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Business Combinations | 12 Months Ended
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Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Business Combinations | Business Combinations Bright Health Medicare. On January 1, 2024, we closed on our acquisition of 100% of the issued and outstanding capital stock of Brand New Day and Central Health Plan of California (“Bright Health Medicare”) for $441 million in cash, consistent with our strategy to grow in our existing markets. For this transaction, we applied the acquisition method of accounting, where the total purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed, based on their fair values as of the acquisition date. The pro forma effects of this acquisition for prior periods were not material to our consolidated results of operations. Acquisition costs amounted to $1 million in the aggregate for the year ended December 31, 2024, and were recorded as “General and administrative expenses” in the accompanying consolidated statements of income. The acquisition-date fair value of the consideration transferred consisted of the following, in millions:
Fair value of consideration transferred: |
Cash | $ | 341 |
Contingent consideration | 86 |
Total | $ | 427 |
The contingent consideration arrangement allowed the seller to earn up to $100 million for the satisfaction of certain conditions within the stock purchase agreement by the fourth quarter of 2024. The fair value of the contingent consideration arrangement at the acquisition date was $86 million. This fair value measurement was based on inputs not observable in the market and thus represented a Level 3 measurement. We estimated the fair value using a probability-weighted scenario approach focused on existing and expected membership. On the acquisition date, we placed the $100 million into a third-party escrow and recorded a receivable of $14 million in relation to the fair value measurement. As of December 31, 2024, the fair value of the contingent consideration arrangement increased to $100 million due to the conditions being met. The net change in fair value is reported in “Other” operating expenses in our consolidated statements of income. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such assets include synergies we expect to achieve as a result of the transaction, such as the use of our existing infrastructure to support the added membership, and future economic benefits arising from the assembled workforce. All of the goodwill was assigned to the Medicare segment and is deductible for income tax purposes. The following table summarizes the fair values assigned to assets acquired and liabilities assumed, in millions.
Assets acquired: |
Current assets | $ | 335 |
Goodwill | 430 |
Intangible assets | 141 |
Other long-term assets | 53 |
Liabilities assumed: |
Medical claims and benefits payable | (476) |
Amounts due government agencies | (33) |
Accounts payable, accrued and other long-term liabilities | (23) |
Fair value of net assets acquired | $ | 427 |
The table below presents intangible assets acquired, by major class, for the Bright Health Medicare acquisition. The weighted-average amortization period, in the aggregate, is 11.1 years.
| Fair Value |  | Life
| (In millions) |  | (Years)
Contract rights - member list | $ | 104 |  |  | 10
Trade Name | 32 |  |  | 15
Provider network | 5 |  |  | 10
| $ | 141 |  |  |
My Choice. On September 1, 2023, we closed on our acquisition of My Choice Wisconsin for preliminary purchase consideration of approximately $74 million. In August 2024, we paid additional purchase consideration of $49 million as a result of final purchase price adjustments as provided in the asset purchase agreement. We recorded various measurement period adjustments that were insignificant. These measurement period adjustments and purchase price adjustments have been finalized. Subsequent Events. Effective February 1, 2025, we closed on our acquisition of 100% of the issued and outstanding capital stock of ConnectiCare Holding Company, Inc. The purchase price for the transaction was $350 million. Due to the recency of the transaction, the initial accounting is incomplete.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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