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Goodwill and Intangible Assets | 12 Months Ended
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Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. Goodwill is not amortized, but is subject to an annual impairment test. We are required to test at least annually for impairment, or more frequently if adverse events or changes in circumstances indicate that the asset may be impaired. When testing goodwill for impairment, we may first assess qualitative factors, such as industry and market factors, 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 goodwill impairment is more likely than not, we perform additional quantitative analysis. We may also elect to skip the qualitative testing and proceed directly to the quantitative testing. Under the quantitative test we first measure the fair values of our reporting units and compare them to the carrying values of the respective units, including goodwill. Second, if the fair value is less than the carrying value of the reporting unit, then the implied value of goodwill would be calculated and compared with the carrying amount of goodwill to determine the impairment charge, if any. We estimate the fair values of our reporting units using discounted cash flows. In the discounted cash flow analyses, we must make assumptions about a wide variety of internal and external factors. Significant assumptions include financial projections of free cash flow (including significant assumptions about operations, capital requirements and income taxes), long-term growth rates for determining terminal value beyond the discretely forecasted periods, and discount rates. No impairment charges relating to goodwill were recorded in the years ended December 31, 2016, 2015, and 2014. The following table presents the balances of goodwill as of December 31, 2016 and 2015. The Health Plans segment addition relates to the business combinations described in Note 4, “Business Combinations.” The Other segment addition relates to the final purchase price allocation adjustments for our Pathways acquisition in 2015.
| Health Plans |  | Molina Medicaid Solutions |  | Other |  | Total
| (In millions)
Historical goodwill | $ | 349 |  |  | $ | 71 |  |  | $ | 157 |  |  | $ | 577 |
Accumulated impairment losses | (58 | ) |  | — |  |  | — |  |  | (58 | )
Balance, December 31, 2015 | 291 |  |  | 71 |  |  | 157 |  |  | 519 |
Acquisitions | 96 |  |  | — |  |  | — |  |  | 96 |
Purchase price allocation adjustments | — |  |  | — |  |  | 5 |  |  | 5 |
Balance at December 31, 2016 | $ | 387 |  |  | $ | 71 |  |  | $ | 162 |  |  | $ | 620 |
Intangible Assets. 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 two and 15 years. 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. For example, our health plan subsidiaries have generally been successful in obtaining 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 undiscounted cash flows that are expected to result from the use of the asset or related group of assets. 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. No significant impairment charges relating to long-lived assets, including intangible assets, were recorded in the years ended December 31, 2016, 2015, and 2014. Based on the balances of our identifiable intangible assets as of December 31, 2016, we estimate that our intangible asset amortization will be $35 million in 2017, $33 million in 2018, $27 million in 2019, $19 million in 2020, and $8 million in 2021. For a presentation of our goodwill and intangible assets by reportable segment, refer to Note 20, “Segment Information.” The following table provides the details of identified intangible assets, by major class, for the periods indicated:
| Cost |  | Accumulated Amortization |  | Carrying Amount
| (In millions)
Intangible assets: |  |  |  |  |
Contract rights and licenses | $ | 267 |  |  | $ | 148 |  |  | $ | 119 |
Customer relationships | 25 |  |  | 24 |  |  | 1 |
Provider networks | 34 |  |  | 14 |  |  | 20 |
Balance at December 31, 2016 | $ | 326 |  |  | $ | 186 |  |  | $ | 140 |
Intangible assets: |  |  |  |  |
Contract rights and licenses | $ | 224 |  |  | $ | 120 |  |  | $ | 104 |
Customer relationships | 25 |  |  | 23 |  |  | 2 |
Provider networks | 27 |  |  | 11 |  |  | 16 |
Balance at December 31, 2015 | $ | 276 |  |  | $ | 154 |  |  | $ | 122 |
The changes in the carrying amounts of goodwill and intangible assets, at cost, in 2016 were due to the acquisitions described in Note 4, “Business Combinations.”

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- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16373-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16265-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16323-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267 + Details
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