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SEGMENT INFORMATION | 3 Months Ended
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Mar. 31, 2016
Segment Reporting [Abstract] |
SEGMENT INFORMATION | SEGMENT INFORMATION We manage our business with three reportable segments: Retail, Group, and Healthcare Services. In addition, the Other Businesses category includes businesses that are not individually reportable because they do not meet the quantitative thresholds required by generally accepted accounting principles. These segments are based on a combination of the type of health plan customer and adjacent businesses centered on well-being solutions for our health plans and other customers, as described below. These segment groupings are consistent with information used by our Chief Executive Officer to assess performance and allocate resources. The Retail segment consists of Medicare benefits, marketed to individuals or directly via group accounts, as well as individual commercial fully-insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and financial protection products. In addition, the Retail segment also includes our contract with CMS to administer the Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program and contracts with various states to provide Medicaid, dual eligible, and Long-Term Support Services benefits, collectively our state-based contracts. The Group segment consists of employer group commercial fully-insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and voluntary insurance benefits, as well as administrative services only, or ASO products. In addition, our Group segment includes our health and wellness products (primarily marketed to employer groups) and military services business, primarily our TRICARE South Region contract. The Healthcare Services segment includes services offered to our health plan members as well as to third parties, including pharmacy solutions, provider services, home based services, and clinical programs, as well as services and capabilities to advance population health. We will continue to report under the category of Other Businesses those businesses which do not align with the reportable segments described above, primarily our closed-block long-term care insurance policies. Our Healthcare Services intersegment revenues primarily relate to managing prescription drug coverage for members of our other segments through Humana Pharmacy Solutions®, or HPS, and includes the operations of Humana Pharmacy, Inc., our mail order pharmacy business. These revenues consist of the prescription price (ingredient cost plus dispensing fee), including the portion to be settled with the member (co-share) or with the government (subsidies), plus any associated administrative fees. Services revenues related to the distribution of prescriptions by third party retail pharmacies in our networks are recognized when the claim is processed and product revenues from dispensing prescriptions from our mail order pharmacies are recorded when the prescription or product is shipped. Our pharmacy operations, which are responsible for designing pharmacy benefits, including defining member co-share responsibilities, determining formulary listings, contracting with retail pharmacies, confirming member eligibility, reviewing drug utilization, and processing claims, act as a principal in the arrangement on behalf of members in our other segments. As principal, our Healthcare Services segment reports revenues on a gross basis including co-share amounts from members collected by third party retail pharmacies at the point of service. In addition, our Healthcare Services intersegment revenues include revenues earned by certain owned providers derived from risk-based and non risk-based managed care agreements with our health plans. Under risk based agreements, the provider receives a monthly capitated fee that varies depending on the demographics and health status of the member, for each member assigned to these owned providers by our health plans. The owned provider assumes the economic risk of funding the assigned members’ healthcare services. Under non risk-based agreements, our health plans retain the economic risk of funding the assigned members' healthcare services. Our Healthcare Services segment reports provider services revenues associated with risk-based agreements on a gross basis, whereby capitation fee revenue is recognized in the period in which the assigned members are entitled to receive healthcare services. Provider services revenues associated with non risk-based agreements are presented net of associated healthcare costs. We present our consolidated results of operations from the perspective of the health plans. As a result, the cost of providing benefits to our members, whether provided via a third party provider or internally through a stand-alone subsidiary, is classified as benefits expense and excludes the portion of the cost for which the health plans do not bear responsibility, including member co-share amounts and government subsidies of $2.9 billion and $2.5 billion for the three months ended March 31, 2016 and 2015, respectively. In addition, depreciation and amortization expense associated with certain businesses in our Healthcare Services segment delivering benefits to our members, primarily associated with our provider services and pharmacy operations, are included with benefits expense. The amount of this expense was $27 million and $21 million for the three months ended March 31, 2016 and 2015, respectively. Other than those described previously, the accounting policies of each segment are the same and are described in Note 2 to the consolidated financial statements included in our 2015 Form 10-K. Transactions between reportable segments primarily consist of sales of services rendered by our Healthcare Services segment, primarily pharmacy, provider, and home based services as well as clinical programs, to our Retail and Group customers. Intersegment sales and expenses are recorded at fair value and eliminated in consolidation. Members served by our segments often use the same provider networks, enabling us in some instances to obtain more favorable contract terms with providers. Our segments also share indirect costs and assets. As a result, the profitability of each segment is interdependent. We allocate most operating expenses to our segments. Assets and certain corporate income and expenses are not allocated to the segments, including the portion of investment income not supporting segment operations, interest expense on corporate debt, and certain other corporate expenses. These items are managed at a corporate level. These corporate amounts are reported separately from our reportable segments and are included with intersegment eliminations in the tables presenting segment results below. Our segment results were as follows for the three months ended March 31, 2016 and 2015:
| Retail |  | Group |  | Healthcare Services |  | Other Businesses |  | Eliminations/ Corporate |  | Consolidated
| (in millions)
Three months ended March 31, 2016 |  |  |  |  |  |  |  |  |  |
Revenues - external customers |  |  |  |  |  |  |  |  |  |  |
Premiums: |  |  |  |  |  |  |  |  |  |  |
Individual Medicare Advantage | $ | 8,027 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 8,027 |
Group Medicare Advantage | 1,077 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,077 |
Medicare stand-alone PDP | 1,039 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,039 |
Total Medicare | 10,143 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 10,143 |
Fully-insured | 997 |  |  | 1,337 |  |  | — |  |  | — |  |  | — |  |  | 2,334 |
Specialty | 65 |  |  | 253 |  |  | — |  |  | — |  |  | — |  |  | 318 |
Medicaid and other | 630 |  |  | 5 |  |  | — |  |  | 10 |  |  | — |  |  | 645 |
Total premiums | 11,835 |  |  | 1,595 |  |  | — |  |  | 10 |  |  | — |  |  | 13,440 |
Services revenue: |  |  |  |  |  |  |  |  |  |  |
Provider | — |  |  | 13 |  |  | 58 |  |  | — |  |  | — |  |  | 71 |
ASO and other | 2 |  |  | 177 |  |  | — |  |  | 3 |  |  | — |  |  | 182 |
Pharmacy | — |  |  | — |  |  | 7 |  |  | — |  |  | — |  |  | 7 |
Total services revenue | 2 |  |  | 190 |  |  | 65 |  |  | 3 |  |  | — |  |  | 260 |
Total revenues - external customers | 11,837 |  |  | 1,785 |  |  | 65 |  |  | 13 |  |  | — |  |  | 13,700 |
Intersegment revenues |  |  |  |  |  |  |  |  |  |  |
Services | — |  |  | 21 |  |  | 4,754 |  |  | — |  |  | (4,775 | ) |  | — |
Products | — |  |  | — |  |  | 1,360 |  |  | — |  |  | (1,360 | ) |  | — |
Total intersegment revenues | — |  |  | 21 |  |  | 6,114 |  |  | — |  |  | (6,135 | ) |  | — |
Investment income | 27 |  |  | 5 |  |  | 7 |  |  | 15 |  |  | 46 |  |  | 100 |
Total revenues | 11,864 |  |  | 1,811 |  |  | 6,186 |  |  | 28 |  |  | (6,089 | ) |  | 13,800 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Benefits | 10,378 |  |  | 1,193 |  |  | — |  |  | 25 |  |  | (199 | ) |  | 11,397 |
Operating costs | 1,276 |  |  | 436 |  |  | 5,913 |  |  | 4 |  |  | (5,861 | ) |  | 1,768 |
Depreciation and amortization | 56 |  |  | 24 |  |  | 32 |  |  | — |  |  | (24 | ) |  | 88 |
Total operating expenses | 11,710 |  |  | 1,653 |  |  | 5,945 |  |  | 29 |  |  | (6,084 | ) |  | 13,253 |
Income (loss) from operations | 154 |  |  | 158 |  |  | 241 |  |  | (1 | ) |  | (5 | ) |  | 547 |
Interest expense | — |  |  | — |  |  | — |  |  | — |  |  | 47 |  |  | 47 |
Income (loss) before income taxes | $ | 154 |  |  | $ | 158 |  |  | $ | 241 |  |  | $ | (1 | ) |  | $ | (52 | ) |  | $ | 500 |
| Retail |  | Group |  | Healthcare Services |  | Other Businesses |  | Eliminations/ Corporate |  | Consolidated
| (in millions)
Three months ended March 31, 2015 |  |  |  |  |  |  |  |  |  |
Revenues - external customers |  |  |  |  |  |  |  |  |  |  |
Premiums: |  |  |  |  |  |  |  |  |  |  |
Individual Medicare Advantage | $ | 7,433 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 7,433 |
Group Medicare Advantage | 1,394 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,394 |
Medicare stand-alone PDP | 1,003 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,003 |
Total Medicare | 9,830 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 9,830 |
Fully-insured | 1,094 |  |  | 1,384 |  |  | — |  |  | — |  |  | — |  |  | 2,478 |
Specialty | 63 |  |  | 270 |  |  | — |  |  | — |  |  | — |  |  | 333 |
Medicaid and other | 591 |  |  | 6 |  |  | — |  |  | 10 |  |  | — |  |  | 607 |
Total premiums | 11,578 |  |  | 1,660 |  |  | — |  |  | 10 |  |  | — |  |  | 13,248 |
Services revenue: |  |  |  |  |  |  |  |  |  |  |
Provider | — |  |  | 9 |  |  | 308 |  |  | — |  |  | — |  |  | 317 |
ASO and other | 4 |  |  | 160 |  |  | — |  |  | 2 |  |  | — |  |  | 166 |
Pharmacy | — |  |  | — |  |  | 7 |  |  | — |  |  | — |  |  | 7 |
Total services revenue | 4 |  |  | 169 |  |  | 315 |  |  | 2 |  |  | — |  |  | 490 |
Total revenues - external customers | 11,582 |  |  | 1,829 |  |  | 315 |  |  | 12 |  |  | — |  |  | 13,738 |
Intersegment revenues |  |  |  |  |  |  |  |  |  |  |
Services | — |  |  | 22 |  |  | 4,367 |  |  | — |  |  | (4,389 | ) |  | — |
Products | — |  |  | — |  |  | 1,150 |  |  | — |  |  | (1,150 | ) |  | — |
Total intersegment revenues | — |  |  | 22 |  |  | 5,517 |  |  | — |  |  | (5,539 | ) |  | — |
Investment income | 27 |  |  | 5 |  |  | — |  |  | 15 |  |  | 48 |  |  | 95 |
Total revenues | 11,609 |  |  | 1,856 |  |  | 5,832 |  |  | 27 |  |  | (5,491 | ) |  | 13,833 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Benefits | 9,936 |  |  | 1,226 |  |  | — |  |  | 23 |  |  | (180 | ) |  | 11,005 |
Operating costs | 1,254 |  |  | 453 |  |  | 5,560 |  |  | 3 |  |  | (5,325 | ) |  | 1,945 |
Depreciation and amortization | 44 |  |  | 23 |  |  | 42 |  |  | — |  |  | (16 | ) |  | 93 |
Total operating expenses | 11,234 |  |  | 1,702 |  |  | 5,602 |  |  | 26 |  |  | (5,521 | ) |  | 13,043 |
Income from operations | 375 |  |  | 154 |  |  | 230 |  |  | 1 |  |  | 30 |  |  | 790 |
Interest expense | — |  |  | — |  |  | — |  |  | — |  |  | 46 |  |  | 46 |
Income (loss) before income taxes | $ | 375 |  |  | $ | 154 |  |  | $ | 230 |  |  | $ | 1 |  |  | $ | (16 | ) |  | $ | 744 |

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- 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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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