Humana(US:HUM)2026-02-19 19:26Membership and Revenue - As of December 31, 2025, Humana had approximately 15 million members in medical benefit plans and 4.7 million members in specialty products[13]. - 83% of total premiums and services revenue in 2025 were derived from federal government contracts, with 14% from individual Medicare Advantage contracts in Florida, covering approximately 1.0 million members[13]. - Total premiums and services revenue for the Insurance segment was $123.842 billion, with individual Medicare Advantage premiums contributing $90.403 billion, representing 70.3% of the segment's revenue[19]. - The Florida contracts accounted for approximately $17.8 billion in premiums revenue, which is about 20% of individual Medicare Advantage premiums revenue and 14% of consolidated premiums and services revenue[27]. - Approximately 93% of the company's total premiums and services revenue for the year ended December 31, 2025, was derived from federal and state government health care coverage programs, including Medicare and Medicaid[115]. - The company provided health insurance coverage to approximately 1.0 million individual Medicare Advantage members in Florida, accounting for about 14% of total premiums and services revenue for the year ended December 31, 2025[117]. Medicare Advantage and Services - Humana's individual Medicare Advantage products are renewed annually, with all contracts for 2026 approved by CMS[28]. - The company serves Medicaid-eligible members through contracts in multiple states, including Florida, Kentucky, and Illinois[34]. - Humana's group Medicare Advantage plans typically offer richer benefits than individual plans, including enhanced prescription drug coverage[31]. - The primary care business operates 350 clinics and serves approximately 491,100 patients, primarily under risk-sharing arrangements with Humana Medicare Advantage health plans[43]. - As of December 31, 2025, approximately 2,260,900 members, or 15.1%, of the medical membership were covered under shared risk value-based arrangements, including 1,947,900 individual Medicare Advantage members, or 37.1% of total individual Medicare Advantage membership[57]. - Approximately 3,586,100 members, or 68%, of individual Medicare Advantage members were in value-based relationships as of December 31, 2025, down from 71% in 2024[201]. Financial Performance - Humana Inc. recorded a consolidated income before income taxes of $1,297 million in 2025, up from $777 million in 2024[200]. - The diluted earnings per common share increased to $7.38 in 2025 from $4.93 in 2024[200]. - Consolidated premiums revenue increased by $10.7 billion, or 9.6%, from $112.1 billion in 2024 to $122.8 billion in 2025, driven by higher Medicare premiums and membership growth[209]. - Consolidated services revenue rose by $1.4 billion, or 31.6%, from $4.4 billion in 2024 to $5.8 billion in 2025, primarily due to growth in primary care and pharmacy solutions[210]. - Total operating expenses increased by $11.8 billion, or 10.2%, from $115.2 billion in 2024 to $126.9 billion in 2025[207]. - The benefit ratio for 2025 was 90.2%, compared to 89.8% in 2024, indicating a slight increase in benefits expense as a percentage of premiums revenue[207]. Strategic Initiatives and Partnerships - The company has entered into a strategic partnership with Welsh, Carson, Anderson & Stowe to expand its primary care model, resulting in 146 clinics operating under this partnership as of December 31, 2025[45]. - The company intends to continue focusing on integrated care delivery models to enhance member engagement and improve health outcomes[201]. - The company is actively involved in integrating Medicaid and Medicare services for dual-eligible populations to improve health outcomes and reduce costs[36]. Regulatory and Compliance Issues - The company is subject to various legal actions that could result in substantial monetary damages or changes in business practices, including claims related to health care benefit payments and false claims litigation[108][109]. - The company faces increased regulatory burdens and negative publicity that could adversely affect its ability to market products and services, potentially increasing costs and impacting financial results[112][113]. - Compliance with HIPAA and HITECH Act regulations requires significant resources and could expose the company to substantial penalties for violations[131]. - The company is subject to various federal and state healthcare fraud and abuse laws, with potential sanctions including exclusion from Medicare and Medicaid programs[135]. Operational Challenges - The company faces intense competitive pressure to contain premium prices while managing increasing medical and administrative costs, which could adversely affect profitability[91]. - The company relies on independent third parties for significant portions of its systems-related support, making operations vulnerable to third-party performance issues[103]. - The healthcare services business relies on the ability to recruit and retain qualified medical professionals, with competition in this market expected to remain high, impacting operational performance[146]. - The pharmacy solutions business faces significant competition and is subject to extensive federal and state regulations, which could affect operational efficiency and compliance costs[149]. Cybersecurity and Risk Management - The costs associated with detecting, preventing, and addressing cybersecurity threats could be substantial, potentially leading to operational disruptions and loss of existing or potential members[107]. - The company relies on third-party service providers for data processing and storage, making it vulnerable to cybersecurity attacks that could compromise sensitive information[106]. - Cybersecurity threats have been managed through comprehensive risk assessments and controls, with no material impact on operations reported through December 31, 2025[163]. - The Board of Directors oversees enterprise risk management, including cybersecurity, with designated committees responsible for internal controls and incident response[164]. Human Resources and Workforce - The company employed approximately 67,060 associates as of December 31, 2025, with a voluntary turnover rate (VTR) of 13.8%, down from 14.4% in 2024[74][76]. - The company’s Total Rewards program includes competitive base pay, 401(k) retirement savings plans with company match, and comprehensive health benefits[78]. - The company’s professional development initiatives provide associates with access to tools and mentorship for career advancement, supporting innovation and organizational growth[80].