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Investments

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Investments

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

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- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
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-Publisher FASB
-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 940
-SubTopic 320
-URI http://asc.fasb.org/subtopic&trid=2176304

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