Company: HUM
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000049071-25-000007
Chunk: 122

Company: HUMANA INC
Filing Date: 2025-02-20
Form: 10-K
Item: Item 1A
Chunk 122
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 or benefit level changes;

•changes in the demographic characteristics of an account or market;

•changes or reductions of our utilization management functions such as preauthorization of services, concurrent review or requirements for physician referrals; 

•changes in our purchase discounts or rebates received from manufacturers and wholesalers;

•pharmacy volume rebates received from drug manufacturers, which in Medicare Part D are fully reported to CMS and factored into member premium pricing and CMS reimbursement to the plan;

•catastrophes, including acts of terrorism, public health emergencies, epidemics or pandemics (such as  COVID-19), or natural disasters (such as hurricanes and earthquakes) which could occur more frequently or with more intense effects as a result of the impact of global climate change; 

•medical cost inflation; and

•government mandated benefits, member eligibility criteria, or other legislative, judicial, or regulatory changes.

    Key to our operational strategy is the implementation of clinical initiatives that we believe provide a better health care experience for our members, lower the cost of healthcare services delivered to our members, and appropriately document the risk profile of our members. Our profitability and competitiveness depend in large part 

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on our ability to appropriately manage health care costs through, among other things, the application of medical management programs such as our chronic care management program. 

While we proactively attempt to effectively manage our operating expenses, increases or decreases in staff-related expenses, any costs associated with exiting products, additional investment in new products (including our opportunities in the Medicare programs, state-based contracts, and expansion of clinical capabilities as part of our integrated care delivery model), investments in health and well-being product offerings, acquisitions, new taxes and assessments, inflation, and implementation of regulatory requirements may increase our operating expenses.

Failure to adequately price our products or estimate sufficient benefits payable or effectively manage our operating expenses, may result in a material adverse effect on our results of operations, financial position, and cash flows.

We are in a highly competitive industry. Some of our competitors are more established in the health care industry in terms of a larger market share and have greater financial resources than we do in some markets. In addition, other companies may enter our markets in the future, including emerging competitors in the Medicare program or competitors in the delivery of health care services. We believe that barriers to entry in our markets are not substantial, so the addition of new competitors can occur relatively easily, and customers enjoy significant flexibility in moving between competitors through the Medicare Annual Enrollment Period. While health plans compete on the basis of many factors