Company: HUM
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0000049071-25-000057
Chunk: 17

Company: HUMANA INC
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 2
Chunk 17
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%89.3%89.2%1.2%0.1%Operating cost ratio (b)12.6%11.5%11.4%10.9%1.1%0.5%Effective tax rate(77.3)%24.4%20.1%24.9%(101.7)%(4.8)%

(a)Represents benefits expense as a percentage of premiums revenue.

(b)Represents operating costs, excluding depreciation and amortization, as a percentage of total revenues less investment income.

38

Premiums Revenue

Consolidated premiums revenue increased $2.8 billion, or 9.9%, from $28.0 billion in the 2024 quarter to $30.7 billion in the 2025 quarter and increased $7.6 billion, or 9.0%, from $84.4 billion in the 2024 period to $91.9 billion in the 2025 period primarily due to higher per member Medicare premiums, largely driven by an increased direct subsidy due to the IRA, and higher per member state-based contracts premiums, as well as membership growth in the state-based contracts and stand-alone PDP businesses. These factors were partially offset by the membership decline within the individual Medicare Advantage business, inclusive of the decision to exit certain unprofitable plans and counties. 

Services Revenue

Consolidated services revenue increased $0.5 billion, or 45.1%, from $1.1 billion in the 2024 quarter to $1.6 billion in the 2025 quarter and increased $1.1 billion, or 32.7%, from $3.3 billion in the 2024 period to $4.3 billion in the 2025 period primarily due to higher revenues associated with growth in the primary care and pharmacy solutions businesses, partially offset by the impact of the v28 risk model revision impacting the Primary Care business. 

Investment Income

Investment income decreased $5 million, or 1.5%, from $343 million in the 2024 quarter to $338 million in the 2025 quarter and decreased $55 million, or 5.9%, from $929 million in the 2024 period to $874 million in the 2025 period primarily due to lower interest income on debt securities.

Benefit Expense    

Consolidated benefits expense increased $2.9 billion, or 11.4%, from $25.1 billion in the 2024 quarter to