Investments

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Available-for-Sale

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


	June 30, 2021
	Amortized Cost		Gross Unrealized				Estimated Fair Value
			Gains		Losses

	(In millions)
Corporate debt securities	$	1,367	$	26	$	—	$	1,393
Mortgage-backed securities	542		7		1		548
Asset-backed securities	174		2		—		176
Municipal securities	74		1		—		75
U.S. Treasury notes	26		—		—		26



Other	23		—		—		23
Total	$	2,206	$	36	$	1	$	2,241


	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

The contractual maturities of our available-for-sale investments as of June 30, 2021 are summarized below:


	Amortized Cost		Estimated Fair Value

	(In millions)
Due in one year or less	$	312	$	314
Due after one year through five years	1,200		1,225
Due after five years through ten years	264		267
Due after ten years	430		435
Total	$	2,206	$	2,241

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 were insignificant for the three and six months ended June 30, 2021. Gross realized investment gains amounted to $1 million and $6 million for the three and six months ended June 30, 2020, respectively. Gross realized investment losses were insignificant for the three and six months ended June 30, 2021, and 2020.

We have determined that unrealized losses at June 30, 2021, and December 31, 2020, 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 June 30, 2021, and December 31, 2020.


	June 30, 2021					December 31, 2020
	Estimated Fair Value		Unrealized Losses		Total Number of Positions	Estimated Fair Value		Unrealized Losses		Total Number of Positions

	(Dollars in millions)

Mortgage-backed securities	$	154	$	1	62	$	77	$	1	21






Total	$	154	$	1	62	$	77	$	1	21

Held-to-Maturity

Pursuant to the regulations governing our state health plan 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 regulations 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. Such investments amounted to $145 million at June 30, 2021, of which $137 million will mature in one year or less, and $8 million will mature in after one through five years.