Group 1 - Humana shares fell 5% in premarket trading after Cigna announced it is not pursuing a merger with Humana [2][3] - Cigna's stock rose 7% in premarket trading following the announcement [2] - Cigna had previously called off plans to acquire Humana due to disagreements on financial terms [2][4] Group 2 - Cigna stated it remains committed to its M&A criteria, focusing on acquisitions that are strategically aligned and financially attractive [3] - Cigna has repurchased $6 billion of its stock this year, with $1 billion in the fourth quarter, and plans to continue buybacks into next year [4] - Humana's stock has lost 37% of its value this year, while Cigna's stock has increased by approximately 7% [4]

Financial Performance - Net income attributable to Humana was $0.5 billion, or $3.98 per diluted common share, for the three months ended September 30, 2024, compared to $0.8 billion, or $6.71 per diluted common share, for the same period in 2023[152] - Net income attributable to Humana was $1.9 billion, or $15.72 per diluted common share, for the nine months ended September 30, 2024, compared to $3.0 billion, or $24.26 per diluted common share, for the same period in 2023[152] - Net income decreased by $350 million (42.2%) to $480 million in Q3 2024, with diluted earnings per share dropping to $3.98 from $6.71 in Q3 2023[161] - Consolidated premiums revenue increased by $2.9 billion (11.4%) to $28.0 billion in Q3 2024 compared to $25.1 billion in Q3 2023, driven by higher Medicare premiums and membership growth[162][163] - Consolidated services revenue grew by $87 million (8.6%) to $1.1 billion in Q3 2024, primarily due to growth in the primary care business, partially offset by the v28 risk model revision[164] - Investment income increased by $35 million (11.4%) to $343 million in Q3 2024, driven by higher interest income on debt securities[164] - Consolidated benefits expense rose by $3.4 billion (15.5%) to $25.1 billion in Q3 2024, with the benefit ratio increasing by 330 basis points to 89.9% due to elevated Medicare Advantage medical costs[165] - Consolidated operating costs increased by $68 million (2.1%) to $3.3 billion in Q3 2024, with the operating cost ratio decreasing by 100 basis points to 11.5% due to scale efficiencies and cost-saving initiatives[168] - Depreciation and amortization expenses increased by $9 million (4.5%) to $210 million in Q3 2024, primarily due to capital expenditures[170] - Interest expense rose by $55 million (48.2%) to $169 million in Q3 2024, driven by higher interest rates and increased average debt balances[171] - The effective income tax rate increased to 24.4% in Q3 2024 from 23.5% in Q3 2023, due to a shift in earnings mix between the Insurance and CenterWell segments[172] - The consolidated benefit ratio was positively impacted by $24 million of favorable prior-period medical claims reserve development in Q3 2024, reducing the ratio by approximately 10 basis points[166] Membership and Business Segments - Approximately 3,984,900 members, or 70%, of individual Medicare Advantage members were in value-based relationships under the integrated care delivery model as of September 30, 2024, compared to 3,727,500 members, or 69%, at September 30, 2023[151] - Individual Medicare Advantage membership increased by 284,800 members, or 5.3%, primarily due to membership additions from the previous Annual Election Period (AEP), including a net increase of 71,600 D-SNP members, or 8.2%[176] - Group Medicare Advantage membership grew by 36,400 members, or 7.1%, driven by growth in small and medium group accounts[177] - Medicare stand-alone PDP membership decreased by 570,100 members, or 19.8%, due to intensified competition[177] - State-based contracts and other membership increased by 181,500 members, or 14.4%, reflecting new contract implementations partially offset by membership loss from the public health emergency unwind[178] - Commercial fully-insured medical membership decreased by 383,400 members, or 93.7%, and commercial ASO medical membership decreased by 261,900 members, or 92.1%, due to the planned exit of the Employer Group Commercial Medical Products business[179] - Specialty membership decreased by 397,500 members, or 8.0%, primarily due to non-renewal of dental and vision plans as a result of exiting the Employer Group Commercial Medical Products business[180] - The company anticipates finalizing the exit from the Employer Group Commercial Medical Products business in the first half of 2025[140] - The Medicare Part D benefit design results in a decreasing benefit ratio as the year progresses, with the PDP benefit ratio generally decreasing as the year progresses[147] - The company's integrated care delivery model aims to improve health outcomes and affordability, with a focus on primary, physician-directed care for members[151] Insurance Segment Performance - The Employer Group Commercial Fully-Insured business increased the Insurance segment benefit ratio by 10 basis points for the three months ended September 30, 2024, and by 20 basis points for the same period in 2023[148] - The Employer Group Commercial Fully-Insured business increased the Insurance segment operating cost ratio by 10 basis points for the three months ended September 30, 2024, and by 40 basis points for the same period in 2023[150] - Insurance segment premiums revenue increased by $2.9 billion, or 11.4%, in the 2024 quarter and by $8.2 billion, or 10.8%, in the 2024 period, driven by higher per member Medicare premiums and Medicare Advantage membership growth[181] - Insurance segment services revenue decreased by $31 million, or 12.1%, in the 2024 quarter and by $15 million, or 2.1%, in the 2024 period[182] - The Insurance segment benefit ratio increased by 300 basis points to 90.6% in the 2024 quarter and to 89.8% in the 2024 period, primarily due to elevated Medicare Advantage and state-based contracts medical cost trends[183] - The Insurance segment operating cost ratio decreased by 120 basis points to 9.2% in the 2024 quarter and by 130 basis points to 8.6% in the 2024 period, driven by scale efficiencies and administrative cost reductions[184] CenterWell Segment Performance - CenterWell services revenue increased by $118 million (15.5%) to $877 million in Q3 2024 compared to $759 million in Q3 2023, driven by growth in the primary care business[187] - CenterWell intersegment revenues grew by $263 million (6.7%) to $4.2 billion in Q3 2024, primarily due to expansion in the home solutions business and growth in the primary care business[188] - CenterWell income from operations decreased by $18 million (4.5%) to $382 million in Q3 2024, primarily due to the impact of the v28 risk model revision[186] - The operating cost ratio for the CenterWell segment increased by 100 basis points to 91.3% in Q3 2024, driven by the unfavorable impact of the v28 risk model revision[190] Cash Flow and Capital Management - Cash and cash equivalents increased to $5.1 billion at September 30, 2024, up from $4.7 billion at December 31, 2023[192] - Net cash provided by operating activities decreased by $7.6 billion to $3.5 billion in the nine months ended September 30, 2024, compared to $11.1 billion in the same period in 2023[193] - Total net capital expenditures, excluding acquisitions, were $421 million in the nine months ended September 30, 2024, down from $721 million in the same period in 2023[198] - The company issued $2.25 billion in senior notes in March 2024, with net proceeds of $2.23 billion used for general corporate purposes, including repayment of existing debt[203] - Medicare receivables decreased by $137 million to $1.29 billion at September 30, 2024, reflecting membership growth and timing of CMS risk-adjustment model collections[196] - The company repurchased $213 million principal amount of senior notes for approximately $196 million cash under a Rule 10b5-1 Repurchase Plan in 2023[204] - Issued $500 million of 5.700% senior notes due 2026 and $750 million of 5.500% senior notes due 2053, with net proceeds of $1.2 billion used for debt repayment and general corporate purposes[206] - Net repayments from commercial paper issuance were $895 million in 2024, while net proceeds from issuance were $1.6 billion in 2023, with a maximum outstanding principal of $2.7 billion in 2024[206] - Repurchased $750 million and $980 million of common shares in 2024 and 2023, respectively, and acquired $18 million and $31 million of shares related to employee stock plans in the same periods[207] - Paid dividends of $323 million and $320 million to stockholders in 2024 and 2023, respectively[207] - Cash, cash equivalents, and short-term investments at the parent company increased to $609 million at September 30, 2024, from $510 million at December 31, 2023[214] - State-regulated subsidiaries had aggregate statutory capital and surplus of $13.5 billion, exceeding minimum regulatory requirements of $10.6 billion as of June 30, 2024[216] - Net unrealized loss position decreased by $448 million to $846 million at September 30, 2024, from $1,294 million at December 31, 2023, with gross unrealized losses of $998 million due to rising interest rates[218] - Average duration of the investment portfolio increased to 3.3 years at September 30, 2024, from 3.0 years at December 31, 2023, with a 1% interest rate increase potentially decreasing fair value by $803 million[219] - Investment-grade credit rating at September 30, 2024, was BBB by S&P and Baa2 by Moody's, with potential downgrades triggering interest rate increases on $250 million of senior notes[213] - Ordinary dividends paid to the parent company totaled approximately $0.5 billion during the nine months ended September 30, 2024[216] Value Creation and Strategic Initiatives - Charges related to value creation initiatives were $55 million and $151 million for the three and nine months ended September 30, 2024, respectively, and $52 million for the three and nine months ended September 30, 2023[141] - The company is evaluating the impact of the SEC's final regulation on climate-related disclosures, which is effective for the annual report for the year ended December 31, 2025[158]

Humana Inc. (HUM) posted third-quarter 2024 adjusted earnings per share (EPS) of $4.16, which surpassed the Zacks Consensus Estimate by 19.5%. However, the bottom line fell from $7.78 per share a year ago. Adjusted revenues improved 14.8% year over year to $29.3 billion. The top line beat the consensus mark by 2.2%. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar. The better-than-expected quarterly results benefited from strong premium growth, improved operating cost management and ...

Financial Data and Key Metrics Changes - The company exceeded expectations for the quarter and is confident in achieving at least $16 of EPS for the full year [11][12] - The adjusted operating cost ratio is expected to decrease by 30 basis points for the year [22] Business Line Data and Key Metrics Changes - Individual Medicare Advantage (MA) membership growth is anticipated to be around 5% year-over-year, with significant gains made throughout 2024 [14][15] - Medical costs in Q3 were largely in line with expectations, with successful cost control efforts noted in areas like value-based care contracts [20][21] Market Data and Key Metrics Changes - The company expects industry growth of 5% to 5.5% for the coming year, down from approximately 6% in the current year [65][66] - The company anticipates a loss of a few hundred thousand members in 2025, which is considered reasonable [43] Company Strategy and Development Direction - The company is focused on delivering a disciplined Medicare product experience, operating with clinical excellence, managing an efficient back office, and deploying growth capital effectively [9][10] - Investments are being made to improve STARS ratings and overall operational performance, with a target for an Investor Day in May 2025 to provide further clarity on long-term strategies [13][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the need for improvement in STARS ratings and is making investments to close gaps in care [17][18] - The company remains optimistic about the positive outlook for Medicare Advantage and value-based care [27] Other Important Information - The company has been recognized as the number one health insurer for customer experience by Forrester for four consecutive years [16] - The company is implementing AI solutions to enhance operational efficiency, particularly in care management [22][23] Q&A Session Summary Question: Investment spending for 2025 - Management indicated that while they are planning for margin improvement in MA, they are also balancing investment spending, which could be around $500 million [28][30] Question: MLR results and 2025 bids - Management confirmed that current year claims developed as expected, and they feel confident about their pricing assumptions for 2025 [40][42] Question: STARS recovery and margin targets - Management stated that meaningful STARS progression is necessary to achieve the 3% margin target by 2027, but they did not specify a minimum level required [46][48] Question: Specialty drug costs - Management noted that higher specialty drug costs are primarily due to new treatments and label expansions, not significantly impacted by IRA changes [50][52] Question: Retention strategies - The company is enhancing digital tools and support for brokers to improve member retention amid plan exits [67][68] Question: Inpatient claims denial rates - Management reported stable trends in inpatient claims denial rates since implementing new rules, with no significant variations noted [86][90] Question: 2026 rates expectations - Management expressed cautious optimism regarding 2026 rates, anticipating adjustments based on observed trends [119]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, The ...

For the quarter ended September 2024, Humana (HUM) reported revenue of $29.3 billion, up 14.8% over the same period last year. EPS came in at $4.16, compared to $7.78 in the year-ago quarter.The reported revenue represents a surprise of +2.24% over the Zacks Consensus Estimate of $28.66 billion. With the consensus EPS estimate being $3.48, the EPS surprise was +19.54%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their ...

Humana (HUM) came out with quarterly earnings of $4.16 per share, beating the Zacks Consensus Estimate of $3.48 per share. This compares to earnings of $7.78 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 19.54%. A quarter ago, it was expected that this health insurer would post earnings of $5.89 per share when it actually produced earnings of $6.96, delivering a surprise of 18.17%. Over the last four quarters, the company ha ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) Humana's executive summary details 3Q24 financial results, updated full-year 2024 guidance, and key operational highlights [3Q24 Financial Performance Overview](index=1&type=section&id=3Q24%20Financial%20Performance%20Overview) Humana reported GAAP EPS of $3.98 and Adjusted EPS of $4.16 for 3Q24, with consolidated pretax results decreasing to $651 million from $1,098 million in 3Q23 Consolidated Pretax Results (in millions) | Metric | 3Q24 (GAAP) | 3Q23 (GAAP) | YTD 2024 (GAAP) | YTD 2023 (GAAP) | |:---|:---|:---|:---|:---| | Consolidated income before income taxes | $651 | $1,098 | $2,583 | $3,974 | | Adjusted (non-GAAP) | $679 | $1,268 | $2,998 | $4,290 | Diluted Earnings Per Share (EPS) | Metric | 3Q24 | 3Q23 | YTD 2024 | YTD 2023 | |:---|:---|:---|:---|:---|\ | GAAP EPS | $3.98 | $6.71 | $15.72 | $24.26 | | Adjusted (non-GAAP) EPS | $4.16 | $7.78 | $18.35 | $26.10 | [Full Year 2024 Guidance Update](index=1&type=section&id=Full%20Year%202024%20Guidance%20Update) Humana updated its full-year 2024 GAAP EPS guidance to 'at least $12.89' and affirmed Adjusted EPS guidance at 'at least $16.00', maintaining its Insurance segment benefit ratio projection FY 2024 EPS Guidance Update | Metric | FY 2024 Guidance | |:---|:---|\ | GAAP EPS | at least $12.89 | | Adjusted (non-GAAP) EPS | at least $16.00 | - Affirmed FY 2024 Insurance segment benefit ratio of approximately **90 percent**[1](index=1&type=chunk) [Key Operational Highlights](index=1&type=section&id=Key%20Operational%20Highlights) Humana increased its 2024 individual Medicare Advantage annual membership growth projection to approximately 265,000 new members, representing about 5 percent growth - Raised 2024 individual Medicare Advantage annual membership growth by **40,000** to approximately **265,000**, or approximately **5 percent**[1](index=1&type=chunk) [Consolidated Financial Results](index=3&type=section&id=Consolidated%20Financial%20Results) This section analyzes Humana's consolidated revenues, EPS, benefit and operating cost ratios, balance sheet, cash flows, and share repurchases [Consolidated Revenues](index=3&type=section&id=Consolidated%20Revenues) Consolidated revenues increased year-over-year, driven by higher Medicare premiums and membership growth, partially offset by declines in group commercial medical and stand-alone PDP membership Consolidated Revenues (in millions) | Metric | 3Q24 | 3Q23 | YTD 2024 | YTD 2023 | |:---|:---|:---|:---|:---|\ | Revenues (GAAP) | $29,397 | $26,423 | $88,548 | $79,912 | | Revenues (Adjusted non-GAAP) | $29,300 | $25,526 | $88,011 | $76,911 | - Favorable year-over-year GAAP consolidated revenues driven by higher per member Medicare premiums and Medicare Advantage and state-based contracts membership growth[10](index=10&type=chunk)[11](index=11&type=chunk) - Partially offset by continued decline in group commercial medical and stand-alone PDP membership[11](index=11&type=chunk) [Consolidated Earnings Per Share (EPS)](index=3&type=section&id=Consolidated%20Earnings%20Per%20Share%20(EPS)) Consolidated GAAP EPS for 3Q24 decreased to $3.98 from $6.71 in 3Q23, with year-to-date figures also lower than the prior year Consolidated Diluted EPS | Metric | 3Q24 | 3Q23 | YTD 2024 | YTD 2023 | |:---|:---|:---|:---|:---|\ | EPS (GAAP) | $3.98 | $6.71 | $15.72 | $24.26 | | EPS (Adjusted non-GAAP) | $4.16 | $7.78 | $18.35 | $26.10 | [Consolidated Benefit Ratio](index=3&type=section&id=Consolidated%20Benefit%20Ratio) The consolidated benefit ratio increased year-over-year due to elevated medical cost trends in Medicare Advantage and state-based contracts, partially mitigated by product pricing and benefit design adjustments Consolidated Benefit Expense Ratio | Metric | 3Q24 | 3Q23 | YTD 2024 | YTD 2023 | |:---|:---|:---|:---|:---|\ | Benefits expense ratio (GAAP) | 89.9 % | 86.6 % | 89.2 % | 86.2 % | | Benefits expense ratio (Adjusted non-GAAP) | 89.8 % | 86.4 % | 89.2 % | 86.1 % | - Year-over-year increases in GAAP consolidated benefit ratio primarily due to elevated Medicare Advantage and state-based contracts medical cost trends in 3Q24 and YTD 2024[12](index=12&type=chunk) - Elevated medical cost trend partially offset by pricing and benefit design of 2024 Medicare Advantage products, including benefit reductions in response to rate notice and emerging 2023 medical cost trends[13](index=13&type=chunk) - Comparisons also reflect a shift in business mix with growth in Medicare Advantage and state-based contracts, which typically have a higher benefit ratio[14](index=14&type=chunk) Consolidated Favorable Prior Period Development (in millions) | Metric | First Quarter | Second Quarter | Third Quarter | YTD | |:---|:---|:---|:---|:---|\ | Prior Period Development from prior years recognized in 2024 | $535 | $134 | $24 | $693 | | Decrease to GAAP benefit ratio | (190 bps) | (50 bps) | (10 bps) | (80 bps) | | Prior Period Development from prior years recognized in 2023 | $522 | $232 | $4 | $758 | | Decrease to GAAP benefit ratio | (200 bps) | (90 bps) | (0 bps) | (100 bps) | [Consolidated Operating Cost Ratio](index=3&type=section&id=Consolidated%20Operating%20Cost%20Ratio) The consolidated operating cost ratio decreased year-over-year, reflecting scale efficiencies, administrative cost savings, and lower broker commissions, partially offset by value creation initiative charges Consolidated Operating Cost Ratio | Metric | 3Q24 | 3Q23 | YTD 2024 | YTD 2023 | |:---|:---|:---|:---|:---|\ | Operating cost ratio (GAAP) | 11.5 % | 12.5 % | 10.9 % | 11.8 % | | Operating cost ratio (Adjusted non-GAAP) | 11.3 % | 12.0 % | 10.7 % | 11.3 % | - Year-over-year decreases in GAAP consolidated operating cost ratio primarily reflected scale efficiencies from Medicare Advantage membership growth, administrative cost efficiencies from value creation initiatives, lower broker commission expense, and the impact of an accrued litigation charge in 3Q23 and YTD 2023[16](index=16&type=chunk) - Partially offset by charges related to value creation initiatives in 3Q24 and YTD 2024, recorded at the corporate level[17](index=17&type=chunk) [Balance Sheet & Cash Flows](index=7&type=section&id=Balance%20Sheet%20%26%20Cash%20Flows) Humana's Days in Claims Payable and Debt-to-total capitalization decreased, while GAAP operating cash flows declined year-over-year primarily due to CMS premium payment timing Key Balance Sheet & Cash Flow Metrics | Metric | September 30, 2024 | June 30, 2024 | September 30, 2023 | |:---|:---|:---|:---|\ | Days in Claims Payable (DCP) | 40.7 days | 41.6 days | 43.1 days | | Debt-to-total capitalization | 42.3 % | 43.6 % | 41.1 % (YTD 2023) | - DCP decreased **0.9 days** sequentially and **2.4 days** year-over-year, driven by a decline in provider accruals and lower reserve requirements[19](index=19&type=chunk)[20](index=20&type=chunk) - Debt-to-total capitalization decreased **130 basis points** to **42.3 percent**, primarily driven by 3Q24 net earnings[20](index=20&type=chunk) Operating Cash Flows (in millions) | Metric | YTD 2024 | YTD 2023 | |:---|:---|:---|\ | Operating cash flows (GAAP) | $3,494 | $11,115 | | Operating cash flows (Adjusted non-GAAP) | $3,494 | $4,042 | - Year-over-year decline in YTD GAAP operating cash flows primarily reflected the early receipt of a **$7.1 billion** October 2023 premium payment from CMS in September 2023, resulting in ten payments in YTD 2023 compared to nine in YTD 2024[21](index=21&type=chunk) [Share Repurchases](index=7&type=section&id=Share%20Repurchases) For YTD 2024, Humana repurchased 1,949,838 shares at an average price of $384.65, with $2.93 billion remaining in repurchase authorization Share Repurchase Activity (YTD 2024) | Metric | YTD 2024 | |:---|:---|\ | Total number of shares repurchased | 1,949,838 | | Average price paid per share | $384.65 | | Remaining repurchase authorization (as of Oct 29, 2024) | $2.93 billion | [Segment Performance](index=7&type=section&id=Segment%20Performance) This section analyzes the financial and operational performance of Humana's Insurance and CenterWell segments [Humana's Insurance Segment](index=7&type=section&id=Humana%27s%20Insurance%20Segment) The Insurance segment experienced revenue growth from Medicare premiums and membership, but its benefit ratio increased due to elevated medical costs, while the operating cost ratio improved Insurance Segment Key Financials (in millions, except ratios) | Metric | 3Q24 (GAAP) | 3Q23 (GAAP) | YTD 2024 (GAAP) | YTD 2023 (GAAP) | |:---|:---|:---|:---|:---|\ | Revenues | $28,370 | $25,511 | $85,594 | $77,289 | | Benefits expense ratio | 90.6 % | 87.6 % | 89.8 % | 86.8 % | | Operating cost ratio | 9.2 % | 10.4 % | 8.6 % | 9.9 % | | Income from operations | $274 | $722 | $1,935 | $3,080 | - Insurance segment revenues increased due to higher per member Medicare premiums and Medicare Advantage and state-based contracts membership growth, partially offset by declines in group commercial medical and stand-alone PDP membership[26](index=26&type=chunk) - Insurance segment benefit ratio increased due to elevated Medicare Advantage and state-based contracts medical cost trends, partially offset by 2024 Medicare Advantage product pricing and benefit design[28](index=28&type=chunk)[29](index=29&type=chunk) - Insurance segment operating cost ratio decreased due to scale efficiencies from Medicare Advantage membership growth, administrative cost efficiencies from value creation initiatives, and lower broker commission expense[31](index=31&type=chunk) [Humana's CenterWell Segment](index=8&type=section&id=Humana%27s%20CenterWell%20Segment) The CenterWell segment reported increased revenues from intersegment activity and specialty pharmacy, but its operating cost ratio rose due to the v28 risk model revision, partially offset by efficiencies CenterWell Segment Key Financials (in millions, except ratios) | Metric | 3Q24 (GAAP) | 3Q23 (GAAP) | YTD 2024 (GAAP) | YTD 2023 (GAAP) | |:---|:---|:---|:---|:---|\ | Revenues | $5,041 | $4,660 | $14,806 | $13,695 | | Operating cost ratio | 91.3 % | 90.3 % | 92.1 % | 91.5 % | | Income from operations | $382 | $400 | $1,002 | $1,017 | - CenterWell segment revenues increased due to greater intersegment revenues from Home Solutions, growth in specialty pharmacy, and higher revenues from Primary Care business, partially offset by the v28 risk model revision[36](index=36&type=chunk) - CenterWell segment operating cost ratio increased primarily due to the unfavorable impact of the v28 risk model revision to Primary Care business[37](index=37&type=chunk) - This increase was partially offset by administrative cost efficiencies from value creation initiatives and positive prior period medical claims development within the Primary Care Organization[37](index=37&type=chunk) CenterWell Pharmacy Solutions Metrics (Medicare) | Metric | 3Q24 | 3Q23 | YTD 2024 | YTD 2023 | |:---|:---|:---|:---|:---|\ | Generic Dispense Rate | 90.8 % | 91.8 % | 91.0 % | 91.4 % | | Mail-Order Penetration | 28.1 % | 29.6 % | 28.5 % | 30.0 % | CenterWell Primary Care Growth (September 30, 2024 vs. 2023) | Category | Center Count | Primary Care Providers | Patients Served | |:---|:---|:---|:---|\ | De novo (YoY Growth) | 20.0 % | 10.1 % | 76.1 % | | Wholly-owned (YoY Growth) | (7.7)% | 7.2 % | 16.1 % | | Independent Physician Associations (YoY Growth) | - | - | 2.8 % | | Total (YoY Growth) | 1.7 % | 8.0 % | 20.9 % | CenterWell Home Solutions Admissions (YoY Growth) | Metric | 3Q24 YoY Growth | YTD YoY Growth | |:---|:---|:---|\ | Episodic Admissions | 3.8 % | 8.3 % | | Total Admissions - Same Store | 5.5 % | 9.5 % | [Full Year 2024 Financial Guidance](index=20&type=section&id=Full%20Year%202024%20Financial%20Guidance) This section outlines Humana's updated full-year 2024 financial guidance, including EPS, revenue, membership projections, and key ratios [Updated Guidance Summary](index=20&type=section&id=Updated%20Guidance%20Summary) Humana updated its full-year 2024 GAAP EPS guidance to 'at least $12.89' while affirming Adjusted EPS at 'at least $16.00', with consolidated and segment revenue projections unchanged Full Year 2024 Diluted EPS Projections | Metric | Current Guidance | Prior Guidance | |:---|:---|:---|\ | GAAP EPS | at least $12.89 | approximately $12.81 | | Non-GAAP EPS | at least $16.00 | approximately $16.00 | Full Year 2024 Total Revenues Projections (in billions) | Segment | Current Guidance | Prior Guidance | |:---|:---|:---|\ | Consolidated (GAAP) | no change | approximately $116 | | Insurance segment (GAAP) | no change | approximately $112 | | CenterWell segment (GAAP) | no change | approximately $19 | [Membership Projections](index=20&type=section&id=Membership%20Projections) Individual Medicare Advantage growth guidance was raised to approximately 265,000, while Group Medicare Advantage and state-based contracts growth projections were lowered Full Year 2024 Membership Growth Projections | Membership Type | Current Guidance | Prior Guidance | |:---|:---|:---|\ | Individual Medicare Advantage | Growth of approximately 265,000 | Growth of approximately 225,000 | | Group Medicare Advantage | Growth of approximately 35,000 | Growth of approximately 45,000 | | Medicare stand-alone PDP | no change (Decline of approximately 600,000) | Decline of approximately 600,000 | | State-based contracts | Growth of approximately 200,000 | Growth of approximately 250,000 | [Segment Income Projections](index=20&type=section&id=Segment%20Income%20Projections) Insurance and CenterWell segment income from operations guidance remains unchanged for both GAAP and Non-GAAP measures Full Year 2024 Segment Income from Operations Projections (in billions) | Segment | Current Guidance (GAAP) | Current Guidance (Non-GAAP) | |:---|:---|:---|\ | Insurance segment | approximately $1.1 | approximately $1.2 | | CenterWell segment | approximately $1.2 | approximately $1.4 | [Key Ratios and Other Metrics](index=20&type=section&id=Key%20Ratios%20and%20Other%20Metrics) Key full-year 2024 projections include an Insurance segment benefit ratio of approximately 90%, a consolidated operating cost ratio of 11.4%, and GAAP cash flows from operations of $2.75 billion Full Year 2024 Key Ratios and Metrics | Metric | Current Guidance | |:---|:---|\ | Benefit Ratio Insurance segment (GAAP) | approximately 90% | | Operating Cost Ratio Consolidated (GAAP) | approximately 11.4% | | Effective Tax Rate (Non-GAAP) | approximately 25.0% | | Weighted Avg. Share Count for Diluted EPS | approximately 121 million | | Cash flows from operations (GAAP) | approximately $2.75 billion | | Capital expenditures (GAAP) | approximately $600 million | [Non-GAAP Financial Measures & Reconciliations](index=11&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section explains Humana's non-GAAP adjustments and provides detailed reconciliation tables for various financial metrics [Explanation of Non-GAAP Adjustments](index=11&type=section&id=Explanation%20of%20Non-GAAP%20Adjustments) Humana utilizes non-GAAP financial measures to present core operating performance, excluding specific items like amortization, valuation adjustments, and litigation charges for consistent analysis - Non-GAAP (Adjusted) financial measures are used to provide a comprehensive perspective for comparing and analyzing core operating performance, serving as consistent indicators for planning and decision-making[43](index=43&type=chunk) - Excluded items from non-GAAP measures include: amortization associated with identifiable intangibles, put/call valuation adjustments, impact of exit of employer group commercial medical products business, value creation initiatives, transaction and integration costs, accrued charge related to certain anticipated litigation expenses, and change in fair market value of publicly-traded equity securities[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - A cumulative net tax impact of non-GAAP adjustments is also applied to EPS[48](index=48&type=chunk) [Reconciliation Tables](index=13&type=section&id=Reconciliation%20Tables) Detailed reconciliations are provided for GAAP to Adjusted (non-GAAP) measures across consolidated and segment revenues, benefit ratios, operating cost ratios, income from operations, and net cash from operating activities Revenues Reconciliation (in millions) | Metric | 3Q24 | 3Q23 | YTD 2024 | YTD 2023 | |:---|:---|:---|:---|:---|\ | **CONSOLIDATED** | | | | | | GAAP | $29,397 | $26,423 | $88,548 | $79,912 | | Impact of exit of employer group commercial medical products business | (97) | (897) | (537) | (3,000) | | Adjusted (non-GAAP) | $29,300 | $25,526 | $88,011 | $76,911 | | **INSURANCE SEGMENT** | | | | | | GAAP | $28,370 | $25,511 | $85,594 | $77,289 | | Impact of exit of employer group commercial medical products business | (97) | (897) | (537) | (3,000) | | Adjusted (non-GAAP) | $28,273 | $24,614 | $85,057 | $74,289 | Benefit Ratio Reconciliation | Metric | 3Q24 | 3Q23 | YTD 2024 | YTD 2023 | |:---|:---|:---|:---|:---|\ | **CONSOLIDATED** | | | | | | GAAP | 89.9 % | 86.6 % | 89.2 % | 86.2 % | | Impact of exit of employer group commercial medical products business | (0.1)% | (0.2)% | — % | (0.1)% | | Adjusted (non-GAAP) | 89.8 % | 86.4 % | 89.2 % | 86.1 % | | **INSURANCE SEGMENT** | | | | | | GAAP | 90.6 % | 87.6 % | 89.8 % | 86.8 % | | Impact of exit of employer group commercial medical products business | (0.1)% | (0.2)% | — % | — % | | Adjusted (non-GAAP) | 90.5 % | 87.4 % | 89.8 % | 86.8 % | Operating Cost Ratio Reconciliation | Metric | 3Q24 | 3Q23 | YTD 2024 | YTD 2023 | |:---|:---|:---|:---|:---|\ | **CONSOLIDATED** | | | | | | GAAP | 11.5 % | 12.5 % | 10.9 % | 11.8 % | | Impact of exit of employer group commercial medical products business | (0.1)% | (0.3)% | (0.1)% | (0.3)% | | Value creation initiatives | (0.1)% | (0.2)% | (0.1)% | (0.1)% | | Accrued charge related to certain anticipated litigation expenses | — % | — % | — % | (0.1)% | | Adjusted (non-GAAP) | 11.3 % | 12.0 % | 10.7 % | 11.3 % | | **INSURANCE SEGMENT** | | | | | | GAAP | 9.2 % | 10.4 % | 8.6 % | 9.9 % | | Impact of exit of employer group commercial medical products business | (0.1)% | (0.4)% | — % | (0.4)% | | Accrued charge related to certain anticipated litigation expenses | — % | (0.1)% | — % | (0.1)% | | Adjusted (non-GAAP) | 9.1 % | 9.9 % | 8.6 % | 9.4 % | Income from Operations Reconciliation (in millions) | Metric | 3Q24 | 3Q23 | YTD 2024 | YTD 2023 | |:---|:---|:---|:---|:---|\ | **INSURANCE SEGMENT** | | | | | | GAAP | $274 | $722 | $1,935 | $3,080 | | Amortization associated with identifiable intangibles | 4 | 6 | 13 | 17 | | Impact of exit of employer group commercial medical products business | 51 | 51 | 111 | 15 | | Accrued charge related to certain anticipated litigation expenses | — | 15 | — | 105 | | Adjusted (non-GAAP) | $329 | $794 | $2,059 | $3,217 | | **CENTERWELL SEGMENT** | | | | | | GAAP | $382 | $400 | $1,002 | $1,017 | | Depreciation and amortization expense | 57 | 53 | 166 | 152 | | Adjusted (non-GAAP) | $439 | $453 | $1,168 | $1,169 | Net Cash from Operating Activities Reconciliation (in millions) | Metric | YTD 2024 | YTD 2023 | |:---|:---|:---|\ | GAAP | $3,494 | $11,115 | | Timing of premium payment from CMS | — | (7,073) | | Adjusted (non-GAAP) | $3,494 | $4,042 | [Cautionary Statement](index=15&type=section&id=Cautionary%20Statement) This section highlights forward-looking statements and various risk factors impacting Humana's business, including regulatory changes, operational challenges, and market competition [Forward-Looking Statements and Risk Factors](index=15&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The report contains forward-looking statements subject to risks including product design, benefit expense management, strategic initiative implementation, Star ratings, data security, legal actions, and government regulation - Forward-looking statements are subject to risks, uncertainties, and assumptions, including those detailed in the company's SEC filings[58](index=58&type=chunk) - Risks include: inability to design/price products competitively or cover healthcare costs, failure to implement operational/strategic initiatives (Medicare, CenterWell), significant decline in Medicare Advantage Star ratings for 2025 and potential negative impact on 2026 quality bonus payments, data integrity failures or cyber-security attacks, adverse outcomes from legal actions/governmental investigations, and risks associated with government contracts and regulatory changes (e.g., Final RADV Rule)[58](index=58&type=chunk)[59](index=59&type=chunk) - Additional risks include: managing acquisitions/divestitures, maintaining provider relationships, attracting/retaining talented employees, competition and regulatory challenges in the pharmacy business, and potential downgrades in debt ratings[59](index=59&type=chunk) [About Humana](index=19&type=section&id=About%20Humana) Humana Inc. is dedicated to prioritizing health for its stakeholders, providing care through its insurance and CenterWell health care services to diverse populations including Medicare and Medicaid members - Humana Inc. is committed to putting health first for teammates, customers, and the company[61](index=61&type=chunk) - Provides care and service through Humana insurance services and CenterWell health care services to Medicare, Medicaid, families, individuals, military service personnel, and communities[61](index=61&type=chunk) [Statistical Schedules and Supplementary Information](index=21&type=section&id=Statistical%20Schedules%20and%20Supplementary%20Information) This section provides detailed unaudited statistical schedules and supplementary financial information, including consolidated statements, balance sheets, cash flows, membership details, and segment-specific operational metrics [Consolidated Statements of Income](index=23&type=section&id=Consolidated%20Statements%20of%20Income) This section presents Humana's consolidated statements of income for both year-to-date and three-month periods ending September 30, 2024 and 2023 Consolidated Statements of Income (YTD September 30, 2024 vs. 2023, in millions) | Metric | YTD 2024 | YTD 2023 | |:---|:---|:---|\ | Premiums | $84,354 | $76,144 | | Services | $3,265 | $2,993 | | Investment income | $929 | $775 | | Total revenues | $88,548 | $79,912 | | Benefits | $75,283 | $65,612 | | Operating costs | $9,529 | $9,361 | | Depreciation and amortization | $631 | $578 | | Total operating expenses | $85,443 | $75,551 | | Income from operations | $3,105 | $4,361 | | Net income attributable to Humana | $1,900 | $3,030 | | Diluted earnings per common share | $15.72 | $24.26 | Consolidated Statements of Income (3 Months Ended September 30, 2024 vs. 2023, in millions) | Metric | 3Q24 | 3Q23 | |:---|:---|:---|\ | Premiums | $27,951 | $25,099 | | Services | $1,103 | $1,016 | | Investment income | $343 | $308 | | Total revenues | $29,397 | $26,423 | | Benefits | $25,120 | $21,745 | | Operating costs | $3,339 | $3,271 | | Depreciation and amortization | $210 | $201 | | Total operating expenses | $28,669 | $25,217 | | Income from operations | $728 | $1,206 | | Net income attributable to Humana | $480 | $832 | | Diluted earnings per common share | $3.98 | $6.71 | [Consolidated Balance Sheets](index=24&type=section&id=Consolidated%20Balance%20Sheets) This section provides Humana's consolidated balance sheets as of September 30, 2024, and December 31, 2023, detailing assets, liabilities, and equity Consolidated Balance Sheets (in millions) | Metric | September 30, 2024 | December 31, 2023 | |:---|:---|:---|\ | Cash and cash equivalents | $5,116 | $4,694 | | Investment securities | $19,033 | $16,626 | | Total current assets | $32,926 | $29,986 | | Total assets | $50,007 | $47,065 | | Benefits payable | $11,125 | $10,241 | | Total current liabilities | $18,727 | $18,872 | | Long-term debt | $11,886 | $10,213 | | Total liabilities | $32,383 | $30,747 | | Total stockholders' equity | $17,565 | $16,262 | | Total equity | $17,624 | $16,318 | | Debt-to-total capitalization ratio | 42.3 % | 41.8 % | [Consolidated Statements of Cash Flows](index=25&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents Humana's consolidated statements of cash flows for the year-to-date periods ending September 30, 2024 and 2023 Consolidated Statements of Cash Flows (YTD September 30, 2024 vs. 2023, in millions) | Metric | YTD 2024 | YTD 2023 | |:---|:---|:---|\ | Net cash provided by operating activities | $3,494 | $11,115 | | Net cash used in investing activities | ($2,889) | ($2,610) | | Net cash (used in) provided by financing activities | ($183) | $1,582 | | Increase in cash and cash equivalents | $422 | $10,087 | | Cash and cash equivalents at end of period | $5,116 | $15,148 | [Consolidating Statements of Income - Quarter](index=26&type=section&id=Consolidating%20Statements%20of%20Income%20-%20Quarter) This section provides consolidating statements of income for Humana's Insurance and CenterWell segments for the three months ended September 30, 2024 and 2023 Consolidating Statements of Income (3 Months Ended September 30, 2024, in millions) | Metric | Insurance | CenterWell | Eliminations/Corporate | Consolidated | |:---|:---|:---|:---|:---|\ | Total revenues | $28,370 | $5,041 | ($4,014) | $29,397 | | Benefits | $25,319 | — | ($199) | $25,120 | | Operating costs | $2,595 | $4,602 | ($3,858) | $3,339 | | Income from operations | $274 | $382 | $72 | $728 | | Benefit ratio | 90.6 % | - | - | 89.9 % | | Operating cost ratio | 9.2 % | 91.3 % | - | 11.5 % | Consolidating Statements of Income (3 Months Ended September 30, 2023, in millions) | Metric | Insurance | CenterWell | Eliminations/Corporate | Consolidated | |:---|:---|:---|:---|:---|\ | Total revenues | $25,511 | $4,660 | ($3,748) | $26,423 | | Benefits | $21,976 | — | ($231) | $21,745 | | Operating costs | $2,634 | $4,207 | ($3,570) | $3,271 | | Income from operations | $722 | $400 | $84 | $1,206 | | Benefit ratio | 87.6 % | - | - | 86.6 % | | Operating cost ratio | 10.4 % | 90.3 % | - | 12.5 % | [Consolidating Statements of Income - YTD](index=28&type=section&id=Consolidating%20Statements%20of%20Income%20-%20YTD) This section presents consolidating statements of income for Humana's Insurance and CenterWell segments for the nine months ended September 30, 2024 and 2023 Consolidating Statements of Income (9 Months Ended September 30, 2024, in millions) | Metric | Insurance | CenterWell | Eliminations/Corporate | Consolidated | |:---|:---|:---|:---|:---|\ | Total revenues | $85,594 | $14,806 | ($11,852) | $88,548 | | Benefits | $75,752 | — | ($469) | $75,283 | | Operating costs | $7,354 | $13,638 | ($11,463) | $9,529 | | Income from operations | $1,935 | $1,002 | $168 | $3,105 | | Benefit ratio | 89.8 % | - | - | 89.2 % | | Operating cost ratio | 8.6 % | 92.1 % | - | 10.9 % | Consolidating Statements of Income (9 Months Ended September 30, 2023, in millions) | Metric | Insurance | CenterWell | Eliminations/Corporate | Consolidated | |:---|:---|:---|:---|:---|\ | Total revenues | $77,289 | $13,695 | ($11,072) | $79,912 | | Benefits | $66,096 | — | ($484) | $65,612 | | Operating costs | $7,597 | $12,526 | ($10,762) | $9,361 | | Income from operations | $3,080 | $1,017 | $264 | $4,361 | | Benefit ratio | 86.8 % | - | - | 86.2 % | | Operating cost ratio | 9.9 % | 91.5 % | - | 11.8 % | [Membership Detail](index=30&type=section&id=Membership%20Detail) This section provides detailed medical membership figures, including Individual and Group Medicare Advantage, Medicare stand-alone PDP, and membership mix as of September 30, 2024 and 2023 Medical Membership (in thousands) | Membership Type | Sep 30, 2024 | Sep 30, 2023 | Dec 31, 2023 | |:---|:---|:---|:---|\ | Individual Medicare Advantage | 5,659.2 | 5,374.4 | 5,408.9 | | Group Medicare Advantage | 546.7 | 510.3 | 509.6 | | Total Medicare Advantage | 6,205.9 | 5,884.7 | 5,918.5 | | Medicare stand-alone PDP | 2,315.7 | 2,885.8 | 2,849.1 | | Total Medical Membership | 16,358.1 | 16,963.5 | 16,857.8 | Individual Medicare Advantage Membership Mix (Sep 30, 2024 vs. 2023) | Metric | Sep 30, 2024 | Sep 30, 2023 | |:---|:---|:---|\ | HMO | 51 % | 53 % | | PPO/PFFS | 49 % | 47 % | | Shared Risk | 37 % | 35 % | | Path to Risk | 33 % | 34 % | | Total Value-based | 70 % | 69 % | [Premiums and Services Revenue Detail](index=31&type=section&id=Premiums%20and%20Services%20Revenue%20Detail) This section details premiums and services revenue for Humana's Insurance and CenterWell segments for both quarterly and year-to-date periods ending September 30, 2024 and 2023 Premiums and Services Revenue Detail (3 Months Ended September 30, 2024 vs. 2023, in millions) | Segment/Type | 3Q24 | 3Q23 | Dollar Change | Percentage Change | |:---|:---|:---|:---|:---|\ | **Insurance** | | | | | | Individual Medicare Advantage | $21,856 | $19,637 | $2,219 | 11.3 % | | Group Medicare Advantage | $1,913 | $1,695 | $218 | 12.9 % | | Medicare standalone PDP | $721 | $493 | $228 | 46.2 % | | State-based contracts and other | $2,921 | $1,995 | $926 | 46.4 % | | Total Insurance | $28,178 | $25,357 | $2,821 | 11.1 % | | **CenterWell** | | | | | | Pharmacy solutions | $2,933 | $2,797 | $136 | 4.9 % | | Primary care | $1,257 | $1,068 | $189 | 17.7 % | | Home solutions | $851 | $795 | $56 | 7.0 % | | Total CenterWell | $5,041 | $4,660 | $381 | 8.2 % | Premiums and Services Revenue Detail (9 Months Ended September 30, 2024 vs. 2023, in millions) | Segment/Type | YTD 2024 | YTD 2023 | Dollar Change | Percentage Change | |:---|:---|:---|:---|:---|\ | **Insurance** | | | | | | Individual Medicare Advantage | $66,519 | $59,195 | $7,324 | 12.4 % | | Group Medicare Advantage | $5,840 | $5,192 | $648 | 12.5 % | | Medicare stand-alone PDP | $2,409 | $1,677 | $732 | 43.6 % | | State-based contracts and other | $7,756 | $5,966 | $1,790 | 30.0 % | | Total Insurance | $85,072 | $76,904 | $8,168 | 10.6 % | | **CenterWell** | | | | | | Pharmacy solutions | $8,635 | $8,509 | $126 | 1.5 % | | Primary care | $3,666 | $3,101 | $565 | 18.2 % | | Home solutions | $2,505 | $2,085 | $420 | 20.1 % | | Total CenterWell | $14,806 | $13,695 | $1,111 | 8.1 % | [CenterWell Segment - Pharmacy Solutions](index=33&type=section&id=CenterWell%20Segment%20-%20Pharmacy%20Solutions) This section provides specific operational metrics and details for the CenterWell segment's Pharmacy Solutions business [CenterWell Segment - Primary Care](index=34&type=section&id=CenterWell%20Segment%20-%20Primary%20Care) This section provides specific operational metrics and details for the CenterWell segment's Primary Care business [CenterWell Segment - Home Solutions](index=35&type=section&id=CenterWell%20Segment%20-%20Home%20Solutions) This section provides specific operational metrics and details for the CenterWell segment's Home Solutions business [Footnotes to Statistical Schedules](index=36&type=section&id=Footnotes%20to%20Statistical%20Schedules) This section contains explanatory footnotes pertaining to the statistical schedules and supplementary financial information provided

Humana Inc. (HUM) is slated to release third-quarter 2024 results on Oct. 30, before the opening bell. The Zacks Consensus Estimate for earnings per share is pegged at $3.48, which indicates a 55.3% plunge from the prior-year quarter's number. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar. The third-quarter earnings estimate has witnessed two downward revisions over the past month. During this time, the estimate declined 1.7%. Meanwhile, the Zacks Consensus Estimate for revenues i ...

NEW YORK, Oct. 22, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, is investigating potential claims against Humana Inc. (“Humana” or the “Company”) (NYSE: HUM) on behalf of Humana stockholders. Our investigation concerns whether Humana has violated the federal securities laws and/or engaged in other unlawful business practices. Click here to participate in the action. On October 2, 2024, Humana disclosed that it has “approximately 1.6 million, or 2 ...