Company: HUM
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000049071-25-000007
Chunk: 174

Company: HUMANA INC
Filing Date: 2025-02-20
Form: 10-K
Item: Item 7
Chunk 174
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 by actuarial standards. For further discussion of our reserving methodology, including our use of completion and claims per member per month trend factors to estimate IBNR, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.

The completion and claims per member per month trend factors are the most significant factors impacting the IBNR estimate. The portion of IBNR estimated using completion factors for claims incurred prior to the most recent two months is generally less variable than the portion of IBNR estimated using trend factors. The following table illustrates the sensitivity of these factors assuming moderately adverse experience and the estimated potential impact on our operating results caused by reasonably likely changes in these factors based on December 31, 2024 data:

Completion Factor (a):Claims Trend Factor (b):FactorChange (c)Decrease inBenefits PayableFactorChange (c)Decrease inBenefits Payable(dollars in millions)0.90%$7934.00%$7270.80%$7054.75%$6820.70%$6173.50%$6360.60%$5293.25%$5910.50%$4403.00%$5450.40%$3522.75%$5000.30%$2642.50%$4540.20%$1762.25%$4090.10%$882.00%$3630.05%$441.75%$3180.03%$221.50%$273

(a)Reflects estimated potential changes in benefits payable at December 31, 2024 caused by changes in completion factors for incurred months prior to the most recent two months.

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(b)Reflects estimated potential changes in benefits payable at December 31, 2024 caused by changes in annualized claims trend used for the estimation of per member per month incurred claims for the most recent two months.

(c)The factor change indicated represents the percentage point change.

The following table provides a historical perspective regarding the accrual and payment of our benefits payable. Components of the total incurred claims for each year include amounts accrued for current year estimated benefits expense as well as adjustments to prior year estimated accruals. Refer to Note 11 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K for