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FAIR VALUE | 6 Months Ended
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Jun. 30, 2025
Fair Value Disclosures [Abstract] |
FAIR VALUE | FAIR VALUE Financial Assets The following table summarizes our fair value measurements at June 30, 2025 and December 31, 2024, respectively, for financial assets measured at fair value on a recurring basis:
| Fair Value Measurements Using
| Fair Value |  | Quoted Prices in Active Markets (Level 1) |  | Other Observable Inputs (Level 2) |  | Unobservable Inputs (Level 3)
| (in millions)
June 30, 2025 |  |  |  |  |  |  |
Cash equivalents | $ | 3,855 |  |  | $ | 3,855 |  |  | $ | — |  |  | $ | — |
Debt securities: |  |  |  |  |  |  |
U.S. Treasury and other U.S. government corporations and agencies: |  |  |  |  |  |  |
U.S. Treasury and agency obligations | 3,058 |  |  | — |  |  | 3,058 |  |  | — |
Mortgage-backed securities | 4,017 |  |  | — |  |  | 4,017 |  |  | — |
Tax-exempt municipal securities | 464 |  |  | — |  |  | 464 |  |  | — |
Mortgage-backed securities: |  |  |  |  |  |  |
Residential | 536 |  |  | — |  |  | 536 |  |  | — |
Commercial | 1,053 |  |  | — |  |  | 1,037 |  |  | 16 |
Asset-backed securities | 1,261 |  |  | — |  |  | 1,173 |  |  | 88 |
Corporate debt securities | 7,710 |  |  | — |  |  | 7,420 |  |  | 290 |
Total debt securities | 18,099 |  |  | — |  |  | 17,705 |  |  | 394 |
Securities lending invested collateral | 467 |  |  | 467 |  |  | — |  |  | — |
Total invested assets | $ | 22,421 |  |  | $ | 4,322 |  |  | $ | 17,705 |  |  | $ | 394 |
December 31, 2024 |  |  |  |  |  |  |
Cash equivalents | $ | 2,048 |  |  | $ | 2,048 |  |  | $ | — |  |  | $ | — |
Debt securities: |  |  |  |  |  |  |
U.S. Treasury and other U.S. government corporations and agencies: |  |  |  |  |  |  |
U.S. Treasury and agency obligations | 3,227 |  |  | — |  |  | 3,227 |  |  | — |
Mortgage-backed securities | 3,995 |  |  | — |  |  | 3,995 |  |  | — |
Tax-exempt municipal securities | 526 |  |  | — |  |  | 526 |  |  | — |
Mortgage-backed securities: |  |  |  |  |  |  |
Residential | 522 |  |  | — |  |  | 522 |  |  | — |
Commercial | 1,206 |  |  | — |  |  | 1,199 |  |  | 7 |
Asset-backed securities | 1,403 |  |  | — |  |  | 1,330 |  |  | 73 |
Corporate debt securities | 7,756 |  |  | — |  |  | 7,514 |  |  | 242 |
Total debt securities | 18,635 |  |  | — |  |  | 18,313 |  |  | 322 |
Securities lending invested collateral | 418 |  |  | 418 |  |  | — |  |  | — |
Total invested assets | $ | 21,101 |  |  | $ | 2,466 |  |  | $ | 18,313 |  |  | $ | 322 |
Our Level 3 assets had a fair value of $394 million, or 1.8% of total invested assets, and $322 million, or 1.5% or total invested assets, at June 30, 2025 and December 31, 2024, respectively. During the six months ended June 30, 2025 and 2024, the changes in the fair value of the assets measured using significant unobservable inputs (Level 3) were comprised of the following:
| Private Placements |  |  |  |
| For the six months ended June 30, 2025 | For the six months ended June 30, 2024 |  |  |  |
| (in millions)
Beginning balance at January 1 | $ | 322 |  | $ | 218 |  |  |  |  |
Total gains or losses: |  |  |  |  |  |
Realized in earnings | — |  | — |  |  |  |  |
Unrealized in other comprehensive income | 3 |  | (1) |  |  |  |  |
Purchases | 71 |  | 40 |  |  |  |  |
Maturities | (2) |  | — |  |  |  |  |
Sales | — |  | — |  |  |  |  |
Settlements | — |  | (1) |  |  |  |  |
Balance at June 30 | $ | 394 |  | $ | 256 |  |  |  |  |
During the six months ended June 30, 2025 and 2024, there were no transfers into or out of Level 3. Interest Rate Swaps We have entered into interest-rate swap agreements with major financial institutions to convert our interest-rate exposure on some of our senior notes payable from fixed rates to variable rates, based on the Secured Overnight Financing Rate (SOFR), to align interest costs more closely with floating interest rates received on our cash equivalents and investment securities. These swap agreements were qualified and designated as a fair value hedge. Our interest rate swaps are recognized in other assets or other liabilities, as appropriate, in our condensed consolidated balance sheets at fair value as of the reporting date. Our interest rate swaps are highly effective at reflecting the fair value of our hedged fixed rate senior notes payable. We utilize market-based financing rates, forward yield curves and discount rates in determining fair value of these swaps at each reporting date, a Level 2 measure within the fair value hierarchy. The cumulative, aggregate adjustment to the carrying value of the senior notes was an increase of approximately $31 million at June 30, 2025. Our swap positions at June 30, 2025 included swap assets of $68 million, included within other long-term assets on our condensed consolidated balance sheet, and swap liabilities of $37 million, included within other long-term liabilities on our condensed consolidated balance sheet. Our swap positions at December 31, 2024 included swap liabilities of $129 million, included within other long-term liabilities on our condensed consolidated balance sheet. We include the gain or loss on the swap agreements in interest expense on our condensed consolidated income statement, the same line item as the offsetting loss or gain on the related senior notes. The gain or loss due to hedge ineffectiveness was not material for the three and six months ended June 30, 2025 and 2024. The following table summarizes the notional amounts at June 30, 2025 and December 31, 2024, respectively, for our senior notes under the swap agreements:
| Notional amount at
Senior Notes Under Swap Agreements | June 30, 2025 | December 31, 2024
| (in millions)
$1,500 million, 5.375% due April 15, 2031 | $ | 700 |  | $ | 700 |
$750 million, 5.875% due March 1, 2033 | 650 |  | 650 |
$850 million, 5.950% due March 15, 2034 | 800 |  | 800 |
$750 million, 5.550% due May 1, 2035 | 600 |  | — |
$400 million, 4.625% due December 1, 2042 | 400 |  | 400 |
$750 million, 4.950% due October 1, 2044 | 400 |  | 400 |
$400 million, 4.800% due March 15, 2047 | 200 |  | 200 |
$500 million, 3.950% due August 15, 2049 | 450 |  | 450 |
$750 million, 5.500% due March 15, 2053 | 700 |  | 700 |
$1,000 million, 5.750% due April 15, 2054 | 800 |  | 700 |
$500 million, 6.000% due May 1, 2055 | 300 |  | — |
Total Senior Notes Under Swap Agreements | $ | 6,000 |  | $ | 5,000 |
Financial Liabilities Our debt is recorded at carrying value in our condensed consolidated balance sheets. The carrying value of our senior notes debt outstanding, net of unamortized debt issuance costs, was $12.6 billion at June 30, 2025 and $11.7 billion at December 31, 2024. The fair value of our senior notes debt was $12.1 billion at June 30, 2025 and $11.2 billion at December 31, 2024. The fair value of our senior notes debt is determined based on Level 2 inputs, including quoted market prices for the same or similar debt, or if no quoted market prices are available, on the current prices estimated to be available to us for debt with similar terms and remaining maturities. Carrying value approximates fair value for our commercial paper borrowings. We had no outstanding commercial paper borrowings at June 30, 2025 and December 31, 2024. Put and Call Options Measured at Fair Value The put and call options fair values associated with our primary care strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, which are exercisable at a fixed revenue exit multiple and provide a minimum return on WCAS' investment if exercised, are measured at fair value each reporting period using a Monte Carlo simulation. The put and call options fair values, derived from the Monte Carlo simulation, were $1.25 billion and $13 million, respectively, at June 30, 2025. The put and call options fair values, derived from the Monte Carlo simulation, were $883 million and $10 million, respectively, at December 31, 2024. The put liability and call asset are included within other long-term liabilities and other long-term assets, respectively, within our condensed consolidated balance sheets. Fair value changes to the put and call options are included within Other expense, net within our condensed consolidated income statement. With the continued expansion of primary care clinics under the partnership with WCAS and updated revenue growth assumptions in our most recent projections available at June 30, 2025, all existing cohorts can be called by us from 2025 to 2033 and could require $3.0 billion to $5.0 billion to purchase. At December 31, 2024, based on projections at that time, all existing cohorts that could be called by us from 2025 to 2032 were estimated to require $2.5 billion to $3.5 billion to purchase. These estimates are dependent on multiple factors including the actual timing of when the put or call options are exercised, expected revenue growth at each center within the respective cohort and future capital contributions, among other factors. The significant unobservable inputs utilized in these Level 3 fair value measurements (and selected values) include the enterprise value, annualized volatility and credit spread. Enterprise value was derived from a discounted cash flow model, which utilized significant unobservable inputs for long-term revenue, to measure underlying cash flows, weighted average cost of capital and long term growth rate. The table below presents the assumptions used for each reporting period.
| June 30, 2025 | December 31, 2024 |  |  |
Annualized volatility | 18.4% - 19.5% | 17.5% - 18.9% |  |  |
Credit spread | 1.1% - 2.0% | 0.9% - 1.5% |  |  |
Revenue exit multiple | 1.5x - 2.5x | 1.5x - 2.5x |  |  |
Weighted average cost of capital | 11.0% - 14.0% | 11.0% - 14.5% |  |  |
Long term growth rate | 3.0 | % | 3.0 | % |  |  |
The assumptions used for annualized volatility, credit spread and weighted average cost of capital reflect the lowest and highest values where they differ significantly across the series of put and call options due to their expected exercise dates. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are measured at fair value on a non-recurring basis subject to fair value adjustment only in certain circumstances. As disclosed in Note 3, we acquired various health and wellness related businesses during 2025 and 2024. The values of net tangible assets acquired and resulting goodwill and other intangible assets were recorded at fair value primarily using Level 3 inputs. The majority of the related tangible assets acquired and liabilities assumed were recorded at their carrying value as of the respective dates of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in these acquisitions were internally estimated primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. We developed internal estimates for expected cash flows and discount rates in the present value calculations. There were no material asset or liabilities measured at fair value on a nonrecurring basis during 2025 and 2024 other than the assets and liabilities assumed in these acquisitions and any subsequent impairments. We recorded a $32 million and $200 million charge relating to our indefinite-lived intangible assets during the second quarter of 2025 and fourth quarter of 2024, respectively. For additional information regarding our fair value measurements, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

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- 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 Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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