1.	Please demonstrate to us that your aggregation of operating segments with respect to the Health Plan segment meets all criteria in ASC 280-10-50-11. In particular, provide us an analysis supporting that the operating segments aggregated have similar economic characteristics. Reconcile your operating segments to the disclosure provided on page 47 with respect to your Programs.

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•	Each health plan engages in activities to earn revenues and incur expenses;

•	Each health plan’s operating results are regularly reviewed by the Company’s chief executive officer, who is the Company’s chief operating decision maker, to assess performance and make decisions about resource allocation; and

•	Discrete financial information is available for each health plan in the form of business unit financial statements.

a.	The nature of the products and services – The health plans are health maintenance organizations (“HMOs”) that serve individuals who qualify for Medicaid, Medicare and other government-sponsored health care programs. The health plans are funded primarily by a combination of federal and state appropriations.

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b.	The nature of the production processes – The health plans assume financial risk for the provision of similar medical care services to their members and share a common enrollment, member services and claims processing infrastructure.

c.	The type or class of customer for their products and services – The health plans primarily serve low-income families and individuals who qualify for government-sponsored and publicly funded health care programs.

d.	The methods used to distribute their products or provide their services – The health plans serve the predominant portion of their membership through a combination of contracts with health care service providers subject to Company-monitored quality measurements.

e.

If applicable, the nature of the regulatory environment, for example, banking, insurance, or public utilities – As HMOs, the health plans operate in very similar regulatory, political and legal environments. In general, they are licensed and regulated by the states’ departments of insurance, and are under contractual relationships with the states’ Medicaid agencies and the Centers for Medicare and Medicaid Services.

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•	The inevitable fluctuation in margins that is the result of fixed premium revenue combined with medical costs that can vary dramatically due to the volatility of medical care utilization.

•	The behavior of members transitioning from fee-for-service environments, where medical utilization is unrestrained, to managed care environments.

•	Retroactive premium rate or other contractual changes related to prior periods that may impact a health plan’s current period performance.

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The impact of new federal or state programs, such as those associated with the Affordable Care Act, under which the Company is adding previously uninsured membership. Historical medical cost data for these individuals is sparse or non-existent. Since historical medical costs are the prime determinant of current premium rates, unreliable, incomplete or incorrect cost data will often result in temporary a distortion of typical and expected gross margins.

1.	Medicaid: Temporary Assistance for Needy Families (TANF), Children’s Health Insurance Program (CHIP), Medicaid Expansion, and the Aged, Blind or Disabled (ABD);

2.	Medicare: Medicare Advantage special needs plans, and members dually eligible for Medicare and Medicaid (MMP); and

3.	Health Insurance Marketplace.

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1.	1

2.

Your adjustment to reconcile net income to adjusted net income on page 38 is presented after-tax, which is inconsistent with Question 102.11 of the updated Compliance and Disclosure Interpretations issued on May 17, 2016. Please confirm that beginning with your Form 10-K for the fiscal year ended December 31, 2016 you will present income taxes as a separate adjustment and provide a clear explanation. This comment is also applicable to earnings releases furnished on Form 8-K.

(1)	Income tax effect of adjustments calculated at the blended federal and state statutory tax rate of 37%.

(2)

Beginning in the first quarter of 2016, we revised our calculation of adjusted net income. We no longer subtract “Amortization of convertible senior notes and lease financing obligations” from net income to arrive at adjusted net income. We made this change because various capital transactions completed in 2015 reduced our relative reliance on convertible notes and lease financing as sources of capital. We believe that this change enhances the comparability of these non-GAAP measures with the corresponding non-GAAP measures used by our competitors. All periods presented conform to this presentation.

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