Company: HUM
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0000049071-25-000023
Chunk: 17

Company: HUMANA INC
Filing Date: 2025-04-30
Form: 10-Q
Item: Item 2
Chunk 17
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 development in the 2025 quarter and $535 million of favorable prior-period medical claims development in the 2024 quarter. Prior-period medical claims reserve development decreased the consolidated benefit ratio by 160 basis points in the 2025 quarter and decreased the consolidated benefit ratio by 190 basis points in the 2024 quarter. 

Operating Costs

Our segments incur both direct and shared indirect operating costs. We allocate the indirect costs shared by the segments primarily as a function of revenues. As a result, the profitability of each segment is interdependent.

Consolidated operating costs increased $338 million, or 11.1%, from $3.0 billion in the 2024 quarter to $3.4 billion in the 2025 quarter. The consolidated operating cost ratio increased 20 basis points from 10.4% for the 2024 quarter to 10.6% for the 2025 quarter primarily due to business mix changes, including within the CenterWell segment which runs a significantly higher operating cost ratio than the Insurance segment, combined with the operating leverage impact of the loss of individual Medicare Advantage membership. This factor was partially offset by administrative cost efficiencies resulting from the value creation initiatives and operating leverage associated with increased revenues from the impact of the IRA as previously described.  

Depreciation and Amortization

Depreciation and amortization decreased $26 million, or 12.4%, from $209 million in the 2024 quarter to $183 million in the 2025 quarter primarily due to decreased capital spending.

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Interest Expense

Interest expense remained relatively unchanged from the 2024 quarter to the 2025 quarter.

Income Taxes

The effective income tax rate was 24.6% and 25.3% for the three months ended March 31, 2025, and 2024, respectively. The year-over-year decrease in the effective income tax rate is primarily due to reduced state tax expense.

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Insurance Segment

 March 31,Change 20252024Members%Membership:Individual Medicare Advantage5,215,800 5,548,900 (333,100)(6.0)%Group Medicare Advantage572,600 551,500 21,100 3.8 %Medicare stand-alone PDP2,433,100 2,347,000 86,100 3.7 %Total Medicare8,221,500 8,447,400 (225,900)(2.7)%Medicare Supplement420,500