Company: HUM
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0000049071-25-000023
Chunk: 16

Company: HUMANA INC
Filing Date: 2025-04-30
Form: 10-Q
Item: Item 2
Chunk 16
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 as a percentage of premiums revenue.

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

34

Premiums Revenue

Consolidated premiums revenue increased $2.3 billion, or 8.0%, from $28.3 billion in the 2024 quarter to $30.5 billion in the 2025 quarter primarily due to higher per member Medicare premiums, driven largely by an increased direct subsidy due to the IRA, and higher per member state-based contracts premiums, as well as membership growth in the stand-alone PDP and state-based contracts 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 $272 million, or 25.6%, from $1.1 billion in the 2024 quarter to $1.3 billion in the 2025 quarter primarily due to higher revenues associated with growth in the primary care business, partially offset by the impact of the v28 risk model revision. 

Investment Income

Investment income decreased $24 million, or 8.3%, from $288 million in the 2024 quarter to $264 million in the 2025 quarter primarily due to lower interest income on debt securities.

Benefit Expense    

Consolidated benefits expense increased $1.4 billion, or 5.6%, from $25.1 billion in the 2024 quarter to $26.5 billion in the 2025 quarter. The consolidated benefit ratio decreased 190 basis points from 88.9% for the 2024 quarter to 87.0% for the 2025 quarter primarily due to individual Medicare Advantage pricing inclusive of plan exits, benefit design changes and favorable workday impacts in the 2025 quarter more than offsetting claims trend and the funding environment, as well as the change in Medicare Part D seasonality due to the IRA. These factors were partially offset by a shift in line of business mix resulting from reductions in individual Medicare Advantage membership, combined with growth in the stand-alone PDP and state-based contracts businesses, which carry a higher benefit ratio. In addition, the decrease was offset by a delayed flu season that led to a more acute period in the 2025 quarter compared to the 2024 quarter and lower favorable prior-period medical claims reserve development.    

Consolidated benefits expense included $477 million of favorable prior-period medical claims reserve