million. Marketplace Risk Corridor Ruling On April 27, 2020, the United States Supreme Court issued its opinion in Maine Community Health Options v. United States. The Supreme Court held that §1342 of the Affordable Care Act obligated the federal government to pay participating insurers the full Marketplace risk corridor amounts calculated by that statute, that such payment obligations survived Congress’ appropriations riders, and that impacted insurers may sue the federal government in the U.S. Court of Federal Claims to recover damages for breach of that obligation. There are no distinguishing factors regarding liability or damages between this case and the cases we ourselves have brought against the federal government for its failure to pay our Marketplace risk corridors claims for 2014, 2015, and 2016. We have already obtained summary judgment for our 2014 and 2015 risk corridor claims in the approximate amount of $52 million, and we have brought another claim for approximately $76 million for the government’s failure to pay our 2016 risk corridor claims. The timing of recognition and collection of these outstanding Marketplace risk corridor claims is uncertain, but we will request that the Court of Claims act as expeditiously as possible to enter judgment for all of the risk corridors amounts owed to us.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt All our debt is held at the parent, which is reported in the Other segment. The following table summarizes our outstanding debt obligations and their classification in the accompanying consolidated balance sheets:
Credit Agreement We are party to a Credit Agreement, which provides for an unsecured delayed draw term loan facility (the “Term Loan Facility”), and an unsecured revolving credit facility (the “Credit Facility”), both described in further detail below. Borrowings under the Credit Agreement bear interest based, at our election, on a base rate or other defined rate, plus in each case the applicable margin. In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the Credit Agreement, we are required to pay a quarterly commitment fee. The Credit Agreement contains customary non-financial and financial covenants. As of March 31, 2020, we were in compliance with all financial and non-financial covenants under the Credit Agreement and other long-term debt. Term Loan Facility. In March 2020, we drew down the Term Loan Facility’s remaining available capacity of $380 million, for an outstanding balance of $600 million as of March 31, 2020. The Term Loan Facility amortizes in quarterly installments, commencing on September 30, 2020, equal to the principal amount of the Term Loan Facility outstanding multiplied by rates ranging from 1.25% to 2.50% (depending on the applicable fiscal quarter) for each fiscal quarter. Because each advance under the Term Loan Facility results in a permanent reduction to its borrowing capacity, no further advances are available. Any remaining outstanding balance under the Term Loan Facility will be due and payable on its January 31, 2024 expiration date. Credit Facility. Our Credit Facility provides for borrowings up to $500 million, and expires on January 31, 2022; therefore, any amounts outstanding will be due and payable on that date. As of March 31, 2020, no amounts were outstanding under the Credit Facility, and outstanding letters of credit amounting to $1 million reduced our borrowing capacity under the Credit Facility to $499 million. 5.375% Notes due 2022 We had $700 million aggregate principal amount of senior notes (the “5.375% Notes”) outstanding as of March 31, 2020, which are due November 15, 2022, unless earlier redeemed. Interest, at a rate of 5.375% per annum, is payable semiannually in arrears on May 15 and November 15. The 5.375% Notes contain customary non-financial covenants and change in control provisions. 4.875% Notes due 2025 We had $330 million aggregate principal amount of senior notes (the “4.875% Notes”) outstanding as of March 31, 2020, which are due June 15, 2025, unless earlier redeemed. Interest, at a rate of 4.875% per annum, is payable semiannually in arrears on June 15 and December 15. The 4.875% Notes contain customary non-financial covenants and change of control provisions. 1.125% Cash Convertible Senior Notes due 2020 For a description of the 1.125% cash convertible senior notes due January 15, 2020 (the “1.125% Convertible Notes”), see Note 11, “Debt,” in our 2019 Annual Report on Form 10-K. In January 2020, we paid $39 million to settle the outstanding $12 million principal amount of the 1.125% Convertible Notes, and settle the related conversion option. Cross-Default Provisions The indentures governing the 4.875% Notes and the 5.375% Notes contain cross-default provisions that are triggered upon default by us or any of our subsidiaries on any indebtedness in excess of the amount specified in the applicable indenture.
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Net Income per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income per Share | Net Income per Share The following table sets forth the calculation of net income per share:
(2) Source data for calculations in thousands.
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Significant Accounting Policies - Receivables (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivables | $ 1,603 | $ 1,406 |
Government receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivables | 1,167 | 1,056 |
Pharmacy rebate receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivables | 160 | 150 |
Health insurer fee reimbursement receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivables | 71 | 5 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivables | $ 205 | $ 195 |
Organization and Basis of Presentation |
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||
Organization and Basis of Presentation | Organization and Basis of Presentation Organization and Operations Molina Healthcare, Inc. provides managed healthcare services under the Medicaid and Medicare programs, and through the state insurance marketplaces (the “Marketplace”). We currently have two reportable segments: the Health Plans segment and the Other segment. Our reportable segments are consistent with how we currently manage the business and view the markets we serve. The Health Plans segment consists of health plans operating in 14 states and the Commonwealth of Puerto Rico. As of March 31, 2020, these health plans served approximately 3.4 million members eligible for Medicaid, Medicare, and other government-sponsored healthcare programs for low-income families and individuals including Marketplace members, most of whom receive government subsidies for premiums. The health plans are generally operated by our respective wholly owned subsidiaries in those states, each of which is licensed as a health maintenance organization (“HMO”). Our state Medicaid contracts typically have terms of three to five years, contain renewal options exercisable by the state Medicaid agency, and allow either the state or the health plan to terminate the contract with or without cause. Such contracts are subject to risk of loss in states that issue requests for proposal (“RFPs”) open to competitive bidding by other health plans. If one of our health plans is not a successful responsive bidder to a state RFP, its contract may not be renewed. In addition to contract renewal, our state Medicaid contracts may be periodically amended to include or exclude certain health benefits (such as pharmacy services, behavioral health services, or long-term care services); populations such as the aged, blind or disabled; and regions or service areas. Recent Developments – Health Plans Segment Refer to Note 11, “Subsequent Events,” for the description of a recent acquisition transaction. Puerto Rico. We have decided to sell our Puerto Rico Medicaid business. In doing so, we will work closely with the regulatory authorities and the provider community, to ensure that our members in Puerto Rico are cared for and have reliable continuity of care. Texas. On March 25, 2020, the Texas Health and Human Services Commission (“HHSC”) notified our Texas health plan that HHSC has canceled all contracts associated with their ABD program (known in Texas as “STAR+PLUS”) re-procurement awards announced in October 2019, and canceled the solicitation associated with their TANF and CHIP programs (known in Texas as “STAR/CHIP”) re-procurement. HHSC further indicated that it is currently deliberating next steps with respect to both re-procurements. Previously, in October 2019, the HHSC had awarded contracts to our Texas health plan for the STAR+PLUS program in two service areas, consisting of one legacy service area and one new service area. This would have been a reduction from our current footprint of six service areas. Also, in 2019, our Texas health plan submitted an RFP response for STAR/CHIP. Illinois. In March 2020, we terminated our agreement to acquire all of the capital stock of NextLevel Health Partners, Inc. due to the seller’s stated unwillingness to close pursuant to the terms of the acquisition agreement. Consolidation and Interim Financial Information The consolidated financial statements include the accounts of Molina Healthcare, Inc., and its subsidiaries. In the opinion of management, all adjustments considered necessary for a fair presentation of the results as of the date and for the interim periods presented have been included; such adjustments consist of normal recurring adjustments. All significant intercompany balances and transactions have been eliminated. The consolidated results of operations for the three months ended March 31, 2020, are not necessarily indicative of the results for the entire year ending December 31, 2020. The unaudited consolidated interim financial statements have been prepared under the assumption that users of the interim financial data have either read or have access to our audited consolidated financial statements for the fiscal year ended December 31, 2019. Accordingly, certain disclosures that would substantially duplicate the disclosures contained in our December 31, 2019, audited consolidated financial statements have been omitted. These unaudited consolidated interim financial statements should be read in conjunction with our audited consolidated financial statements for the fiscal year ended December 31, 2019. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Principal areas requiring the use of estimates include:
• The determination of unrecognized tax benefits.
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Subsequent Events (Details) member in Thousands |
3 Months Ended | 12 Months Ended | |||
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Apr. 30, 2020
USD ($)
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Apr. 27, 2020
USD ($)
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Mar. 31, 2020
USD ($)
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Mar. 31, 2019
USD ($)
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Dec. 31, 2019
USD ($)
member
state
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Subsequent Event [Line Items] | |||||
Total revenue | $ 4,549,000,000 | $ 4,119,000,000 | |||
Magellan Complete Care | Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Net purchase price | $ 820,000,000 | ||||
Face amount | $ 400,000,000 | ||||
Maine Community Health Options v. United States | |||||
Subsequent Event [Line Items] | |||||
Claims settled | $ 52,000,000 | ||||
Maine Community Health Options v. United States | Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Claims sought | $ 76,000,000 | ||||
Magellan Complete Care | |||||
Subsequent Event [Line Items] | |||||
Number of states with programs | state | 6 | ||||
Members served by government-sponsored healthcare programs | member | 155 | ||||
Total revenue | $ 2,700,000,000 |
Medical Claims and Benefits Payable - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
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Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
|
Other Liabilities Disclosure [Abstract] | |||
Non-risk provider payables | $ 116 | $ 132 | |
Prior period claims, favorable development | $ 101 | $ 189 |
Stockholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Share Activity | Activity for RSAs and PSUs is summarized below:
The aggregate fair values of RSAs and PSUs granted and vested are presented in the following table:
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets Measured on Recurring Basis | Our financial instruments measured at fair value on a recurring basis at March 31, 2020, were as follows:
Our financial instruments measured at fair value on a recurring basis at December 31, 2019, were as follows:
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Fair Value, by Balance Sheet Grouping | The following table summarizes the fair values and the presentation of our derivative financial instruments in the accompanying consolidated balance sheets:
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Schedule of Fair Value, Asset and Liabilities Measured on Recurring Basis - Disclosure Only | The carrying amounts and estimated fair values of our notes payable are classified as Level 2 financial instruments. Fair value for these securities is determined using a market approach based on quoted market prices for similar securities in active markets or quoted prices for identical securities in inactive markets. The carrying amount and estimated fair value of the Term Loan Facility is classified as a Level 3 financial instrument, because certain inputs used to determine its fair value are not observable. As of March 31, 2020, the carrying amount of the Term Loan Facility approximated fair value because its interest rate is a variable rate that approximates rates currently available to us.
______________________ (1) For more information on debt repayments, refer to Note 7, “Debt.”
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Medical Claims and Benefits Payable - Medical Claims and Benefits Payable (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Other Liabilities Disclosure [Abstract] | ||||
Fee-for-service claims incurred but not paid (“IBNP”) | $ 1,444 | $ 1,406 | ||
Pharmacy payable | 150 | 126 | ||
Capitation payable | 62 | 55 | ||
Other | 325 | 267 | ||
Medical claims and benefits payable | $ 1,981 | $ 1,854 | $ 1,995 | $ 1,961 |
Label | Element | Value |
---|---|---|
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 85,000,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 85,000,000 |
Segments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Segment Information | The following table presents total revenue by segment. Inter-segment revenue was insignificant for all periods presented.
The following table reconciles margin to consolidated income before income taxes:
______________________
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Investments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-Sale Investments | The following tables summarize our investments as of the dates indicated:
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Contractual Maturities of Investments | The contractual maturities of our available-for-sale investments as of March 31, 2020 are summarized below:
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Available-for-Sale Investments in a Continuous Loss Position | The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a continuous loss position for 12 months or more as of March 31, 2020:
The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a continuous loss position for 12 months or more as of December 31, 2019:
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Stockholders' Equity |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' Equity Stock Purchase Program In early December 2019, our board of directors authorized the purchase of up to $500 million, in the aggregate, of our common stock. This program was funded by existing cash on hand and was completed in March 2020. Under this program, pursuant to Rule 10b5-1 trading plans, we purchased approximately 3.4 million shares of our common stock for $446 million in the first quarter of 2020 (average cost of $132.45 per share). In the first quarter of 2020, we also paid $7 million to settle shares purchased in late December 2019. 1.125% Warrants For a description of the 1.125% Warrants, refer to our 2019 Annual Report on Form 10-K, Note 12, “Derivatives,” and Note 14, “Stockholders’ Equity.” Approximately 310,000 of the 1.125% Warrants were outstanding at December 31, 2019. In the first quarter of 2020, we entered into privately negotiated termination agreements under which we paid $30 million to the Counterparties for the termination of the remaining 1.125% Warrants outstanding, which resulted in a reduction of additional paid-in-capital for the same amount. Share-Based Compensation In connection with our employee stock plans, approximately 98,000 shares of common stock vested or were purchased, net of shares used to settle employees’ income tax obligations, during the three months ended March 31, 2020. Share-based compensation is recorded to “General and administrative expenses” in the accompanying consolidated statements of income. Total share-based compensation expense amounted to $12 million and $9 million, respectively, in the three months ended March 31, 2020 and 2019. As of March 31, 2020, there was $89 million of total unrecognized compensation expense related to unvested restricted stock awards (“RSAs”), and performance stock units (“PSUs”), which we expect to recognize over remaining weighted-average periods of 2.9 years and 1.9 years, respectively. This unrecognized compensation cost assumes an estimated forfeiture rate of 10.7% for non-executive employees as of March 31, 2020. As of March 31, 2020, there was also $3 million of total unrecognized compensation expense related to unvested stock options, which we expect to recognize over a weighted-average period of 0.5 years. No stock options were granted or exercised in the three months ended March 31, 2020. Activity for RSAs and PSUs is summarized below:
The aggregate fair values of RSAs and PSUs granted and vested are presented in the following table:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements We consider the carrying amounts of current assets and current liabilities (not including the current portion of long-term debt) to approximate their fair values because of the relatively short period of time between the origination of these instruments and their expected realization or payment. For our financial instruments measured at fair value on a recurring basis, we prioritize the inputs used in measuring fair value according to the three-tier fair value hierarchy. For a description of the methods and assumptions that we use to a) estimate the fair value; and b) determine the classification according to the fair value hierarchy for each financial instrument, refer to our 2019 Annual Report on Form 10-K, Note 4, “Fair Value Measurements.” Our financial instruments measured at fair value on a recurring basis at March 31, 2020, were as follows:
Our financial instruments measured at fair value on a recurring basis at December 31, 2019, were as follows:
The net changes in fair value of Level 3 financial instruments were insignificant to our results of operations for the three months ended March 31, 2020. Derivatives The following table summarizes the fair values and the presentation of our derivative financial instruments in the accompanying consolidated balance sheets:
For additional description of our derivative financial instruments, see Note 11, “Debt,” and Note 12, “Derivatives,” in our 2019 Annual Report on Form 10-K. Our derivative financial instruments did not qualify for hedge treatment; therefore, the change in fair value of these instruments is recognized immediately in our consolidated statements of income, and reported in “Other income, net.” Gains and losses for our derivative financial instruments are presented individually in the accompanying consolidated statements of cash flows, “Supplemental cash flow information.” In the first quarter of 2020, we received $27 million for the settlement of the call option derivative asset, and we paid $39 million to settle the outstanding $12 million principal amount of the 1.125% Convertible Notes, and settle the related conversion option. For more information, refer to Notes 7, “Debt,” and 8, “Stockholders' Equity.” Fair Value Measurements – Disclosure Only The carrying amounts and estimated fair values of our notes payable are classified as Level 2 financial instruments. Fair value for these securities is determined using a market approach based on quoted market prices for similar securities in active markets or quoted prices for identical securities in inactive markets. The carrying amount and estimated fair value of the Term Loan Facility is classified as a Level 3 financial instrument, because certain inputs used to determine its fair value are not observable. As of March 31, 2020, the carrying amount of the Term Loan Facility approximated fair value because its interest rate is a variable rate that approximates rates currently available to us.
______________________ (1) For more information on debt repayments, refer to Note 7, “Debt.”
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Significant Accounting Policies (Policies) |
3 Months Ended | ||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||
Consolidation and Interim Financial Information | Consolidation and Interim Financial Information The consolidated financial statements include the accounts of Molina Healthcare, Inc., and its subsidiaries. In the opinion of management, all adjustments considered necessary for a fair presentation of the results as of the date and for the interim periods presented have been included; such adjustments consist of normal recurring adjustments. All significant intercompany balances and transactions have been eliminated. The consolidated results of operations for the three months ended March 31, 2020, are not necessarily indicative of the results for the entire year ending December 31, 2020. The unaudited consolidated interim financial statements have been prepared under the assumption that users of the interim financial data have either read or have access to our audited consolidated financial statements for the fiscal year ended December 31, 2019. Accordingly, certain disclosures that would substantially duplicate the disclosures contained in our December 31, 2019, audited consolidated financial statements have been omitted. These unaudited consolidated interim financial statements should be read in conjunction with our audited consolidated financial statements for the fiscal year ended December 31, 2019.
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Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Principal areas requiring the use of estimates include:
• The determination of unrecognized tax benefits.
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term, highly liquid investments that are both readily convertible into known amounts of cash and have a maturity of three months or less on the date of purchase. The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported within the accompanying consolidated balance sheets that sum to the total of the same such amounts presented in the accompanying consolidated statements of cash flows. The restricted cash and cash equivalents presented below are included in “Restricted investments” in the accompanying consolidated balance sheets.
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Investments | Investments Our investments are principally held in debt securities, which are grouped into two separate categories for accounting and reporting purposes: available-for-sale securities, and held-to-maturity securities. Available-for-sale (“AFS”) securities are recorded at fair value and unrealized gains and losses, if any, are recorded in stockholders’ equity as other comprehensive income (loss), net of applicable income taxes. Held-to-maturity (“HTM”) securities are recorded at amortized cost, which approximates fair value, and unrealized holding gains or losses are not generally recognized. Realized gains and losses, and unrealized losses arising from credit-related factors with respect to AFS and HTM securities are included in the determination of net income. The cost of securities sold is determined using the specific-identification method. Our investment policy requires that all our investments have final maturities of less than 10 years, or less than 10 years average life for structured securities. Investments and restricted investments are subject to interest rate risk and will decrease in value if market rates increase. Declines in interest rates over time will reduce our investment income. In general, our AFS securities are classified as current assets without regard to the securities’ contractual maturity dates because they may be readily liquidated. We monitor our investments for credit-related impairment. For comprehensive discussions of the fair value and classification of our investments, see Note 4, “Fair Value Measurements,” and Note 5, “Investments.” Accrued interest receivable relating to our AFS and HTM securities is presented within “Prepaid expenses and other current assets” in the accompanying consolidated balance sheets, and amounted to $11 million and $12 million at March 31, 2020, and December 31, 2019, respectively. We do not measure an allowance for credit losses on accrued interest receivable. Instead, we write off accrued interest receivable that has not been collected within 90 days of the interest payment due date. We recognize such write offs as a reversal of interest income. No accrued interest was written off during the three months ended March 31, 2020.
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Premium Revenue and Contractual Provisions That May Adjust or Limit Revenue or Profit | Premium Revenue Recognition and Premiums Receivable Premium revenue is generated from our Health Plans segment contracts related to our Medicaid, Medicare and Marketplace programs. Premium revenue is generally received based on per member per month (“PMPM”) rates established in advance of the periods covered. These premiums revenues are recognized in the month that members are entitled to receive healthcare services, and premiums collected in advance are deferred. The state Medicaid programs and the federal Medicare program periodically adjust premiums. Additionally, many of our contracts contain provisions that may adjust or limit revenue or profit, as described below. Consequently, we recognize premium revenue as it is earned under such provisions. Contractual Provisions That May Adjust or Limit Revenue or Profit Medicaid Program Medical Cost Floors (Minimums), and Medical Cost Corridors. A portion of our premium revenue may be returned if certain minimum amounts are not spent on defined medical care costs. In the aggregate, we recorded liabilities under the terms of such contract provisions of $74 million at each of March 31, 2020, and December 31, 2019, respectively. Approximately $69 million of the liabilities accrued at each of March 31, 2020, and December 31, 2019, respectively, relate to our participation in Medicaid Expansion programs. In certain circumstances, the health plans may receive additional premiums if amounts spent on medical care costs exceed a defined maximum threshold. Receivables relating to such provisions were insignificant at March 31, 2020, and December 31, 2019. Profit Sharing and Profit Ceiling. Our contracts with certain states contain profit-sharing or profit ceiling provisions under which we refund amounts to the states if our health plans generate profit above a certain specified percentage. In some cases, we are limited in the amount of administrative costs that we may deduct in calculating the refund, if any. Liabilities for profits in excess of the amount we are allowed to retain under these provisions were insignificant at March 31, 2020, and December 31, 2019. Retroactive Premium Adjustments. State Medicaid programs periodically adjust premium rates on a retroactive basis. In these cases, we must adjust our premium revenue in the period in which we learn of the adjustment, based on our best estimate of the ultimate premium we expect to realize for the period being adjusted. Medicare Program Risk Adjusted Premiums. Our Medicare premiums are subject to retroactive increase or decrease based on the health status of our Medicare members (as measured by member risk score). We estimate our members’ risk scores and the related amount of Medicare revenue that will ultimately be realized for the periods presented based on our knowledge of our members’ health status, risk scores and Centers for Medicare and Medicaid Services (“CMS”) practices. Consolidated balance sheet amounts related to anticipated Medicare risk adjusted premiums and Medicare Part D settlements were insignificant at March 31, 2020, and December 31, 2019. Minimum MLR. The Affordable Care Act (“ACA”) has established a minimum annual medical loss ratio (“Minimum MLR”) of 85% for Medicare. The medical loss ratio represents medical costs as a percentage of premium revenue. Federal regulations define what constitutes medical costs and premium revenue. If the Minimum MLR is not met, we may be required to pay rebates to the federal government. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of income. The amounts payable for the Medicare Minimum MLR were insignificant at March 31, 2020, and December 31, 2019. Marketplace Program Refer to Note 11, “Subsequent Events,” for the description of a recent United States Supreme Court decision regarding Marketplace risk corridors. Risk Adjustment. Under this program, our health plans’ composite risk scores are compared with the overall average risk score for the relevant state and market pool. Generally, our health plans will make a risk adjustment payment into the pool if their composite risk scores are below the average risk score (risk adjustment payable), and will receive a risk adjustment payment from the pool if their composite risk scores are above the average risk score (risk adjustment receivable). We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium revenue in our consolidated statements of income. As of March 31, 2020, Marketplace risk adjustment payables amounted to $456 million and related receivables amounted to $76 million, for a net payable of $380 million, of which $80 million relates to 2020 and $300 million relates primarily to 2019. As of December 31, 2019, Marketplace risk adjustment payables amounted to $368 million and related receivables amounted to $63 million, for a net payable of $305 million, which relates primarily to 2019 and prior periods. Minimum MLR. The ACA has established a Minimum MLR of 80% for the Marketplace. If the Minimum MLR is not met, we may be required to pay rebates to our Marketplace policyholders. The Marketplace risk adjustment program is taken into consideration when computing the Minimum MLR. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of income. Aggregate balance sheet amounts related to the Minimum MLR were insignificant at March 31, 2020, and December 31, 2019.
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Receivables | Receivables Receivables consist primarily of amounts due from government agencies, which may be subject to potential retroactive adjustments. Because substantially all our receivable amounts are readily determinable and substantially all of our creditors are governmental authorities, our allowance for credit losses is insignificant.
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Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments, receivables, and restricted investments. Our investments and a portion of our cash equivalents are managed by professional portfolio managers operating under documented investment guidelines. Our portfolio managers must obtain our prior approval before selling investments where the loss position of those investments exceeds certain levels. Our investments consist primarily of investment-grade debt securities with final maturities of less than 10 years, or less than 10 years average life for structured securities. Restricted investments are invested principally in cash, cash equivalents, and U.S. Treasury securities. Concentration of credit risk with respect to accounts receivable is limited because our payors consist principally of the federal government, and governments of each state or commonwealth in which our health plan subsidiaries operate.
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Income Taxes | Income Taxes The provision for income taxes is determined using an estimated annual effective tax rate, which generally differs from the U.S. federal statutory rate primarily because of foreign and state taxes, nondeductible expenses such as the HIF, certain compensation, and other general and administrative expenses. The effective tax rate may be subject to fluctuations during the year as new information is obtained. Such information may affect the assumptions used to estimate the annual effective tax rate, including projected pretax earnings, the mix of pretax earnings in the various tax jurisdictions in which we operate, valuation allowances against deferred tax assets, the recognition or the reversal of the recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities, along with net operating loss and tax credit carryovers.
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Recent Accounting Pronouncements Adopted and Not Yet Adopted | Recent Accounting Pronouncements Adopted Credit Losses. In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was subsequently modified by several ASUs issued in 2018 and 2019. We adopted Topic 326 effective January 1, 2020, using the modified retrospective approach. Under this method we recognized the cumulative effect of adopting the standard as an adjustment to the opening balance of retained earnings on January 1, 2020, which was immaterial. Recent Accounting Pronouncements Not Yet Adopted Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by a change in the reference rate from LIBOR or another reference rate expected to be discontinued, if certain conditions are met. ASU 2020-04 is effective immediately and expires after December 31, 2022. We are evaluating the effect of reference rate reform and this guidance on our contracts and other transactions. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (“SEC”) did not have, nor does management expect such pronouncements to have, a significant impact on our present or future consolidated financial statements.
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Significant Accounting Policies - Quality Incentive Premium Revenue Recognized (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2020 |
Mar. 31, 2019 |
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Schedule of Premium Revenue by Health Plan Type [Line Items] | ||
Maximum available quality incentive premium - current period | $ 61 | $ 45 |
Quality incentive premium revenue recognized in current period: | ||
Earned current period | 44 | 26 |
Earned prior periods | 12 | 20 |
Total | $ 56 | $ 46 |
Quality incentive premium revenue recognized as a percentage of total premium revenue | 1.30% | 1.20% |
Select Health Plans | Minimum | ||
Schedule of Premium Revenue by Health Plan Type [Line Items] | ||
Percentage of additional incremental revenue earned | 1.00% | |
Select Health Plans | Maximum | ||
Schedule of Premium Revenue by Health Plan Type [Line Items] | ||
Percentage of additional incremental revenue earned | 4.00% |
Fair Value Measurements - Balance Sheet Grouping (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
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Current assets: Prepaid expenses and other current assets | Call option | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | $ 0 | $ 29 |
Current liabilities: Accounts payable, accrued liabilities and other | Conversion option | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative liabilities | $ 0 | $ 29 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2020 |
Dec. 31, 2019 |
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Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares outstanding (in shares) | 59,000,000 | 62,000,000 |
Preferred stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Significant Accounting Policies |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term, highly liquid investments that are both readily convertible into known amounts of cash and have a maturity of three months or less on the date of purchase. The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported within the accompanying consolidated balance sheets that sum to the total of the same such amounts presented in the accompanying consolidated statements of cash flows. The restricted cash and cash equivalents presented below are included in “Restricted investments” in the accompanying consolidated balance sheets.
Investments Our investments are principally held in debt securities, which are grouped into two separate categories for accounting and reporting purposes: available-for-sale securities, and held-to-maturity securities. Available-for-sale (“AFS”) securities are recorded at fair value and unrealized gains and losses, if any, are recorded in stockholders’ equity as other comprehensive income (loss), net of applicable income taxes. Held-to-maturity (“HTM”) securities are recorded at amortized cost, which approximates fair value, and unrealized holding gains or losses are not generally recognized. Realized gains and losses, and unrealized losses arising from credit-related factors with respect to AFS and HTM securities are included in the determination of net income. The cost of securities sold is determined using the specific-identification method. Our investment policy requires that all our investments have final maturities of less than 10 years, or less than 10 years average life for structured securities. Investments and restricted investments are subject to interest rate risk and will decrease in value if market rates increase. Declines in interest rates over time will reduce our investment income. In general, our AFS securities are classified as current assets without regard to the securities’ contractual maturity dates because they may be readily liquidated. We monitor our investments for credit-related impairment. For comprehensive discussions of the fair value and classification of our investments, see Note 4, “Fair Value Measurements,” and Note 5, “Investments.” Accrued interest receivable relating to our AFS and HTM securities is presented within “Prepaid expenses and other current assets” in the accompanying consolidated balance sheets, and amounted to $11 million and $12 million at March 31, 2020, and December 31, 2019, respectively. We do not measure an allowance for credit losses on accrued interest receivable. Instead, we write off accrued interest receivable that has not been collected within 90 days of the interest payment due date. We recognize such write offs as a reversal of interest income. No accrued interest was written off during the three months ended March 31, 2020. Premium Revenue Recognition and Premiums Receivable Premium revenue is generated from our Health Plans segment contracts related to our Medicaid, Medicare and Marketplace programs. Premium revenue is generally received based on per member per month (“PMPM”) rates established in advance of the periods covered. These premiums revenues are recognized in the month that members are entitled to receive healthcare services, and premiums collected in advance are deferred. The state Medicaid programs and the federal Medicare program periodically adjust premiums. Additionally, many of our contracts contain provisions that may adjust or limit revenue or profit, as described below. Consequently, we recognize premium revenue as it is earned under such provisions. Contractual Provisions That May Adjust or Limit Revenue or Profit Medicaid Program Medical Cost Floors (Minimums), and Medical Cost Corridors. A portion of our premium revenue may be returned if certain minimum amounts are not spent on defined medical care costs. In the aggregate, we recorded liabilities under the terms of such contract provisions of $74 million at each of March 31, 2020, and December 31, 2019, respectively. Approximately $69 million of the liabilities accrued at each of March 31, 2020, and December 31, 2019, respectively, relate to our participation in Medicaid Expansion programs. In certain circumstances, the health plans may receive additional premiums if amounts spent on medical care costs exceed a defined maximum threshold. Receivables relating to such provisions were insignificant at March 31, 2020, and December 31, 2019. Profit Sharing and Profit Ceiling. Our contracts with certain states contain profit-sharing or profit ceiling provisions under which we refund amounts to the states if our health plans generate profit above a certain specified percentage. In some cases, we are limited in the amount of administrative costs that we may deduct in calculating the refund, if any. Liabilities for profits in excess of the amount we are allowed to retain under these provisions were insignificant at March 31, 2020, and December 31, 2019. Retroactive Premium Adjustments. State Medicaid programs periodically adjust premium rates on a retroactive basis. In these cases, we must adjust our premium revenue in the period in which we learn of the adjustment, based on our best estimate of the ultimate premium we expect to realize for the period being adjusted. Medicare Program Risk Adjusted Premiums. Our Medicare premiums are subject to retroactive increase or decrease based on the health status of our Medicare members (as measured by member risk score). We estimate our members’ risk scores and the related amount of Medicare revenue that will ultimately be realized for the periods presented based on our knowledge of our members’ health status, risk scores and Centers for Medicare and Medicaid Services (“CMS”) practices. Consolidated balance sheet amounts related to anticipated Medicare risk adjusted premiums and Medicare Part D settlements were insignificant at March 31, 2020, and December 31, 2019. Minimum MLR. The Affordable Care Act (“ACA”) has established a minimum annual medical loss ratio (“Minimum MLR”) of 85% for Medicare. The medical loss ratio represents medical costs as a percentage of premium revenue. Federal regulations define what constitutes medical costs and premium revenue. If the Minimum MLR is not met, we may be required to pay rebates to the federal government. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of income. The amounts payable for the Medicare Minimum MLR were insignificant at March 31, 2020, and December 31, 2019. Marketplace Program Refer to Note 11, “Subsequent Events,” for the description of a recent United States Supreme Court decision regarding Marketplace risk corridors. Risk Adjustment. Under this program, our health plans’ composite risk scores are compared with the overall average risk score for the relevant state and market pool. Generally, our health plans will make a risk adjustment payment into the pool if their composite risk scores are below the average risk score (risk adjustment payable), and will receive a risk adjustment payment from the pool if their composite risk scores are above the average risk score (risk adjustment receivable). We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium revenue in our consolidated statements of income. As of March 31, 2020, Marketplace risk adjustment payables amounted to $456 million and related receivables amounted to $76 million, for a net payable of $380 million, of which $80 million relates to 2020 and $300 million relates primarily to 2019. As of December 31, 2019, Marketplace risk adjustment payables amounted to $368 million and related receivables amounted to $63 million, for a net payable of $305 million, which relates primarily to 2019 and prior periods. Minimum MLR. The ACA has established a Minimum MLR of 80% for the Marketplace. If the Minimum MLR is not met, we may be required to pay rebates to our Marketplace policyholders. The Marketplace risk adjustment program is taken into consideration when computing the Minimum MLR. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of income. Aggregate balance sheet amounts related to the Minimum MLR were insignificant at March 31, 2020, and December 31, 2019. A summary of the categories of amounts due government agencies is as follows:
Quality Incentives At many of our health plans, revenue ranging from approximately 1% to 4% of certain health plan premiums is earned only if certain performance measures are met. Such performance measures are generally found in our Medicaid and MMP contracts. As described in Note 1, “Organization and Basis of Presentation–Use of Estimates,” recognition of quality incentive premium revenue is subject to the use of estimates. The following table quantifies the quality incentive premium revenue recognized for the periods presented, including the amounts earned in the periods presented and prior periods.
Receivables Receivables consist primarily of amounts due from government agencies, which may be subject to potential retroactive adjustments. Because substantially all our receivable amounts are readily determinable and substantially all of our creditors are governmental authorities, our allowance for credit losses is insignificant.
Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments, receivables, and restricted investments. Our investments and a portion of our cash equivalents are managed by professional portfolio managers operating under documented investment guidelines. Our portfolio managers must obtain our prior approval before selling investments where the loss position of those investments exceeds certain levels. Our investments consist primarily of investment-grade debt securities with final maturities of less than 10 years, or less than 10 years average life for structured securities. Restricted investments are invested principally in cash, cash equivalents, and U.S. Treasury securities. Concentration of credit risk with respect to accounts receivable is limited because our payors consist principally of the federal government, and governments of each state or commonwealth in which our health plan subsidiaries operate. Health Insurer Fee Under the Affordable Care Act, the federal government imposes an annual fee, or excise tax, on health insurers for each calendar year (the “HIF”). Public Law No. 115-120 provided for a HIF moratorium in 2019; therefore, there was no HIF incurred or reimbursed in that year. The HIF is reinstated in 2020, but the Further Consolidated Appropriations Act, 2020, repealed the HIF effective for years after 2020. The HIF is allocated to health insurers based on each health insurer's share of net premiums for all U.S. health insurers in the year preceding the assessment. Our estimated HIF liability for 2020 is $271 million, and was accrued as of January 1, 2020, with a corresponding deferred expense asset that will be amortized to expense through December 31, 2020, on a straight-line basis. The HIF is not deductible for income tax purposes, and is payable by September 30, 2020. Due to the reinstatement of the HIF in 2020, our effective tax rate is higher in 2020 compared with 2019. Within our Medicaid program, we must secure additional reimbursement from our state partners for this added cost. We have obtained a contractual commitments or are receiving payments from all states in which we operate Medicaid programs to reimburse us for the HIF, and such HIF revenue is being recognized ratably throughout the year. Income Taxes The provision for income taxes is determined using an estimated annual effective tax rate, which generally differs from the U.S. federal statutory rate primarily because of foreign and state taxes, nondeductible expenses such as the HIF, certain compensation, and other general and administrative expenses. The effective tax rate may be subject to fluctuations during the year as new information is obtained. Such information may affect the assumptions used to estimate the annual effective tax rate, including projected pretax earnings, the mix of pretax earnings in the various tax jurisdictions in which we operate, valuation allowances against deferred tax assets, the recognition or the reversal of the recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities, along with net operating loss and tax credit carryovers. Recent Accounting Pronouncements Adopted Credit Losses. In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was subsequently modified by several ASUs issued in 2018 and 2019. We adopted Topic 326 effective January 1, 2020, using the modified retrospective approach. Under this method we recognized the cumulative effect of adopting the standard as an adjustment to the opening balance of retained earnings on January 1, 2020, which was immaterial. Recent Accounting Pronouncements Not Yet Adopted Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by a change in the reference rate from LIBOR or another reference rate expected to be discontinued, if certain conditions are met. ASU 2020-04 is effective immediately and expires after December 31, 2022. We are evaluating the effect of reference rate reform and this guidance on our contracts and other transactions. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (“SEC”) did not have, nor does management expect such pronouncements to have, a significant impact on our present or future consolidated financial statements.
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Investments - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2020
USD ($)
| |
Investments, Debt and Equity Securities [Abstract] | |
Gross realized investment gains | $ 5 |
Debt securities held to maturity | 82 |
Held-to-maturity, within one year, amortized cost | 79 |
Held-to-maturity, over one year to five years, amortized cost | $ 3 |
Medical Claims and Benefits Payable - Components of Change in Medical Claims and Benefits Payable (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Insurance Claims | ||
Medical claims and benefits payable, beginning balance | $ 1,854 | $ 1,961 |
Components of medical care costs related to: | ||
Current period | 3,817 | 3,560 |
Prior periods | (101) | (189) |
Total medical care costs | 3,716 | 3,371 |
Change in non-risk and other provider payables | (10) | 171 |
Payments for medical care costs related to: | ||
Current period | 2,274 | 2,197 |
Prior periods | 1,305 | 1,311 |
Total paid | 3,579 | 3,508 |
Medical claims and benefits payable, ending balance | $ 1,981 | $ 1,995 |
Stockholders' Equity - Share Activity (Details) |
3 Months Ended |
---|---|
Mar. 31, 2020
$ / shares
shares
| |
Number of Shares | |
Beginning Balance (shares) | 771,758 |
Granted (shares) | 455,248 |
Vested (shares) | (158,478) |
Forfeited (shares) | (35,028) |
Ending Balance (shares) | 1,033,500 |
Weighted Average Grant Date Fair Value | |
Begining Balance (usd per share) | $ / shares | $ 102.01 |
Granted (usd per share) | $ / shares | 122.20 |
Vested (usd per share) | $ / shares | 92.92 |
Forfeited (usd per share) | $ / shares | 101.60 |
Ending Balance (usd per share) | $ / shares | $ 112.31 |
RSAs | |
Number of Shares | |
Beginning Balance (shares) | 447,680 |
Granted (shares) | 294,319 |
Vested (shares) | (151,110) |
Forfeited (shares) | (12,202) |
Ending Balance (shares) | 578,687 |
PSUs | |
Number of Shares | |
Beginning Balance (shares) | 324,078 |
Granted (shares) | 160,929 |
Vested (shares) | (7,368) |
Forfeited (shares) | (22,826) |
Ending Balance (shares) | 454,813 |
Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 2,365 | $ 2,452 | $ 3,224 | |
Restricted cash and cash equivalents | 58 | 74 | ||
Total cash, cash equivalents, and restricted cash and cash equivalents presented in the consolidated statements of cash flows | $ 2,423 | $ 2,508 | $ 3,298 | $ 2,926 |
Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt | The following table summarizes our outstanding debt obligations and their classification in the accompanying consolidated balance sheets:
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Net Income per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Denominators for the Computation of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the calculation of net income per share:
(2) Source data for calculations in thousands.
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Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
|
Schedule of Premium Revenue by Health Plan Type [Line Items] | ||
Maturity period | 10 years | |
Average maturity period | 10 years | |
Interest receivable | $ 11 | $ 12 |
Medical cost floors and corridors | 74 | 74 |
Amounts due government agencies | 777 | 664 |
Risk adjustment payable | 456 | 368 |
Risk adjustment receivable | 76 | 63 |
Risk adjustment, net payable | 380 | 305 |
Risk adjustment, net payable, current year | 80 | |
Risk adjustment, net payable, prior year | 300 | |
Receivables from state and federal government agencies | 1,603 | 1,406 |
HIF liabilities | 271 | |
Medicaid Expansion | ||
Schedule of Premium Revenue by Health Plan Type [Line Items] | ||
Amounts due government agencies | $ 69 | $ 69 |
Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Numerator: | ||||
Net income | $ 178 | $ 198 | ||
Denominator: | ||||
Shares outstanding at the beginning of the period (in shares) | 61.9 | 62.1 | ||
Weighted-average number of shares issued: | ||||
Stock purchases (in shares) | (1.7) | 0.0 | ||
Stock-based compensation (in shares) | 0.0 | 0.0 | ||
Denominator for net income per share, basic (in shares) | 60.2 | 62.1 | ||
Effect of dilutive securities: | ||||
Warrants (in shares) | 0.1 | 3.5 | ||
Stock-based compensation (in shares) | 0.7 | 0.6 | ||
Denominator for net income per share, diluted (in shares) | 61.0 | 66.2 | ||
Net income per share: | ||||
Basic (in dollars per share) | $ 2.95 | $ 3.19 | ||
Diluted (in dollars per share) | $ 2.92 | $ 2.99 | ||
Potentially dilutive common shares (in shares) | 0.1 |
Commitments and Contingencies |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies COVID-19 Pandemic On March 11, 2020, the World Health Organization officially declared COVID-19, the disease caused by the novel coronavirus, a pandemic. The ultimate effects of the pandemic, and the duration of any such effects, including any impact to our medical care ratio (which could increase or decrease), are not known or quantifiable at this time. As of March 31, 2020, we have not experienced any significant interruptions in the services we provide, nor was there a material impact of the pandemic to our consolidated financial position, results of operations, and cash flows in the first quarter of 2020. Legal Proceedings The healthcare industry is subject to numerous laws and regulations of federal, state, and local governments. Penalties associated with violations of these laws and regulations include significant fines, exclusion from participating in publicly funded programs, and the repayment of previously collected revenues. In the ordinary course of business we are involved in legal actions, some of which seek monetary damages which are not covered by insurance. We have accrued liabilities for certain matters for which we deem the loss to be both probable and reasonably estimable, but the outcome of legal actions is inherently uncertain and our estimates of such losses could be understated, and could also subsequently change as a result of further developments of these matters. For certain pending matters, accruals have not been established because we believe we are not liable or because such matters have not progressed sufficiently through discovery or factual development to enable us to reasonably estimate a range of possible loss. An adverse determination in one or more of these pending matters could have an adverse effect on our consolidated financial position, results of operations, or cash flows.
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Medical Claims and Benefits Payable |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medical Claims and Benefits Payable | Medical Claims and Benefits Payable The following table provides the details of our medical claims and benefits payable as of the dates indicated.
“Other” medical claims and benefits payable includes amounts payable to certain providers for which we act as an intermediary on behalf of various government agencies without assuming financial risk. Such receipts and payments do not impact our consolidated statements of income. Non-risk provider payables amounted to $116 million and $132 million as of March 31, 2020, and December 31, 2019, respectively. The following table presents the components of the change in our medical claims and benefits payable for the periods indicated. The amounts presented for “Components of medical care costs related to: Prior periods” represent the amounts by which our original estimate of medical claims and benefits payable at the beginning of the period were more than the actual amount of the liability, based on information (principally the payment of claims) developed since that liability was first reported.
Our estimates of medical claims and benefits payable recorded at December 31, 2019, and 2018 developed favorably by approximately $101 million and $189 million as of March 31, 2020, and 2019, respectively. The favorable prior year development recognized in the three months ended March 31, 2020, was primarily due to lower than expected utilization of medical services by our Medicaid members, and improved operating performance. Consequently, the ultimate costs recognized in 2020, as claims payments were processed, were lower than our original estimates in 2019.
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 178 | $ 198 |
Other comprehensive (loss) income: | ||
Unrealized investment (loss) income | (25) | 7 |
Less: effect of income taxes | (6) | 2 |
Other comprehensive (loss) income, net of tax | (19) | 5 |
Comprehensive income | $ 159 | $ 203 |
Segments - Reconciliation of Gross Margin to Consolidated Income (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Segment Reporting Information [Line Items] | ||
Total revenue | $ 4,549 | $ 4,119 |
Add: other operating revenues | 4,549 | 4,119 |
Less: other operating expenses | (4,275) | (3,839) |
Operating income | 274 | 280 |
Other expenses, net | 21 | 20 |
Income before income tax expense | 253 | 260 |
Other operating | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 245 | 167 |
Add: other operating revenues | 245 | 167 |
Less: other operating expenses | (559) | (468) |
Health Plans | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 4,545 | 4,117 |
Add: other operating revenues | 4,545 | 4,117 |
Health Plans | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Gross margin | 588 | 581 |
Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 4 | 2 |
Add: other operating revenues | $ 4 | $ 2 |
Investments - Contractual Maturities of Investments (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Amortized Cost | ||
Due in one year or less | $ 375 | |
Due after one year through five years | 1,032 | |
Due after five years through ten years | 183 | |
Due after ten years | 440 | |
Amortized Cost | 2,030 | $ 1,941 |
Estimated Fair Value | ||
Due in one year or less | 375 | |
Due after one year through five years | 1,017 | |
Due after five years through ten years | 181 | |
Due after ten years | 437 | |
Estimated Fair Value | $ 2,010 |
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