0001179929-21-000024 | 10-K | XBRL Viewer

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Cover Page - USD ($) shares in Millions, $ in Billions	12 Months Ended
Cover Page - USD ($) shares in Millions, $ in Billions	Dec. 31, 2020	Feb. 12, 2021	Jun. 30, 2020
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	1-31719
Entity Registrant Name	MOLINA HEALTHCARE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-4204626
Entity Address, Address Line One	200 Oceangate
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Long Beach
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90802
City Area Code	562
Local Phone Number	435-3666
Title of 12(b) Security	Common Stock, $0.001 Par Value
Trading Symbol	MOH
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 10.5
Entity Common Stock, Shares Outstanding		58.0
Documents Incorporated by Reference	Portions of the registrant’s Proxy Statement for the 2021 Annual Meeting of Stockholders to be held on May 6, 2021, are incorporated by reference into Part III of this Form 10-K, to the extent described therein.
Entity Central Index Key	0001179929
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY

Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenue:
Investment income and other revenue	$ 76	$ 132	$ 125
Total revenue	19,423	16,829	18,890
Operating expenses:
General and administrative expenses	1,480	1,296	1,333
Premium tax expenses	649	489	417
Health insurer fees	277	0	348
Depreciation and amortization	88	89	99
Other	31	6	61
Total operating expenses	18,345	15,785	17,759
Operating income	1,078	1,044	1,131
Other expenses, net:
Interest expense	102	87	115
Other expenses (income), net	15	(15)	17
Total other expenses, net	117	72	132
Income before income tax expense	961	972	999
Income tax expense	288	235	292
Net income	$ 673	$ 737	$ 707
Net income per share:
Basic (in dollars per share)	$ 11.40	$ 11.85	$ 11.57
Diluted (in dollars per share)	$ 11.23	$ 11.47	$ 10.61
Weighted average shares outstanding:
Basic (in shares)	59.0	62.2	61.1
Diluted (in shares)	59.9	64.2	66.6
Premium revenue
Revenue:
Revenues	$ 18,299	$ 16,208	$ 17,612
Premium tax revenue
Revenue:
Revenues	649	489	417
Health insurer fees reimbursed
Revenue:
Revenues	271	0	329
Marketplace risk corridor judgment
Revenue:
Revenues	128	0	0
Service
Revenue:
Revenues	0	0	407
Operating expenses:
Cost of revenue	0	0	364
Medical care costs
Operating expenses:
Cost of revenue	$ 15,820	$ 13,905	$ 15,137

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 673	$ 737	$ 707
Other comprehensive income (loss):
Unrealized investment income (loss)	44	16	(3)
Less: effect of income taxes	11	4	(1)
Other comprehensive income (loss), net of tax	33	12	(2)
Comprehensive income	$ 706	$ 749	$ 705

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 4,154	$ 2,452
Investments	1,875	1,946
Receivables	1,672	1,406
Prepaid expenses and other current assets	175	163
Total current assets	7,876	5,967
Property, equipment, and capitalized software, net	391	385
Goodwill and intangible assets, net	941	172
Restricted investments	136	79
Deferred income taxes	69	79
Other assets	119	105
Total assets	9,532	6,787
Current liabilities:
Medical claims and benefits payable	2,696	1,854
Amounts due government agencies	1,253	664
Accounts payable, accrued liabilities and other	641	502
Deferred revenue	375	249
Total current liabilities	4,965	3,269
Long-term debt	2,127	1,237
Finance lease liabilities	225	231
Other long-term liabilities	119	90
Total liabilities	7,436	4,827
Stockholders’ equity:
Common stock, $0.001 par value per share; 150 million shares authorized; outstanding: 59 million shares at December 31, 2020, and 62 million at December 31, 2019	0	0
Preferred stock, $0.001 par value per share; 20 million shares authorized, no shares issued and outstanding	0	0
Additional paid-in capital	199	175
Accumulated other comprehensive income	37	4
Retained earnings	1,860	1,781
Total stockholders’ equity	2,096	1,960
Total liabilities and stockholders’ equity	$ 9,532	$ 6,787

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value (dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares, outstanding	59,000,000	62,000,000
Preferred stock, par value (dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions	Total	Adoption of new accounting standards	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss) Adoption of new accounting standards	Retained Earnings	Retained Earnings Adoption of new accounting standards
Beginning Balance (in shares) at Dec. 31, 2017	59,300,000		60,000,000
Beginning Balance at Dec. 31, 2017	$ 1,337	$ 6	$ 0	$ 1,044	$ (5)	$ (1)	$ 298	$ 7
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	707						707
Termination of warrants	(550)			(550)
Exchange of convertible senior notes (in shares)			2,000,000
Exchange of convertible senior notes	108			108
Conversion of convertible senior notes	4			4
Other comprehensive income (loss), net	(2)				(2)
Share-based compensation	$ 37			37
Ending Balance (in shares) at Dec. 31, 2018	62,100,000		62,000,000
Ending Balance at Dec. 31, 2018	$ 1,647	$ 85	$ 0	643	(8)		1,012	$ 85
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	737						737
Common stock purchases	(54)			(1)			(53)
Termination of warrants	(514)			(514)
Exchange of convertible senior notes	0
Other comprehensive income (loss), net	12				12
Share-based compensation	$ 47			47
Ending Balance (in shares) at Dec. 31, 2019	61,900,000		62,000,000
Ending Balance at Dec. 31, 2019	$ 1,960		$ 0	175	4		1,781
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	673
Common stock purchases (in shares)			(4,000,000)
Common stock purchases	(605)			(11)			(594)
Termination of warrants	(30)			(30)
Exchange of convertible senior notes	0
Other comprehensive income (loss), net	33				33
Share-based compensation (in shares)			1,000,000
Share-based compensation	65			65
Ending Balance (in shares) at Dec. 31, 2020			59,000,000
Ending Balance at Dec. 31, 2020	$ 2,096		$ 0	$ 199	$ 37		$ 1,860

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Operating activities:
Net income	$ 673	$ 737	$ 707
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	88	89	127
Deferred income taxes	(19)	10	(6)
Share-based compensation	57	39	27
Loss (gain) on debt repayment	15	(15)	22
Loss on sales of subsidiaries, net of gain	0	0	15
Non-cash restructuring charges	0	0	17
Other, net	12	0	26
Changes in operating assets and liabilities, net of the effect of acquisitions:
Receivables	(100)	(76)	(530)
Prepaid expenses and other current assets	(16)	28	6
Medical claims and benefits payable	544	(107)	(226)
Amounts due government agencies	446	(303)	(574)
Accounts payable, accrued liabilities and other	78	2	45
Deferred revenue	126	38	(21)
Income taxes	(14)	(15)	51
Net cash provided by operating activities	1,890	427	(314)
Investing activities:
Purchases of investments	(670)	(2,536)	(1,444)
Proceeds from sales and maturities of investments	1,097	2,302	2,445
Purchases of property, equipment and capitalized software	(74)	(57)	(30)
Net cash paid in business combinations	(755)	0	0
Net cash received from sale of subsidiaries	0	0	190
Other, net	2	(2)	(18)
Net cash (used in) provided by investing activities	(400)	(293)	1,143
Financing activities:
Proceeds from senior notes offerings, net of issuance costs	1,429	0	0
Common stock purchases	(606)	(47)	0
Repayment of term loan facility	(600)	0	0
Proceeds from borrowings under term loan facility	380	220	0
Repayment of senior notes	(338)	0	0
Cash paid for partial termination of warrants	(30)	(514)	(549)
Cash paid for partial settlement of conversion option	(27)	(578)	(623)
Cash received for partial settlement of call option	27	578	623
Repayment of principal amount of convertible senior notes	(12)	(240)	(362)
Repayment of credit facility	0	0	(300)
Other, net	2	29	18
Net cash provided by (used in) financing activities	225	(552)	(1,193)
Net increase (decrease) in cash and cash equivalents, and restricted cash and cash equivalents	1,715	(418)	(364)
Cash and cash equivalents, and restricted cash and cash equivalents at beginning of period	2,508	2,926	3,290
Cash and cash equivalents, and restricted cash and cash equivalents at end of period	4,223	2,508	2,926
Cash paid during the period for:
Income taxes	321	239	240
Interest	112	78	93
Schedule of non-cash investing and financing activities:
Fair value of assets acquired	(1,340)	0	0
Fair value of contingent consideration liabilities	40	0	0
Fair value of liabilities assumed	545	0	0
Net cash paid in business combinations	(755)	0	0
Convertible senior notes exchange transaction:
Common stock issued in exchange for convertible senior notes	0	0	131
Component of convertible senior notes allocated to additional paid-in capital, net of income taxes	0	0	(23)
Net increase to additional paid-in capital	0	0	108
Common stock used for stock-based compensation	(8)	(7)	(6)
Common stock purchases not settled at end of period	6	7	0
Details of change in fair value of derivatives, net:
Change in fair value of derivatives, net	0	0	0
Details of sales of subsidiaries:
Decrease in carrying amount of assets	0	0	(327)
Decrease in carrying amount of liabilities	0	0	85
Transaction costs	0	0	(15)
Cash received from buyers	0	0	242
Loss on sale of subsidiaries, net of gain	0	0	(15)
(Loss) gain on call option
Details of change in fair value of derivatives, net:
Change in fair value of derivatives, net	(2)	132	577
Gain (loss) on conversion option
Details of change in fair value of derivatives, net:
Change in fair value of derivatives, net	$ 2	$ (132)	$ (577)

Organization and Basis of Presentation	12 Months Ended
Organization and Basis of Presentation	Dec. 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, through the state insurance marketplaces (the “Marketplace”), and under other government-sponsored healthcare programs for low-income families and individuals, most of whom receive government subsidies for premiums. As of December 31, 2020, we had 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. Through our locally operated health plans in 15 states, we served approximately 4.0 million members as of December 31, 2020. In addition, in connection with our acquisition of Magellan Complete Care on December 31, 2020, we added approximately 200,000 members, and now operate health plans in 18 states. These health plans are generally operated by our respective wholly owned subsidiaries in those states, and licensed as health maintenance organizations (“HMOs”). 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 (“RFP”) 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 Acquisition of Magellan Complete Care. On December 31, 2020, we closed on our acquisition of 100% of the outstanding equity interests of the Magellan Complete Care line of business of Magellan Health, Inc., for total purchase consideration of approximately $1,037 million. Because this acquisition closed on December 31, 2020, Magellan Complete Care’s operating results were insignificant to our consolidated results of operations for the year ended December 31, 2020. See Note 4, “Business Combinations,” for further information. New York. In September 2020, we entered into a definitive agreement to acquire substantially all the assets of Affinity Health Plan, Inc. The net purchase price for the transaction is approximately $380 million, subject to various adjustments at closing, which we intend to fund with cash on hand. We currently expect the transaction to close as early as the second quarter of 2021. In July 2020, we completed the acquisition of certain assets of YourCare Health Plan, Inc. See Note 4, “Business Combinations,” for further information. Kentucky. In May 2020, our Kentucky health plan was selected as an awardee pursuant to the statewide Medicaid managed care RFP issued by the Kentucky Cabinet for Health and Family Services, Department of Medicaid Services. The new Medicaid contract began on January 1, 2021. In connection with this RFP award, we completed the acquisition of certain assets of Passport Health Plan, Inc. (“Passport”) in September 2020. See Note 4, “Business Combinations,” for further information. Texas. In March 2020, the Texas Health and Human Services Commission (“HHSC”) notified our Texas health plan that HHSC had upheld our protest and had canceled all previously awarded contracts associated with the re-procurement awards announced in October 2019 for the ABD program (known in Texas as “STAR+PLUS”). In addition, HHSC canceled the pending re-procurement associated with the TANF and CHIP programs (known in Texas as “STAR/CHIP”). HHSC has indicated that the STAR+PLUS RFP will be posted in late 2021 or early 2022, with awards estimated to be announced in the second quarter of 2022, and start of operations in the fourth quarter of 2023. HHSC has also indicated that the STAR/CHIP RFP will be posted in the fourth quarter of 2022, with awards estimated to be announced in late 2022 or early 2023, and start of operations in the third quarter of 2024. Puerto Rico. We exited Puerto Rico’s Medicaid program when our contract expired on October 31, 2020. We have been working with the regulatory authorities and the provider community to ensure that our former members in Puerto Rico have reliable continuity of care. Consolidation and Presentation The consolidated financial statements include the accounts of Molina Healthcare, Inc., and its subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. Financial information related to subsidiaries acquired during any year is included only for periods subsequent to their acquisition. In the opinion of management, all adjustments considered necessary for a fair presentation of the results as of the date and for the periods presented have been included; such adjustments consist of normal recurring adjustments. 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 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; •Purchase price allocations relating to business combinations, including the determination of contingent consideration; •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 •The determination of unrecognized tax benefits.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

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.


	December 31,
	2020		2019		2018
	(In millions)
Cash and cash equivalents	$	4,154	$	2,452	$	2,826
Restricted cash and cash equivalents	69		56		100
Total cash and cash equivalents, and restricted cash and cash equivalents presented in the consolidated statements of cash flows	$	4,223	$	2,508	$	2,926

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, 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 of 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 5, “Fair Value Measurements,” and Note 6, “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 $10 million and $12 million at December 31, 2020, and 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 year ended December 31, 2020.

Receivables

Receivables consist primarily of premium amounts due from government agencies, which may be subject to potential retroactive adjustments. Because substantially all of our receivable amounts are readily determinable and substantially all of our creditors are governmental authorities, our allowance for doubtful accounts is insignificant. Any amounts determined to be uncollectible are charged to expense when such determination is made.


	December 31,
	2020		2019
	(In millions)
Government receivables	$	969	$	1,056
Pharmacy rebate receivables	178		150
Health insurer fee reimbursement receivables	104		5
Other	255		195
Magellan Complete Care	166		—
Total	$	1,672	$	1,406

Business Combinations

We account for business combinations using the acquisition method of accounting, which requires us to recognize the assets acquired and the liabilities assumed at their acquisition date fair values. As discussed below, the excess of the purchase consideration transferred over the fair value of the net tangible and intangible assets acquired is recorded as goodwill. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the final determination of the values of assets acquired or liabilities assumed, or one year after the date of acquisition, whichever comes first, any subsequent adjustments are recorded within our consolidated results of operations. Refer to Note 4, Business Combinations, and Note 9, “Goodwill and Intangible Assets, Net,” for further details.

Long-Lived Assets, including Intangible Assets

Long-lived assets consist primarily of property, equipment, capitalized software (see Note 7, “Property, Equipment, and Capitalized Software, Net”), and intangible assets resulting from acquisitions. Finite-lived, separately-identified intangible assets acquired in business combinations are assets that represent future expected benefits but lack physical substance (such as purchased contract rights and provider contracts). Intangible assets are initially recorded at fair value and are then amortized on a straight-line basis over their expected useful lives, generally between five and 16 years.

Determining the fair value of identifiable assets acquired, particularly intangible assets, and liabilities assumed, requires management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. Determining the useful life of an intangible asset also requires judgment, as different types of intangible assets will have different useful lives. The most significant intangible asset we typically record in a business combination is contract rights associated with membership assumed. In determining the estimated fair value of the intangible assets, we typically apply the income approach, which discounts the projected future net cash flows using an appropriate discount rate that reflects the risk associated with such projected future cash flows. The most critical assumptions used in determining the fair value of contract rights include forecasted operating margins and the weighted average cost of capital.

Our intangible assets are subject to impairment tests when events or circumstances indicate that a finite-lived intangible asset’s (or asset group’s) carrying value may not be recoverable. Consideration is given to a number of potential impairment indicators, including the ability of our health plan subsidiaries to obtain the renewal by amendment of their contracts in each state prior to the actual expiration of their contracts. However, there can be no assurance that these contracts will continue to be renewed. Following the identification of any potential impairment indicators, to determine whether an impairment exists, we would compare the carrying amount of a finite-lived intangible asset with the greater of the undiscounted cash flows that are expected to result from the use of the asset or related group of assets, or its value under the asset liquidation method. If it is determined that the carrying amount of the asset is not recoverable, the amount by which the carrying value exceeds the estimated fair value is recorded as an impairment. Refer to Note 9, “Goodwill and Intangible Assets, Net,” for further details.

Goodwill

Goodwill represents the excess of the purchase consideration over the fair value of net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment on an annual basis and more frequently if impairment indicators are present. Impairment indicators may include experienced or expected operating cash-flow deterioration or losses, significant losses of membership, loss of state funding, loss of state contracts, and other factors. Goodwill is impaired if the carrying amount of the reporting unit (one of our state health plans) exceeds its estimated fair value. This excess is recorded as an impairment loss and adjusted if necessary for the impact of tax-deductible goodwill. The loss recognized may not exceed the total goodwill allocated to the reporting unit.

When testing goodwill for impairment, we may first assess qualitative factors, such as industry and market factors, the dynamic economic and political environments in which we operate, cost factors, and changes in overall performance, to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. If our qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, we perform the quantitative assessment. We may also elect to bypass the qualitative assessment and proceed directly to the quantitative assessment. If performing a quantitative assessment, we generally estimate the fair values of our reporting units by applying the income approach, using discounted cash flows.

For the annual impairment test under a quantitative assessment, the base year in the reporting units’ discounted cash flows is derived from the annual financial planning cycle, which commences in the fourth quarter of the year. When computing discounted cash flows, we make assumptions about a wide variety of internal and external factors, and consider what the reporting unit’s selling price would be in an orderly transaction between market participants at the measurement date. Significant assumptions include financial projections of free cash flow (including significant assumptions about membership, premium rates, healthcare and operating cost trends, contract renewal and the procurement of new contracts, capital requirements and income taxes), long-term growth rates for determining terminal value beyond the discretely forecasted periods, and discount rates. When determining the discount rate, we consider the overall level of inherent risk of the reporting unit, and the expected rate an outside investor would expect to earn. As part of a quantitative assessment, we may also apply the asset liquidation method to estimate the fair value of individual reporting units, which is computed as total assets minus total liabilities, excluding intangible assets and deferred taxes. Finally, we apply a market approach to reconcile the value of our reporting units to our consolidated market value. Under the market approach, we consider publicly traded comparable company information to determine revenue and earnings multiples which are used to estimate our reporting units’ fair values. The assumptions used are consistent with those used in our long-range business plan and annual planning process. However, if these assumptions differ from actual results, the outcome of our goodwill impairment tests could be adversely affected.

Leases

Right-of-use (“ROU”) assets represent our right to use the underlying assets over the lease term, and lease liabilities represent our obligation for lease payments arising from the related leases. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease terms may include options to extend or terminate the lease when we believe it is reasonably certain that we will exercise such options. If applicable, we account for lease and non-lease components within a lease as a single lease component.

Because most of our leases do not provide an implicit interest rate, we generally use our incremental borrowing rate to determine the present value of lease payments. Lease expenses for operating lease payments are recognized on a straight-line basis over the lease term, and the related ROU assets and liabilities are reduced to the present value of the remaining lease payments at the end of each period. Finance lease payments reduce finance lease liabilities,

the related ROU assets are amortized on a straight-line basis over the lease term, and interest expense is recognized using the effective interest method.

The significant majority of our operating leases consist of long-term operating leases for office space. Short-term leases (those with terms of 12 months or less) are not recorded as ROU assets or liabilities in the consolidated balance sheets. For certain leases that represent a portfolio of similar assets, such as a fleet of vehicles, we apply a portfolio approach to account for the related ROU assets and liabilities, rather than account for such assets and the related liabilities individually. A nominal number of our lease agreements include rental payments that adjust periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

For further information, including the amount and location of the ROU assets and lease liabilities recognized in the accompanying consolidated balance sheets, see Note 8, “Leases.”

Medical Claims and Benefits Payable

Medical care costs are recognized in the period in which services are provided and include fee-for-service claims, pharmacy benefits, capitation payments to providers, and various other medically-related costs. Under fee-for-service claims arrangements with providers, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of hospital and physician services. Such medical care costs include amounts paid by us as well as estimated medical claims and benefits payable for costs that were incurred but not paid as of the reporting date (“IBNP”). Pharmacy benefits represent payments for members' prescription drug costs, net of rebates from drug manufacturers. We estimate pharmacy rebates based on historical and current utilization of prescription drugs and contractual provisions. Capitation payments represent monthly contractual fees paid to providers, who are responsible for providing medical care to members, which could include medical or ancillary costs like dental, vision and other supplemental health benefits. Such capitation costs are fixed in advance of the periods covered and are not subject to significant accounting estimates. Other medical care costs include all medically-related administrative costs, amounts due to providers pursuant to risk-sharing or other incentive arrangements, provider claims, and other healthcare expenses. Examples of medically-related administrative costs include expenses relating to health education, quality assurance, case management, care coordination, disease management, and 24-hour on-call nurses. Additionally, we include an estimate for the cost of settling claims incurred through the reporting date in our medical claims and benefits payable liability.

Medical claims and benefits payable consist mainly of fee-for-service IBNP, unpaid pharmacy claims, capitation costs, other medical costs, including amounts payable to providers pursuant to risk-sharing or other incentive arrangements and amounts payable to providers on behalf of certain state agencies for certain state assessments in which we assume no financial risk. IBNP includes the costs of claims incurred as of the balance sheet date which have been reported to us, and our best estimate of the cost of claims incurred but not yet reported to us. We also include an additional reserve to ensure that our overall IBNP liability is sufficient under moderately adverse conditions. We reflect changes in these estimates in the consolidated results of operations in the period in which they are determined.

The estimation of the IBNP liability requires a significant degree of judgment in applying actuarial methods, determining the appropriate assumptions and considering numerous factors. Of those factors, we consider estimated completion factors and the assumed healthcare cost trend to be the most critical assumptions. Other relevant factors also include, but are not limited to, healthcare service utilization trends, claim inventory levels, changes in membership, product mix, seasonality, benefit changes or changes in Medicaid fee schedules, provider contract changes, prior authorizations and the incidence of catastrophic or pandemic cases.

Because of the significant degree of judgment involved in estimation of our IBNP liability, there is considerable variability and uncertainty inherent in such estimates. Each reporting period, the recognized IBNP liability represents our best estimate of the total amount of unpaid claims incurred as of the balance sheet date using a consistent methodology in estimating our IBNP liability. We believe our current estimates are reasonable and adequate; however, the development of our estimate is a continuous process that we monitor and update as more complete claims payment information and healthcare cost trend data becomes available. Actual medical care costs may be less than we previously estimated (favorable development) or more than we previously estimated (unfavorable development), and any differences could be material. Any adjustments to reflect favorable development would be recognized as a decrease to medical care costs, and any adjustments to reflect unfavorable development would be recognized as an increase to medical care costs, in the period in which the adjustments are determined.

Refer to Note 10, “Medical Claims and Benefits Payable,” for a table presenting the components of the change in our medical claims and benefits payable, for all periods presented in the accompanying consolidated financial statements.

Premium Revenue Recognition and Amounts Due Government Agencies

Premium revenue is generated from our Health Plans segment contracts, for our participation in the 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 premium revenues are recognized in the month that members are entitled to receive healthcare services, and premiums collected in advance are deferred. State Medicaid programs and the federal Medicare program periodically adjust premium rates.

Certain components of premium revenue are subject to accounting estimates and are described below, under “Contractual Provisions That May Adjust or Limit Revenue or Profit,” and “Quality Incentives.”

Contractual Provisions That May Adjust or Limit Revenue or Profit

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. Liabilities accrued for premiums to be returned under such provisions are reported in the aggregate as “Amounts due government agencies” in the accompanying consolidated balance sheets. Categorized by program, such amounts due government agencies included the following:


	December 31,
	2020		2019

	(In millions)
Medicaid program:
Minimum MLR and profit sharing	$	513	$	92
Other	76		95
Medicare program:
Risk adjustment and Part D risk sharing	45		14
Minimum MLR and profit sharing	62		36
Other	30		21
Marketplace program:
Risk adjustment	326		368
Minimum MLR	37		15

Other	21		23
Magellan Complete Care	143		—
Total amounts due government agencies	$	1,253	$	664

Medicaid Program

Minimum MLR 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. Under certain medical cost corridor provisions, the health plans may receive additional premiums if amounts spent on medical care costs exceed a defined maximum threshold.

Profit Sharing. Our contracts with certain states contain profit sharing 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.

Retroactive Premium Adjustments. State Medicaid programs periodically adjust premium rates on a retroactive basis. In these cases, we adjust our premium revenue in the period in which we determine that the adjustment is probable and reasonably estimable, and is based on our best estimate of the ultimate premium we expect to realize for the period being adjusted.

In 2020, various states enacted temporary premium refunds and related actions in response to the reduced demand for medical services stemming from COVID-19, which resulted in a reduction of our medical margin. In some cases, these premium actions were retroactive to earlier periods in 2020, or as early as the beginning of the states’ fiscal years in 2019. Beginning in the second quarter of 2020, we have recognized retroactive premium actions that we believe to be probable, and where the ultimate premium amount is reasonably estimable. We recognized $564 million related to these retroactive premium actions, in the aggregate, in 2020, including $37 million related to

MMP plans. Approximately $401 million was recognized in the fourth quarter of 2020, mostly associated with recently enacted risk-sharing corridors.

It is possible that certain states could increase the level of existing premium refunds, and it is also possible that other states could implement some form of retroactive premium refund in the future. Due to these uncertainties, the ultimate outcomes could differ materially from our estimates as a result of changes in facts or further developments, which could have an adverse effect on our consolidated financial position, results of operations, or cash flows.

Medicare Program

Risk Adjustment. 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 & Medicaid Services (“CMS”) practices.

Minimum MLR. The Affordable Care Act (“ACA”) 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.

Marketplace Program

Risk Corridor Judgment. In April 2020, the United States 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, 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. In June 2020, the Claims Court granted us judgment in the amount of $128 million for 2014, 2015, and 2016 Marketplace risk corridor claims, which we received in October 2020. Consistent with the timing of the cash receipt, the gain was recognized in our fourth quarter 2020 financial results and reported in “Marketplace risk corridor judgment” in our consolidated statements of income. The judgment did not create additional Minimum MLR rebates.

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 December 31, 2020, Marketplace risk adjustment payables amounted to $326 million and related receivables amounted to $20 million, for a net payable of $306 million. 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.

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.

Reinsurance

We bear underwriting and reserving risks associated with our health plan subsidiaries. We limit our risk of significant catastrophic losses by maintaining high deductible reinsurance coverage with a highly-rated, unaffiliated insurance company (the “third-party reinsurer”). Because we remain liable to our policyholders in the event the third-party reinsurer is unable to pay its portion of the losses, we continually monitor the third-party reinsurer’s financial condition, including its ability to maintain high credit ratings. Intercompany transactions with our captive are eliminated in consolidation.

We report reinsurance premiums as a reduction to premium revenue, while related reinsurance recoveries are reported as a reduction to medical care costs. Reinsurance premiums amounted to $9 million, $17 million, and $16 million for the years ended December 31, 2020, 2019, and 2018, respectively. Reinsurance recoveries amounted to $23 million, $18 million, and $33 million for the years ended December 31, 2020, 2019, and 2018, respectively. Reinsurance recoverable of $17 million, $21 million, and $31 million, as of December 31, 2020, 2019, and 2018, respectively, is included in “Receivables” in the accompanying consolidated balance sheets.

Premium Deficiency Reserves on Loss Contracts

We assess the profitability of our contracts to determine if it is probable that a loss will be incurred in the future by reviewing current results and forecasts. For purposes of this assessment, contracts are grouped in a manner consistent with our method of acquiring, servicing and measuring the profitability of such contracts. A premium deficiency is recognized if anticipated future medical care and administrative costs exceed anticipated future premium revenue, investment income and reinsurance recoveries. In the third quarter of 2020, we recognized a premium deficiency reserve (“PDR”) of $10 million for our Medicaid contract in Puerto Rico, $4 million of which was amortized in the fourth quarter of 2020 to offset losses the PDR was established to cover. As described in Note 1, “Organization and Basis of Presentation,” we exited Puerto Rico’s Medicaid program when our contract expired on October 31, 2020. No premium deficiency reserves were recorded as of December 31, 2019.

Income Taxes

We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates expected to be in effect during the year in which the basis differences reverse. Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. For further discussion and disclosure, see Note 12, “Income Taxes.”

Taxes Based on Premiums

Health Insurer Fee (“HIF”). Under the Affordable Care Act, the federal government imposed an annual fee, or excise tax, on health insurers for each calendar year (the “HIF”).

The HIF was 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, and was not deductible for income tax purposes. Our HIF liability for 2020 was $277 million, which was settled in September 2020. Public Law No. 115-120 provided for a HIF moratorium in 2019; therefore, there was no HIF incurred or reimbursed in that year. Due to the reinstatement of the HIF in 2020, our effective tax rate was higher in 2020 compared with 2019. The Further Consolidated Appropriations Act, 2020 repealed the HIF effective for years after 2020.

Premium and Use Tax. Certain of our health plans are assessed a tax based on premium revenue collected. The premium revenues we receive from these states include the premium tax assessment. We have reported these taxes on a gross basis, as premium tax revenue and as premium tax expenses in the consolidated statements of income.

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 in which our health plan subsidiaries operate.

Risks and Uncertainties

Our profitability depends in large part on our ability to accurately predict and effectively manage medical care costs. We continually review our medical costs in light of our underlying claims experience and revised actuarial data. However, several factors could adversely affect medical care costs. These factors, which include changes in healthcare practices, inflation, new technologies, major epidemics, natural disasters, and malpractice litigation, are beyond our control and may have an adverse effect on our ability to accurately predict and effectively control medical care costs. Costs in excess of those anticipated could have a material adverse effect on our financial condition, results of operations, or cash flows.

We operate health plans primarily as a direct contractor with the states, and in Los Angeles County, California, as a subcontractor to another health plan holding a direct contract with the state. We are therefore dependent upon a relatively small number of contracts to support our revenue. The loss of any one of those contracts could have a material adverse effect on our financial position, results of operations, or cash flows. In addition, our ability to arrange for the provision of medical services to our members is dependent upon our ability to develop and maintain adequate provider networks. Our inability to develop or maintain such networks might, in certain circumstances, have a material adverse effect on our financial position, results of operations, or cash flows.

The following table summarizes premium revenue by state health plan for the periods presented:


	Year Ended December 31,
	2020				2019				2018
	Amount		% of Total		Amount		% of Total		Amount		% of Total
	(Dollars in millions)
California	$	2,109	11.5	%	$	2,266	14.0	%	$	2,150	12.2	%
Florida	643		3.5		734		4.5		1,790		10.2
Illinois	1,328		7.3		1,002		6.2		793		4.5
Kentucky	654		3.6		—		—		—		—
Michigan	1,587		8.7		1,624		10.0		1,601		9.1
Ohio	2,962		16.2		2,553		15.8		2,388		13.6

Texas	3,085		16.9		2,991		18.5		3,244		18.4
Washington	3,169		17.3		2,695		16.6		2,361		13.4
Other (1)	2,762		15.0		2,343		14.4		3,285		18.6
Total	$	18,299	100.0	%	$	16,208	100.0	%	$	17,612	100.0	%

_______________________

(1)“Other” includes the Idaho, Mississippi, New Mexico, New York, Puerto Rico, South Carolina, Utah and Wisconsin health plans, which were immaterial to our consolidated results of operations.

Recent Accounting Pronouncements Adopted

Credit Losses. In June 2016, the Financial Accounting Standards Board (“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 the London Interbank Offered Rate (“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.

Net Income Per Share

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Net Income Per Share

The following table sets forth the calculation of basic and diluted net income per share:


	Year Ended December 31,
	2020		2019		2018
	(In millions, except net income per share)
Numerator:
Net income	$	673	$	737	$	707
Denominator:
Shares outstanding at the beginning of the period	61.9		62.1		59.3
Weighted-average number of shares issued:
Stock purchases	(3.0)		—		—
Stock-based compensation	0.1		0.1		0.2
Exchange of convertible senior notes (1)	—		—		1.4
Conversion of convertible senior notes (1)	—		—		0.2
Denominator for basic net income per share	59.0		62.2		61.1
Effect of dilutive securities:
Stock-based compensation	0.9		0.6		0.3
Warrants (2)	—		1.4		4.8
Convertible senior notes (1)	—		—		0.4
Denominator for diluted net income per share	59.9		64.2		66.6

Net income per share - Basic (3)	$	11.40	$	11.85	$	11.57
Net income per share - Diluted (3)	$	11.23	$	11.47	$	10.61

_______________________________

(1)“Convertible senior notes” in this table refer to the 1.625% convertible senior notes due 2044 that were settled in 2018.

(2)For more information regarding the warrants, including partial termination transactions, refer to Note 13, “Stockholders' Equity.” The dilutive effect of all potentially dilutive common shares is calculated using the treasury stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income per share because to do so would have been anti-dilutive.

(3)Source data for calculations in thousands.

Business Combinations

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Business Combinations

In the last half of 2020, we closed on three business combinations in the Health Plans segment, consistent with our strategy to grow in our existing markets and expand into new markets. For these transactions, we applied the acquisition method of accounting, where the total purchase price was allocated, or preliminarily allocated, to the tangible and intangible assets acquired and liabilities assumed, based on their fair values as of the acquisition dates. We expect to complete the final determination of the purchase price allocations as soon as practicable, but no later than one year following the acquisitions’ closing dates in accordance with Accounting Standards Codification Topic 805, Business Combinations. Measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date.

Acquisition costs amounted to $16 million in the aggregate for the year ended December 31, 2020, and were recorded as “General and administrative expenses” in the accompanying consolidated statements of income.

Magellan Complete Care. On December 31, 2020, we closed on our acquisition of 100% of the outstanding equity interests of the Magellan Complete Care line of business of Magellan Health, Inc., for total purchase consideration of approximately $1,037 million. Total purchase consideration paid in cash amounted to $1,008 million, which consisted of the base purchase price of $850 million, plus approximately $158 million in preliminary closing adjustments, primarily relating to excess regulatory capital. Total purchase consideration also included assumed liabilities of $29 million.

Magellan Complete Care is a managed care organization serving members in six states, including Medicaid members in Arizona and statewide in Virginia, and integrated acute care members in Florida. Through its Senior Whole Health branded plans, Magellan Complete Care provides fully integrated plans for Medicaid and Medicare dual beneficiaries in Massachusetts, as well as managed long-term care in New York. As of December 31, 2020, Magellan Complete Care served approximately 200,000 members in its managed care plans. Magellan Complete Care also provides consultative services to participants who self-direct their care through Wisconsin’s long-term services and supports (“LTSS”) program. For the year ended December 31, 2020, Magellan Complete Care’s total 2020 revenue was approximately $2.9 billion.

Because this acquisition closed on December 31, 2020, Magellan Complete Care’s operating results were insignificant to our consolidated results of operations for the year ended December 31, 2020. If we had acquired Magellan Complete Care on January 1, 2019, our total revenue and earnings for the year ended December 31, 2019, would have been approximately $19.6 billion and $772 million, respectively, and our total revenue and earnings for the year ended December 31, 2020, would have been approximately $22.4 billion and $833 million, respectively. These amounts were computed after adjusting the results of Magellan Complete Care to reflect the additional amortization that would have been charged assuming the fair value adjustments to intangible assets and liabilities had been applied beginning on January 1, 2019, together with the consequential tax effects. The pro forma results do not reflect any anticipated synergies, efficiencies, or other cost savings of the acquisition. Accordingly, the unaudited pro forma financial information is not indicative of the results if the acquisition had been completed on January 1, 2020, or January 1, 2019, and is not a projection of future results.

The valuation of the assets acquired, and liabilities assumed has not yet been finalized because the acquisition closed on December 31, 2020. As a result, provisional estimates have been recorded and are subject to change, primarily for accounts that include the use of estimates, such as medical claims and benefits payable, receivables, amounts due government agencies, certain acquired intangible assets, and certain tax assets and liabilities.

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such assets include synergies we expect to achieve, such as the use of our existing infrastructure to support the added membership, and future economic benefits arising from the assembled workforce. Approximately 27% of the goodwill is deductible for income tax purposes. The following table summarizes the provisional fair values assigned to assets acquired and liabilities assumed.


	December 31, 2020
	(In millions)
Assets acquired:
Cash and cash equivalents	$	310
Investments	312
Receivables	166
Prepaid expenses and other current assets	16
Property and equipment	3
Intangible assets	191
Goodwill	488
Restricted investments	49
Other assets	14
Liabilities assumed:
Medical claims and benefits payable	(294)
Amounts due government agencies	(143)
Accounts payable, accrued and other long-term liabilities	(84)
Deferred income taxes	(20)
Net purchase price paid	$	1,008

Kentucky. On September 1, 2020, we closed on the acquisition of certain assets of Passport Health Plan, Inc., a Medicaid health plan. Effective on that same date, the Kentucky Medicaid agency approved the novation of Passport’s Medicaid contract to Molina Healthcare of Kentucky, Inc., thereby ensuring continuity of care for Passport’s Medicaid members. As of December 31, 2020, our Kentucky health plan had 337,000 Medicaid

members. The total purchase price was $66 million, which included our initial cash payment of $20 million in September 2020, plus $46 million in contingent consideration payable to the seller. See further information regarding contingent consideration in Note 5, “Fair Value Measurements.” We recorded goodwill of $30 million, all of which is deductible for income tax purposes. The goodwill recorded relates to future economic benefits arising from the assembled workforce, and the future growth associated with the member contract rights that are incremental to the contract rights identified.

New York. On July 1, 2020, we closed on the acquisition of certain assets of YourCare Health Plan, Inc., a Medicaid health plan operating in certain regions of New York, for a cash purchase price of $42 million. As a result of this transaction, we added approximately 47,000 Medicaid members in New York. We recorded goodwill of $31 million, substantially all of which is deductible for income tax purposes. The goodwill recorded relates to future economic benefits arising from expected synergies to be achieved, including the use of our existing infrastructure to support the added membership.

Intangible Assets Acquired

The table below presents intangible assets acquired, by major class, for the three acquisitions.


	Fair Value		Life			Weighted-Average Life

	(In millions)		(Years)			(Years)
Contract rights - member list	$	193	5	-	10	5.3
Provider network	27				10	10.0
Trade name	15		10	-	16	15.4
	$	235				6.5

Fair Value Measurements

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

We consider the carrying amounts of current assets and current liabilities 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 a three-tier fair value hierarchy as follows:

Level 1 — Observable Inputs. Level 1 financial instruments are actively traded and therefore the fair value for these securities is based on quoted market prices for identical securities in active markets.

Level 2 — Directly or Indirectly Observable Inputs. Fair value for these investments is determined using a market approach based on quoted prices for similar securities in active markets or quoted prices for identical securities in inactive markets.

Level 3 — Unobservable Inputs. Level 3 financial instruments are valued using unobservable inputs that represent management’s best estimate of what market participants would use in pricing the financial instrument at the measurement date. As of December 31, 2020, our Level 3 financial instruments consisted of contingent consideration liabilities. As of December 31, 2019, our Level 3 financial instruments consisted of derivative financial instruments.

The net changes in fair value of Level 3 financial instruments are reported in “Other” operating expenses in our consolidated statements of income. In the year ended December 31, 2020, we recognized a loss of $6 million, primarily for the increase in the fair value of the contingent consideration liability described below, because the opening 2021 enrollment for our Kentucky health plan was higher than our estimate as of September 30, 2020. In the year ended December 31, 2019, the net changes in fair value of Level 3 financial instruments were insignificant to our results of operations.

Our financial instruments measured at fair value on a recurring basis at December 31, 2020, were as follows:


	Total		Level 1		Level 2		Level 3
	(In millions)
Corporate debt securities	$	1,256	$	—	$	1,256	$	—
Mortgage-backed securities	392		—		392		—
Asset-backed securities	132		—		132		—
Municipal securities	68		—		68		—

U.S. Treasury notes	27		—		27		—


Total assets	$	1,875	$	—	$	1,875	$	—

Contingent consideration liabilities	$	46	$	—	$	—	$	46
Total liabilities	$	46	$	—	$	—	$	46

Our financial instruments measured at fair value on a recurring basis at December 31, 2019, were as follows:


	Total		Level 1		Level 2		Level 3
	(In millions)
Corporate debt securities	$	1,178	$	—	$	1,178	$	—
Mortgage-backed securities	420		—		420		—
Asset-backed securities	127		—		127		—
Municipal securities	78		—		78		—
U.S. Treasury notes	86		—		86		—
Government-sponsored enterprise securities (“GSEs”)	49		—		49		—
Certificate of deposit	1		—		1		—
Other	7		—		7		—
Subtotal	1,946		—		1,946		—
Call option derivative asset	29		—		—		29
Total assets	$	1,975	$	—	$	1,946	$	29

Conversion option derivative liability	$	29	$	—	$	—	$	29
Total liabilities	$	29	$	—	$	—	$	29

Contingent Consideration Liabilities

As of December 31, 2020, our Level 3 financial instruments recorded at fair value on a recurring basis included contingent consideration liabilities of $46 million, in connection with the Kentucky acquisition described in Note 4, “Business Combinations.” As of December 31, 2020, the contingent consideration fair value was estimated primarily based on an amount we expect to pay the seller for members enrolled in our Kentucky health plan as of January 1, 2021, over a minimum threshold. Half this amount is payable later in 2021, with the remainder payable in early 2022, subject to review and agreement among us and the seller. The second half payment is contingent upon the outcome of certain legal challenges. The current portion is reported in “Accounts payable, accrued liabilities and other,” and the non-current portion is reported in “Other long-term liabilities,” in the accompanying consolidated balance sheets. Contingent consideration liabilities are remeasured to fair value each quarter until the contingencies are resolved with fair value adjustments, if any, recorded to operations.

Derivatives

The following table summarizes the fair values and the presentation of our derivative financial instruments in the accompanying consolidated balance sheets:


		December 31,
	Balance Sheet Location	2020		2019
		(In millions)
Derivative asset:
Call Option	Current assets: Prepaid expenses and other current assets	$	—	$	29
Derivative liability:
Conversion Option	Current liabilities: Accounts payable, accrued liabilities and other	$	—	$	29

Our derivative financial instruments did not qualify for hedge treatment. 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 year ended December 31, 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 11, “Debt,” and 13 “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.


	December 31, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
4.375% Notes	$	789	$	843	$	—	$	—
5.375% Notes	697		742		696		745
3.875% Notes	641		691		—		—
4.875% Notes (1)	—		—		327		340
Term Loan Facility (1)	—		—		220		220
1.125% Convertible Notes (1)	—		—		12		42
Total	$	2,127	$	2,276	$	1,255	$	1,347

_______________________________

(1) For more information on debt repayments, refer to Note 11, “Debt.”

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Investments

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Investments

Available-for-Sale

We consider all of our investments classified as current assets to be available-for-sale. The following tables summarize our current investments as of the dates indicated:


	December 31, 2020
	Amortized Cost		Gross Unrealized				Estimated Fair Value
			Gains		Losses
	(In millions)
Corporate debt securities	$	1,220	$	36	$	—	$	1,256
Mortgage-backed securities	383		10		1		392
Asset-backed securities	130		2		—		132
Municipal securities	66		2		—		68

U.S. Treasury notes	27		—		—		27


Total	$	1,826	$	50	$	1	$	1,875


	December 31, 2019
	Amortized Cost		Gross Unrealized				Estimated Fair Value
			Gains		Losses
	(In millions)
Corporate debt securities	$	1,174	$	5	$	1	$	1,178
Mortgage-backed securities	420		1		1		420
Asset-backed securities	126		1		—		127
Municipal securities	78		—		—		78
U.S. Treasury notes	86		—		—		86
GSEs	49		—		—		49
Certificate of deposit	1		—		—		1
Other	7		—		—		7
Total	$	1,941	$	7	$	2	$	1,946

The contractual maturities of our current investments as of December 31, 2020 are summarized below:


	Amortized Cost		Estimated Fair Value
	(In millions)
Due in one year or less	$	474	$	475
Due after one year through five years	892		926
Due after five years through ten years	132		137
Due after ten years	328		337
Total	$	1,826	$	1,875

Gross realized gains and losses from sales of available-for-sale securities are calculated under the specific identification method and are included in investment income. Gross realized investment gains amounted to $6 million and $13 million in the years ended December 31, 2020 and 2019, respectively. Gross realized investment losses were insignificant in the years ended December 31, 2020 and 2019. Gross realized investment gains and losses for the year ended December 31, 2018 were insignificant.

We have determined that unrealized losses at December 31, 2020 and 2019 primarily resulted from fluctuating interest rates, rather than a deterioration of the creditworthiness of the issuers. Therefore, we determined that an allowance for credit losses was not necessary. So long as we maintain the intent and ability to hold these securities to maturity, we are unlikely to experience losses. In the event that we dispose of these securities before maturity, we expect that realized losses, if any, will be insignificant.

The following table summarizes those available-for-sale investments that have been in a continuous loss position for less than 12 months. No investments have been in a continuous loss position for 12 months or more as of December 31, 2020, and 2019.


	In a Continuous Loss Position for Less than 12 Months as of December 31, 2020					In a Continuous Loss Position for Less than 12 Months as of December 31, 2019
	Estimated Fair Value		Unrealized Losses		Total Number of Positions	Estimated Fair Value		Unrealized Losses		Total Number of Positions
	(Dollars in millions)
Mortgage-backed securities	$	77	$	1	21	$	143	$	1	72
Corporate debt securities	—		—		—	222		1		167






Total	$	77	$	1	21	$	365	$	2	239

Held-to-Maturity

Pursuant to the regulations governing our Health Plans segment subsidiaries, we maintain statutory deposits and deposits required by government authorities primarily in cash, cash equivalents, and U.S. Treasury securities. We also maintain restricted investments as protection against the insolvency of certain capitated providers. The use of these funds is limited as required by regulation in the various states in which we operate, or as needed in the event of insolvency of capitated providers. Therefore, such investments are reported as “Restricted investments” in the accompanying consolidated balance sheets.

We have the ability to hold these restricted investments until maturity, and as a result, we would not expect the value of these investments to decline significantly due to a sudden change in market interest rates. Our held-to-maturity restricted investments are carried at amortized cost, which approximates fair value, of which $134 million will mature in one year or less, and $2 million will mature in after one through five years. The following table presents the balances of restricted investments:


	December 31,
	2020		2019
	(In millions)

Florida	$	12	$	12


New Mexico	21		21

New York	14		9
Ohio	16		12



Other	24		25
Magellan Complete Care	49		—
Total Health Plans segment	$	136	$	79

Property, Equipment, and Capitalized Software, Net

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property, Equipment, and Capitalized Software, Net

Property, Equipment, and Capitalized Software, Net Property and equipment are stated at historical cost. Replacements and major improvements are capitalized, and repairs and maintenance are charged to expense as incurred. Software developed for internal use is capitalized. Furniture and equipment are generally depreciated using the straight-line method over estimated useful lives ranging from three to seven years. Software is generally amortized over its estimated useful life of three years. Leasehold improvements are amortized over the term of the lease, or over their useful lives from five to 10 years, whichever is shorter. Buildings are depreciated over their estimated useful lives of 31.5 to 40 years.

A summary of property, equipment, and capitalized software is as follows:


	December 31,
	2020		2019
	(In millions)
Capitalized software	$	475	$	421
Furniture and equipment	221		213
Building and improvements	49		49
Land	4		4
Magellan Complete Care	3		—
Total cost	752		687
Less: accumulated amortization - capitalized software	(385)		(351)
Less: accumulated depreciation and amortization - furniture, equipment, building, and improvements	(192)		(179)
Total accumulated depreciation and amortization	(577)		(530)
ROU assets - finance leases	216		228
Property, equipment, and capitalized software, net	$	391	$	385

The following table presents all depreciation and amortization recognized in our consolidated statements of income:


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Recorded in depreciation and amortization:
Amortization of capitalized software	$	38	$	33	$	42
Amortization of finance leases	19		17		—
Depreciation and amortization of furniture, equipment, building, and improvements	16		21		36
Amortization of intangible assets	15		18		21
Subtotal	88		89		99
Recorded in cost of service revenue:
Amortization of capitalized software and deferred contract costs	—		—		28
Total depreciation and amortization recognized	$	88	$	89	$	127

Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

We are a party to operating and finance leases primarily for our corporate and health plan offices. Our operating leases have remaining lease terms up to 8 years, some of which include options to extend the leases for up to 10 years. As of December 31, 2020, the weighted average remaining operating lease term is 4 years.

Our finance leases have remaining lease terms of 1 year to 18 years, some of which include options to extend the leases for up to 25 years. As of December 31, 2020, the weighted average remaining finance lease term is 15 years.

As of December 31, 2020, the weighted-average discount rate used to compute the present value of lease payments was 5.2% for operating lease liabilities, and 6.5% for finance lease liabilities. The components of lease expense for the years ended December 31, 2020, and 2019, are presented in the following table. Rental expense related to operating leases amounted to $62 million for the year ended December 31, 2018.


	Year Ended December 31,
	2020		2019
	(In millions)
Operating lease expense	$	28	$	34

Finance lease expense:
Amortization of ROU assets	$	19	$	17
Interest on lease liabilities	15		15
Total finance lease expense	$	34	$	32

Supplemental consolidated cash flow information related to leases follows:


	Year Ended December 31,
	2020		2019
	(In millions)
Cash used in operating activities:
Operating leases	$	30	$	36
Finance leases	15		15
Cash used in financing activities:
Finance leases	9		6
ROU assets recognized in exchange for lease obligations:
Operating leases	28		99
Finance leases	$	7	$	245

Supplemental information related to leases, including location of amounts reported in the accompanying consolidated balance sheets, follows:


	December 31,
	2020		2019
	(In millions)
Operating leases:
ROU assets
Other assets	$	58	$	65
Other assets - Magellan Complete Care	13		—
Total other assets	$	71	$	65
Lease liabilities
Accounts payable and accrued liabilities (current)	$	21	$	25
Other long-term liabilities (non-current)	42		48
Magellan Complete Care	13		—
Total operating lease liabilities	$	76	$	73
Finance leases:
ROU assets
Property, equipment, and capitalized software, net	$	216	$	228
Lease liabilities
Accounts payable and accrued liabilities (current)	$	12	$	8
Finance lease liabilities (non-current)	225		231
Total finance lease liabilities	$	237	$	239

Maturities of lease liabilities as of December 31, 2020, were as follows:


	Operating		Finance
	Leases		Leases
	(In millions)
2021	$	29	$	26
2022	20		24
2023	16		22
2024	10		22
2025	6		23
Thereafter	3		266
Subtotal - undiscounted lease payments	84		383
Less imputed interest	(8)		(146)
Total	$	76	$	237

Leases


	Year Ended December 31,
	2020		2019
	(In millions)
Operating lease expense	$	28	$	34

Finance lease expense:
Amortization of ROU assets	$	19	$	17
Interest on lease liabilities	15		15
Total finance lease expense	$	34	$	32

Supplemental consolidated cash flow information related to leases follows:


	Year Ended December 31,
	2020		2019
	(In millions)
Cash used in operating activities:
Operating leases	$	30	$	36
Finance leases	15		15
Cash used in financing activities:
Finance leases	9		6
ROU assets recognized in exchange for lease obligations:
Operating leases	28		99
Finance leases	$	7	$	245

Supplemental information related to leases, including location of amounts reported in the accompanying consolidated balance sheets, follows:


	December 31,
	2020		2019
	(In millions)
Operating leases:
ROU assets
Other assets	$	58	$	65
Other assets - Magellan Complete Care	13		—
Total other assets	$	71	$	65
Lease liabilities
Accounts payable and accrued liabilities (current)	$	21	$	25
Other long-term liabilities (non-current)	42		48
Magellan Complete Care	13		—
Total operating lease liabilities	$	76	$	73
Finance leases:
ROU assets
Property, equipment, and capitalized software, net	$	216	$	228
Lease liabilities
Accounts payable and accrued liabilities (current)	$	12	$	8
Finance lease liabilities (non-current)	225		231
Total finance lease liabilities	$	237	$	239

Maturities of lease liabilities as of December 31, 2020, were as follows:


	Operating		Finance
	Leases		Leases
	(In millions)
2021	$	29	$	26
2022	20		24
2023	16		22
2024	10		22
2025	6		23
Thereafter	3		266
Subtotal - undiscounted lease payments	84		383
Less imputed interest	(8)		(146)
Total	$	76	$	237

Goodwill and Intangible Assets, Net

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, Net

Goodwill

The following table presents the changes in the carrying amounts of goodwill, for the periods presented. All goodwill is recorded in the Health Plans segment.


	(In millions)
Balance, December 31, 2018	$	143
Acquisitions	—
Dispositions	—
Impairment and other	—
Balance, December 31, 2019	143
Acquisitions	549
Dispositions	—
Impairment and other	—
Balance, December 31, 2020	$	692

For the Health Plans segment, gross goodwill amounted to $994 million and $445 million, as of December 31, 2020 and 2019, respectively. Accumulated impairment losses amounted to $302 million at each of December 31, 2020 and 2019, respectively. The changes in the carrying amounts of both goodwill and intangible assets, net, in 2020, was due to the acquisitions described in Note 4, “Business Combinations.”

Intangible Assets, Net

The following table provides the details of identified intangible assets, by major class, for the periods presented. All intangible assets, net, are recorded in the Health Plans segment.


	December 31, 2020						December 31, 2019
	Cost		Accumulated Amortization		Carrying Amount		Cost		Accumulated Amortization		Carrying Amount
	(In millions)
Contract rights and licenses	$	370	$	168	$	202	$	179	$	156	$	23
Provider networks	47		15		32		20		14		6
Trade name	15		—		15		—		—		—
Total	$	432	$	183	$	249	$	199	$	170	$	29

As of December 31, 2020, we estimate that our intangible asset amortization will be approximately $46 million in 2021, $44 million in 2022, 2023 and 2024, and $43 million in 2025.

Medical Claims and Benefits Payable

12 Months Ended

Dec. 31, 2020

Insurance [Abstract]

Medical Claims and Benefits Payable

The following table provides the details of our medical claims and benefits payable as of the dates indicated.


	December 31,
	2020		2019		2018
	(In millions)
Fee-for-service claims incurred but not paid (“IBNP”)	$	1,647	$	1,406	$	1,562
Pharmacy payable	157		126		115
Capitation payable	70		55		52
Other	528		267		232
Magellan Complete Care	294		—		—
Total	$	2,696	$	1,854	$	1,961

“Other” medical claims and benefits payable include 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 $235 million, $132 million and $107 million, as of December 31, 2020, 2019, and 2018, 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 years” represent the amount by which our original estimate of medical claims and benefits payable at the beginning of the year were more than the actual liabilities, based on information (principally the payment of claims) developed since those liabilities were first reported.


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Medical claims and benefits payable, beginning balance	$	1,854	$	1,961	$	2,192
Components of medical care costs related to:
Current year	15,939		14,176		15,478
Prior years (1)	(119)		(271)		(341)
Total medical care costs	15,820		13,905		15,137
Payments for medical care costs related to:
Current year	13,871		12,554		13,671
Prior years	1,507		1,482		1,710
Total paid	15,378		14,036		15,381
Acquisition - Magellan Complete Care	294		—		—
Change in non-risk and other provider payables	106		24		13
Medical claims and benefits payable, ending balance	$	2,696	$	1,854	$	1,961

________________

(1)December 31, 2018, includes the 2018 benefit of the 2017 Marketplace CSR reimbursement of $81 million.

Our estimates of medical claims and benefits payable recorded at December 31, 2020, 2019 and 2018 developed favorably by approximately $119 million, $271 million and $341 million in 2020, 2019 and 2018, respectively.

The favorable prior year development recognized in 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 were lower than our original estimates in 2019, which was not discernible until additional information was provided, and as claims payments were processed.

The favorable prior year development recognized in 2019 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 2019 were lower than our original estimates in 2018, which was not discernible until additional information was provided, and as claims payments were processed.

The favorable prior year development recognized in 2018 includes a benefit of approximately $81 million in reduced medical care costs relating to Marketplace CSR subsidies for 2017 dates of service. The remainder of the favorable

prior period development was primarily due to lower than expected utilization of medical services by our Medicaid and Marketplace members and improved operating performance. Consequently, the ultimate costs recognized in 2018 were lower than our original estimates in 2017, which was not discernible until additional information was provided, and as claims payments were processed.

The following tables provide information about incurred and paid claims development as of December 31, 2020, as well as cumulative claims frequency and the total of incurred but not paid claims liabilities. The cumulative claim frequency is measured by claim event, and includes claims covered under capitated arrangements.


Incurred Claims and Allocated Claims Adjustment Expenses							Total IBNP		Cumulative number of reported claims
Benefit Year	2018		2019		2020

	(Unaudited)		(Unaudited)
	(In millions)
2018	$	15,478	$	15,245	$	15,233	$	11	110
2019			14,176		14,083		27		100
2020					15,939		1,593		93
					$	45,255	$	1,631


Cumulative Paid Claims and Allocated Claims Adjustment Expenses
Benefit Year	2018		2019		2020

	(Unaudited)		(Unaudited)
	(In millions)
2018	$	13,752	$	15,220	$	15,222
2019			12,554		14,056
2020					13,871
					$	43,149

The following table represents a reconciliation of claims development to the aggregate carrying amount of the liability for medical claims and benefits payable.


	2020
	(In millions)
Incurred claims and allocated claims adjustment expenses	$	45,255
Less: cumulative paid claims and allocated claims adjustment expenses	(43,149)
All outstanding liabilities before 2018	16
Magellan Complete Care	294
Non-risk and other provider payables	280
Medical claims and benefits payable	$	2,696

Debt

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Debt

Contractual maturities of debt, as of December 31, 2020, are illustrated in the following table. All amounts represent the principal amounts of the debt instruments outstanding.


	Total		2021		2022		2023		2024		2025		Thereafter

	(In millions)
4.375% Notes due 2028	$	800	$	—	$	—	$	—	$	—	$	—	$	800
5.375% Notes due 2022	700		—		700		—		—		—		—
3.875% Notes due 2030	650		—		—		—		—		—		650
Total	$	2,150	$	—	$	700	$	—	$	—	$	—	$	1,450

All 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:


	December 31,
	2020		2019
	(In millions)
Current portion of long-term debt:
1.125% Convertible Notes, net of unamortized discount	$	—	$	12
Term loan facility	—		6
Total (1)	$	—	$	18
Non-current portion of long-term debt:
4.375% Notes due 2028	$	800	$	—
5.375% Notes due 2022	700		700
3.875% Notes due 2030	650		—
4.875% Notes due 2025	—		330
Term loan facility	—		214

Less: debt issuance costs	(23)		(7)
Total	$	2,127	$	1,237

______________________

(1)Reported in “Accounts payable, accrued liabilities and other.”

Credit Agreement

In June 2020, we entered into a credit agreement (the “Credit Agreement”) that replaced our prior credit agreement. The terms of the Credit Agreement are substantially similar to the terms of the prior agreement. Among various provisions, significant changes incorporated to the Credit Agreement included:

•An increase of the revolving credit facility (the “Credit Facility”) from $500 million to $1.0 billion;

•A $15 million swingline sub-facility and a $100 million letter of credit sub-facility;

•An increase of incremental term loans available to finance certain acquisitions from $150 million to $500 million, plus an unlimited amount as long as our consolidated net leverage ratio is not greater than 3:1;

•The ability to engage in acquisitions where the consummation of such acquisitions is not conditioned on the availability of, or on obtaining, third-party financing;

•Termination of the term loan facility under the prior credit agreement; and

•LIBOR succession provisions.

The Credit Agreement has a term of five years, and all amounts outstanding will be due and payable on June 8, 2025. 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 December 31, 2020, we were in compliance with all financial and non-financial covenants under the Credit Agreement and other long-term debt. As of December 31, 2020, no amounts were outstanding under the Credit Facility.

High-Yield Senior Notes

Our high-yield senior notes are described below. Each of these notes are senior unsecured obligations of Molina and rank equally in right of payment with all existing and future senior debt, and senior to all existing and future subordinated debt of Molina. In addition, each of the notes contain customary non-financial covenants and change of control provisions.

The indentures governing the high-yield senior 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.

4.375% Notes due 2028. On June 2, 2020, we completed the private offering of $800 million aggregate principal amount of senior notes (the “4.375% Notes”) due June 15, 2028, unless earlier redeemed. The 4.375% Notes contain optional early redemption provisions, with redemption prices in excess of par. Interest, at a rate of 4.375%

per annum, is payable semiannually in arrears on June 15 and December 15 of each year. A portion of the net proceeds from the 4.375% Notes offering was used to repay $600 million principal amount outstanding under the term loan facility of our prior credit agreement, and the balance is intended to be used for general corporate purposes. Deferred issuance costs amounted to $11 million.

5.375% Notes due 2022. We have $700 million aggregate principal amount of senior notes (the “5.375% Notes”) outstanding as of December 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.

3.875% Notes due 2030. On November 17, 2020, we completed the private offering of $650 million aggregate principal amount of senior notes (the “3.875% Notes”) due November 15, 2030, unless earlier redeemed. The 3.875% Notes contain optional early redemption provisions, with redemption prices in excess of par. Interest, at a rate of 3.875% per annum, is payable semiannually in arrears on May 15 and November 15 of each year, commencing on May 15, 2021. A portion of the net proceeds from the 3.875% Notes offering was used to repay $330 million principal amount outstanding under the 4.875% Notes, and the balance is intended to be used for general corporate purposes. Deferred issuance costs amounted to $10 million.

4.875% Notes due 2025. In December 2020, we completed the early redemption of the entire $330 million aggregate principal amount of senior notes (the “4.875% Notes”) that would have been due June 15, 2025. In accordance with the indenture governing such notes, the 4.875% Notes were settled at 100% of par, plus an early redemption premium which amounted to $8 million, plus accrued and unpaid interest. In conjunction with the redemption, we wrote off $3 million in unamortized deferred issuance costs directly related to the 4.875% Notes.

1.125% Cash Convertible Senior Notes due 2020

In January 2020, we paid $39 million to settle the $12 million remaining principal amount outstanding of the 1.125% cash convertible senior notes due January 15, 2020 (the “1.125% Convertible Notes”), and settled the related conversion option.

Other Expenses (Income), Net

In the year ended December 31, 2020, we recognized an aggregate loss on debt repayment of $15 million including costs incurred in repayment of the term loan facility, the 4.875% Notes repayment costs described above, and other financing transactions. In the year ended December 31, 2019, we recognized a gain on debt repayment of $15 million in connection with the 1.125% Convertible Notes repayment transactions. These amounts are reported in “Other expenses (income), net” in the accompanying consolidated statements of income.

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income tax expense for continuing operations consisted of the following:


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Current:
Federal	$	281	$	204	$	272
State	26		12		18
Foreign	—		9		8
Total current	307		225		298
Deferred:
Federal	(13)		5		(3)
State	(7)		6		(3)
Foreign	1		(1)		—
Total deferred	(19)		10		(6)
Income tax expense	$	288	$	235	$	292

A reconciliation of the U.S. federal statutory income tax rate to the combined effective income tax rate for continuing operations is as follows:


	Year Ended December 31,
	2020		2019		2018
Statutory federal tax (benefit) rate	21.0	%	21.0	%	21.0	%
State income provision (benefit), net of federal	1.6		1.4		1.2

Nondeductible health insurer fee (“HIF”)	6.1		—		7.3
Nondeductible compensation	1.1		1.2		0.7


Worthless stock deduction	—		—		(1.0)




Other	0.2		0.6		—
Effective tax expense rate	30.0	%	24.2	%	29.2	%

The effective tax rate was not impacted by the HIF in 2019 given the HIF moratorium. Our effective tax rate is based on expected income, statutory tax rates, and tax planning opportunities available to us in the various jurisdictions in which we operate. Management estimates and judgments are required in determining our effective tax rate. We are routinely under audit by federal, state, or local authorities regarding the timing and amount of deductions, nexus of income among various tax jurisdictions, and compliance with federal, state, foreign, and local tax laws.

Deferred tax assets and liabilities are classified as non-current. Significant components of our deferred tax assets and liabilities as of December 31, 2020 and 2019 were as follows:


	December 31,
	2020		2019
	(In millions)
Accrued expenses and reserve liabilities	$	52	$	35
Other accrued medical costs	15		11
Net operating losses	11		13
Fixed assets and intangibles	—		26
Unearned premiums	18		11
Lease financing obligation	8		5
Tax credit carryover	7		11
Other	4		—
Valuation allowance	(17)		(24)
Total deferred income tax assets, net of valuation allowance	98		88
Fixed assets and intangibles	(7)		—
Prepaid expenses	(10)		(6)
Unrealized gains and losses	(12)		(1)
Other	—		(2)
Total deferred income tax liabilities	(29)		(9)
Net deferred income tax asset	$	69	$	79

At December 31, 2020, we had state net operating loss carryforwards of $189 million, which begin expiring in 2035.

At December 31, 2020, we had foreign net operating loss carryforwards of $5 million, which expire in 2031.

At December 31, 2020, we had California research and development and enterprise zone tax credit carryovers of $3 million, which will begin to expire in 2024, and foreign tax credit carryovers of $5 million, which expire in 2030.

We evaluate the need for a valuation allowance taking into consideration the ability to carry back and carry forward tax credits and losses, available tax planning strategies and future income, including reversal of temporary differences. We have determined that as of December 31, 2020, $17 million of deferred tax assets did not satisfy the recognition criteria. Therefore, we decreased our valuation allowance by $7 million, from $24 million at December 31, 2019, to $17 million as of December 31, 2020.

We recognize tax benefits only if the tax position is more likely than not to be sustained. We are subject to income taxes in the United States, Puerto Rico, and numerous state jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate.

The roll forward of our unrecognized tax benefits is as follows:


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Gross unrecognized tax benefits at beginning of period	$	(20)	$	(20)	$	(13)
Increases in tax positions for current year	—		—		(9)
Lapse in statute of limitations	—		—		2



Gross unrecognized tax benefits at end of period	$	(20)	$	(20)	$	(20)

The total amount of unrecognized tax benefits at December 31, 2020, 2019 and 2018 that, if recognized, would affect the effective tax rates is $18 million in each of those respective years. We expect that during the next 12 months it is reasonably possible that unrecognized tax benefit liabilities may decrease by as much as $10 million due to resolution of exams and refund claims.

Our continuing practice is to recognize interest and/or penalties related to unrecognized tax benefits in income tax expense. Amounts accrued for the payment of interest and penalties as of December 31, 2020, 2019 and 2018 were insignificant.

We are under examination by the IRS for calendar years 2015 through 2017 and may be subject to examination for calendar years 2018 and 2019. With a few exceptions, which are immaterial in the aggregate, we no longer are subject to state, local, and Puerto Rico tax examinations for years before 2015.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Stockholders' Equity

Stock Purchase Programs

In September 2020, our board of directors authorized the purchase of up to $500 million, in the aggregate, of our common stock. This program is funded with cash on hand and extends through December 31, 2021. The exact timing and amount of any repurchase is determined by management based on market conditions and share price, in addition to other factors, and subject to the restrictions relating to volume, price, and timing under applicable law. Under this program, pursuant to a Rule 10b5-1 trading plan, we purchased approximately 766,000 shares of our common stock for $159 million in November and December 2020 (average cost of $208.37 per share), including approximately 29,000 shares purchased for $6 million in late December 2020, and settled in early January 2021.

In 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 with existing cash on hand and was completed in March 2020. Under this program, pursuant to a Rule 10b5-1 trading plan, 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.

Subsequent Event

From January 1, 2021 through February 11, 2021, we purchased approximately 577,000 shares for $122 million (average cost of $211.65 per share).

Warrants

In connection with the 1.125% Convertible Notes settlement transaction described in Note 11, “Debt,” in the first quarter of 2020 we entered into privately negotiated agreements to terminate the associated 310,000 warrants outstanding for $30 million, 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 244,000 shares and 242,000 shares of common stock were issued, net of shares used to settle employees’ income tax obligations, during the years ended December 31, 2020, and 2019, respectively. Total share-based compensation expense is reported in “General and administrative expenses” in the accompanying consolidated statements of income, and summarized below.


	Year Ended December 31,
	2020				2019				2018
	(In millions)
	Pretax Charges		Net-of-Tax Amount		Pretax Charges		Net-of-Tax Amount		Pretax Charges		Net-of-Tax Amount
RSAs, PSAs and PSUs (defined below)	$	47	$	44	$	29	$	28	$	17	$	17
Employee stock purchase plan and stock options	10		9		10		9		10		9
Total	$	57	$	53	$	39	$	37	$	27	$	26

Equity Incentive Plan

At December 31, 2020, we had employee equity incentives outstanding under our 2019 Equity Incentive Plan (the “2019 EIP”). The 2019 EIP provides for awards, in the form of restricted and performance stock awards (“RSAs” and “PSAs”), performance units (“PSUs”), stock options, and other stock– or cash–based awards, to eligible persons who perform services for us. The 2019 EIP provides for the issuance of up to 2.9 million shares of our common stock.

Stock-based awards. RSAs, PSAs and PSUs are granted with a fair value equal to the market price of our common stock on the date of grant, and generally vest in equal annual installments over periods up to four years from the date of grant. Certain PSUs may vest in their entirety at the end of three-year performance periods, if their performance conditions are met. We generally recognize expense for RSAs, PSAs and PSUs on a straight-line basis. Activity for stock-based awards in the year ended December 31, 2020, is summarized below.


	RSAs	Weighted Average Grant Date Fair Value		PSUs	Weighted Average Grant Date Fair Value
Unvested balance, December 31, 2019	447,680	$	102.41	324,078	$	101.45
Granted	344,739	127.89		188,522	123.61
Vested	(172,675)	98.05		(7,368)	68.16
Forfeited	(34,660)	113.10		(33,323)	98.34
Unvested balance, December 31, 2020	585,084	$	118.07	471,909	$	111.04

As of December 31, 2020, total unrecognized compensation expense related to unvested RSAs and PSUs was $42 million, and $23 million, respectively, which we expect to recognize over a remaining weighted-average period of 2.2 years, and 1.2 years, respectively. This unrecognized compensation cost assumes an estimated forfeiture rate of 12.2% for non-executive employees as of December 31, 2020, based on actual forfeitures over the last 4 years.

The total grant date fair value of awards granted and vested is presented in the following table.


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Granted:
RSAs	$	44	$	33	$	28
PSUs	23		20		16
Total granted	$	67	$	53	$	44
Vested:
RSAs	$	22	$	19	$	15
PSAs	—		—		3
PSUs	1		2		—
Total vested	$	23	$	21	$	18

Stock Options. Stock option awards generally have an exercise price equal to the fair market value of our common stock on the date of grant, vest in equal annual installments over periods up to four years from the date of grant, and have a maximum term of ten years from the date of grant. Stock option activity for the year ended December 31, 2020, is summarized below.


	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual term
		(Per share)		(In millions)		(Years)
Stock options outstanding as of December 31, 2019 and December 31, 2020	405,000	$	64.79	$	60	6.4
Stock options exercisable and expected to vest as of December 31, 2020	405,000	$	64.79	$	60	6.4
Exercisable as of December 31, 2020	405,000	$	64.79	$	60	6.4

No stock options were granted or exercised in 2020, 2019, or 2018, and as of December 31, 2020, there was no unrecognized compensation expense related to unvested stock options.

The following is a summary of information about stock options outstanding and exercisable at December 31, 2020.


	Options Outstanding and Exercisable
	Number of Shares	Weighted-Average Remaining Contractual Life	Weighted-Average Exercise Price
		(Years)	(Per share)
Range of Exercise Prices
$33.02	30,000	2.2	$	33.02
$67.33	375,000	6.8	$	67.33
Total	405,000

Employee Stock Purchase Plans (“ESPP”)

Under our ESPP, eligible employees may purchase common shares at 85% of the lower of the fair market value of our common stock on either the first or last trading day of each six-month offering period. Each participant is limited to a maximum purchase of $25,000 (as measured by the fair value of the stock acquired) per year through payroll deductions. We estimate the fair value of the stock issued using a standard option pricing model. For the years ended December 31, 2020, 2019, and 2018, the inputs to this model were as follows: risk-free interest rates of approximately 0.2% to 2.3%; expected volatility of approximately 31% to 51%, dividend yields of 0%, and an average expected life of 0.5 years.

Employee Benefit Plans	12 Months Ended
Employee Benefit Plans	Dec. 31, 2020
Postemployment Benefits [Abstract]
Employee Benefit Plans	Employee Benefit Plans We sponsor defined contribution 401(k) plans that cover substantially all employees of our company and its subsidiaries. Eligible employees are permitted to contribute up to the maximum amount allowed by law. We match up to the first 4% of compensation contributed by employees. Expense recognized in connection with our contributions to the 401(k) plans amounted to $28 million, $28 million, and $36 million in the years ended December 31, 2020, 2019, and 2018, respectively. We also have a non-qualified deferred compensation plan for certain key employees. Under this plan, eligible participants may defer up to 75% of their base salary and 90% of their bonus to provide tax-deferred growth.

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Regulatory Capital Requirements and Dividend Restrictions Our health plans, which are generally operated by our respective wholly owned subsidiaries in those states, are subject to state laws and regulations that, among other things, require the maintenance of minimum levels of statutory capital, as defined by each state. The National Association of Insurance Commissioners (“NAIC”), has adopted rules which, if implemented by the states, set minimum capitalization requirements for insurance companies, HMOs, and other entities bearing risk for healthcare coverage. The requirements take the form of risk-based capital (“RBC”) rules which may vary from state to state. Regulators in some states may also enforce capital requirements that require the retention of net worth in excess of amounts formally required by statute or regulation. All of the states in which our health plans operate, except California, Florida, Massachusetts and New York, have adopted the RBC rules. The RBC rules, if adopted by California, Florida, Massachusetts or New York, could increase the minimum capital required for those states. Our Massachusetts health plan, acquired on December 31, 2020, maintains a $35 million performance bond, effective through December 31, 2021, to partially satisfy minimum net worth requirements in that state. Statutes, regulations and informal capital requirements also restrict the timing, payment, and amount of dividends and other distributions that may be paid to us as the sole stockholder. To the extent our subsidiaries must comply with these regulations, they may not have the financial flexibility to transfer funds to us. Based on current statutes and regulations, the net assets in these subsidiaries (not including the Magellan Complete Care subsidiaries and after intercompany eliminations), which may not be transferable to us in the form of loans, advances, or cash dividends was approximately $1,960 million at December 31, 2020, and $1,810 million at December 31, 2019. We estimate the Magellan Complete Care subsidiaries’ net assets that may not be transferable amounted to approximately $420 million at December 31, 2020. Because of the statutory restrictions that inhibit the ability of our health plans to transfer net assets to us, the amount of retained earnings readily available to pay dividends to our stockholders is generally limited to cash, cash equivalents and investments held by the parent company—Molina Healthcare, Inc. Such cash, cash equivalents and investments amounted to $644 million and $997 million as of December 31, 2020 and 2019, respectively. As of December 31, 2020, our health plans (not including the Magellan Complete Care subsidiaries) had aggregate statutory capital and surplus of approximately $2,020 million compared with the required minimum aggregate statutory capital and surplus of approximately $1,310 million. As of December 31, 2020, the aggregate and minimum capital and surplus of the Magellan Complete Care subsidiaries amounted to approximately $420 million and $230 million, respectively. The aggregate capital and surplus of our wholly owned subsidiaries was in excess of these minimum capital requirements as of December 31, 2020. We have the ability and commitment to provide additional capital to each of our health plans when necessary to ensure that statutory capital and surplus continue to meet regulatory requirements. COVID-19 Pandemic We continue to monitor and assess the estimated operating and financial impact of the COVID-19 pandemic, and as it evolves, we continue to process, assemble, and assess member utilization information. We believe that our cash resources, borrowing capacity available under the Credit Agreement, and cash flow generated from operations will be sufficient to withstand the financial impact of the pandemic, and will enable us to continue to support our operations, regulatory requirements, debt repayment obligations, and capital expenditures for the foreseeable future. Legal Proceedings The healthcare industry is subject to numerous laws and regulations of federal, state, and local governments. Compliance with these laws and regulations can be subject to government review and interpretation, as well as regulatory actions unknown and unasserted at this time. Penalties associated with violations of these laws and regulations include significant fines and penalties, exclusion from participating in publicly funded programs, and the repayment of previously billed and collected revenues. We are involved in legal actions in the ordinary course of business including, but not limited to, various employment claims, vendor disputes and provider claims. Some of these legal actions seek monetary damages, including claims for punitive damages, which may not be covered by insurance. We review legal matters and update our estimates of reasonably possible losses and related disclosures, as necessary. We have accrued liabilities for legal matters for which we deem the loss to be both probable and reasonably estimable. These liability estimates could change as a result of further developments of the matters. The outcome of legal actions is inherently uncertain. 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. Kentucky RFP. On September 4, 2020, Anthem Kentucky Managed Care Plan, Inc. brought an action in Franklin County Circuit Court against the Kentucky Finance and Administration Cabinet, the Kentucky Cabinet for Health and Family Services and all of the winning bidder health plans, including Molina Healthcare of Kentucky, Inc., Civil Action No. 20-CI-00719. In its action, Anthem requested that the court disqualify Molina Healthcare of Kentucky, find that the Kentucky RFP scoring was erroneous and violated procedures or was arbitrary and capricious, set aside the contract awards and conduct a new RFP evaluation process, and award injunctive relief, including stopping the implementation of the contracts awarded under the RFP. On September 28, 2020, the court issued a temporary restraining order preserving the status quo, and on October 23, 2020, the court issued a temporary injunction directing that the RFP readiness review and open enrollment proceed with six health plans, including both Anthem and Molina Healthcare. On December 22, 2020, the court granted a motion by UnitedHealthcare of Kentucky LTD. to assert a cross-claim against the Kentucky Cabinet for Health and Family Services, which sought in part a disqualification of Anthem or Molina Healthcare and a declaratory judgment that the Kentucky Medicaid program proceed with only five health plans. On December 23, 2020, Humana Health Plan, Inc. brought a separate action against the Commonwealth of Kentucky and the winning bidder health plans, including Molina Healthcare of Kentucky, Civil Action 20-CI-00987. On January 11, 2021, both actions were consolidated before the Franklin County Circuit Court. Humana requests a declaratory judgment finding that the Commonwealth violated the Medicaid contract by allocating Passport members to Molina Healthcare for 2021 so that Passport members would instead be allocated to Humana and other winning health plans, or, in the alternative, monetary damages from the Commonwealth. Molina Healthcare believes it has meritorious defenses to the claims of Anthem, United, and Humana, and intends to vigorously defend its position, including its twice being a winning bidder of the Kentucky Medicaid RFP, and its protection of the continuity of care for Passport Medicaid members. This matter remains subject to significant additional legal proceedings, and no assurances can be given regarding the ultimate outcome. Under the court’s temporary injunction, Molina Healthcare of Kentucky continues to operate under its contract and provide care to Kentucky Medicaid members. Professional Liability Insurance We carry medical professional liability insurance for healthcare services rendered in the primary care institutions that we manage. In addition, we carry managed care errors and omissions insurance for all managed care services that we provide.

Segments

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segments

Segments As of December 31, 2020, we had 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 reportable segment includes our regulated health plan operating segments, along with the recently acquired Magellan Complete Care health plans operating segment. Because this acquisition closed on December 31, 2020, Magellan Complete Care’s operating results were insignificant to our consolidated results of operations for the year ended December 31, 2020. Management will continue to evaluate the composition of its operating and reportable segments for future filings. The Other segment, which is insignificant to our consolidated results of operations, includes certain corporate amounts not associated with or allocated to the Health Plans segment. In 2018, the Other segment also included the results of certain unregulated subsidiaries we sold in late 2018.

Margin is the appropriate earnings measure for our reportable segments, based on how our chief operating decision maker currently reviews results, assesses performance, and allocates resources.

The key metrics used to assess the performance of our Health Plans segment are premium revenue, medical margin and MCR. MCR represents the amount of medical care costs as a percentage of premium revenue. Therefore, the underlying margin, or the amount earned by the Health Plans segment after medical costs are deducted from premium revenue, is the most important measure of earnings reviewed by management. Margin for our Health Plans segment is also referred to as “Medical Margin.”


	Health Plans		Other		Consolidated
	(In millions)
2020
Total revenue	$	19,415	$	8	$	19,423
Margin	2,479		—		2,479
Total assets	8,359		1,173		9,532
2019
Total revenue	$	16,815	$	14	$	16,829
Margin	2,303		—		2,303
Total assets	5,265		1,522		6,787
2018
Total revenue	$	18,471	$	419	$	18,890
Margin	2,475		43		2,518
Total assets	6,165		989		7,154

The following table reconciles margin by segment to consolidated income before income tax expense:


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Margin:
Health Plans	$	2,479	$	2,303	$	2,475
Other	—		—		43
Total margin	2,479		2,303		2,518
Add: other operating revenues (1)	1,124		621		871
Less: other operating expenses (2)	(2,525)		(1,880)		(2,258)
Operating income	1,078		1,044		1,131
Less: other expenses, net	117		72		132
Income before income tax expense	$	961	$	972	$	999

______________________

(1)Other operating revenues include premium tax revenue, health insurer fees reimbursed, Marketplace risk corridor judgment, 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.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Section 50
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-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599

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+ Details

Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2020

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information of Registrant

The condensed balance sheets as of December 31, 2020 and 2019, and the related condensed statements of income, comprehensive income and cash flows for each of the three years in the period ended December 31, 2020 for our parent company Molina Healthcare, Inc. (the “Registrant”), are presented below.

Condensed Balance Sheets


	December 31,
	2020		2019
	(In millions, except per-share data)
ASSETS
Current assets:
Cash and cash equivalents	$	575	$	836
Investments	69		161
Receivables	2		2
Due from affiliates	114		49
Prepaid expenses and other current assets	65		75
Total current assets	825		1,123
Property, equipment, and capitalized software, net	339		327
Goodwill and intangible assets, net	369		13
Investments in subsidiaries	3,228		2,225
Deferred income taxes	5		10
Advances to related parties and other assets	83		76
Total assets	$	4,849	$	3,774
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:

Accounts payable, accrued liabilities and other	$	338	$	307
Total current liabilities	338		307
Long-term debt	2,127		1,237
Finance lease liabilities	225		231
Other long-term liabilities	63		39
Total liabilities	2,753		1,814
Stockholders’ equity:
Common stock, $0.001 par value; 150 million shares authorized; outstanding: 59 million shares at December 31, 2020, and 62 million at December 31, 2019	—		—
Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding	—		—
Additional paid-in capital	199		175
Accumulated other comprehensive income	37		4
Retained earnings	1,860		1,781
Total stockholders’ equity	2,096		1,960
Total liabilities and stockholders’ equity	$	4,849	$	3,774

See accompanying notes.

Condensed Statements of Income


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Revenue:
Administrative services fees	$	1,208	$	1,038	$	1,138
Investment income and other revenue	13		18		17
Total revenue	1,221		1,056		1,155
Expenses:
General and administrative expenses	1,089		937		1,007
Depreciation and amortization	67		63		69
Other operating expenses, net	24		4		6
Total operating expenses	1,180		1,004		1,082
Operating income	41		52		73
Interest expense	102		87		114
Other expenses (income), net	15		(15)		17
Total other expenses, net	117		72		131
Loss before income tax (benefit) expense and equity in net earnings of subsidiaries	(76)		(20)		(58)
Income tax (benefit) expense	(5)		9		(14)
Net loss before equity in net earnings of subsidiaries	(71)		(29)		(44)
Equity in net earnings of subsidiaries	744		766		751
Net income	$	673	$	737	$	707

Condensed Statements of Comprehensive Income


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Net income	$	673	$	737	$	707
Other comprehensive income (loss):
Unrealized investment income (loss)	44		16		(3)
Less: effect of income taxes	11		4		(1)
Other comprehensive income (loss), net of tax	33		12		(2)
Comprehensive income	$	706	$	749	$	705

See accompanying notes.

Condensed Statements of Cash Flows


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Operating activities:
Net cash provided by operating activities	$	59	$	64	$	118
Investing activities:
Capital contributions to subsidiaries	(107)		(43)		(145)
Dividends received from subsidiaries	635		1,373		298
Purchases of investments	(188)		(152)		(136)
Proceeds from sales and maturities of investments	282		93		388
Purchases of property, equipment and capitalized software	(74)		(56)		(22)
Net cash paid in business combinations	(1,028)		—		—
Net cash received from sale of subsidiaries	—		—		242
Change in amounts due to/from affiliates	(68)		38		6
Other, net	3		1		—
Net cash (used in) provided by investing activities	(545)		1,254		631
Financing activities:
Proceeds from senior notes offering, net of issuance costs	1,429		—		—
Common stock purchases	(606)		(47)		—
Repayment of term loan facility	(600)		—		—
Proceeds from borrowings under term loan facility	380		220		—
Repayment of senior notes	(338)		—		—
Cash paid for partial termination of warrants	(30)		(514)		(549)
Cash paid for partial settlement of conversion option	(27)		(578)		(623)
Cash received for partial settlement of call option	27		578		623
Repayment of principal amount of convertible notes	(12)		(240)		(362)
Repayment of credit facility	—		—		(300)
Other, net	2		29		19
Net cash provided by (used in) financing activities	225		(552)		(1,192)
Net (decrease) increase in cash and cash equivalents	(261)		766		(443)
Cash and cash equivalents at beginning of period	836		70		513
Cash and cash equivalents at end of period	$	575	$	836	$	70

Notes to Condensed Financial Information of Registrant

Note A - Basis of Presentation

The Registrant was incorporated in 2002. Prior to that date, Molina Healthcare of California (formerly known as Molina Medical Centers) operated as a California health plan and as the parent company for three other state health plans. In June 2003, the employees and operations of the corporate entity were transferred from Molina Healthcare of California to the Registrant.

The Registrant’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The accompanying condensed financial information of the Registrant should be read in conjunction with the consolidated financial statements and accompanying notes.

Note B - Transactions with Subsidiaries

The Registrant provides certain centralized medical and administrative services to our subsidiaries pursuant to administrative services agreements that include, but are not limited to, information technology, product development and administration, underwriting, claims processing, customer service, certain care management services, human

resources, marketing, purchasing, risk management, actuarial, finance, accounting, compliance, legal and public relations. Fees are based on the fair market value of services rendered and are recorded as operating revenue. Payment is subordinated to the subsidiaries’ ability to comply with minimum capital and other restrictive financial requirements of the states in which they operate. Charges in 2020, 2019, and 2018 for these services amounted to $1,208 million, $1,038 million, and $1,137 million, respectively, and are included in operating revenue.

The Registrant and its subsidiaries are included in the consolidated federal and state income tax returns filed by the Registrant. Income taxes are allocated to each subsidiary in accordance with an intercompany tax allocation agreement. The agreement allocates income taxes in an amount generally equivalent to the amount which would be expensed by the subsidiary if it filed a separate tax return. Net operating loss benefits are paid to the subsidiary by the Registrant to the extent such losses are utilized in the consolidated tax returns.

Note C - Dividends and Capital Contributions

When the Registrant receives dividends from its subsidiaries, such amounts are recorded as a reduction to the investments in the respective subsidiaries.

For all periods presented, the Registrant made capital contributions to certain subsidiaries primarily to comply with minimum net worth requirements and to fund business combinations. Such amounts have been recorded as an increase in investment in the respective subsidiaries.

Significant Accounting Policies (Policies)	12 Months Ended
Significant Accounting Policies (Policies)	Dec. 31, 2020
Accounting Policies [Abstract]
Consolidation and Presentation	Consolidation and Presentation The consolidated financial statements include the accounts of Molina Healthcare, Inc., and its subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. Financial information related to subsidiaries acquired during any year is included only for periods subsequent to their acquisition. In the opinion of management, all adjustments considered necessary for a fair presentation of the results as of the date and for the periods presented have been included; such adjustments consist of normal recurring adjustments.
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 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; •Purchase price allocations relating to business combinations, including the determination of contingent consideration; •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 •The determination of unrecognized tax benefits.
Cash and Cash Equivalents	Cash and Cash EquivalentsCash 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	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, 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 of 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.
Receivables	Receivables Receivables consist primarily of premium amounts due from government agencies, which may be subject to potential retroactive adjustments. Because substantially all of our receivable amounts are readily determinable and substantially all of our creditors are governmental authorities, our allowance for doubtful accounts is insignificant. Any amounts determined to be uncollectible are charged to expense when such determination is made.
Long-Lived Assets, including Intangible Assets	Long-Lived Assets, including Intangible Assets Long-lived assets consist primarily of property, equipment, capitalized software (see Note 7, “Property, Equipment, and Capitalized Software, Net”), and intangible assets resulting from acquisitions. Finite-lived, separately-identified intangible assets acquired in business combinations are assets that represent future expected benefits but lack physical substance (such as purchased contract rights and provider contracts). Intangible assets are initially recorded at fair value and are then amortized on a straight-line basis over their expected useful lives, generally between five and 16 years. Determining the fair value of identifiable assets acquired, particularly intangible assets, and liabilities assumed, requires management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. Determining the useful life of an intangible asset also requires judgment, as different types of intangible assets will have different useful lives. The most significant intangible asset we typically record in a business combination is contract rights associated with membership assumed. In determining the estimated fair value of the intangible assets, we typically apply the income approach, which discounts the projected future net cash flows using an appropriate discount rate that reflects the risk associated with such projected future cash flows. The most critical assumptions used in determining the fair value of contract rights include forecasted operating margins and the weighted average cost of capital. Property and equipment are stated at historical cost. Replacements and major improvements are capitalized, and repairs and maintenance are charged to expense as incurred. Software developed for internal use is capitalized. Furniture and equipment are generally depreciated using the straight-line method over estimated useful lives ranging from three to seven years. Software is generally amortized over its estimated useful life of three years. Leasehold improvements are amortized over the term of the lease, or over their useful lives from five to 10 years, whichever is shorter. Buildings are depreciated over their estimated useful lives of 31.5 to 40 years.
Intangible Assets	Our intangible assets are subject to impairment tests when events or circumstances indicate that a finite-lived intangible asset’s (or asset group’s) carrying value may not be recoverable. Consideration is given to a number of potential impairment indicators, including the ability of our health plan subsidiaries to obtain the renewal by amendment of their contracts in each state prior to the actual expiration of their contracts. However, there can be no assurance that these contracts will continue to be renewed. Following the identification of any potential impairment indicators, to determine whether an impairment exists, we would compare the carrying amount of a finite-lived intangible asset with the greater of the undiscounted cash flows that are expected to result from the use of the asset or related group of assets, or its value under the asset liquidation method. If it is determined that the carrying amount of the asset is not recoverable, the amount by which the carrying value exceeds the estimated fair value is recorded as an impairment.
Business Combinations and Goodwill	Business Combinations We account for business combinations using the acquisition method of accounting, which requires us to recognize the assets acquired and the liabilities assumed at their acquisition date fair values. As discussed below, the excess of the purchase consideration transferred over the fair value of the net tangible and intangible assets acquired is recorded as goodwill. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the final determination of the values of assets acquired or liabilities assumed, or one year after the date of acquisition, whichever comes first, any subsequent adjustments are recorded within our consolidated results of operations. Refer to Note 4, Business Combinations, and Note 9, “Goodwill and Intangible Assets, Net,” for further details. Goodwill Goodwill represents the excess of the purchase consideration over the fair value of net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment on an annual basis and more frequently if impairment indicators are present. Impairment indicators may include experienced or expected operating cash-flow deterioration or losses, significant losses of membership, loss of state funding, loss of state contracts, and other factors. Goodwill is impaired if the carrying amount of the reporting unit (one of our state health plans) exceeds its estimated fair value. This excess is recorded as an impairment loss and adjusted if necessary for the impact of tax-deductible goodwill. The loss recognized may not exceed the total goodwill allocated to the reporting unit. When testing goodwill for impairment, we may first assess qualitative factors, such as industry and market factors, the dynamic economic and political environments in which we operate, cost factors, and changes in overall performance, to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. If our qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, we perform the quantitative assessment. We may also elect to bypass the qualitative assessment and proceed directly to the quantitative assessment. If performing a quantitative assessment, we generally estimate the fair values of our reporting units by applying the income approach, using discounted cash flows. For the annual impairment test under a quantitative assessment, the base year in the reporting units’ discounted cash flows is derived from the annual financial planning cycle, which commences in the fourth quarter of the year. When computing discounted cash flows, we make assumptions about a wide variety of internal and external factors, and consider what the reporting unit’s selling price would be in an orderly transaction between market participants at the measurement date. Significant assumptions include financial projections of free cash flow (including significant assumptions about membership, premium rates, healthcare and operating cost trends, contract renewal and the procurement of new contracts, capital requirements and income taxes), long-term growth rates for determining terminal value beyond the discretely forecasted periods, and discount rates. When determining the discount rate, we consider the overall level of inherent risk of the reporting unit, and the expected rate an outside investor would expect to earn. As part of a quantitative assessment, we may also apply the asset liquidation method to estimate the fair value of individual reporting units, which is computed as total assets minus total liabilities, excluding intangible assets and deferred taxes. Finally, we apply a market approach to reconcile the value of our reporting units to our consolidated market value. Under the market approach, we consider publicly traded comparable company information to determine revenue and earnings multiples which are used to estimate our reporting units’ fair values. The assumptions used are consistent with those used in our long-range business plan and annual planning process. However, if these assumptions differ from actual results, the outcome of our goodwill impairment tests could be adversely affected.
Leases	Leases Right-of-use (“ROU”) assets represent our right to use the underlying assets over the lease term, and lease liabilities represent our obligation for lease payments arising from the related leases. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease terms may include options to extend or terminate the lease when we believe it is reasonably certain that we will exercise such options. If applicable, we account for lease and non-lease components within a lease as a single lease component. Because most of our leases do not provide an implicit interest rate, we generally use our incremental borrowing rate to determine the present value of lease payments. Lease expenses for operating lease payments are recognized on a straight-line basis over the lease term, and the related ROU assets and liabilities are reduced to the present value of the remaining lease payments at the end of each period. Finance lease payments reduce finance lease liabilities, the related ROU assets are amortized on a straight-line basis over the lease term, and interest expense is recognized using the effective interest method. The significant majority of our operating leases consist of long-term operating leases for office space. Short-term leases (those with terms of 12 months or less) are not recorded as ROU assets or liabilities in the consolidated balance sheets. For certain leases that represent a portfolio of similar assets, such as a fleet of vehicles, we apply a portfolio approach to account for the related ROU assets and liabilities, rather than account for such assets and the related liabilities individually. A nominal number of our lease agreements include rental payments that adjust periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. For further information, including the amount and location of the ROU assets and lease liabilities recognized in the accompanying consolidated balance sheets, see Note 8, “Leases.
Medical Claims and Benefits Payable	Medical Claims and Benefits Payable Medical care costs are recognized in the period in which services are provided and include fee-for-service claims, pharmacy benefits, capitation payments to providers, and various other medically-related costs. Under fee-for-service claims arrangements with providers, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of hospital and physician services. Such medical care costs include amounts paid by us as well as estimated medical claims and benefits payable for costs that were incurred but not paid as of the reporting date (“IBNP”). Pharmacy benefits represent payments for members' prescription drug costs, net of rebates from drug manufacturers. We estimate pharmacy rebates based on historical and current utilization of prescription drugs and contractual provisions. Capitation payments represent monthly contractual fees paid to providers, who are responsible for providing medical care to members, which could include medical or ancillary costs like dental, vision and other supplemental health benefits. Such capitation costs are fixed in advance of the periods covered and are not subject to significant accounting estimates. Other medical care costs include all medically-related administrative costs, amounts due to providers pursuant to risk-sharing or other incentive arrangements, provider claims, and other healthcare expenses. Examples of medically-related administrative costs include expenses relating to health education, quality assurance, case management, care coordination, disease management, and 24-hour on-call nurses. Additionally, we include an estimate for the cost of settling claims incurred through the reporting date in our medical claims and benefits payable liability. Medical claims and benefits payable consist mainly of fee-for-service IBNP, unpaid pharmacy claims, capitation costs, other medical costs, including amounts payable to providers pursuant to risk-sharing or other incentive arrangements and amounts payable to providers on behalf of certain state agencies for certain state assessments in which we assume no financial risk. IBNP includes the costs of claims incurred as of the balance sheet date which have been reported to us, and our best estimate of the cost of claims incurred but not yet reported to us. We also include an additional reserve to ensure that our overall IBNP liability is sufficient under moderately adverse conditions. We reflect changes in these estimates in the consolidated results of operations in the period in which they are determined. The estimation of the IBNP liability requires a significant degree of judgment in applying actuarial methods, determining the appropriate assumptions and considering numerous factors. Of those factors, we consider estimated completion factors and the assumed healthcare cost trend to be the most critical assumptions. Other relevant factors also include, but are not limited to, healthcare service utilization trends, claim inventory levels, changes in membership, product mix, seasonality, benefit changes or changes in Medicaid fee schedules, provider contract changes, prior authorizations and the incidence of catastrophic or pandemic cases. Because of the significant degree of judgment involved in estimation of our IBNP liability, there is considerable variability and uncertainty inherent in such estimates. Each reporting period, the recognized IBNP liability represents our best estimate of the total amount of unpaid claims incurred as of the balance sheet date using a consistent methodology in estimating our IBNP liability. We believe our current estimates are reasonable and adequate; however, the development of our estimate is a continuous process that we monitor and update as more complete claims payment information and healthcare cost trend data becomes available. Actual medical care costs may be less than we previously estimated (favorable development) or more than we previously estimated (unfavorable development), and any differences could be material. Any adjustments to reflect favorable development would be recognized as a decrease to medical care costs, and any adjustments to reflect unfavorable development would be recognized as an increase to medical care costs, in the period in which the adjustments are determined. Refer to Note 10, “Medical Claims and Benefits Payable,” for a table presenting the components of the change in our medical claims and benefits payable, for all periods presented in the accompanying consolidated financial statements. Premium Revenue Recognition and Amounts Due Government Agencies Premium revenue is generated from our Health Plans segment contracts, for our participation in the 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 premium revenues are recognized in the month that members are entitled to receive healthcare services, and premiums collected in advance are deferred. State Medicaid programs and the federal Medicare program periodically adjust premium rates. Certain components of premium revenue are subject to accounting estimates and are described below, under “Contractual Provisions That May Adjust or Limit Revenue or Profit,” and “Quality Incentives.” Contractual Provisions That May Adjust or Limit Revenue or Profit 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. Liabilities accrued for premiums to be returned under such provisions are reported in the aggregate as “Amounts due government agencies” in the accompanying consolidated balance sheets. Medicaid Program Minimum MLR 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. Under certain medical cost corridor provisions, the health plans may receive additional premiums if amounts spent on medical care costs exceed a defined maximum threshold. Profit Sharing. Our contracts with certain states contain profit sharing 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. Retroactive Premium Adjustments. State Medicaid programs periodically adjust premium rates on a retroactive basis. In these cases, we adjust our premium revenue in the period in which we determine that the adjustment is probable and reasonably estimable, and is based on our best estimate of the ultimate premium we expect to realize for the period being adjusted. In 2020, various states enacted temporary premium refunds and related actions in response to the reduced demand for medical services stemming from COVID-19, which resulted in a reduction of our medical margin. In some cases, these premium actions were retroactive to earlier periods in 2020, or as early as the beginning of the states’ fiscal years in 2019. Beginning in the second quarter of 2020, we have recognized retroactive premium actions that we believe to be probable, and where the ultimate premium amount is reasonably estimable. It is possible that certain states could increase the level of existing premium refunds, and it is also possible that other states could implement some form of retroactive premium refund in the future. Due to these uncertainties, the ultimate outcomes could differ materially from our estimates as a result of changes in facts or further developments, which could have an adverse effect on our consolidated financial position, results of operations, or cash flows. Medicare Program Risk Adjustment. 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 & Medicaid Services (“CMS”) practices. Minimum MLR. The Affordable Care Act (“ACA”) 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. Marketplace Program Risk Corridor Judgment. In April 2020, the United States 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, 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.Consistent with the timing of the cash receipt, the gain was recognized in our fourth quarter 2020 financial results and reported in “Marketplace risk corridor judgment” in our consolidated statements of income. The judgment did not create additional Minimum MLR rebates.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. 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. 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.
Reinsurance	Reinsurance We bear underwriting and reserving risks associated with our health plan subsidiaries. We limit our risk of significant catastrophic losses by maintaining high deductible reinsurance coverage with a highly-rated, unaffiliated insurance company (the “third-party reinsurer”). Because we remain liable to our policyholders in the event the third-party reinsurer is unable to pay its portion of the losses, we continually monitor the third-party reinsurer’s financial condition, including its ability to maintain high credit ratings. Intercompany transactions with our captive are eliminated in consolidation. We report reinsurance premiums as a reduction to premium revenue, while related reinsurance recoveries are reported as a reduction to medical care costs.
Income Taxes	Income TaxesWe account for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates expected to be in effect during the year in which the basis differences reverse. Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
Taxes Based on Premiums	Taxes Based on Premiums Health Insurer Fee (“HIF”). Under the Affordable Care Act, the federal government imposed an annual fee, or excise tax, on health insurers for each calendar year (the “HIF”). The HIF was 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, and was not deductible for income tax purposes.
Concentrations of Credit Risk	Concentrations of Credit RiskFinancial 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 in which our health plan subsidiaries operate.
Risks and Uncertainties	Risks and Uncertainties Our profitability depends in large part on our ability to accurately predict and effectively manage medical care costs. We continually review our medical costs in light of our underlying claims experience and revised actuarial data. However, several factors could adversely affect medical care costs. These factors, which include changes in healthcare practices, inflation, new technologies, major epidemics, natural disasters, and malpractice litigation, are beyond our control and may have an adverse effect on our ability to accurately predict and effectively control medical care costs. Costs in excess of those anticipated could have a material adverse effect on our financial condition, results of operations, or cash flows. We operate health plans primarily as a direct contractor with the states, and in Los Angeles County, California, as a subcontractor to another health plan holding a direct contract with the state. We are therefore dependent upon a relatively small number of contracts to support our revenue. The loss of any one of those contracts could have a material adverse effect on our financial position, results of operations, or cash flows. In addition, our ability to arrange for the provision of medical services to our members is dependent upon our ability to develop and maintain adequate provider networks. Our inability to develop or maintain such networks might, in certain circumstances, have a material adverse effect on our financial position, results of operations, or cash flows.
Recent Accounting Pronouncements Adopted and Not Yet Adopted	Recent Accounting Pronouncements Adopted Credit Losses. In June 2016, the Financial Accounting Standards Board (“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 the London Interbank Offered Rate (“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.
Fair Value Measurements	Fair Value Measurements We consider the carrying amounts of current assets and current liabilities 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 a three-tier fair value hierarchy as follows: Level 1 — Observable Inputs. Level 1 financial instruments are actively traded and therefore the fair value for these securities is based on quoted market prices for identical securities in active markets. Level 2 — Directly or Indirectly Observable Inputs. Fair value for these investments is determined using a market approach based on quoted prices for similar securities in active markets or quoted prices for identical securities in inactive markets. Level 3 — Unobservable Inputs. Level 3 financial instruments are valued using unobservable inputs that represent management’s best estimate of what market participants would use in pricing the financial instrument at the measurement date. As of December 31, 2020, our Level 3 financial instruments consisted of contingent consideration liabilities. As of December 31, 2019, our Level 3 financial instruments consisted of derivative financial instruments.

Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Cash and cash equivalents

The restricted cash and cash equivalents presented below are included in “Restricted investments” in the accompanying consolidated balance sheets.


	December 31,
	2020		2019		2018
	(In millions)
Cash and cash equivalents	$	4,154	$	2,452	$	2,826
Restricted cash and cash equivalents	69		56		100
Total cash and cash equivalents, and restricted cash and cash equivalents presented in the consolidated statements of cash flows	$	4,223	$	2,508	$	2,926

Restricted cash and cash equivalents

The restricted cash and cash equivalents presented below are included in “Restricted investments” in the accompanying consolidated balance sheets.


	December 31,
	2020		2019		2018
	(In millions)
Cash and cash equivalents	$	4,154	$	2,452	$	2,826
Restricted cash and cash equivalents	69		56		100
Total cash and cash equivalents, and restricted cash and cash equivalents presented in the consolidated statements of cash flows	$	4,223	$	2,508	$	2,926

Schedule of receivables


	December 31,
	2020		2019
	(In millions)
Government receivables	$	969	$	1,056
Pharmacy rebate receivables	178		150
Health insurer fee reimbursement receivables	104		5
Other	255		195
Magellan Complete Care	166		—
Total	$	1,672	$	1,406

Amounts due to government agencies

Liabilities accrued for premiums to be returned under such provisions are reported in the aggregate as “Amounts due government agencies” in the accompanying consolidated balance sheets. Categorized by program, such amounts due government agencies included the following:


	December 31,
	2020		2019

	(In millions)
Medicaid program:
Minimum MLR and profit sharing	$	513	$	92
Other	76		95
Medicare program:
Risk adjustment and Part D risk sharing	45		14
Minimum MLR and profit sharing	62		36
Other	30		21
Marketplace program:
Risk adjustment	326		368
Minimum MLR	37		15

Other	21		23
Magellan Complete Care	143		—
Total amounts due government agencies	$	1,253	$	664

Summarized premium revenue

The following table summarizes premium revenue by state health plan for the periods presented:


	Year Ended December 31,
	2020				2019				2018
	Amount		% of Total		Amount		% of Total		Amount		% of Total
	(Dollars in millions)
California	$	2,109	11.5	%	$	2,266	14.0	%	$	2,150	12.2	%
Florida	643		3.5		734		4.5		1,790		10.2
Illinois	1,328		7.3		1,002		6.2		793		4.5
Kentucky	654		3.6		—		—		—		—
Michigan	1,587		8.7		1,624		10.0		1,601		9.1
Ohio	2,962		16.2		2,553		15.8		2,388		13.6

Texas	3,085		16.9		2,991		18.5		3,244		18.4
Washington	3,169		17.3		2,695		16.6		2,361		13.4
Other (1)	2,762		15.0		2,343		14.4		3,285		18.6
Total	$	18,299	100.0	%	$	16,208	100.0	%	$	17,612	100.0	%

_______________________

(1)“Other” includes the Idaho, Mississippi, New Mexico, New York, Puerto Rico, South Carolina, Utah and Wisconsin health plans, which were immaterial to our consolidated results of operations.

Net Income Per Share (Tables)

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Summary of denominators for the computation of basic and diluted earnings per share

The following table sets forth the calculation of basic and diluted net income per share:


	Year Ended December 31,
	2020		2019		2018
	(In millions, except net income per share)
Numerator:
Net income	$	673	$	737	$	707
Denominator:
Shares outstanding at the beginning of the period	61.9		62.1		59.3
Weighted-average number of shares issued:
Stock purchases	(3.0)		—		—
Stock-based compensation	0.1		0.1		0.2
Exchange of convertible senior notes (1)	—		—		1.4
Conversion of convertible senior notes (1)	—		—		0.2
Denominator for basic net income per share	59.0		62.2		61.1
Effect of dilutive securities:
Stock-based compensation	0.9		0.6		0.3
Warrants (2)	—		1.4		4.8
Convertible senior notes (1)	—		—		0.4
Denominator for diluted net income per share	59.9		64.2		66.6

Net income per share - Basic (3)	$	11.40	$	11.85	$	11.57
Net income per share - Diluted (3)	$	11.23	$	11.47	$	10.61

_______________________________

(1)“Convertible senior notes” in this table refer to the 1.625% convertible senior notes due 2044 that were settled in 2018.

(3)Source data for calculations in thousands.

Business Combinations (Tables)

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Summary of assets acquired and liabilities assumed

The following table summarizes the provisional fair values assigned to assets acquired and liabilities assumed.


	December 31, 2020
	(In millions)
Assets acquired:
Cash and cash equivalents	$	310
Investments	312
Receivables	166
Prepaid expenses and other current assets	16
Property and equipment	3
Intangible assets	191
Goodwill	488
Restricted investments	49
Other assets	14
Liabilities assumed:
Medical claims and benefits payable	(294)
Amounts due government agencies	(143)
Accounts payable, accrued and other long-term liabilities	(84)
Deferred income taxes	(20)
Net purchase price paid	$	1,008

Summary of intangible assets acquired

The table below presents intangible assets acquired, by major class, for the three acquisitions.


	Fair Value		Life			Weighted-Average Life

	(In millions)		(Years)			(Years)
Contract rights - member list	$	193	5	-	10	5.3
Provider network	27				10	10.0
Trade name	15		10	-	16	15.4
	$	235				6.5

Fair Value Measurements (Tables)

12 Months Ended

Dec. 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 December 31, 2020, were as follows:


	Total		Level 1		Level 2		Level 3
	(In millions)
Corporate debt securities	$	1,256	$	—	$	1,256	$	—
Mortgage-backed securities	392		—		392		—
Asset-backed securities	132		—		132		—
Municipal securities	68		—		68		—

U.S. Treasury notes	27		—		27		—


Total assets	$	1,875	$	—	$	1,875	$	—

Contingent consideration liabilities	$	46	$	—	$	—	$	46
Total liabilities	$	46	$	—	$	—	$	46

Our financial instruments measured at fair value on a recurring basis at December 31, 2019, were as follows:


	Total		Level 1		Level 2		Level 3
	(In millions)
Corporate debt securities	$	1,178	$	—	$	1,178	$	—
Mortgage-backed securities	420		—		420		—
Asset-backed securities	127		—		127		—
Municipal securities	78		—		78		—
U.S. Treasury notes	86		—		86		—
Government-sponsored enterprise securities (“GSEs”)	49		—		49		—
Certificate of deposit	1		—		1		—
Other	7		—		7		—
Subtotal	1,946		—		1,946		—
Call option derivative asset	29		—		—		29
Total assets	$	1,975	$	—	$	1,946	$	29

Conversion option derivative liability	$	29	$	—	$	—	$	29
Total liabilities	$	29	$	—	$	—	$	29

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:


		December 31,
	Balance Sheet Location	2020		2019
		(In millions)
Derivative asset:
Call Option	Current assets: Prepaid expenses and other current assets	$	—	$	29
Derivative liability:
Conversion Option	Current liabilities: Accounts payable, accrued liabilities and other	$	—	$	29

Fair value measurements of senior notes


	December 31, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
4.375% Notes	$	789	$	843	$	—	$	—
5.375% Notes	697		742		696		745
3.875% Notes	641		691		—		—
4.875% Notes (1)	—		—		327		340
Term Loan Facility (1)	—		—		220		220
1.125% Convertible Notes (1)	—		—		12		42
Total	$	2,127	$	2,276	$	1,255	$	1,347

_______________________________

(1) For more information on debt repayments, refer to Note 11, “Debt.”

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Investments (Tables)

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Investments

The following tables summarize our current investments as of the dates indicated:


	December 31, 2020
	Amortized Cost		Gross Unrealized				Estimated Fair Value
			Gains		Losses
	(In millions)
Corporate debt securities	$	1,220	$	36	$	—	$	1,256
Mortgage-backed securities	383		10		1		392
Asset-backed securities	130		2		—		132
Municipal securities	66		2		—		68

U.S. Treasury notes	27		—		—		27


Total	$	1,826	$	50	$	1	$	1,875


	December 31, 2019
	Amortized Cost		Gross Unrealized				Estimated Fair Value
			Gains		Losses
	(In millions)
Corporate debt securities	$	1,174	$	5	$	1	$	1,178
Mortgage-backed securities	420		1		1		420
Asset-backed securities	126		1		—		127
Municipal securities	78		—		—		78
U.S. Treasury notes	86		—		—		86
GSEs	49		—		—		49
Certificate of deposit	1		—		—		1
Other	7		—		—		7
Total	$	1,941	$	7	$	2	$	1,946

Contractual maturities of investments

The contractual maturities of our current investments as of December 31, 2020 are summarized below:


	Amortized Cost		Estimated Fair Value
	(In millions)
Due in one year or less	$	474	$	475
Due after one year through five years	892		926
Due after five years through ten years	132		137
Due after ten years	328		337
Total	$	1,826	$	1,875

Available-for-sale investments


	In a Continuous Loss Position for Less than 12 Months as of December 31, 2020					In a Continuous Loss Position for Less than 12 Months as of December 31, 2019
	Estimated Fair Value		Unrealized Losses		Total Number of Positions	Estimated Fair Value		Unrealized Losses		Total Number of Positions
	(Dollars in millions)
Mortgage-backed securities	$	77	$	1	21	$	143	$	1	72
Corporate debt securities	—		—		—	222		1		167






Total	$	77	$	1	21	$	365	$	2	239

Balances of restricted investments

The following table presents the balances of restricted investments:


	December 31,
	2020		2019
	(In millions)

Florida	$	12	$	12


New Mexico	21		21

New York	14		9
Ohio	16		12



Other	24		25
Magellan Complete Care	49		—
Total Health Plans segment	$	136	$	79

Property, Equipment, and Capitalized Software, Net (Tables)

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Summary of property and equipment and depreciation and amortization recognized

A summary of property, equipment, and capitalized software is as follows:


	December 31,
	2020		2019
	(In millions)
Capitalized software	$	475	$	421
Furniture and equipment	221		213
Building and improvements	49		49
Land	4		4
Magellan Complete Care	3		—
Total cost	752		687
Less: accumulated amortization - capitalized software	(385)		(351)
Less: accumulated depreciation and amortization - furniture, equipment, building, and improvements	(192)		(179)
Total accumulated depreciation and amortization	(577)		(530)
ROU assets - finance leases	216		228
Property, equipment, and capitalized software, net	$	391	$	385

The following table presents all depreciation and amortization recognized in our consolidated statements of income:


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Recorded in depreciation and amortization:
Amortization of capitalized software	$	38	$	33	$	42
Amortization of finance leases	19		17		—
Depreciation and amortization of furniture, equipment, building, and improvements	16		21		36
Amortization of intangible assets	15		18		21
Subtotal	88		89		99
Recorded in cost of service revenue:
Amortization of capitalized software and deferred contract costs	—		—		28
Total depreciation and amortization recognized	$	88	$	89	$	127

Leases (Tables)

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Components of lease expense and supplemental consolidated cash flow information

The components of lease expense for the years ended December 31, 2020, and 2019, are presented in the following table. Rental expense related to operating leases amounted to $62 million for the year ended December 31, 2018.


	Year Ended December 31,
	2020		2019
	(In millions)
Operating lease expense	$	28	$	34

Finance lease expense:
Amortization of ROU assets	$	19	$	17
Interest on lease liabilities	15		15
Total finance lease expense	$	34	$	32

Supplemental consolidated cash flow information related to leases follows:


	Year Ended December 31,
	2020		2019
	(In millions)
Cash used in operating activities:
Operating leases	$	30	$	36
Finance leases	15		15
Cash used in financing activities:
Finance leases	9		6
ROU assets recognized in exchange for lease obligations:
Operating leases	28		99
Finance leases	$	7	$	245

Supplemental lease information

Supplemental information related to leases, including location of amounts reported in the accompanying consolidated balance sheets, follows:


	December 31,
	2020		2019
	(In millions)
Operating leases:
ROU assets
Other assets	$	58	$	65
Other assets - Magellan Complete Care	13		—
Total other assets	$	71	$	65
Lease liabilities
Accounts payable and accrued liabilities (current)	$	21	$	25
Other long-term liabilities (non-current)	42		48
Magellan Complete Care	13		—
Total operating lease liabilities	$	76	$	73
Finance leases:
ROU assets
Property, equipment, and capitalized software, net	$	216	$	228
Lease liabilities
Accounts payable and accrued liabilities (current)	$	12	$	8
Finance lease liabilities (non-current)	225		231
Total finance lease liabilities	$	237	$	239

Operating lease maturities

Maturities of lease liabilities as of December 31, 2020, were as follows:


	Operating		Finance
	Leases		Leases
	(In millions)
2021	$	29	$	26
2022	20		24
2023	16		22
2024	10		22
2025	6		23
Thereafter	3		266
Subtotal - undiscounted lease payments	84		383
Less imputed interest	(8)		(146)
Total	$	76	$	237

Finance lease maturities

Maturities of lease liabilities as of December 31, 2020, were as follows:


	Operating		Finance
	Leases		Leases
	(In millions)
2021	$	29	$	26
2022	20		24
2023	16		22
2024	10		22
2025	6		23
Thereafter	3		266
Subtotal - undiscounted lease payments	84		383
Less imputed interest	(8)		(146)
Total	$	76	$	237

Goodwill and Intangible Assets, Net (Tables)

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

The following table presents the changes in the carrying amounts of goodwill, for the periods presented. All goodwill is recorded in the Health Plans segment.


	(In millions)
Balance, December 31, 2018	$	143
Acquisitions	—
Dispositions	—
Impairment and other	—
Balance, December 31, 2019	143
Acquisitions	549
Dispositions	—
Impairment and other	—
Balance, December 31, 2020	$	692

Summary of identified intangible assets, by major class

The following table provides the details of identified intangible assets, by major class, for the periods presented. All intangible assets, net, are recorded in the Health Plans segment.


	December 31, 2020						December 31, 2019
	Cost		Accumulated Amortization		Carrying Amount		Cost		Accumulated Amortization		Carrying Amount
	(In millions)
Contract rights and licenses	$	370	$	168	$	202	$	179	$	156	$	23
Provider networks	47		15		32		20		14		6
Trade name	15		—		15		—		—		—
Total	$	432	$	183	$	249	$	199	$	170	$	29

Medical Claims and Benefits Payable (Tables)

12 Months Ended

Dec. 31, 2020

Insurance [Abstract]

Schedule of liability for unpaid claims and claims adjustment expense

The following table provides the details of our medical claims and benefits payable as of the dates indicated.


	December 31,
	2020		2019		2018
	(In millions)
Fee-for-service claims incurred but not paid (“IBNP”)	$	1,647	$	1,406	$	1,562
Pharmacy payable	157		126		115
Capitation payable	70		55		52
Other	528		267		232
Magellan Complete Care	294		—		—
Total	$	2,696	$	1,854	$	1,961

Components of the change in medical claims and benefits payable


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Medical claims and benefits payable, beginning balance	$	1,854	$	1,961	$	2,192
Components of medical care costs related to:
Current year	15,939		14,176		15,478
Prior years (1)	(119)		(271)		(341)
Total medical care costs	15,820		13,905		15,137
Payments for medical care costs related to:
Current year	13,871		12,554		13,671
Prior years	1,507		1,482		1,710
Total paid	15,378		14,036		15,381
Acquisition - Magellan Complete Care	294		—		—
Change in non-risk and other provider payables	106		24		13
Medical claims and benefits payable, ending balance	$	2,696	$	1,854	$	1,961

________________

(1)December 31, 2018, includes the 2018 benefit of the 2017 Marketplace CSR reimbursement of $81 million.

Incurred and paid claims development


Incurred Claims and Allocated Claims Adjustment Expenses							Total IBNP		Cumulative number of reported claims
Benefit Year	2018		2019		2020

	(Unaudited)		(Unaudited)
	(In millions)
2018	$	15,478	$	15,245	$	15,233	$	11	110
2019			14,176		14,083		27		100
2020					15,939		1,593		93
					$	45,255	$	1,631


Cumulative Paid Claims and Allocated Claims Adjustment Expenses
Benefit Year	2018		2019		2020

	(Unaudited)		(Unaudited)
	(In millions)
2018	$	13,752	$	15,220	$	15,222
2019			12,554		14,056
2020					13,871
					$	43,149

Reconciliation of claims development to liability

The following table represents a reconciliation of claims development to the aggregate carrying amount of the liability for medical claims and benefits payable.


	2020
	(In millions)
Incurred claims and allocated claims adjustment expenses	$	45,255
Less: cumulative paid claims and allocated claims adjustment expenses	(43,149)
All outstanding liabilities before 2018	16
Magellan Complete Care	294
Non-risk and other provider payables	280
Medical claims and benefits payable	$	2,696

Debt (Tables)

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Maturities of long-term debt

Contractual maturities of debt, as of December 31, 2020, are illustrated in the following table. All amounts represent the principal amounts of the debt instruments outstanding.


	Total		2021		2022		2023		2024		2025		Thereafter

	(In millions)
4.375% Notes due 2028	$	800	$	—	$	—	$	—	$	—	$	—	$	800
5.375% Notes due 2022	700		—		700		—		—		—		—
3.875% Notes due 2030	650		—		—		—		—		—		650
Total	$	2,150	$	—	$	700	$	—	$	—	$	—	$	1,450

Long term debt

The following table summarizes our outstanding debt obligations and their classification in the accompanying consolidated balance sheets:


	December 31,
	2020		2019
	(In millions)
Current portion of long-term debt:
1.125% Convertible Notes, net of unamortized discount	$	—	$	12
Term loan facility	—		6
Total (1)	$	—	$	18
Non-current portion of long-term debt:
4.375% Notes due 2028	$	800	$	—
5.375% Notes due 2022	700		700
3.875% Notes due 2030	650		—
4.875% Notes due 2025	—		330
Term loan facility	—		214

Less: debt issuance costs	(23)		(7)
Total	$	2,127	$	1,237

______________________

(1)Reported in “Accounts payable, accrued liabilities and other.”

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
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+ Details

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Provision for income taxes

Income tax expense for continuing operations consisted of the following:


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Current:
Federal	$	281	$	204	$	272
State	26		12		18
Foreign	—		9		8
Total current	307		225		298
Deferred:
Federal	(13)		5		(3)
State	(7)		6		(3)
Foreign	1		(1)		—
Total deferred	(19)		10		(6)
Income tax expense	$	288	$	235	$	292

Effective income tax rate reconciliation to the statutory federal income tax rate

A reconciliation of the U.S. federal statutory income tax rate to the combined effective income tax rate for continuing operations is as follows:


	Year Ended December 31,
	2020		2019		2018
Statutory federal tax (benefit) rate	21.0	%	21.0	%	21.0	%
State income provision (benefit), net of federal	1.6		1.4		1.2

Nondeductible health insurer fee (“HIF”)	6.1		—		7.3
Nondeductible compensation	1.1		1.2		0.7


Worthless stock deduction	—		—		(1.0)




Other	0.2		0.6		—
Effective tax expense rate	30.0	%	24.2	%	29.2	%

Significant components of deferred tax assets and liabilities

Significant components of our deferred tax assets and liabilities as of December 31, 2020 and 2019 were as follows:


	December 31,
	2020		2019
	(In millions)
Accrued expenses and reserve liabilities	$	52	$	35
Other accrued medical costs	15		11
Net operating losses	11		13
Fixed assets and intangibles	—		26
Unearned premiums	18		11
Lease financing obligation	8		5
Tax credit carryover	7		11
Other	4		—
Valuation allowance	(17)		(24)
Total deferred income tax assets, net of valuation allowance	98		88
Fixed assets and intangibles	(7)		—
Prepaid expenses	(10)		(6)
Unrealized gains and losses	(12)		(1)
Other	—		(2)
Total deferred income tax liabilities	(29)		(9)
Net deferred income tax asset	$	69	$	79

Unrecognized tax benefits roll forward

The roll forward of our unrecognized tax benefits is as follows:


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Gross unrecognized tax benefits at beginning of period	$	(20)	$	(20)	$	(13)
Increases in tax positions for current year	—		—		(9)
Lapse in statute of limitations	—		—		2



Gross unrecognized tax benefits at end of period	$	(20)	$	(20)	$	(20)

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Stock based compensation expense

Total share-based compensation expense is reported in “General and administrative expenses” in the accompanying consolidated statements of income, and summarized below.


	Year Ended December 31,
	2020				2019				2018
	(In millions)
	Pretax Charges		Net-of-Tax Amount		Pretax Charges		Net-of-Tax Amount		Pretax Charges		Net-of-Tax Amount
RSAs, PSAs and PSUs (defined below)	$	47	$	44	$	29	$	28	$	17	$	17
Employee stock purchase plan and stock options	10		9		10		9		10		9
Total	$	57	$	53	$	39	$	37	$	27	$	26

Restricted and performance stock activity

Activity for stock-based awards in the year ended December 31, 2020, is summarized below.


	RSAs	Weighted Average Grant Date Fair Value		PSUs	Weighted Average Grant Date Fair Value
Unvested balance, December 31, 2019	447,680	$	102.41	324,078	$	101.45
Granted	344,739	127.89		188,522	123.61
Vested	(172,675)	98.05		(7,368)	68.16
Forfeited	(34,660)	113.10		(33,323)	98.34
Unvested balance, December 31, 2020	585,084	$	118.07	471,909	$	111.04

Stock options, activity

The total grant date fair value of awards granted and vested is presented in the following table.


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Granted:
RSAs	$	44	$	33	$	28
PSUs	23		20		16
Total granted	$	67	$	53	$	44
Vested:
RSAs	$	22	$	19	$	15
PSAs	—		—		3
PSUs	1		2		—
Total vested	$	23	$	21	$	18


	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual term
		(Per share)		(In millions)		(Years)
Stock options outstanding as of December 31, 2019 and December 31, 2020	405,000	$	64.79	$	60	6.4
Stock options exercisable and expected to vest as of December 31, 2020	405,000	$	64.79	$	60	6.4
Exercisable as of December 31, 2020	405,000	$	64.79	$	60	6.4

Stock option plans, by exercise price range

The following is a summary of information about stock options outstanding and exercisable at December 31, 2020.


	Options Outstanding and Exercisable
	Number of Shares	Weighted-Average Remaining Contractual Life	Weighted-Average Exercise Price
		(Years)	(Per share)
Range of Exercise Prices
$33.02	30,000	2.2	$	33.02
$67.33	375,000	6.8	$	67.33
Total	405,000

Segments (Tables)

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Operating segment information

Margin for our Health Plans segment is also referred to as “Medical Margin.”


	Health Plans		Other		Consolidated
	(In millions)
2020
Total revenue	$	19,415	$	8	$	19,423
Margin	2,479		—		2,479
Total assets	8,359		1,173		9,532
2019
Total revenue	$	16,815	$	14	$	16,829
Margin	2,303		—		2,303
Total assets	5,265		1,522		6,787
2018
Total revenue	$	18,471	$	419	$	18,890
Margin	2,475		43		2,518
Total assets	6,165		989		7,154

The following table reconciles margin by segment to consolidated income before income tax expense:


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Margin:
Health Plans	$	2,479	$	2,303	$	2,475
Other	—		—		43
Total margin	2,479		2,303		2,518
Add: other operating revenues (1)	1,124		621		871
Less: other operating expenses (2)	(2,525)		(1,880)		(2,258)
Operating income	1,078		1,044		1,131
Less: other expenses, net	117		72		132
Income before income tax expense	$	961	$	972	$	999

______________________

(1)Other operating revenues include premium tax revenue, health insurer fees reimbursed, Marketplace risk corridor judgment, 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.

Condensed Financial Information of Registrant (Tables)

12 Months Ended

Dec. 31, 2020

Condensed Financial Information Disclosure [Abstract]

Condensed balance sheets

Condensed Balance Sheets


	December 31,
	2020		2019
	(In millions, except per-share data)
ASSETS
Current assets:
Cash and cash equivalents	$	575	$	836
Investments	69		161
Receivables	2		2
Due from affiliates	114		49
Prepaid expenses and other current assets	65		75
Total current assets	825		1,123
Property, equipment, and capitalized software, net	339		327
Goodwill and intangible assets, net	369		13
Investments in subsidiaries	3,228		2,225
Deferred income taxes	5		10
Advances to related parties and other assets	83		76
Total assets	$	4,849	$	3,774
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:

Accounts payable, accrued liabilities and other	$	338	$	307
Total current liabilities	338		307
Long-term debt	2,127		1,237
Finance lease liabilities	225		231
Other long-term liabilities	63		39
Total liabilities	2,753		1,814
Stockholders’ equity:
Common stock, $0.001 par value; 150 million shares authorized; outstanding: 59 million shares at December 31, 2020, and 62 million at December 31, 2019	—		—
Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding	—		—
Additional paid-in capital	199		175
Accumulated other comprehensive income	37		4
Retained earnings	1,860		1,781
Total stockholders’ equity	2,096		1,960
Total liabilities and stockholders’ equity	$	4,849	$	3,774

Condensed statements of income

Condensed Statements of Income


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Revenue:
Administrative services fees	$	1,208	$	1,038	$	1,138
Investment income and other revenue	13		18		17
Total revenue	1,221		1,056		1,155
Expenses:
General and administrative expenses	1,089		937		1,007
Depreciation and amortization	67		63		69
Other operating expenses, net	24		4		6
Total operating expenses	1,180		1,004		1,082
Operating income	41		52		73
Interest expense	102		87		114
Other expenses (income), net	15		(15)		17
Total other expenses, net	117		72		131
Loss before income tax (benefit) expense and equity in net earnings of subsidiaries	(76)		(20)		(58)
Income tax (benefit) expense	(5)		9		(14)
Net loss before equity in net earnings of subsidiaries	(71)		(29)		(44)
Equity in net earnings of subsidiaries	744		766		751
Net income	$	673	$	737	$	707

Condensed statements of comprehensive income

Condensed Statements of Comprehensive Income


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Net income	$	673	$	737	$	707
Other comprehensive income (loss):
Unrealized investment income (loss)	44		16		(3)
Less: effect of income taxes	11		4		(1)
Other comprehensive income (loss), net of tax	33		12		(2)
Comprehensive income	$	706	$	749	$	705

Condensed statements of cash flows

Condensed Statements of Cash Flows


	Year Ended December 31,
	2020		2019		2018
	(In millions)
Operating activities:
Net cash provided by operating activities	$	59	$	64	$	118
Investing activities:
Capital contributions to subsidiaries	(107)		(43)		(145)
Dividends received from subsidiaries	635		1,373		298
Purchases of investments	(188)		(152)		(136)
Proceeds from sales and maturities of investments	282		93		388
Purchases of property, equipment and capitalized software	(74)		(56)		(22)
Net cash paid in business combinations	(1,028)		—		—
Net cash received from sale of subsidiaries	—		—		242
Change in amounts due to/from affiliates	(68)		38		6
Other, net	3		1		—
Net cash (used in) provided by investing activities	(545)		1,254		631
Financing activities:
Proceeds from senior notes offering, net of issuance costs	1,429		—		—
Common stock purchases	(606)		(47)		—
Repayment of term loan facility	(600)		—		—
Proceeds from borrowings under term loan facility	380		220		—
Repayment of senior notes	(338)		—		—
Cash paid for partial termination of warrants	(30)		(514)		(549)
Cash paid for partial settlement of conversion option	(27)		(578)		(623)
Cash received for partial settlement of call option	27		578		623
Repayment of principal amount of convertible notes	(12)		(240)		(362)
Repayment of credit facility	—		—		(300)
Other, net	2		29		19
Net cash provided by (used in) financing activities	225		(552)		(1,192)
Net (decrease) increase in cash and cash equivalents	(261)		766		(443)
Cash and cash equivalents at beginning of period	836		70		513
Cash and cash equivalents at end of period	$	575	$	836	$	70

Organization and Basis of Presentation (Details) member in Millions, $ in Millions	1 Months Ended		12 Months Ended
	Dec. 31, 2020 USD ($) state member	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) Segment state member	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Basis Of Presentation [Line Items]
Number of reportable segments \| Segment			2
Number of states for operated health plans \| state	15		15
Net cash paid in business combinations			$ 755	$ 0	$ 0
Health Plans
Basis Of Presentation [Line Items]
Number of served members \| member	4.0		4.0
Number of members eligible for the health care programs, approximately \| member	0.2		0.2
Health Plans \| Minimum
Basis Of Presentation [Line Items]
Contract term			3 years
Health Plans \| Maximum
Basis Of Presentation [Line Items]
Contract term			5 years
Magellan Complete Care
Basis Of Presentation [Line Items]
Number of states for operated health plans \| state	18		18
Ownership percentage	100.00%		100.00%
Net cash paid in business combinations	$ 1,037
Affinity Health Plan
Basis Of Presentation [Line Items]
Net cash paid in business combinations		$ 380

Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Cash and cash equivalents	$ 4,154	$ 2,452	$ 2,826
Restricted cash and cash equivalents	69	56	100
Total cash and cash equivalents, and restricted cash and cash equivalents presented in the consolidated statements of cash flows	$ 4,223	$ 2,508	$ 2,926	$ 3,290

Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Sep. 30, 2020
Property, Plant and Equipment [Line Items]
Maturity period (less than)			10 years
Average maturity period (less than)			10 years
Interest receivable		$ 10.0	$ 10.0	$ 12.0
Reduction in premiums			(4.0)
Marketplace risk adjustment payables		326.0	326.0	368.0
Risk adjustment receivable		20.0	20.0	63.0
Risk adjustment, net payable		306.0	306.0	305.0
Prepaid reinsurance premiums		9.0	9.0	17.0	$ 16.0
Reinsurance recoveries			23.0	18.0	33.0
Reinsurance recoverable		17.0	17.0	$ 21.0	$ 31.0
HIF liabilities		277.0	277.0
Maine Community Health Options v. United States
Property, Plant and Equipment [Line Items]
Summary judgement	$ 128.0
COVID-19
Property, Plant and Equipment [Line Items]
Reduction in premiums		$ 401.0	564.0
COVID-19 \| MMP Plans
Property, Plant and Equipment [Line Items]
Reduction in premiums			$ 37.0
PUERTO RICO \| Medicaid
Property, Plant and Equipment [Line Items]
Premium deficiency reserve						$ 10.0
Minimum
Property, Plant and Equipment [Line Items]
Useful life			5 years
Minimum \| Premium revenue
Property, Plant and Equipment [Line Items]
Percentage of additional incremental revenue earned			1.00%
Maximum
Property, Plant and Equipment [Line Items]
Useful life			16 years
Maximum \| Premium revenue
Property, Plant and Equipment [Line Items]
Percentage of additional incremental revenue earned			4.00%
Structured Securities
Property, Plant and Equipment [Line Items]
Average maturity period (less than)			10 years

Significant Accounting Policies - Receivables (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Statutory Accounting Practices [Line Items]
Total receivables	$ 1,672	$ 1,406
Government receivables
Statutory Accounting Practices [Line Items]
Total receivables	969	1,056
Pharmacy rebate receivables
Statutory Accounting Practices [Line Items]
Total receivables	178	150
Health insurer fee reimbursement receivables
Statutory Accounting Practices [Line Items]
Total receivables	104	5
Other
Statutory Accounting Practices [Line Items]
Total receivables	255	195
Magellan Complete Care
Statutory Accounting Practices [Line Items]
Total receivables	$ 166	$ 0

Significant Accounting Policies - Amounts Due To Government Agencies (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Medicaid program:
Minimum MLR and profit sharing	$ 513	$ 92
Other	76	95
Medicare program:
Risk adjustment and Part D risk sharing	45	14
Minimum MLR and profit sharing	62	36
Other	30	21
Marketplace program:
Risk adjustment	326	368
Minimum MLR	37	15
Other	21	23
Magellan Complete Care	143	0
Total amounts due government agencies	$ 1,253	$ 664

Significant Accounting Policies - Schedule of Premium Revenue (Details) - Health Plans - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues from External Customers and Long-Lived Assets [Line Items]
Premium revenue	$ 18,299	$ 16,208	$ 17,612
Premium revenue percentage	100.00%	100.00%	100.00%
California
Revenues from External Customers and Long-Lived Assets [Line Items]
Premium revenue	$ 2,109	$ 2,266	$ 2,150
Premium revenue percentage	11.50%	14.00%	12.20%
Florida
Revenues from External Customers and Long-Lived Assets [Line Items]
Premium revenue	$ 643	$ 734	$ 1,790
Premium revenue percentage	3.50%	4.50%	10.20%
Illinois
Revenues from External Customers and Long-Lived Assets [Line Items]
Premium revenue	$ 1,328	$ 1,002	$ 793
Premium revenue percentage	7.30%	6.20%	4.50%
Kentucky
Revenues from External Customers and Long-Lived Assets [Line Items]
Premium revenue	$ 654	$ 0	$ 0
Premium revenue percentage	3.60%	0.00%	0.00%
Michigan
Revenues from External Customers and Long-Lived Assets [Line Items]
Premium revenue	$ 1,587	$ 1,624	$ 1,601
Premium revenue percentage	8.70%	10.00%	9.10%
Ohio
Revenues from External Customers and Long-Lived Assets [Line Items]
Premium revenue	$ 2,962	$ 2,553	$ 2,388
Premium revenue percentage	16.20%	15.80%	13.60%
Texas
Revenues from External Customers and Long-Lived Assets [Line Items]
Premium revenue	$ 3,085	$ 2,991	$ 3,244
Premium revenue percentage	16.90%	18.50%	18.40%
Washington
Revenues from External Customers and Long-Lived Assets [Line Items]
Premium revenue	$ 3,169	$ 2,695	$ 2,361
Premium revenue percentage	17.30%	16.60%	13.40%
Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Premium revenue	$ 2,762	$ 2,343	$ 3,285
Premium revenue percentage	15.00%	14.40%	18.60%

Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Numerator:
Net income	$ 673	$ 737	$ 707
Denominator:
Shares outstanding at the beginning of the period (in shares)		61.9	62.1	59.3
Weighted-average number of shares issued:
Stock purchases (in shares)	(3.0)	0.0	0.0
Stock-based compensation (in shares)	0.1	0.1	0.2
Exchange of convertible senior notes (in shares)	0.0	0.0	1.4
Conversion of convertible senior notes (in shares)	0.0	0.0	0.2
Denominator for basic net income per share (in shares)	59.0	62.2	61.1
Effect of dilutive securities:
Share-based compensation (in shares)	0.9	0.6	0.3
Warrants (in shares)	0.0	1.4	4.8
Convertible senior notes (in shares)	0.0	0.0	0.4
Denominator for diluted net income per share (in shares)	59.9	64.2	66.6
Net income per share:
Basic (in dollars per share)	$ 11.40	$ 11.85	$ 11.57
Diluted (in dollars per share)	$ 11.23	$ 11.47	$ 10.61
Convertible senior notes
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Stated interest rate	1.625%

Business Combinations - Narrative (Details) member in Thousands, $ in Thousands		1 Months Ended		6 Months Ended	12 Months Ended
	Jul. 01, 2020 USD ($) member	Dec. 31, 2020 USD ($) member security	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) member business_combination security	Dec. 31, 2020 USD ($) member business_combination security	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 01, 2020 USD ($)
Business Acquisition [Line Items]
Number of business combinations \| business_combination				3	3
Acquisition costs					$ 16,000
Net cash paid in business combinations					755,000	$ 0	$ 0
Contingent consideration liabilities		$ 46,000	$ 46,000	$ 46,000	$ 46,000
Business combination goodwill is deductible for income tax purposes		27.00%
Health Plans
Business Acquisition [Line Items]
Number of members eligible for the health care programs, approximately \| member		200		200	200
Goodwill		$ 692,000		$ 692,000	$ 692,000	143,000	$ 143,000
Magellan Complete Care
Business Acquisition [Line Items]
Ownership percentage		100.00%		100.00%	100.00%
Net cash paid in business combinations		$ 1,037,000
Total purchase consideration paid					$ 1,008,000
Purchase price					850,000
Preliminary closing adjustments					158,000
Contingent consideration liabilities		$ 29,000		$ 29,000	$ 29,000
Number of states in which company operates (in state) \| security		6		6	6
Revenue of acquired business					$ 2,900,000
Pro forma revenue					22,400,000	19,600,000
Pro forma earnings					$ 833,000	$ 772,000
Passport Health Plan Inc
Business Acquisition [Line Items]
Purchase price			66,000
Preliminary closing adjustments			$ 20,000
Number of members eligible for the health care programs, approximately \| member		337		337	337
Goodwill								$ 30,000
Your Care Health Plan Inc
Business Acquisition [Line Items]
Preliminary closing adjustments	$ 42,000
Number of members eligible for the health care programs, approximately \| member	47
Goodwill	$ 31,000

Business Combinations - Summarizes the Preliminary Values of the Assets acquired and Liabilities Assumed at the Date of Acquisition (Details) - Health Plans Segment $ in Millions	Dec. 31, 2020 USD ($)
Assets acquired:
Cash and cash equivalents	$ 310
Investments	312
Receivables	166
Prepaid expenses and other current assets	16
Property and equipment	3
Intangible assets	191
Goodwill	488
Restricted investments	49
Other assets	14
Liabilities assumed:
Medical claims and benefits payable	(294)
Amounts due government agencies	(143)
Accounts payable, accrued and other long-term liabilities	(84)
Deferred income taxes	(20)
Net purchase price paid	$ 1,008

Business Combinations - Intangible Assets (Details) $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets value	$ 235
Intangible assets amortization period	6 years 6 months
Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible asset useful life	5 years
Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible asset useful life	16 years
Contract rights - member list
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets value	$ 193
Intangible assets amortization period	5 years 3 months 18 days
Contract rights - member list \| Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible asset useful life	5 years
Contract rights - member list \| Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible asset useful life	10 years
Provider network
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets value	$ 27
Intangible asset useful life	10 years
Intangible assets amortization period	10 years
Trade name
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets value	$ 15
Intangible assets amortization period	15 years 4 months 24 days
Trade name \| Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible asset useful life	10 years
Trade name \| Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible asset useful life	16 years

Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Jan. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Recognized loss		$ 6
Cash received for partial settlement of call option		$ 27	$ 578	$ 623
Debt instrument, interest rate, stated percentage		4.875%
1.125% Convertible Notes \| Convertible Debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Repayments of debt	$ 39	$ 39
Current portion of long-term debt	$ 12	$ 0	$ 12
Debt instrument, interest rate, stated percentage	1.125%	1.125%	1.125%

Fair Value Measurements - Financial Instruments on a Recurring Basis (Details) - USD ($) $ in Millions	Dec. 31, 2020	Sep. 30, 2020	Dec. 31, 2019
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	$ 1,875		$ 1,946
Total assets	1,875		1,975
Contingent consideration liabilities	46	$ 46
Total liabilities	46		29
Corporate debt securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	1,256		1,178
Mortgage-backed securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	392		420
Asset-backed securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	132		127
Municipal securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	68		78
Certificates of deposit
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			1
U.S. Treasury notes
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	27		86
Government-sponsored enterprise securities (“GSEs”)
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			49
Other
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			7
Call option derivative asset
Fair value of assets measured on recurring basis
Call option derivative asset			29
Conversion option derivative liability
Fair value of assets measured on recurring basis
Conversion option derivative liability			29
Level 1
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			0
Total assets	0		0
Contingent consideration liabilities	0
Total liabilities	0		0
Level 1 \| Corporate debt securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	0		0
Level 1 \| Mortgage-backed securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	0		0
Level 1 \| Asset-backed securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	0		0
Level 1 \| Municipal securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	0		0
Level 1 \| Certificates of deposit
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			0
Level 1 \| U.S. Treasury notes
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	0		0
Level 1 \| Government-sponsored enterprise securities (“GSEs”)
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			0
Level 1 \| Other
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			0
Level 1 \| Call option derivative asset
Fair value of assets measured on recurring basis
Call option derivative asset			0
Level 1 \| Conversion option derivative liability
Fair value of assets measured on recurring basis
Conversion option derivative liability			0
Level 2
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			1,946
Total assets	1,875		1,946
Contingent consideration liabilities	0
Total liabilities	0		0
Level 2 \| Corporate debt securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	1,256		1,178
Level 2 \| Mortgage-backed securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	392		420
Level 2 \| Asset-backed securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	132		127
Level 2 \| Municipal securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	68		78
Level 2 \| Certificates of deposit
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			1
Level 2 \| U.S. Treasury notes
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	27		86
Level 2 \| Government-sponsored enterprise securities (“GSEs”)
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			49
Level 2 \| Other
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			7
Level 2 \| Call option derivative asset
Fair value of assets measured on recurring basis
Call option derivative asset			0
Level 2 \| Conversion option derivative liability
Fair value of assets measured on recurring basis
Conversion option derivative liability			0
Level 3
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			0
Total assets	0		29
Contingent consideration liabilities	46
Total liabilities	46		29
Level 3 \| Corporate debt securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	0		0
Level 3 \| Mortgage-backed securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	0		0
Level 3 \| Asset-backed securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	0		0
Level 3 \| Municipal securities
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	0		0
Level 3 \| Certificates of deposit
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			0
Level 3 \| U.S. Treasury notes
Fair value of assets measured on recurring basis
Debt securities, available-for-sale	$ 0		0
Level 3 \| Government-sponsored enterprise securities (“GSEs”)
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			0
Level 3 \| Other
Fair value of assets measured on recurring basis
Debt securities, available-for-sale			0
Level 3 \| Call option derivative asset
Fair value of assets measured on recurring basis
Call option derivative asset			29
Level 3 \| Conversion option derivative liability
Fair value of assets measured on recurring basis
Conversion option derivative liability			$ 29

Fair Value Measurements - Balance Sheet Grouping (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Current assets \| (Loss) gain on call option
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	$ 0	$ 29
Current liabilities \| Conversion option derivative liability
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability	$ 0	$ 29

Fair Value Measurements - Long-Term Debt (Details) - USD ($) $ in Millions	Dec. 31, 2020	Jan. 31, 2020	Dec. 31, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, interest rate, stated percentage	4.875%
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	$ 2,127		$ 1,255
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	$ 2,276		1,347
Senior Notes \| 4.375% Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, interest rate, stated percentage	4.375%
Senior Notes \| 4.375% Notes \| Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	$ 789		0
Senior Notes \| 4.375% Notes \| Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	$ 843		0
Senior Notes \| 5.375% Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, interest rate, stated percentage	5.375%
Senior Notes \| 5.375% Notes \| Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	$ 697		696
Senior Notes \| 5.375% Notes \| Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	$ 742		745
Senior Notes \| 3.875% Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, interest rate, stated percentage	3.875%
Senior Notes \| 3.875% Notes \| Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	$ 641		0
Senior Notes \| 3.875% Notes \| Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	$ 691		0
Senior Notes \| 4.875% Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, interest rate, stated percentage	4.875%
Senior Notes \| 4.875% Notes \| Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	$ 0		327
Senior Notes \| 4.875% Notes \| Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	0		340
Term Loan Facility \| Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	0		220
Term Loan Facility \| Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	$ 0		$ 220
Convertible Debt \| 4.875% Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, interest rate, stated percentage	4.875%
Convertible Debt \| 1.125% Convertible Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, interest rate, stated percentage	1.125%	1.125%	1.125%
Convertible Debt \| 1.125% Convertible Notes \| Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	$ 0		$ 12
Convertible Debt \| 1.125% Convertible Notes \| Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair values of long-term debt	$ 0		$ 42

Investments - Schedule of Investments (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 1,826	$ 1,941
Gross Unrealized Gains	50	7
Gross Unrealized Losses	1	2
Estimated Fair Value	1,875	1,946
Corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,220	1,174
Gross Unrealized Gains	36	5
Gross Unrealized Losses	0	1
Estimated Fair Value	1,256	1,178
Corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	383	420
Gross Unrealized Gains	10	1
Gross Unrealized Losses	1	1
Estimated Fair Value	392	420
Asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	130	126
Gross Unrealized Gains	2	1
Gross Unrealized Losses	0	0
Estimated Fair Value	132	127
Municipal securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	66	78
Gross Unrealized Gains	2	0
Gross Unrealized Losses	0	0
Estimated Fair Value	68	78
U.S. Treasury notes
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	27	86
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair Value	$ 27	86
GSEs
Debt Securities, Available-for-sale [Line Items]
Amortized Cost		49
Gross Unrealized Gains		0
Gross Unrealized Losses		0
Estimated Fair Value		49
Certificate of deposit
Debt Securities, Available-for-sale [Line Items]
Amortized Cost		1
Gross Unrealized Gains		0
Gross Unrealized Losses		0
Estimated Fair Value		1
Other
Debt Securities, Available-for-sale [Line Items]
Amortized Cost		7
Gross Unrealized Gains		0
Gross Unrealized Losses		0
Estimated Fair Value		$ 7

Investments - Contractual Maturities (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Amortized Cost
Due in one year or less	$ 474
Due after one year through five years	892
Due after five years through ten years	132
Due after ten years	328
Amortized Cost	1,826	$ 1,941
Estimated Fair Value
Due in one year or less	475
Due after one year through five years	926
Due after five years through ten years	137
Due after ten years	337
Estimated Fair Value	$ 1,875

Investments - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
Investments - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]
Gross realized investment gains	$ 6	$ 13
Amortized Cost, Due in one year or less	134
Amortized Cost, Due one year through five years	$ 2

Investments - Available-for-Sale (Details) $ in Millions	Dec. 31, 2020 USD ($) security	Dec. 31, 2019 USD ($) security
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	$ 77	$ 365
Unrealized Losses	$ 1	$ 2
Total Number of Positions \| security	21	239
Mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	$ 77	$ 143
Unrealized Losses	$ 1	$ 1
Total Number of Positions \| security	21	72
Corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	$ 0	$ 222
Unrealized Losses	$ 0	$ 1
Total Number of Positions \| security	0	167

Investments - Balances of Restricted Investments (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Schedule of Held-to-maturity Securities [Line Items]
Restricted investments	$ 136	$ 79
Magellan Complete Care
Schedule of Held-to-maturity Securities [Line Items]
Restricted investments	49	0
Florida
Schedule of Held-to-maturity Securities [Line Items]
Restricted investments	12	12
New Mexico
Schedule of Held-to-maturity Securities [Line Items]
Restricted investments	21	21
New York
Schedule of Held-to-maturity Securities [Line Items]
Restricted investments	14	9
Ohio
Schedule of Held-to-maturity Securities [Line Items]
Restricted investments	16	12
Other
Schedule of Held-to-maturity Securities [Line Items]
Restricted investments	$ 24	$ 25

Property, Equipment, and Capitalized Software, Net - Additional Information (Details)	12 Months Ended
	Dec. 31, 2020
Furniture and equipment \| Minimum
Property, Plant and Equipment [Line Items]
Useful life of property plant and equipment	3 years
Furniture and equipment \| Maximum
Property, Plant and Equipment [Line Items]
Useful life of property plant and equipment	7 years
Software
Property, Plant and Equipment [Line Items]
Useful life of property plant and equipment	3 years
Leasehold improvements \| Minimum
Property, Plant and Equipment [Line Items]
Useful life of property plant and equipment	5 years
Leasehold improvements \| Maximum
Property, Plant and Equipment [Line Items]
Useful life of property plant and equipment	10 years
Building and improvements \| Minimum
Property, Plant and Equipment [Line Items]
Useful life of property plant and equipment	31 years 6 months
Building and improvements \| Maximum
Property, Plant and Equipment [Line Items]
Useful life of property plant and equipment	40 years

Property, Equipment, and Capitalized Software, Net - Summary of Property, Equipment, and Capitalized Software (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Total cost	$ 752	$ 687
Less: accumulated amortization - capitalized software	(385)	(351)
Less: accumulated depreciation and amortization - furniture, equipment, building, and improvements	(192)	(179)
Total accumulated depreciation and amortization	(577)	(530)
ROU assets - finance leases	216	228
Property, equipment, and capitalized software, net	391	385
Capitalized software
Property, Plant and Equipment [Line Items]
Total cost	475	421
Furniture and equipment
Property, Plant and Equipment [Line Items]
Total cost	221	213
Building and improvements
Property, Plant and Equipment [Line Items]
Total cost	49	49
Land
Property, Plant and Equipment [Line Items]
Total cost	4	4
Magellan Complete Care
Property, Plant and Equipment [Line Items]
Total cost	$ 3	$ 0

Property, Equipment, and Capitalized Software, Net - Depreciation and Amortization (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Recorded in depreciation and amortization:
Amortization of capitalized software	$ 38	$ 33	$ 42
Depreciation and amortization of furniture, equipment, building, and improvements	16	21	36
Amortization of intangible assets	15	18	21
Amortization of finance leases	19	17	0
Subtotal	88	89	99
Recorded in cost of service revenue:
Amortization of capitalized software and deferred contract costs	0	0	28
Total depreciation and amortization recognized	$ 88	$ 89	$ 127

Leases - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
Leases - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2020
Lessee, Lease, Description [Line Items]
Operating lease, remaining lease term		8 years
Operating lease renewal term		10 years
Operating leases, weighted average remaining lease term		4 years
Finance lease renewal term		25 years
Finance leases, weighted average remaining lease term		15 years
Operating leases, weighted average discount rate		5.20%
Finance leases, weighted average discount rate		6.50%
Operating lease, expense	$ 62
Minimum
Lessee, Lease, Description [Line Items]
Finance lease, remaining lease term		1 year
Maximum
Lessee, Lease, Description [Line Items]
Finance lease, remaining lease term		18 years

Leases - Components of Lease Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Operating lease expense	$ 28	$ 34
Finance lease expense:
Amortization of ROU assets	19	17	$ 0
Interest on lease liabilities	15	15
Total finance lease expense	$ 34	$ 32

Leases - Supplemental Cash Flow (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash used in operating activities:
Operating leases	$ 30	$ 36
Finance leases	15	15
Cash used in financing activities:
Finance leases	9	6
ROU assets recognized in exchange for lease obligations:
Operating leases	28	99
Finance leases	$ 7	$ 245

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
ROU assets
Other assets	$ 58	$ 65
Total other assets	71	65
Lease liabilities
Accounts payable and accrued liabilities (current)	21	25
Other long-term liabilities (non-current)	42	48
Total operating lease liabilities	76	73
ROU assets
Property, equipment, and capitalized software, net	216	228
Lease liabilities
Accounts payable and accrued liabilities (current)	12	8
Finance lease liabilities (non-current)	225	231
Total finance lease liabilities	$ 237	$ 239
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssets	us-gaap:OtherAssets
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent	us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent	us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesNoncurrent	us-gaap:OtherLiabilitiesNoncurrent
Magellan Complete Care
ROU assets
Total other assets	$ 13	$ 0
Lease liabilities
Total operating lease liabilities	$ 13	$ 0

Leases - Lease Maturities (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Operating
2021	$ 29
2022	20
2023	16
2024	10
2025	6
Thereafter	3
Subtotal - undiscounted lease payments	84
Less imputed interest	(8)
Total operating lease liabilities	76	$ 73
Finance
2021	26
2022	24
2023	22
2024	22
2025	23
Thereafter	266
Subtotal - undiscounted lease payments	383
Less imputed interest	(146)
Total finance lease liabilities	$ 237	$ 239

Goodwill and Intangible Assets, Net - Balances of Goodwill (Details) - Health Plans - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Goodwill [Roll Forward]
Beginning balance	$ 143	$ 143
Acquisitions	549	0
Dispositions	0	0
Impairment and other	0	0
Ending balance	$ 692	$ 143

Goodwill and Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Future Amortization Expenses
Future amortization expense, 2021	$ 46
Future amortization expense, 2022	44
Future amortization expense, 2023	44
Future amortization expense, 2024	44
Future amortization expense, 2025	43
Health Plans
Finite-Lived Intangible Assets [Line Items]
Gross goodwill	994	$ 445
Accumulated impairment loss	$ 302	$ 302

Goodwill and Intangible Assets, Net - Intangible Assets Balances (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Cost	$ 432	$ 199
Accumulated Amortization	183	170
Carrying Amount	249	29
Contract rights and licenses
Finite-Lived Intangible Assets [Line Items]
Cost	370	179
Accumulated Amortization	168	156
Carrying Amount	202	23
Provider networks
Finite-Lived Intangible Assets [Line Items]
Cost	47	20
Accumulated Amortization	15	14
Carrying Amount	32	6
Trade name
Finite-Lived Intangible Assets [Line Items]
Cost	15	0
Accumulated Amortization	0	0
Carrying Amount	$ 15	$ 0

Medical Claims and Benefits Payable - Medical Claims and Future Benefits (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Liability for Claims and Claims Adjustment Expense [Line Items]
Fee-for-service claims incurred but not paid (“IBNP”)	$ 1,647	$ 1,406	$ 1,562
Pharmacy payable	157	126	115
Capitation payable	70	55	52
Other	528	267	232
Total	2,696	1,854	1,961	$ 2,192
Magellan Complete Care
Liability for Claims and Claims Adjustment Expense [Line Items]
Total	$ 294	$ 0	$ 0

Medical Claims and Benefits Payable - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Insurance [Abstract]
Non-risk provide payables	$ 235	$ 132	$ 107
Favorable (unfavorable) adjustment	$ 119	$ 271	341
CMS Subsidies
Liability for Claims and Claims Adjustment Expense [Line Items]
Disposal group, operating expense			$ 81

Medical Claims and Benefits Payable - Components of the Change (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Medical claims and benefits payable, beginning balance	$ 1,854	$ 1,961	$ 2,192
Components of medical care costs related to:
Current year	15,939	14,176	15,478
Prior periods	(119)	(271)	(341)
Total medical care costs	15,820	13,905	15,137
Payments for medical care costs related to:
Current year	13,871	12,554	13,671
Prior years	1,507	1,482	1,710
Total paid	15,378	14,036	15,381
Acquisition - Magellan Complete Care	294	0	0
Change in non-risk and other provider payables	106	24	13
Medical claims and benefits payable, ending balance	$ 2,696	$ 1,854	1,961
CMS Subsidies
Liability for Claims and Claims Adjustment Expense [Line Items]
Disposal group, operating expense			$ 81

Medical Claims and Benefits Payable - Incurred Claims and Allocated Adjustment Expense (Details) $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($) claim	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Product Information [Line Items]
Incurred Claims and Allocated Claims Adjustment Expenses	$ 15,820	$ 13,905	$ 15,137
Incurred Claims and Allocated Claims Adjustment Expenses	45,255
Total IBNP	1,631
Benefit Year 2018
Product Information [Line Items]
Incurred Claims and Allocated Claims Adjustment Expenses	15,233	15,245	$ 15,478
Total IBNP	$ 11
Cumulative number of reported claims (in claim) \| claim	110,000,000
Benefit Year 2019
Product Information [Line Items]
Incurred Claims and Allocated Claims Adjustment Expenses	$ 14,083	$ 14,176
Total IBNP	$ 27
Cumulative number of reported claims (in claim) \| claim	100,000,000
Benefit Year 2020
Product Information [Line Items]
Incurred Claims and Allocated Claims Adjustment Expenses	$ 15,939
Total IBNP	$ 1,593
Cumulative number of reported claims (in claim) \| claim	93,000,000

Medical Claims and Benefits Payable - Cumulative Paid Claims and Allocated Claims Adjustment Expenses (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Product Information [Line Items]
Claims paid	$ 43,149
Benefit Year 2018
Product Information [Line Items]
Claims paid	15,222	$ 15,220	$ 13,752
Benefit Year 2019
Product Information [Line Items]
Claims paid	14,056	$ 12,554
Benefit Year 2020
Product Information [Line Items]
Claims paid	$ 13,871

Medical Claims and Benefits Payable - Reconciliation of Claims Development (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Insurance [Abstract]
Incurred claims and allocated claims adjustment expenses	$ 45,255
Less: cumulative paid claims and allocated claims adjustment expenses	(43,149)
All outstanding liabilities before 2018	16
Acquisition - Magellan Complete Care	294	$ 0	$ 0
Non-risk and other provider payables	280
Total	$ 2,696	$ 1,854	$ 1,961	$ 2,192

Debt - Maturities (Details) $ in Millions	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
Percentage of contractual interest rate	4.875%
Net carrying amount	$ 2,150
2021	0
2022	700
2023	0
2024	0
2025	0
Thereafter	$ 1,450
Senior Notes \| 4.375% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate	4.375%
Net carrying amount	$ 800
2021	0
2022	0
2023	0
2024	0
2025	0
Thereafter	$ 800
Senior Notes \| 5.375% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate	5.375%
Net carrying amount	$ 700
2021	0
2022	700
2023	0
2024	0
2025	0
Thereafter	$ 0
Senior Notes \| 3.875% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate	3.875%
Net carrying amount	$ 650
2021	0
2022	0
2023	0
2024	0
2025	0
Thereafter	$ 650

Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions	Dec. 31, 2020	Jan. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Percentage of contractual interest rate	4.875%
Total (1)	$ 0		$ 18
Less: debt issuance costs	(23)		(7)
Total	$ 2,127		$ 1,237
Convertible Debt \| 1.125% Convertible Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate	1.125%	1.125%	1.125%
Current portion of long-term debt	$ 0	$ 12	$ 12
Convertible Debt \| 4.875% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate	4.875%
Term loan facility \| Term loan facility
Debt Instrument [Line Items]
Current portion of long-term debt	$ 0		6
Non-current portion of long-term debt	$ 0		214
Senior Notes \| 4.375% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate	4.375%
Non-current portion of long-term debt	$ 800		0
Senior Notes \| 5.375% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate	5.375%
Non-current portion of long-term debt	$ 700		700
Senior Notes \| 3.875% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate	3.875%
Non-current portion of long-term debt	$ 650		0
Senior Notes \| 4.875% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate	4.875%
Non-current portion of long-term debt	$ 0		$ 330

Debt - Credit Agreement (Details) - Term Loan Facility	1 Months Ended
Debt - Credit Agreement (Details) - Term Loan Facility	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	May 31, 2020 USD ($)
Line of Credit Facility [Line Items]
Agreement term	5 years
Incremental Term Loan
Line of Credit Facility [Line Items]
Incremental term loans	$ 500,000,000		$ 150,000,000
Net leverage		3
Term Loan Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	1,000,000,000.0		$ 500,000,000
Amount outstanding under Letter of Credit		$ 0
Swingline Sub Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	15,000,000
Letter Of Credit Sub-Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 100,000,000

Debt - Senior Notes (Details) - USD ($)		1 Months Ended	12 Months Ended
Debt - Senior Notes (Details) - USD ($)	Jun. 02, 2020	Dec. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Nov. 17, 2020
Debt Instrument [Line Items]
Percentage of contractual interest rate on notes		4.875%	4.875%
Repayment of credit facility			$ 0	$ 0	$ 300,000,000
Net carrying amount of debt		$ 2,150,000,000	$ 2,150,000,000
Senior Notes \| 4.375% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate on notes		4.375%	4.375%
Aggregate principal amount of notes outstanding	$ 800,000,000
Deferred issuance costs	11,000,000
Net carrying amount of debt		$ 800,000,000	$ 800,000,000
Senior Notes \| 5.375% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate on notes		5.375%	5.375%
Aggregate principal amount of notes outstanding		$ 700,000,000	$ 700,000,000
Net carrying amount of debt		$ 700,000,000	$ 700,000,000
Senior Notes \| 3.875% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate on notes		3.875%	3.875%
Net carrying amount of debt		$ 650,000,000	$ 650,000,000
Senior Notes \| 4.875% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate on notes		4.875%	4.875%
Aggregate principal amount of notes outstanding		$ 330,000,000	$ 330,000,000
Deferred issuance costs						$ 10,000,000
Settled percent		100.00%
Unpaid interest		$ 8,000,000	8,000,000
Unamortized issuance cost		$ 3,000,000	$ 3,000,000
Convertible Debt \| 4.375% Notes
Debt Instrument [Line Items]
Repayment of credit facility	$ 600,000,000
Convertible Debt \| 4.875% Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate on notes		4.875%	4.875%

Debt - Convertible Notes (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
Debt - Convertible Notes (Details) - USD ($) $ in Millions	Jan. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Percentage of contractual interest rate on notes		4.875%
Loss (gain) on debt repayment		$ (15)	$ 15	$ (22)
Debt repayment		$ (15)
Convertible Debt \| 1.125% Convertible Notes
Debt Instrument [Line Items]
Percentage of contractual interest rate on notes	1.125%	1.125%	1.125%
Repayments of debt	$ 39	$ 39
Current portion of long-term debt	$ 12	$ 0	$ 12

Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Current:
Federal	$ 281	$ 204	$ 272
State	26	12	18
Foreign	0	9	8
Total current	307	225	298
Deferred:
Federal	(13)	5	(3)
State	(7)	6	(3)
Foreign	1	(1)	0
Total deferred	(19)	10	(6)
Income tax expense	$ 288	$ 235	$ 292

Income Taxes - Reconciliation of the U.S. Federal Statutory Income Tax Rate (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Statutory federal tax (benefit) rate	21.00%	21.00%	21.00%
State income provision (benefit), net of federal	1.60%	1.40%	1.20%
Nondeductible health insurer fee (“HIF”)	6.10%	0.00%	7.30%
Nondeductible compensation	1.10%	1.20%	0.70%
Worthless stock deduction	0.00%	0.00%	(1.00%)
Other	0.20%	0.60%	0.00%
Effective tax expense rate	30.00%	24.20%	29.20%

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Accrued expenses and reserve liabilities	$ 52,000	$ 35,000
Other accrued medical costs	15,000	11,000
Net operating losses	11,000	13,000
Fixed assets and intangibles	0	26,000
Unearned premiums	18,000	11,000
Lease financing obligation	8,000	5,000
Tax credit carryover	7,000	11,000
Other	4,000	0
Valuation allowance	(17,000)	(24,000)
Total deferred income tax assets, net of valuation allowance	98,000	88,000
Fixed assets and intangibles	(7,000)	0
Prepaid expenses	(10,000)	(6,000)
Unrealized gains and losses	(12,000)	(1,000)
Other	0	(2,000)
Total deferred income tax liabilities	(29,000)	(9,000)
Net deferred income tax asset	$ 69,000	$ 79,000

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Operating Loss Carryforwards [Line Items]
Deferred tax assets	$ 17
Decrease in deferred tax asset valuation allowance	7
Valuation allowance	17	$ 24
Impact on effective tax rate if tax benefits are recognized	18
Liability for unrecognized tax benefits, potential decrease	10
State
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	189
Tax credit carryovers	3
Foreign
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	5
Tax credit carryovers	$ 5

Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Unrecognized tax benefits roll forward
Gross unrecognized tax benefits at beginning of period	$ (20)	$ (20)	$ (13)
Increases in tax positions for current year	0	0	(9)
Lapse in statute of limitations	0	0	2
Gross unrecognized tax benefits at end of period	$ (20)	$ (20)	$ (20)

Stockholders' Equity - Additional Information (Details) - USD ($)	1 Months Ended		2 Months Ended	3 Months Ended		12 Months Ended
	Feb. 11, 2021	Dec. 31, 2020	Dec. 31, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Sep. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Repurchased of common stock						$ 605,000,000	$ 54,000,000
Common stock purchases						606,000,000	47,000,000	$ 0
Cash paid for partial termination of 1.125% Warrants						$ 30,000,000	$ 514,000,000	$ 549,000,000
Unrecognized compensation forfeited rate						12.20%
Stock option expiration period						4 years
Granted (in shares)						0	0	0
RSAs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum award vesting period						4 years
Weighted average period for recognition						2 years 2 months 12 days
Unrecognized compensation expense		$ 42,000,000	$ 42,000,000			$ 42,000,000
Weighted average period of unrecognized compensation expense						2 years 2 months 12 days
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum award vesting period						3 years
Weighted average period for recognition						1 year 2 months 12 days
Unrecognized compensation expense		$ 23,000,000	$ 23,000,000			$ 23,000,000
Weighted average period of unrecognized compensation expense						1 year 2 months 12 days
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum award vesting period						4 years
Stock option expiration period						10 years
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee purchase price as a percentage of stock price						85.00%
Maximum annual contribution per employee						$ 25,000
Risk-free interest rate, minimum						0.20%
Risk-free interest rate, maximum						2.30%
Minimum expected volatility rate inputs for fair value measurement						31.00%
Maximum expected volatility rate inputs for fair value measurement						51.00%
Dividend yield						0.00%
Expected term of awards						6 months
2019 EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued under ESPP (in shares)							2,900,000
1.125% Warrants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stated percentage of warrants		1.125%	1.125%			1.125%
Warrants outstanding (in shares)		310,000	310,000			310,000
Cash paid for partial termination of 1.125% Warrants				$ 30,000,000
Stated interest rate		1.125%	1.125%			1.125%
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock authorized							$ 500,000,000		$ 500,000,000
Repurchased of common stock (in shares)		29,000	766,000		3,400,000	4,000,000
Repurchased of common stock		$ 6,000,000	$ 159,000,000		$ 446,000,000
Common stock purchases				$ 7,000,000
Average cost (USD per share)			$ 208.37		$ 132.45
Share-based compensation (in shares)						1,000,000
Common Stock \| Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation (in shares)						244,000	242,000
Common Stock \| Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Repurchased of common stock (in shares)	577,000
Repurchased of common stock	$ 122,000,000
Average cost (USD per share)	$ 211.65

Stockholders' Equity - Components of Share-based Compensation (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Pretax Charges	$ 57	$ 39	$ 27
Net-of-Tax Amount	53	37	26
RSAs, PSAs and PSUs (defined below)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Pretax Charges	47	29	17
Net-of-Tax Amount	44	28	17
Employee stock purchase plan and stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Pretax Charges	10	10	10
Net-of-Tax Amount	$ 9	$ 9	$ 9

Stockholders' Equity - Restricted and Performance Stock Activity (Details)	12 Months Ended
	Dec. 31, 2020 $ / shares shares
RSAs
RSAs and PSUs
Unvested balance, beginning of period (in shares) \| shares	447,680
Granted (in shares) \| shares	344,739
Vested (in shares) \| shares	(172,675)
Forfeited (in shares) \| shares	(34,660)
Unvested balance, shares end of period (in shares) \| shares	585,084
Weighted Average Grant Date Fair Value
Unvested balance, beginning balance (USD per share) \| $ / shares	$ 102.41
Granted (USD per share) \| $ / shares	127.89
Vested (USD per share) \| $ / shares	98.05
Forfeited (USD per share) \| $ / shares	113.10
Unvested balance, ending balance (USD per share) \| $ / shares	$ 118.07
PSUs
RSAs and PSUs
Unvested balance, beginning of period (in shares) \| shares	324,078
Granted (in shares) \| shares	188,522
Vested (in shares) \| shares	(7,368)
Forfeited (in shares) \| shares	(33,323)
Unvested balance, shares end of period (in shares) \| shares	471,909
Weighted Average Grant Date Fair Value
Unvested balance, beginning balance (USD per share) \| $ / shares	$ 101.45
Granted (USD per share) \| $ / shares	123.61
Vested (USD per share) \| $ / shares	68.16
Forfeited (USD per share) \| $ / shares	98.34
Unvested balance, ending balance (USD per share) \| $ / shares	$ 111.04

Stockholders' Equity - Fair Value of Awards Granted and Vested (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of restricted shares granted	$ 67	$ 53	$ 44
Fair value of restricted shares vested	23	21	18
RSAs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of restricted shares granted	44	33	28
Fair value of restricted shares vested	22	19	15
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of restricted shares granted	23	20	16
Fair value of restricted shares vested	1	2	0
PSAs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of restricted shares vested	$ 0	$ 0	$ 3

Stockholders' Equity - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Number of Shares
Beginning balance, outstanding (in shares)	405,000
Ending balance, outstanding (in shares)	405,000	405,000
Weighted Average Exercise Price
Beginning balance, outstanding (usd per share)	$ 64.79
Ending balance, outstanding (usd per share)	$ 64.79	$ 64.79
Stock options exercisable and expected to vest (in shares)	405,000
Exercisable (in shares)	405,000
Weighted Average Exercise Price, Stock options exercisable and expected to vest (usd per share)	$ 64.79
Weighted Average Exercise Price, Exercisable (usd per share)	$ 64.79
Outstanding, Aggregate Intrinsic Value	$ 60	$ 60
Exercisable, Aggregate Intrinsic Value	$ 60
Outstanding, Weighted Average Remaining Contractual term	6 years 4 months 24 days	6 years 4 months 24 days
Exercisable, Weighted Average Remaining Contractual term	6 years 4 months 24 days

Stockholders' Equity - Stock Options by Exercise Price (Details)	12 Months Ended
	Dec. 31, 2020 $ / shares shares
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options Outstanding, Number (in shares) \| shares	405,000
$33.02
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Lower end of range (usd per share)	$ 33.02
Options Outstanding, Number (in shares) \| shares	30,000
Options Outstanding, Weighted Average Remaining Contractual Life (Years)	2 years 2 months 12 days
Options Outstanding, Weighted-Average Exercise Price (usd per share)	$ 33.02
$67.33
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Upper end of range (usd per share)	$ 67.33
Options Outstanding, Number (in shares) \| shares	375,000
Options Outstanding, Weighted Average Remaining Contractual Life (Years)	6 years 9 months 18 days
Options Outstanding, Weighted-Average Exercise Price (usd per share)	$ 67.33

Employee Benefit Plans (Details) - USD ($) $ in Millions	12 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Postemployment Benefits [Abstract]
Maximum matching contribution by employer under defined contribution plan	4.00%
Expense recognized in connection with contributions	$ 28	$ 28	$ 36
Deferred compensation plan deferral percentage of basic salary	75.00%
Deferred compensation plan deferral percentage of bonus	90.00%

Commitments and Contingencies (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Statutory Accounting Practices [Line Items]
Performance bond	$ 35
Net assets of subsidiaries subject to restrictions	1,960	$ 1,810
Aggregate statutory capital and surplus	2,020
Required minimum statutory capital surplus	1,310
Parent Company
Statutory Accounting Practices [Line Items]
Cash, cash equivalents, and investments	644	997
Magellan Complete Care
Statutory Accounting Practices [Line Items]
Net assets of subsidiaries subject to restrictions	420
Aggregate statutory capital and surplus	$ 420	$ 230

Segments - Narrative (Details)	12 Months Ended
Segments - Narrative (Details)	Dec. 31, 2020 Segment
Segment Reporting [Abstract]
Number of reportable segments	2

Segments - Schedule of Operating Segment Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Total revenue	$ 19,423	$ 16,829	$ 18,890
Margin	2,479	2,303	2,518
Total assets	9,532	6,787	7,154
Health Plans
Segment Reporting Information [Line Items]
Total revenue	19,415	16,815	18,471
Total assets	8,359	5,265	6,165
Other
Segment Reporting Information [Line Items]
Total revenue	8	14	419
Margin	0	0	43
Total assets	$ 1,173	$ 1,522	$ 989

- Definition

Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

+ References

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Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity.

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+ Details

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Segments - Reconciliation of Gross Margin to Consolidated Income (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Total margin	$ 2,479	$ 2,303	$ 2,518
Add: Other operating revenues	19,423	16,829	18,890
Less: Other operating expenses	(18,345)	(15,785)	(17,759)
Operating income	1,078	1,044	1,131
Less: other expenses, net	117	72	132
Income before income tax expense	961	972	999
Health Plans
Segment Reporting Information [Line Items]
Add: Other operating revenues	19,415	16,815	18,471
Other
Segment Reporting Information [Line Items]
Total margin	0	0	43
Add: Other operating revenues	8	14	419
Operating Segments
Segment Reporting Information [Line Items]
Total margin	2,479	2,303	2,518
Operating Segments \| Health Plans
Segment Reporting Information [Line Items]
Total margin	2,479	2,303	2,475
Operating Segments \| Other
Segment Reporting Information [Line Items]
Total margin	0	0	43
Other Operating
Segment Reporting Information [Line Items]
Add: Other operating revenues	1,124	621	871
Less: Other operating expenses	$ (2,525)	$ (1,880)	$ (2,258)

Condensed Financial Information of Registrant - Condensed Balance Sheets (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 4,154	$ 2,452	$ 2,826
Investments	1,875	1,946
Receivables	1,672	1,406
Prepaid expenses and other current assets	175	163
Total current assets	7,876	5,967
Property, equipment, and capitalized software, net	391	385
Goodwill and intangible assets, net	941	172
Deferred income taxes	69	79
Total assets	9,532	6,787	7,154
Current liabilities:
Accounts payable, accrued liabilities and other	641	502
Total current liabilities	4,965	3,269
Long-term debt	2,127	1,237
Finance lease liabilities	225	231
Other long-term liabilities	119	90
Total liabilities	7,436	4,827
Stockholders’ equity:
Common stock, $0.001 par value; 150 million shares authorized; outstanding: 59 million shares at December 31, 2020, and 62 million at December 31, 2019	0	0
Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding	0	0
Additional paid-in capital	199	175
Accumulated other comprehensive income	37	4
Retained earnings	1,860	1,781
Total stockholders’ equity	2,096	1,960	$ 1,647	$ 1,337
Total liabilities and stockholders’ equity	9,532	6,787
Parent Company
Current assets:
Cash and cash equivalents	575	836
Investments	69	161
Receivables	2	2
Due from affiliates	114	49
Prepaid expenses and other current assets	65	75
Total current assets	825	1,123
Property, equipment, and capitalized software, net	339	327
Goodwill and intangible assets, net	369	13
Investments in subsidiaries	3,228	2,225
Deferred income taxes	5	10
Advances to related parties and other assets	83	76
Total assets	4,849	3,774
Current liabilities:
Accounts payable, accrued liabilities and other	338	307
Total current liabilities	338	307
Long-term debt	2,127	1,237
Finance lease liabilities	225	231
Other long-term liabilities	63	39
Total liabilities	2,753	1,814
Stockholders’ equity:
Common stock, $0.001 par value; 150 million shares authorized; outstanding: 59 million shares at December 31, 2020, and 62 million at December 31, 2019	0	0
Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding	0	0
Additional paid-in capital	199	175
Accumulated other comprehensive income	37	4
Retained earnings	1,860	1,781
Total stockholders’ equity	2,096	1,960
Total liabilities and stockholders’ equity	$ 4,849	$ 3,774

Condensed Financial Information of Registrant - Condensed Balance Sheets - Additional Information (Details) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Condensed Financial Statements, Captions [Line Items]
Common stock, par value (dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares, outstanding	59,000,000	62,000,000
Preferred stock, par value (dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

Condensed Financial Information of Registrant - Condensed Statements of Operations (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenue:
Investment income and other revenue	$ 76	$ 132	$ 125
Total revenue	19,423	16,829	18,890
Expenses:
General and administrative expenses	1,480	1,296	1,333
Depreciation and amortization	88	89	99
Total operating expenses	18,345	15,785	17,759
Operating income	1,078	1,044	1,131
Interest expense	102	87	115
Other expenses (income), net	15	(15)	17
Total other expenses, net	117	72	131
Income tax (benefit) expense	288	235	292
Net income	673	737	707
Parent Company
Revenue:
Administrative services fees	1,208	1,038	1,138
Investment income and other revenue	13	18	17
Total revenue	1,221	1,056	1,155
Expenses:
General and administrative expenses	1,089	937	1,007
Depreciation and amortization	67	63	69
Other operating expenses, net	24	4	6
Total operating expenses	1,180	1,004	1,082
Operating income	41	52	73
Interest expense	102	87	114
Other expenses (income), net	15	(15)	17
Loss before income tax (benefit) expense and equity in net earnings of subsidiaries	(76)	(20)	(58)
Income tax (benefit) expense	(5)	9	(14)
Net loss before equity in net earnings of subsidiaries	(71)	(29)	(44)
Equity in net earnings of subsidiaries	744	766	751
Net income	$ 673	$ 737	$ 707

Condensed Financial Information of Registrant - Condensed Statements of Comprehensive Income (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Condensed Financial Statements, Captions [Line Items]
Net income	$ 673	$ 737	$ 707
Statement of Other Comprehensive Income [Abstract]
Unrealized investment income (loss)	44	16	(3)
Less: effect of income taxes	11	4	(1)
Other comprehensive income (loss), net of tax	33	12	(2)
Comprehensive income	706	749	705
Parent Company
Condensed Financial Statements, Captions [Line Items]
Net income	673	737	707
Statement of Other Comprehensive Income [Abstract]
Unrealized investment income (loss)	44	16	(3)
Less: effect of income taxes	11	4	(1)
Other comprehensive income (loss), net of tax	33	12	(2)
Comprehensive income	$ 706	$ 749	$ 705

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Condensed Financial Information of Registrant - Condensed Statements of Cash Flows (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Operating activities:
Net cash provided by operating activities	$ 1,890	$ 427	$ (314)
Investing activities:
Purchases of investments	(670)	(2,536)	(1,444)
Proceeds from sales and maturities of investments	1,097	2,302	2,445
Purchases of property, equipment and capitalized software	(74)	(57)	(30)
Net cash received from sale of subsidiaries	0	0	190
Other, net	2	(2)	(18)
Net cash (used in) provided by investing activities	(400)	(293)	1,143
Financing activities:
Proceeds from senior notes offerings, net of issuance costs	1,429	0	0
Common stock purchases	(606)	(47)	0
Repayment of term loan facility	(600)	0	0
Proceeds from borrowings under term loan facility	380	220	0
Repayment of senior notes	(338)	0	0
Cash paid for partial termination of warrants	(30)	(514)	(549)
Cash paid for partial settlement of conversion option	(27)	(578)	(623)
Cash received for partial settlement of call option	27	578	623
Repayment of principal amount of convertible notes	(12)	(240)	(362)
Repayment of credit facility	0	0	(300)
Other, net	2	29	18
Net cash provided by (used in) financing activities	225	(552)	(1,193)
Net increase (decrease) in cash and cash equivalents, and restricted cash and cash equivalents	1,715	(418)	(364)
Cash and cash equivalents, and restricted cash and cash equivalents at beginning of period	2,508	2,926	3,290
Cash and cash equivalents, and restricted cash and cash equivalents at end of period	4,223	2,508	2,926
Parent Company
Operating activities:
Net cash provided by operating activities	59	64	118
Investing activities:
Capital contributions to subsidiaries	(107)	(43)	(145)
Dividends received from subsidiaries	635	1,373	298
Purchases of investments	(188)	(152)	(136)
Proceeds from sales and maturities of investments	282	93	388
Purchases of property, equipment and capitalized software	(74)	(56)	(22)
Net cash paid in business combinations	(1,028)	0	0
Net cash received from sale of subsidiaries	0	0	242
Change in amounts due to/from affiliates	(68)	38	6
Other, net	3	1	0
Net cash (used in) provided by investing activities	(545)	1,254	631
Financing activities:
Proceeds from senior notes offerings, net of issuance costs	1,429	0	0
Common stock purchases	(606)	(47)	0
Repayment of term loan facility	(600)	0	0
Proceeds from borrowings under term loan facility	380	220	0
Repayment of senior notes	(338)	0	0
Cash paid for partial termination of warrants	(30)	(514)	(549)
Cash paid for partial settlement of conversion option	(27)	(578)	(623)
Cash received for partial settlement of call option	27	578	623
Repayment of principal amount of convertible notes	(12)	(240)	(362)
Repayment of credit facility	0	0	(300)
Other, net	2	29	19
Net cash provided by (used in) financing activities	225	(552)	(1,192)
Net increase (decrease) in cash and cash equivalents, and restricted cash and cash equivalents	(261)	766	(443)
Cash and cash equivalents, and restricted cash and cash equivalents at beginning of period	836	70	513
Cash and cash equivalents, and restricted cash and cash equivalents at end of period	$ 575	$ 836	$ 70

Condensed Financial Information of Registrant - Notes to Condensed Financial Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Parent Company
Related Party Transaction [Line Items]
Services revenue from subsidiaries	$ 1,208	$ 1,038	$ 1,137