Company Overview - Humana (HUM) shares increased by 10.7% to $281.95 in the last trading session, with a higher-than-average trading volume [1] - The stock has gained 1.4% over the past four weeks [1] Revenue Drivers - The increase in Humana's stock price was primarily driven by the U.S. government's decision to raise Medicare Advantage payment rates by 5.06% for 2026, significantly higher than the initially proposed 2.23% increase [2] - This adjustment is projected to generate over $25 billion in additional revenue for insurers, benefiting companies like Humana [2] Earnings Expectations - Humana is expected to report quarterly earnings of $9.95 per share, reflecting a year-over-year increase of 37.6% [3] - Revenue for the upcoming quarter is anticipated to be $32.22 billion, which is a 9.8% increase compared to the same quarter last year [3] Market Sentiment - The consensus EPS estimate for Humana has remained unchanged over the last 30 days, indicating stability in earnings expectations [4] - The stock's price typically does not continue to rise without trends in earnings estimate revisions, suggesting that monitoring future earnings revisions will be crucial for assessing stock performance [4] Industry Context - Humana operates within the Zacks Medical - HMOs industry, which includes other companies like Select Medical (SEM) [4] - Select Medical's stock closed 0.6% higher at $15.75, but has seen a decline of 10% over the past month [4]

Company Overview - Proactive is a financial news publisher that provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company has a team of experienced and qualified news journalists who produce independent content [2] Market Focus - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - The news team delivers insights across various sectors including biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Adoption - Proactive is recognized for its forward-looking approach and enthusiastic adoption of technology to enhance workflows [4] - The company utilizes automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]

Core Insights - Humana Inc. (HUM) is well-positioned for growth due to improved premium revenues, an aging U.S. population, acquisitions, and strong cash generation abilities [1] - The company has a strong outlook for 2025, with anticipated revenue growth and earnings per share [3][4] Revenue Growth - Humana's premium revenues increased by 10.7% year over year in 2024, driven by a solid customer base in its Medicaid and Medicare operations [5] - The company expects revenues for 2025 to be between $126 billion and $128 billion, reflecting a 7.8% improvement from 2024 [3] Earnings Performance - Humana has consistently outperformed earnings estimates, with an average surprise of 15.35% over the last four quarters [2] Strategic Acquisitions - The company has pursued strategic acquisitions to enhance its capabilities and expand its footprint, including Family Physicians Group, Curo, Enclara, iCare, and Inclusa [7] - The acquisition of Enclara improved hospice pharmacy services, while the iCare deal expanded its Medicare presence in Wisconsin [7] Financial Position - As of December 31, 2024, Humana held cash and investment securities totaling $20.4 billion, significantly exceeding its long-term debt of $11.1 billion [8] - The company anticipates GAAP cash flow from operations to be between $2.4 billion and $2.9 billion for 2025, supporting its capital deployment strategy [8] Market Demand - The growing elderly population in the U.S. is expected to sustain demand for Humana's Medicare plans, supported by its CenterWell brand introduced in 2022 [6]

Core Viewpoint - Humana Inc. is expanding its CenterWell Senior Primary Care Centers, with a focus on providing accessible, value-based healthcare for seniors, particularly in underserved communities [1][3][4]. Group 1: Expansion and Accessibility - The grand opening of the CenterWell Senior Primary Care Center in Gladstone, MO, marks the beginning of a broader expansion, with plans for 22 additional centers at Walmart locations across four states by mid-2025 [1][2]. - The Gladstone facility began seeing patients in December, with further centers in Florida, Georgia, and Texas expected to open later this spring [2]. Group 2: Value-Based Care Model - Humana's value-based care model emphasizes preventive care, which has resulted in a 10% increase in primary care visits among patients in these models, leading to fewer hospital admissions and better management of chronic conditions [3][4]. - The company aims to strengthen its presence in the Medicare Advantage market, a significant revenue driver, by attracting more seniors to its network [4]. Group 3: Financial Performance - The CenterWell segment generated revenues of $5.1 billion in the fourth quarter of 2024, supported by expanding service lines and improved revenues from the Primary Care business [5]. - Humana's shares have seen a decline of 23.2% over the past year, contrasting with a 3% decline in the broader industry [6].

Core Insights - Humana Inc. has partnered with Icon Health to enhance access to musculoskeletal care for seniors through its CenterWell and Conviva primary care providers, launching in Palm Beach County [1][2] - This collaboration is expected to strengthen Humana's CenterWell segment, which reported an 8.9% year-over-year revenue increase in Q4 2024, and aims to simplify access to comprehensive treatment for musculoskeletal conditions [2][3] - The initiative aligns with Humana's commitment to value-based care, potentially reducing emergency room visits and hospital admissions, thereby improving patient health and operational efficiency [3][4] Company Performance - Humana's shares have increased by 12.1% over the past three months, outperforming the industry growth of 4.1% [5] Strategic Positioning - By integrating specialized care within primary care settings, Humana is well-positioned to attract more seniors seeking comprehensive healthcare solutions, supporting its long-term growth strategy [4]

Group 1 - The partnership between CenterWell Senior Primary Care, Conviva Senior Primary Care, and Icon Health aims to provide seniors with integrated musculoskeletal care in primary care settings [1][2][3] - Musculoskeletal conditions are significant causes of disability among seniors, necessitating coordinated care among various healthcare providers [2][3] - The collaboration focuses on a value-based care model that emphasizes early intervention, accurate diagnosis, and personalized treatment plans for seniors [4][6] Group 2 - Icon Health's approach includes virtual-first access, allowing seniors to receive timely care from musculoskeletal specialists [6][7] - The partnership enhances patient convenience by accepting Original Medicare and various Medicare Advantage plans, facilitating easier access to care [4][5] - The integrated care model aims to improve health outcomes by providing comprehensive treatment options tailored to individual patient needs [3][4][7]

[Business Overview](index=4&type=section&id=Item%201.%20Business) Humana Inc. operates as a health and well-being company through its insurance and healthcare services segments, primarily serving Medicare members and deriving significant revenue from federal government contracts [Company Profile](index=4&type=section&id=General) Humana Inc. is a health and well-being company operating through insurance and healthcare services segments, serving approximately 16 million medical members and 5 million specialty product members as of December 31, 2024 - As of December 31, 2024, Humana had approximately **16 million medical members** and **5 million specialty product members**[14](index=14&type=chunk) - In 2024, **85% of total premiums and services revenue** was derived from federal government contracts, with individual Medicare Advantage contracts in Florida representing **14%** of this revenue, covering about **924,800 members**[14](index=14&type=chunk) [Business Segments](index=4&type=section&id=Business%20Segments) Humana operates through its Insurance segment, providing health insurance products primarily focused on Medicare, and its CenterWell segment, delivering integrated healthcare services including pharmacy, primary care, and home solutions [Insurance Segment](index=6&type=section&id=Insurance%20Segment) The Insurance segment is Humana's largest, generating 97% of consolidated premiums and services revenue in 2024, primarily from Individual Medicare Advantage, and is exiting the Employer Group Commercial Medical Products business Insurance Segment Premiums and Services Revenue (FY 2024) | Product | Revenue (in millions) | % of Consolidated Revenue | | :--- | :--- | :--- | | Individual Medicare Advantage | $88,019 | 75.6% | | Group Medicare Advantage | $7,731 | 6.6% | | Medicare stand-alone PDP | $3,137 | 2.7% | | State-based contracts and other | $10,915 | 9.4% | | **Total Insurance Segment** | **$113,070** | **97.0%** | - The company is exiting the Employer Group Commercial Medical Products business, with the process expected to be finalized in the first half of 2025[41](index=41&type=chunk) - Humana was awarded the new T-5 TRICARE East Region contract, which commenced on January 1, 2025, covering approximately **4.6 million beneficiaries** across 24 states and Washington D.C[45](index=45&type=chunk) [CenterWell Segment](index=10&type=section&id=CenterWell%20Segment) The CenterWell segment provides pharmacy, primary care, and home solutions, generating $3.47 billion in external services revenue in 2024 and operating 344 primary care clinics CenterWell Segment Services Revenue (FY 2024) | Line of Business | External Revenue (in millions) | Intersegment Revenue (in millions) | | :--- | :--- | :--- | | Home solutions | $1,313 | $2,050 | | Pharmacy solutions | $904 | $10,724 | | Primary care | $1,248 | $3,697 | | **Total** | **$3,465** | **$16,471** | - The Primary Care Organization (PCO) operates **344 primary care clinics** with approximately **1,000 providers**, serving **390,500 patients**[50](index=50&type=chunk) - Humana sold a **60% interest** in Gentiva Hospice in August 2022 and continues to hold approximately a **35% minority ownership stake**[56](index=56&type=chunk) [Medical Membership](index=12&type=section&id=Insurance%20Medical%20Membership) As of December 31, 2024, Humana's total insurance medical membership was approximately 16.3 million, with Military services (TRICARE) and Individual Medicare Advantage being the largest components Medical Membership by Product (as of Dec 31, 2024) | Product | Membership (in thousands) | % of Total | | :--- | :--- | :--- | | Military services (TRICARE) | 6,009.1 | 36.8% | | Individual Medicare Advantage | 5,661.8 | 34.6% | | Medicare stand-alone PDP | 2,288.2 | 14.0% | | State-based contracts and other | 1,459.9 | 8.9% | | Group Medicare Advantage | 545.7 | 3.3% | | Medicare Supplement | 377.3 | 2.3% | | **Total** | **16,347.1** | **100.0%** | [Provider Arrangements and Care Management](index=12&type=section&id=Provider%20Arrangements) Humana manages healthcare services through contracted and employed providers, utilizing various reimbursement models including value-based arrangements where providers share financial risk - As of December 31, 2024, approximately **2.4 million members** (**14.4% of total medical membership**) were covered under shared risk value-based arrangements[66](index=66&type=chunk) - Within the individual Medicare Advantage population, **2.1 million members** (**38.0%**) were in shared risk arrangements[66](index=66&type=chunk) [Human Capital Management](index=16&type=section&id=Human%20Capital%20Management) As of December 31, 2024, Humana employed approximately 65,680 associates, focusing on well-being and engagement, though voluntary turnover increased to 14.4% in 2024 - The company had approximately **65,680 associates** as of December 31, 2024[84](index=84&type=chunk) - Voluntary turnover rate (VTR) increased to **14.4% in 2024** from **13.4% in 2023**[85](index=85&type=chunk) [Risk Factors](index=20&type=page&id=Item%201A.%20Risk%20Factors) Humana faces significant risks related to business operations, regulatory changes, and cybersecurity threats, which could materially impact its financial performance and reputation [Business and Operational Risks](index=20&type=section&id=Business%20and%20Operational%20Risks) Humana faces risks from product pricing, medical cost estimation, intense competition, and a significant decline in Medicare Advantage Star Ratings for 2025, which will negatively impact future bonus payments - Profitability may be adversely affected if premiums are insufficient to cover healthcare costs, which are sensitive to utilization, new technologies, and prescription drug costs[96](index=96&type=chunk)[97](index=97&type=chunk) - The company faces intense competition, with price being a significant factor; failure to compete effectively or manage membership mix could harm financial results[102](index=102&type=chunk)[105](index=105&type=chunk) - A significant decline in Medicare Advantage Star Ratings for 2025 will negatively impact 2026 quality bonus payments, with approximately **25% of MA members** in plans rated 4-star or higher for 2025, compared to **94% for 2024**[109](index=109&type=chunk)[110](index=110&type=chunk) [Regulatory and Legal Risks](index=21&type=section&id=Regulatory%20and%20Legal%20Risks) As a major government contractor, Humana is exposed to substantial regulatory and legal risks, including changes in government programs, audit challenges, and ongoing litigation - Approximately **94% of total premiums and services revenue for 2024** came from government programs, making the company highly sensitive to legislative and regulatory changes[124](index=124&type=chunk) - The company is challenging the CMS Final RADV Rule, which eliminates the FFS Adjuster for audits starting in PY 2018; an unfavorable outcome could materially impact results[129](index=129&type=chunk)[130](index=130&type=chunk)[563](index=563&type=chunk) - Humana is subject to various legal proceedings, including a putative stockholder class action alleging false or misleading statements about financial performance and Medicare Advantage Star Ratings[118](index=118&type=chunk)[119](index=119&type=chunk)[573](index=573&type=chunk) [Cybersecurity and Technology Risks](index=22&type=section&id=Cybersecurity%20and%20Technology%20Risks) Humana's operations heavily rely on information systems and data integrity, exposing it to risks from system failures and cybersecurity attacks that could lead to data breaches and reputational damage - Business operations depend significantly on information systems for pricing, service delivery, and financial reporting; failure to maintain or implement new systems could have a material adverse effect[111](index=111&type=chunk)[112](index=112&type=chunk) - The company is a regular target of cybersecurity attacks; a successful attack could result in misappropriation of data, system shutdowns, regulatory fines, and reputational damage[115](index=115&type=chunk)[116](index=116&type=chunk) [Management's Discussion and Analysis (MD&A)](index=41&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Humana's financial condition and results of operations, highlighting key performance drivers, strategic initiatives, and significant financial impacts [Executive Overview](index=41&type=section&id=Executive%20Overview) Management's overview emphasizes Humana's integrated care delivery strategy, the planned exit from the Employer Group Commercial Medical business, and the significant impact of special charges on 2024 net income - As of December 31, 2024, **71% of individual Medicare Advantage members** (**4.0 million**) were in value-based care relationships[216](index=216&type=chunk) - The company is exiting the Employer Group Commercial Medical Products business, with the process expected to be finalized in the first half of 2025[199](index=199&type=chunk) Impact of Special Items on Pre-Tax Income (in millions) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Put/call valuation adjustments | $296 | $320 | | Value creation initiatives | $281 | $436 | | Impairment charges | $200 | $91 | | Accrued litigation charge | — | $105 | | Transaction and integration costs | — | $(48) | | **Total Impact** | **$777** | **$904** | [Results of Operations (2024 vs. 2023)](index=46&type=section&id=Results%20of%20Operations) Humana's consolidated revenues increased 10.7% to $117.8 billion in 2024, driven by Medicare Advantage growth, but net income fell 51.1% to $1.2 billion due to a worsened benefit ratio Consolidated Financial Results (FY 2024 vs. FY 2023) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $117,761M | $106,374M | +10.7% | | Net Income | $1,214M | $2,484M | -51.1% | | Diluted EPS | $9.98 | $20.00 | -50.1% | | Benefit Ratio | 89.8% | 87.3% | +250 bps | | Operating Cost Ratio | 11.8% | 12.5% | -70 bps | - The increase in the benefit ratio was primarily due to elevated Medicare Advantage and state-based contracts medical cost trends and lower favorable prior period medical claims reserve development (**$701 million in 2024** vs. **$872 million in 2023**)[230](index=230&type=chunk)[231](index=231&type=chunk) - The operating cost ratio improved due to scale efficiencies from MA membership growth, cost-saving initiatives, and lower broker commission expenses compared to the prior year[233](index=233&type=chunk) [Insurance Segment Results](index=49&type=section&id=Insurance%20Segment%20Results) The Insurance segment's income from operations decreased 51.4% to $1.3 billion in 2024, despite revenue growth, due to a higher benefit ratio driven by elevated medical cost trends Insurance Segment Key Metrics (FY 2024 vs. FY 2023) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Total External Revenues | $113,070M | $102,272M | +10.6% | | Income from Operations | $1,289M | $2,654M | -51.4% | | Benefit Ratio | 90.4% | 88.0% | +240 bps | | Operating Cost Ratio | 9.2% | 10.2% | -100 bps | - Individual Medicare Advantage membership grew by **252,900** (**4.7%**), while stand-alone PDP membership declined by **560,900** (**19.7%**)[238](index=238&type=chunk)[240](index=240&type=chunk)[242](index=242&type=chunk) - For 2025, the company anticipates a net membership decline of approximately **550,000** in its individual Medicare Advantage offerings[240](index=240&type=chunk) [CenterWell Segment Results](index=53&type=section&id=CenterWell%20Segment%20Results) The CenterWell segment's income from operations decreased 5.3% to $1.3 billion in 2024, despite revenue growth, primarily due to an increased operating cost ratio influenced by risk model revisions and compensation accruals CenterWell Segment Key Metrics (FY 2024 vs. FY 2023) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $19,936M | $18,405M | +8.3% | | Income from Operations | $1,329M | $1,404M | -5.3% | | Operating Cost Ratio | 92.2% | 91.2% | +100 bps | - The increase in the operating cost ratio was driven by the v28 risk model revision's impact on primary care and reduced compensation accruals in 2023, partially offset by value creation initiatives[255](index=255&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) Humana's cash and cash equivalents decreased by $2.5 billion in 2024, with cash from operations at $3.0 billion, and the company utilized cash for investing and financing activities Summary of Cash Flows (FY 2024, in billions) | Cash Flow Category | Amount | | :--- | :--- | | Net cash from operating activities | $3.0 | | Net cash used in investing activities | $(3.0) | | Net cash used in financing activities | $(2.5) | | **Net (decrease) in cash** | **$(2.5)** | - The company repurchased **$0.8 billion** of common stock and paid **$431 million** in dividends during 2024[280](index=280&type=chunk)[281](index=281&type=chunk) - As of December 31, 2024, the parent company had **$0.6 billion** in cash and equivalents, and state-regulated subsidiaries held aggregate statutory capital of **$13.2 billion**, exceeding the minimum requirement of **$11.4 billion**[288](index=288&type=chunk)[551](index=551&type=chunk) [Critical Accounting Policies and Estimates](index=59&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Humana's critical accounting estimates include benefits expense recognition (IBNR), revenue recognition (Medicare risk-adjustment), and impairment testing for investments, goodwill, and intangible assets - Benefits Payable (IBNR) is a critical estimate; the company recorded **$701 million** in favorable prior-period medical claims reserve development in 2024, compared to **$872 million in 2023**[297](index=297&type=chunk)[299](index=299&type=chunk) - Goodwill stood at **$9.6 billion** and indefinite-lived intangible assets at **$1.2 billion** at year-end; an impairment charge of **$200 million** was recorded in 2024 related to indefinite-lived intangible assets[315](index=315&type=chunk)[319](index=319&type=chunk) - The investment portfolio had **$1.4 billion** in gross unrealized losses at year-end, primarily attributed to increased market interest rates[309](index=309&type=chunk)[324](index=324&type=chunk) [Financial Statements and Supplementary Data](index=67&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Humana's consolidated financial statements, including balance sheets, income statements, and cash flow statements, along with detailed notes on accounting policies and financial disclosures [Consolidated Financial Statements](index=67&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements provide Humana's financial position as of December 31, 2024 and 2023, and its results of operations and cash flows for the three years ended December 31, 2024 Consolidated Balance Sheet Highlights (as of Dec 31, 2024) | Account | Amount (in millions) | | :--- | :--- | | Cash and cash equivalents | $2,221 | | Investment securities | $18,635 | | Goodwill | $9,631 | | **Total Assets** | **$46,479** | | Benefits payable | $10,440 | | Total debt (Short & Long-term) | $11,721 | | **Total Liabilities** | **$30,034** | | **Total Stockholders' Equity** | **$16,375** | Consolidated Income Statement Highlights (FY 2024) | Account | Amount (in millions) | | :--- | :--- | | Premiums Revenue | $112,104 | | Services Revenue | $4,431 | | **Total Revenues** | **$117,761** | | Benefits Expense | $100,664 | | Operating Costs | $13,696 | | **Income from Operations** | **$2,562** | | **Net Income Attributable to Humana** | **$1,207** | [Notes to Consolidated Financial Statements](index=73&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on Humana's significant accounting policies, segment information, debt, and legal contingencies, including critical audit matters identified by the independent auditor - Benefits payable totaled **$10.4 billion** at year-end, including an IBNR estimate of **$7.3 billion**; the company recognized **$701 million** in favorable development from prior years' reserves in 2024[492](index=492&type=chunk)[495](index=495&type=chunk) - Total debt outstanding was **$11.7 billion**; the company maintains **$4.7 billion** in revolving credit facilities, with no borrowings outstanding at year-end[509](index=509&type=chunk)[523](index=523&type=chunk) - The company is involved in significant legal proceedings, including a stockholder class action related to financial performance disclosures and a lawsuit filed against HHS to vacate its 2025 Star Ratings[573](index=573&type=chunk)[574](index=574&type=chunk) - The independent auditor's report identified two Critical Audit Matters: (1) Valuation of Incurred but not yet Reported Benefits Payable, and (2) Impairment Assessments of Home Solutions Reporting Unit Goodwill and Certificates of Need Intangible Assets[608](index=608&type=chunk)[609](index=609&type=chunk)[613](index=613&type=chunk) [Controls and Procedures](index=118&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that Humana's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2024, with no material changes during the fourth quarter - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[622](index=622&type=chunk) - Based on the COSO framework, management determined that the company's internal control over financial reporting was effective as of December 31, 2024[625](index=625&type=chunk) - There were no material changes to the company's internal control over financial reporting during the fourth quarter of 2024[627](index=627&type=chunk)

Humana TodayHUMHumana$265.54 +8.30 (+3.23%) 52-Week Range$213.31▼$406.46Dividend Yield1.33%P/E Ratio26.69Price Target$285.68Add to WatchlistHealth insurance giant Humana Inc. NYSE: HUM stock initially rose in reaction to its fourth quarter of 2024 earnings report despite posting losses. The medical sector giant was one of the first carriers to sound the alarm of rising inpatient utilization costs, notably with its Medicare Advantage (MA) plan members in Q4 2023. Since then, many other MA plan providers lik ...

If you like what you have just read and want to receive at least 4 exclusive stock tips every week focused on Pharma, Biotech and Healthcare, then join me at my marketplace channel, Haggerston BioHealth . Invest alongside the model portfolio or simply access the investment bank-grade financial models and research. I hope to see you there.The group is for both novice and experienced biotech investors. It provides catalysts to look out for and buy and sell ratings. It also provides product sales and forecasts ...

Humana Inc. (HUM) incurred a fourth-quarter 2024 adjusted net loss of $2.16 per share, narrower than the Zacks Consensus Estimate of a loss of $2.26 per share but wider than the prior-year quarter’s loss of 11 cents per share.See the Zacks Earnings Calendar to stay ahead of market-making news.Adjusted revenues of $29.2 billion advanced 13.5% year over year. The top line surpassed the consensus mark by 1.1%. The quarterly results were hurt by a decline in medical membership, which in turn, resulted from a ye ...