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What changed in Humana's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Humana's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+283 added−284 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-20)

Top changes in Humana's 2025 10-K

283 paragraphs added · 284 removed · 235 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

63 edited+6 added−12 removed88 unchanged
Biggest changeInsurance Medical Membership The following table summarizes total insurance medical membership (in thousands) at December 31, 2024, by market and product: Insurance Medical Membership Individual Medicare Advantage Group Medicare Advantage Medicare stand- alone PDP Medicare Supplement State- based contracts and other Commercial fully-insured Commercial ASO Military services Total Percent of Total Florida 924.8 11.3 113.2 20.2 580.2 0.3 0.1 — 1,650.1 10.10 % Texas 470.6 5.0 145.8 44.8 — — — — 666.2 4.10 % North Carolina 321.8 174.3 78.6 6.1 — — — — 580.8 3.60 % Georgia 338.7 2.9 67.4 14.2 — — — — 423.2 2.60 % Kentucky 132.6 74.3 200.8 13.0 148.9 — 3.1 — 572.7 3.50 % Ohio 213.1 17.3 73.3 28.4 186.4 — — — 518.5 3.20 % Tennessee 209.4 13.5 74.5 8.7 47.0 — — — 353.1 2.20 % Illinois 206.3 38.3 74.7 8.2 14.1 — — — 341.6 2.10 % Louisiana 212.4 10.5 41.2 3.8 148.7 — — — 416.6 2.50 % California 119.3 4.2 134.8 26.9 0.1 — — — 285.3 1.70 % Oklahoma 77.4 3.4 47.4 5.7 186.1 — — — 320.0 2.00 % Indiana 158.9 20.8 55.7 12.6 35.0 — — — 283.0 1.70 % South Carolina 208.0 0.5 32.7 8.1 33.5 — — — 282.8 1.70 % Virginia 185.1 2.7 73.8 6.9 — — — — 268.5 1.60 % New York 142.1 9.7 56.2 8.0 — — — — 216.0 1.30 % Michigan 174.5 30.2 53.0 7.2 — — 1.6 — 266.5 1.60 % Wisconsin 81.8 6.1 59.6 6.0 55.3 — — — 208.8 1.30 % Mississippi 142.9 0.4 49.8 5.1 — — — — 198.2 1.20 % Pennsylvania 99.0 9.7 74.3 10.2 14.2 — — — 207.4 1.30 % Arizona 131.2 0.3 48.2 7.6 — — — — 187.3 1.10 % TRICARE — — — — — — — 6,009.1 6,009.1 36.80 % Others 1,111.9 110.3 733.2 125.6 10.4 — — — 2,091.4 12.80 % Totals 5,661.8 545.7 2,288.2 377.3 1,459.9 0.3 4.8 6,009.1 16,347.1 100.0 % Provider Arrangements We provide our members with access to health care services through our networks of health care providers whom we employ or with whom we have contracted, including hospitals and other independent facilities such as outpatient surgery centers, primary care providers, specialist physicians, dentists, and providers of ancillary health care services and facilities.
Biggest changeFor additional information on our ownership interest of Gentiva Hospice, refer to Note 4 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K. 11 Insurance Medical Membership The following table summarizes total insurance medical membership (in thousands) at December 31, 2025, by market and product: Insurance Medical Membership Individual Medicare Advantage Group Medicare Advantage Medicare stand- alone PDP Medicare Supplement State- based contracts and other Military services Total Percent of Total Florida 1,006.2 11.1 112.8 24.0 569.9 — 1,724.0 11.5 % Texas 437.9 4.8 148.2 63.2 — — 654.1 4.4 % Kentucky 131.3 74.3 184.9 19.3 205.4 — 615.2 4.1 % North Carolina 253.0 179.4 87.3 7.6 — — 527.3 3.5 % Ohio 192.0 17.4 80.1 28.3 179.4 — 497.2 3.3 % Louisiana 194.1 7.8 49.4 3.8 139.3 — 394.4 2.6 % Illinois 224.9 41.6 98.0 11.7 12.8 — 389.0 2.6 % Virginia 158.7 2.7 104.2 9.9 105.2 — 380.7 2.5 % Georgia 272.8 2.8 77.6 22.0 — — 375.2 2.5 % Tennessee 191.8 12.8 90.1 10.9 62.9 — 368.5 2.5 % Oklahoma 74.1 3.3 52.3 11.1 185.5 — 326.3 2.2 % Michigan 176.6 29.8 77.2 11.8 — — 295.4 2.0 % California 133.8 4.1 110.0 45.8 — — 293.7 2.0 % Indiana 158.0 18.8 64.8 13.1 32.5 — 287.2 1.9 % South Carolina 170.9 0.4 29.6 12.5 37.1 — 250.5 1.7 % Wisconsin 82.7 8.1 67.1 5.7 55.3 — 218.9 1.5 % Washington 103.0 15.2 71.0 8.5 5.5 — 203.2 1.4 % Pennsylvania 80.4 10.0 65.9 17.6 19.7 — 193.6 1.3 % Alabama 97.4 29.0 50.6 7.7 — — 184.7 1.2 % Arizona 121.5 0.9 51.9 7.9 — — 182.2 1.1 % TRICARE — — — — — 4,605.4 4,605.4 30.7 % Others 988.2 94.1 789.6 156.0 5.1 — 2,033.0 13.5 % Totals 5,249.3 568.4 2,462.6 498.4 1,615.6 4,605.4 14,999.7 100.0 % Provider Arrangements We provide our members with access to health care services through our networks of health care providers whom we employ or with whom we have contracted, including hospitals and other independent facilities such as outpatient surgery centers, primary care providers, specialist physicians, dentists, and providers of ancillary health care services and facilities.
Most of our Medicare PFFS plans are network-based products with in and out of network benefits due to a requirement that Medicare Advantage organizations establish adequate provider networks, except in geographic areas that CMS determines have fewer than two network-based Medicare Advantage plans. In these areas, we offer Medicare PFFS plans that have no preferred network.
Most of our Medicare PFFS plans are network-based products with in and out of network benefits due to a requirement that Medicare Advantage organizations to establish adequate provider networks, except in geographic areas that CMS determines have fewer than two network-based Medicare Advantage plans. In these areas, we offer Medicare PFFS plans that have no preferred network.
Individuals in these plans pay us a monthly premium to receive typical Medicare Advantage benefits along with the freedom to choose any health care provider that accepts individuals at rates equivalent to Medicare FFS payment rates. CMS uses a risk-adjustment model which adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members.
Individuals in these plans pay us a monthly premium to receive typical Medicare Advantage benefits along with the freedom to choose any health care provider that accepts individuals at rates equivalent to Medicare FFS payment rates. CMS uses a risk-adjustment model that adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members.
Our Culture, Engagement and Approach to Work We believe that our members’ experience is linked to our associates’ experience and that engaged, productive associates are the key to building a healthy company and a caring environment where our associates go above and beyond for our members, driving innovation, and offering fulfilling experiences that incentivizes them to stay with us over the long-term.
Our Culture, Engagement and Approach to Work We believe that our members’ experience is linked to our associates’ experience and that engaged, productive associates are the key to building a healthy company and caring environment where our associates go above and beyond for our members, driving innovation, and offering fulfilling experiences that incentivizes them to stay with 15 us over the long-term.
These services may lead to lower utilization associated with improved member health and/or lower drug costs. For information on our intersegment revenues, refer to Note 18 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
These services may lead to lower utilization associated with improved member health and/or lower drug costs. For 9 information on our intersegment revenues, refer to Note 18 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
We also offer quality and outcome measurement and improvement programs such as the Health Care Effectiveness Data and Information Set, or HEDIS, which is used by employers, government purchasers and the National Committee for Quality Assurance (NCQA) to evaluate health plans based on various criteria, including effectiveness of care and member satisfaction.
We also offer quality and outcome measurement and improvement programs such as the Health Care Effectiveness Data and Information Set, or HEDIS, which is used by employers, government purchasers 13 and the National Committee for Quality Assurance (NCQA) to evaluate health plans based on various criteria, including effectiveness of care and member satisfaction.
By regularly surveying samples of our workforce, we are able to continuously assess our effectiveness and act when needed, which in turn helps to strengthen our culture and support associate engagement. We aim to conduct a confidential, third-party administered AES on an annual basis and encourage all of our associates to participate.
By regularly surveying samples of our workforce, we are able to continuously assess our effectiveness and act when needed, which in turn helps to strengthen our culture and support associate engagement. We aim to conduct our confidential, third-party administered AES on an annual basis and encourage all of our associates to participate.
We have contracts in multiple states to serve Medicaid-eligible members, including Florida, Kentucky, Illinois, Indiana, Louisiana, Ohio, Oklahoma, South Carolina and Wisconsin. We also serve members who qualify for both Medicaid and Medicare, referred to as "dual eligible", through our Medicaid, Medicare Advantage, and stand-alone prescription drug plans.
We have contracts in multiple states to serve Medicaid-eligible members, including Florida, Kentucky, Illinois, Indiana, Louisiana, Ohio, Oklahoma, South Carolina, Virginia and Wisconsin. We also serve members who qualify for both Medicaid and Medicare, referred to as "dual eligible", through our Medicaid, Medicare Advantage, and stand-alone prescription drug plans.
PCO operates these clinics primarily under the Conviva Senior Primary Care and CenterWell Senior Primary Care brands. Our primary care subsidiaries operate our medical center business through both employed physicians and care providers, and through third-party management service organizations with whom we contract to arrange for and manage certain clinical services.
Our primary care business operates these clinics primarily under the Conviva Senior Primary Care and CenterWell Senior Primary Care brands. Our primary care subsidiaries operate our medical center business through both employed physicians and care providers, and through third-party management service organizations with whom we contract to arrange for and manage certain clinical services.
Further, underwriting techniques are not employed in connection with our individual Medicare, military services, or Medicaid products because government regulations require us to accept all eligible applicants regardless of their health or medical history. Competition The health benefits industry is highly competitive.
Further, underwriting techniques are not employed in connection with our individual Medicare, military services, or Medicaid products because government regulations require us to accept all eligible applicants regardless of their health or medical history. 14 Competition The health benefits industry is highly competitive.
These ancillary services and facilities include laboratories, ambulance services, medical 12 equipment services, home health agencies, mental health providers, rehabilitation facilities, nursing homes, optical services, and pharmacies. Our membership base and the ability to influence where our members seek care generally enable us to obtain contractual discounts with providers.
These ancillary services and facilities include laboratories, ambulance services, medical equipment services, home health agencies, mental health providers, rehabilitation facilities, nursing homes, optical services, and pharmacies. Our membership base and the ability to influence where our members seek care generally enable us to obtain contractual discounts with providers.
While our programs vary by location, associate type and business, they generally include: 16 Financial • Competitive base pay, with additional incentive, supplemental, and/or recognition pay • Short - and long-term disability insurance • Tuition assistance program • 401(k) retirement savings plans with Company match program • Paid internship • Charitable gift matching program • Health savings account (HSA) and flexible savings account (FSA) contributions • Comprehensive financial well-being programs and support, including an employer-sponsored personal emergency savings account with matching funds from the Company • Life insurance Health • Medical, dental and vision benefits • On-site health and fitness centers • Supplemental health benefits • On-site health screenings and vaccinations • Long-term care insurance • Weekly paid well-being time • Whole-person well-being and rewards programs and platform • On-demand fitness classes, nutritional education through teaching kitchens, and digital coaching apps • Incentives for engaging in well-being programs Life • Paid time off, paid holidays, paid volunteer time off and jury duty pay • Mental health support, including our robust Employee Assistance Program and Work-Life Services • Adoption assistance • Paid parental leave program (6 weeks) • Employee discount programs and services • Paid caregiver time off program (2 weeks) • Helping hands program • Nursing moms program with on-site lactation rooms • Transit services Learning and Development • Internal and external learning events • Access to degree and certification programs with tuition assistance Talent Development and Growth Opportunities We are committed to promoting continuous learning and growth by offering employees a comprehensive range of resources to enhance their skills and advance their careers.
While our programs vary by location, associate type and business, they generally include: 16 Financial • Competitive base pay, with additional incentive, supplemental, and/or recognition pay • Short - and long-term disability insurance • Tuition assistance program • 401(k) retirement savings plans with Company match program • Paid internship • Comprehensive financial well-being programs and support, including an employer-sponsored personal emergency savings account with matching funds from the Company • Health savings account (HSA) and flexible savings account (FSA) contributions • Life insurance • Charitable gift matching program Health • Medical, dental and vision benefits • On-site health and fitness centers • Supplemental health benefits • On-site health screenings and vaccinations • Long-term care insurance • Weekly paid well-being time • Whole-person well-being and rewards programs and platform • On-demand fitness classes, nutritional education through teaching kitchens, and digital coaching apps • Incentives for engaging in well-being programs Life • Paid time off, paid holidays, paid volunteer time off and jury duty pay • Mental health support, including our robust Employee Assistance Program and Work-Life Services • Adoption assistance • Paid parental leave program (6 weeks) • Employee discount programs and services • Paid caregiver time off program (2 weeks) • Helping hands program • Nursing moms program with on-site lactation rooms • Transit services Learning and Development • Internal and external learning events • Access to degree and certification programs with tuition assistance Talent Development and Growth Opportunities We are committed to promoting continuous learning and growth by offering associates a variety of resources to enhance their skills and advance their careers.
These services include management information systems, product development 15 and administration, finance, human resources, accounting, law, public relations, marketing, insurance, purchasing, risk management, internal audit, actuarial, underwriting, claims processing, billing/enrollment, and customer service.
These services include management information systems, product development and administration, finance, human resources, accounting, law, public relations, marketing, insurance, purchasing, risk management, internal audit, actuarial, underwriting, claims processing, billing/enrollment, and customer service.
Dintenfass began his career as a consultant at McKinsey & Company. (4) Mr. Felter currently serves as Senior Vice President, Chief Accounting Officer and Controller, having been elected to this position in August 2022. Before joining the Company, Mr. Felter served as Senior Director - Investment Finance for OneAmerica Financial Partners, Inc. in 2022. Prior to OneAmerica, Mr.
Dintenfass began his career as a consultant at McKinsey & Company. (3) Mr. Felter currently serves as Senior Vice President, Chief Accounting Officer and Controller, having been elected to this position in August 2022. Before joining the Company, Mr. Felter served as Senior Director - Investment Finance for OneAmerica Financial Partners, Inc. in 2022. Prior to OneAmerica, Mr.
Dintenfass spent over five years at Bank of America in a variety of strategy and marketing roles across Consumer and Small Business banking and Merrill Lynch Wealth Management. Earlier in his career, Mr. Dintenfass spent 13 years at Procter & Gamble in global P&L and brand management roles of increasing responsibility. Mr.
Before Fidelity, Mr. Dintenfass spent over five years at Bank of America in a variety of strategy and marketing roles across Consumer and Small Business banking and Merrill Lynch Wealth Management. Earlier in his career, Mr. Dintenfass spent 13 years at Procter & Gamble in global P&L and brand management roles of increasing responsibility. Mr.
Additional information related to our human capital management can be found by referencing our Definitive Proxy Statement of the Annual Meeting of Stockholders scheduled to be held on April 17, 2025 appearing under the caption "Human Capital Management." 17 Information About Our Executive Officers Set forth below are names and ages of all of our current executive officers as of February 1, 2025, their positions, and the date first elected as an executive officer : Name Age Position First Elected Officer James A.
Additional information related to our human capital management can be found by referencing our Definitive Proxy Statement of the Annual Meeting of Stockholders scheduled to be held on April 16, 2026 appearing under the caption "Human Capital Management." 17 Information About Our Executive Officers Set forth below are names and ages of all of our current executive officers as of February 1, 2026, their positions, and the date first elected as an executive officer : Name Age Position First Elected Officer James A.
This Annual Report on Form 10-K, or 2024 Form 10-K, contains both historical and forward-looking information. See Part I, Item 1A, "Risk Factors" of this Form 10-K for a description of a number of factors that may adversely affect our results or business.
This Annual Report on Form 10-K, or 2025 Form 10-K, contains both historical and forward-looking information. See Part I, Item 1A, "Risk Factors" of this Form 10-K for a description of a number of factors that may adversely affect our results or business.
Capitation expense under delegated arrangements for which we have a limited view of the underlying claims experience was approximately $3.6 billion, or 3.6%, of total benefits expense, for the year ended December 31, 2024. We remain financially responsible for health care services to our members in the event our providers fail to provide such services.
Capitation expense under delegated arrangements for which we have a limited view of the underlying claims experience was approximately $3.7 billion, or 3.3%, of total benefits expense, for the year ended December 31, 2025. We remain financially responsible for health care services to our members in the event our providers fail to provide such services.
All material contracts between Humana and CMS relating to our Medicare stand-alone PDP products have been renewed for 2025, and all of our product offerings filed with CMS for 2025 have been approved. We have administered CMS’s Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program since 2010.
All material contracts between Humana and CMS relating to our Medicare stand-alone PDP products have been renewed for 2026, and all of our product offerings filed with CMS and going to market for 2026 have been approved. We have administered CMS’s Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program since 2010.
PCO also operates a Medical Services Organization, or MSO, through Conviva and CenterWell that coordinates medical care for Medicare Advantage beneficiaries across multiple states. This MSO provides resources in care coordination, financial risk management, clinical integration and patient engagement that help physicians improve the patient experience as well as care outcomes.
Our primary care business also operates a management services organization, or MSO, through Conviva and CenterWell that coordinates medical care for Medicare Advantage beneficiaries across multiple states. This MSO provides resources in care coordination, financial risk management, clinical integration and patient engagement that help physicians improve the patient experience as well as care outcomes.
Home Solutions CenterWell Home Health We operate CenterWell Home Health, one of the nation's largest home health providers, through which we are actively involved in the care management of our customers with the greatest needs via in-home care. CenterWell Home Health has locations in 40 states, providing extensive geographic coverage with approximately 65% overlap with our individual Medicare Advantage membership.
Home Solutions CenterWell Home Health We operate CenterWell Home Health, one of the nation's largest home health providers, through which we are actively involved in the care management of our customers with the greatest needs via in-home care. CenterWell Home Health has locations in 37 states, providing extensive geographic coverage with approximately 68% overlap with our individual Medicare Advantage membership.
Our professional development initiatives ensure employees have access to tools, mentorship and opportunities that enable them to succeed in their current roles and prepare for future growth opportunities, thereby strengthening our organization and driving innovation.
Our professional development initiatives ensure associates have access to tools, mentorship and opportunities that enable them to succeed in their current roles and prepare for future growth opportunities, strengthening our organization and driving innovation.
Primary Care We operate full-service, value-based senior focused primary care centers in a number of states, including Georgia, Florida, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia staffed by primary care providers and medical specialists with a primary focus on the senior population under our Primary Care Organization, or PCO.
Primary Care We operate full-service, value-based senior focused primary care centers in a number of states, including Arizona, Georgia, Florida, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia staffed by primary care providers and medical specialists with a primary focus on the senior population under our primary care business.
Dintenfass had a series of leadership roles at Fidelity Investments from 2015 to 2024 where he most recently served as Executive Vice President, Head of Product and Emerging Segments, leading a P&L portfolio across retail and workplace investing. Mr. Dintenfass also served as Fidelity’s Chief Marketing Officer and Head of Customer Experience Design. Before Fidelity, Mr.
Prior to joining the Company, Mr. Dintenfass had a series of leadership roles at Fidelity Investments from 2015 to 2024 where he most recently served as Executive Vice President, Head of Product and Emerging Segments, leading a P&L portfolio across retail and workplace investing. Mr. Dintenfass also served as Fidelity’s Chief Marketing Officer and Head of Customer Experience Design.
Humana Inc. was organized as a Delaware corporation in 1964. Our principal executive offices are located at 500 West Main Street, Louisville, Kentucky 40202, the telephone number at that address is (502) 580-1000, and our website address is www.humana.com.
Humana Inc. was organized as a Delaware corporation in 1964. Our principal executive offices are located at 101 East Main Street, Louisville, Kentucky 40202, the telephone number at that address is (502) 580-1000, and our website address is www.humana.com.
The AES is an in-depth survey covering eighteen dimensions that align to the Company’s strategy and employee engagement. We aggregate survey results, provide them to our entire associate population and encourage leaders to use the information to create open, honest action plans with their teams to build upon our collective engagement.
The AES is an in-depth survey covering a variety of dimensions that align to the Company’s strategy and associate engagement. We aggregate survey results, provide them to our entire associate population and encourage leaders to use the information to create open, honest action plans with their teams to build upon our collective engagement.
Mellet 48 Chief Financial Officer 01/25 (6) Michelle A. O'Hara 49 Chief Human Resources Officer 01/25 (7) George Renaudin II 56 President, Insurance 02/23 (8) Sanjay K. Shetty, M.D. 51 President, CenterWell 04/23 (9) Joseph C. Ventura 48 Chief Legal Officer 02/19 (10) (1) Mr.
Mellet 49 Chief Financial Officer 01/25 (6) Michelle A. O'Hara 50 Chief Human Resources Officer 01/25 (7) George Renaudin II 57 President, Insurance 02/23 (8) Sanjay K. Shetty, M.D. 52 President, CenterWell 04/23 (9) Joseph C. Ventura 49 Chief Legal Officer 02/19 (10) (1) Mr.
At December 31, 2024, we employed approximately 1,100 sales representatives, as well as approximately 2,700 telemarketing representatives who assisted in the marketing of Medicare products, including Medicare Advantage and PDP, and specialty products in our Insurance segment, including making appointments for sales representatives with prospective members.
At December 31, 2025, we employed approximately 1,000 sales representatives, as well as approximately 2,200 telemarketing representatives who assisted in the marketing of Medicare products, including Medicare Advantage and PDP, and specialty products in our Insurance segment, including making appointments for sales representatives with prospective members.
Human Capital Management Our associates are essential to our success in delivering on our core strategy, and creating positive healthcare experiences for our members. We are committed to recruiting, developing, and retaining strong and diverse teams. As of December 31, 2024, we had approximately 65,680 associates.
Human Capital Management Our associates are essential to our success in delivering on our core strategy, and creating positive healthcare experiences for our members. We are committed to recruiting, developing, and retaining strong and diverse teams. As of December 31, 2025, we had approximately 67,060 associates.
All material contracts between Humana and CMS relating to our Medicare Advantage products have been renewed for 2025, and all of our product offerings filed with CMS for 2025 have been approved.
All material contracts between Humana and CMS relating to our Medicare Advantage products have been renewed for 2026, and all of our product offerings filed with CMS and going to market for 2026 have been approved.
We believe that voluntary turnover rate (VTR) is an important indicator of workforce satisfaction as we strive for our associates to choose us over other opportunities. During 2024, our VTR was 14.4%, representing an increase from 13.4% in 2023.
We believe that voluntary turnover rate (VTR) is an important indicator of workforce satisfaction as we strive for our associates to choose us over other opportunities. During 2025, our VTR was 13.8%, representing a decrease from 14.4% in 2024.
In addition to a commission based directly on premium volume for sales to particular customers, we also have programs that pay brokers and agents based on other metrics. These include commission bonuses based on sales that attain certain levels or involve particular products.
In addition to a commission based directly on premium volume for sales to particular customers, we also have programs that pay brokers and agents based on other metrics. These include commission bonuses based on sales that attain certain levels or involve particular products. We also pay additional commissions based on aggregate volumes of sales involving multiple customers.
For additional information, refer to Note 4 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
For additional information, refer to Note 17 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" and Part I, Item 1A, "Risk Factors" of this Form 10-K.
We have achieved and maintained NCQA health plan accreditation in many of our Medicare and Medicaid markets. Humana’s pharmacy organization is accredited by URAC. Sales and Marketing We use various methods to market our products, including television, radio, the Internet, telemarketing, wholesale distributors (general agencies) and direct mailings.
We have achieved and maintained NCQA health plan accreditation in many of our Medicare and Medicaid markets. Humana’s subsidiary, CenterWell Pharmacy, Inc., holds accreditations from URAC. Sales and Marketing We use various methods to market our products, including television, radio, the Internet, telemarketing, wholesale distributors (general agencies) and direct mailings.
These efforts are leading to a better quality of life for people with Medicare, Medicaid, families, individuals, military service personnel, and communities at large. As of December 31, 2024, we had approximately 16 million members in our medical benefit plans, as well as approximately 5 million members in our specialty products.
These efforts are leading to a better quality of life for Medicare and Medicaid participants, families, individuals, military service personnel, and communities at large. As of December 31, 2025, we had approximately 15 million members in our medical benefit plans, as well as approximately 4.7 million members in our specialty products.
We have participated in the TRICARE program since 1996 under contracts with the DoD. Under our contracts, we provide administrative services while the federal government retains all of the risk of the cost of health benefits. Accordingly, we account for revenues under the current contract net of estimated health care costs similar to an administrative services fee only agreement.
Under our contracts, we provide administrative services while the federal government retains all of the risk of the cost of health benefits. Accordingly, we account for revenues under the current contract net of estimated health care costs similar to an administrative services fee only agreement.
PCO’s MSO collaborates with physicians, medical groups and integrated delivery systems to successfully transition to value-based care by engaging, partnering and offering practical services and solutions. In 2020, our Primary Care Organization entered into a strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, to accelerate the expansion of our primary care model.
Primary care’s MSO collaborates with physicians, medical groups and integrated delivery systems to successfully transition to value-based care by engaging, partnering and offering practical services and solutions. 10 Our primary care business previously entered into a strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, to accelerate the expansion of our primary care model through the development of clinics.
During 2024, 85% of our total premiums and services revenue were derived from contracts with the federal government, including 14% derived from our individual Medicare Advantage contracts in Florida with the Centers for Medicare and Medicaid Services, or CMS, under which we provide health insurance coverage to approximately 924,800 members as of December 31, 2024.
During 2025, 83% of our total premiums and services revenue were derived from contracts with the federal government, including 14% derived from our individual Medicare Advantage contracts in Florida with the Centers for Medicare and Medicaid Services, or CMS, under which we provided health insurance coverage to approximately 1.0 million members as of December 31, 2025.
Our pay and benefits structure is designed to motivate, incentivize and reward our associates, at all levels of the organization, for their skill development, demonstration of our values and performance.
Our pay and benefits structure is designed to attract, motivate, incentivize, retain, and reward our associates, at all levels of the organization, for their skill development, demonstration of our values and performance fostering an engaged and talented team.
These 7 Florida contracts accounted for premiums revenue of approximately $16.4 billion, which represented approximately 19% of our individual Medicare Advantage premiums revenue, or 14% of our consolidated premiums and services revenue for the year ended December 31, 2024.
These 7 Florida contracts accounted for premiums revenue of approximately $17.8 billion, which represented approximately 20% of our individual Medicare Advantage premiums revenue, or 14% of our consolidated premiums and services revenue for the year ended December 31, 2025.
We also pay additional commissions based on aggregate volumes of sales involving multiple customers. 14 In our Insurance segment, we market our specialty products to individuals through their employers or other groups, which typically offer employees or members a selection of specialty products, pay for all or part of the premiums, and make payroll deductions for any premiums payable by the employees.
In our Insurance segment, we market our specialty products to individuals through their employers or other groups, which typically offer employees or members a selection of specialty products, pay for all or part of the premiums, and make payroll deductions for any premiums payable by the employees.
Our health plan subsidiaries may enter into these value-based arrangements with third-party providers or our owned provider subsidiaries. At December 31, 2024, approximately 2,361,500 members, or 14.4%, of our medical membership, were covered under shared risk value-based arrangements, which provide all member benefits, including 2,114,900 individual Medicare Advantage members, or 38.0%, of our total individual Medicare Advantage membership.
Our health plan subsidiaries may enter into these value-based arrangements with third-party providers or our owned provider subsidiaries. At December 31, 2025, approximately 2,260,900 members, or 15.1%, of our medical membership, were covered under shared risk value-based arrangements, which provide all member benefits, including 1,947,900 individual Medicare Advantage members, or 37.1%, of our total individual Medicare Advantage membership.
Felter spent nearly 11 years in multiple roles of increasing responsibility at Ernst & Young LLP where he oversaw large audit engagements for public and private entities with a concentration in the health insurance sector. 18 (5) Mr. Mehta currently serves as Chief Information Officer, having been elected to this position in February 2025. Prior to joining the Company, Mr.
Felter spent nearly 11 years in multiple roles of increasing responsibility at Ernst & Young LLP where he oversaw large audit engagements for public and private entities with a concentration in the health insurance sector. (4) Mr. Martin currently serves as President, Medicare Advantage, having been elected to this position in January 2026. Prior to joining the Company, Mr.
Rechtin served as President and CEO at Envision Healthcare, having held that position from 2020 to 2023. Previously, Mr. Rechtin was President of OptumCare in 2019 after serving in multiple senior-level roles at Davita Medical Group from 2014 to 2019. (2) Dr. Agrawal currently serves as Chief Strategy and Corporate Development Officer, having joined the Company in December 2018.
Rechtin served as President and CEO at Envision Healthcare, having held that position from 2020 to 2023. Previously, Mr. Rechtin was President of OptumCare in 2019 after serving in multiple senior-level roles at Davita Medical Group from 2014 to 2019. (2) Mr. Dintenfass currently serves as President, Enterprise Growth, having joined the Company in February 2024.
However, 13 we delegated claim processing functions under capitation arrangements covering approximately 304,400 members, including 303,500 individual Medicare Advantage members, or 14.4%, of the 2,114,900 individual Medicare Advantage members covered under shared risk value-based contracts at December 31, 2024, with the provider assuming substantially all the risk of coordinating the members’ health care benefits.
However, we delegated claim processing functions under capitation arrangements covering approximately 299,900 members, including 299,100 individual Medicare Advantage members, or 15.4%, of the 1,947,900 individual Medicare Advantage members covered under shared risk value-based contracts at December 31, 2025, with the provider assuming substantially all the risk of coordinating the members’ health care benefits.
PCO currently operates 344 primary care clinics and employs approximately 1,000 primary care providers. PCO serves approximately 390,500 patients, primarily under risk sharing arrangements with Humana Medicare Advantage health plans, third-party Medicare Advantage health plans and CMS administered risk sharing arrangements for Original Medicare.
Our primary care business currently operates 350 primary care clinics and employs approximately 1,300 primary care providers. Primary care serves approximately 491,100 patients, primarily under risk sharing arrangements with Humana Medicare Advantage health plans, third-party Medicare Advantage health plans and CMS administered risk sharing arrangements for Original Medicare.
Renaudin currently services as President, Insurance, having been elected to this position in October 2024 from his prior role as President, Medicare & Medicaid. Mr. Renaudin joined the Company in April 2004 and since then has held various leadership roles of increasing responsibility, including previously holding the position of President, Medicare. (9) Dr.
Renaudin joined the Company in April 2004 and since then has held various leadership roles of increasing responsibility, including previously holding the position of President, Medicare. (9) Dr. Shetty currently serves as President, CenterWell, having been elected to this position in April 2023. Prior to joining the Company, Dr.
The following table presents our services revenue for the CenterWell segment by line of business for the year ended December 31, 2024: CenterWell Segment Services Revenue Percent of Consolidated Premiums and Services Revenue (dollars in millions) Intersegment revenues: Home solutions $ 2,050 n/a Pharmacy solutions 10,724 n/a Primary care 3,697 n/a Total intersegment revenues $ 16,471 n/a External services revenue: Home solutions $ 1,313 1.1 % Pharmacy solutions 904 0.8 % Primary care 1,248 1.1 % Total external services revenue $ 3,465 3.0 % n/a – not applicable 10 Pharmacy Solutions Our pharmacy solutions business includes the operations of CenterWell Pharmacy (our mail-order pharmacy business), CenterWell Specialty Pharmacy, and other retail pharmacies located within CenterWell Primary Care clinics for brand, generic, specialty drugs, over the counter medications and supplies, as well as hospice pharmacy drugs.
The following table presents our services revenue for the CenterWell segment by line of business for the year ended December 31, 2025: CenterWell Segment Services Revenue Percent of Consolidated Premiums and Services Revenue (dollars in millions) Intersegment revenues: Home solutions $ 2,127 n/a Pharmacy solutions 11,741 n/a Primary care 3,789 n/a Total intersegment revenues $ 17,657 n/a External services revenue: Home solutions $ 1,401 1.1 % Pharmacy solutions 1,218 0.9 % Primary care 2,197 1.7 % Total external services revenue $ 4,816 3.7 % n/a – not applicable Pharmacy Solutions Our pharmacy solutions business includes the operations of CenterWell Pharmacy (our mail-order pharmacy business), CenterWell Specialty Pharmacy, and other retail pharmacies located within CenterWell Primary Care clinics for brand, generic, specialty drugs, over the counter medications and supplies, as well as hospice pharmacy drugs.
This is critical to deploying a value-based, advanced home health model at scale that makes it easier for patients and providers to benefit from our full continuum of home-based capabilities, leveraging the best channel to deliver the right care needed at the right time. 11 OneHome OneHome serves as the convener for the value-based model meeting the needs of health plans by serving their members through a full-risk model for integrated home-based services.
This is critical to deploying a value-based, advanced home health model at scale that makes it easier for patients and providers to benefit from our full continuum of home-based capabilities, leveraging the best channel to deliver the right care needed at the right time.
Mehta held technology and digital leadership roles at JPMorgan, Barclays and Verizon. (6) Ms. Mellet currently serves as Chief Financial Officer, having been elected to this position in January 2025. Prior to joining the Company, Ms. Mellet served as Partner and Chief Financial Officer of Global Infrastructure Partners (GIP) from February 2023 to January 2025. Prior to GIP, Ms.
Additionally, he served in the CIO role for Global Consumer Technology in Asia Pacific and Europe. Prior to Citi, Mr. Mehta held technology and digital leadership roles at JPMorgan, Barclays and Verizon. (6) Ms. Mellet currently serves as Chief Financial Officer, having been elected to this position in January 2025. Prior to joining the Company, Ms.
Mehta served as Chief Data Officer at Citigroup for six years from 2018 to 2025. Previously, he held the role of CIO for Citi Global Wealth across a mix of client segments. Additionally, he served in the CIO role for Global Consumer Technology in Asia Pacific and Europe. Prior to Citi, Mr.
Mehta currently serves as Chief Information Officer, having been elected to this position in February 2025. Prior to joining the Company, Mr. Mehta served as Chief Data Officer at Citigroup for six years from 2018 to 2025. Previously, he held the role of CIO for Citi Global Wealth across a mix of client segments.
Rechtin 54 President and Chief Executive Officer, Director 01/24 (1) Vishal Agrawal, M.D. 50 Chief Strategy and Corporate Development Officer 12/18 (2) David E. Dintenfass 54 President, Enterprise Growth 02/24 (3) John-Paul W. Felter 41 Senior Vice President, Chief Accounting Officer and Controller 08/22 (4) Japan A. Mehta 44 Chief Information Officer 02/25 (5) Celeste M.
Rechtin 55 President and Chief Executive Officer, Director 01/24 (1) David E. Dintenfass 55 President, Enterprise Growth 02/24 (2) John-Paul W. Felter 42 Senior Vice President, Chief Accounting Officer and Controller 08/22 (3) Aaron C. Martin 56 President, Medicare Advantage 01/26 (4) Japan A. Mehta 45 Chief Information Officer 02/25 (5) Celeste M.
We typically contract with hospitals on either (1) a per diem rate, which is an all-inclusive rate per day, (2) a case rate for diagnosis-related groups (DRG), which is an all-inclusive rate per admission, or (3) a discounted charge for inpatient hospital services.
We also have programs for prenatal and premature infant care, asthma related illness, end stage renal disease, diabetes, cancer, and certain other conditions. 12 We typically contract with hospitals on either (1) a per diem rate, which is an all-inclusive rate per day, (2) a case rate for diagnosis-related groups (DRG), which is an all-inclusive rate per admission, or (3) a discounted charge for inpatient hospital services.
Further, we believe in fostering a fair and inclusive work environment, one where all associates receive equitable pay for their contributions. Each year, we conduct a comprehensive pay equity/gap analysis to identify and address potential pay disparities between associates performing similar work in similar capacities.
Each year, we conduct a comprehensive pay equity/gap analysis to identify and address potential pay disparities between associates performing similar work in similar capacities.
The following table presents our premiums and services revenue for the Insurance segment by product for the year ended December 31, 2024: Insurance Segment Premiums and Services Revenue Percent of Consolidated Premiums and Services Revenue (dollars in millions) Premiums: Individual Medicare Advantage $ 88,019 75.6 % Group Medicare Advantage 7,731 6.6 % Medicare stand-alone PDP 3,137 2.7 % Total Medicare 98,887 84.9 % Commercial fully-insured 501 0.4 % Specialty benefits 955 0.8 % Medicare Supplement 846 0.7 % State-based contracts and other 10,915 9.4 % Total premiums revenue 112,104 96.2 % Services: Commercial ASO 50 — % Military services and other 916 0.8 % Services revenue 966 0.8 % Total Insurance segment premiums and services revenue $ 113,070 97.0 % Medicare We have participated in the Medicare program for private health plans for over 30 years and have established a national presence, offering at least one type of Medicare plan in all 50 states.
The following table presents our premiums and services revenue for the Insurance segment by product for the year ended December 31, 2025: Insurance Segment Premiums and Services Revenue Percent of Consolidated Premiums and Services Revenue (dollars in millions) Premiums: Individual Medicare Advantage $ 90,403 70.3 % Group Medicare Advantage 9,014 7.0 % Medicare stand-alone PDP 6,844 5.3 % Total Medicare 106,261 82.6 % Specialty benefits 989 0.8 % Medicare Supplement 1,098 0.9 % State-based contracts and other 14,477 11.2 % Total premiums revenue 122,825 95.5 % Services: Military services and other 1,017 0.8 % Services revenue 1,017 0.8 % Total Insurance segment premiums and services revenue $ 123,842 96.3 % Medicare We have participated in the Medicare program for private health plans for over 30 years and have established a national presence, offering at least one type of Medicare plan in all 50 states.
O’Hara served as Executive Vice President and Chief Human Resources Officer from 2019 to 2025 at Science Applications International Corporation (SAIC). Prior to becoming Chief Human Resources Officer in 2019, Ms. O’Hara held various roles of increasing responsibility at SAIC that included talent acquisition, integrated talent management, total rewards and human resources. (8) Mr.
Prior to becoming Chief Human Resources Officer in 2019, Ms. O’Hara held various roles of increasing responsibility at SAIC that included talent acquisition, integrated talent management, total rewards and human resources. (8) Mr. Renaudin currently serves as President, Insurance, having been elected to this position in October 2024 from his prior role as President, Medicare & Medicaid. Mr.
Mellet served as Chief Financial Officer, Senior Managing Director and an Executive Vice President at Evercore from 2021 to 2023. Before joining Evercore, Ms. Mellet served as Executive Vice President and Chief Financial Officer from 2018 to 2021 and SVP and Deputy Chief Financial Officer from 2017 to 2018 at the Federal National Mortgage Association (Fannie Mae).
Mellet served as Executive Vice President and Chief Financial Officer from 2018 to 2021 and SVP and Deputy Chief Financial Officer from 2017 to 2018 at the Federal National Mortgage Association (Fannie Mae). Before her tenure at Fannie Mae, Ms. Mellet spent more than 18 years at Morgan Stanley, last serving as global treasurer.
For additional information on the sale of Gentiva Hospice, refer to Note 3 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
As of December 31, 2025, there were 146 primary care clinics operating under the partnership. For additional information, refer to Note 4 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
Shetty held various roles of increasing responsibility, leading the large accountable care organization, a multispecialty group practice, and acute care hospitals. Prior to Steward, Dr. Shetty worked as a strategy consultant at Bain & Company, Inc., and practiced as a radiologist and a faculty member at Harvard Medical School. (10) Mr. Ventura currently serves as Chief Legal Officer.
Shetty worked as a strategy consultant at Bain & Company, Inc., and practiced as a radiologist and a faculty member at Harvard Medical School. (10) Mr. Ventura currently serves as Chief Legal Officer.
Before her tenure at Fannie Mae, Ms. Mellet spent more than 18 years at Morgan Stanley, last serving as global treasurer. She was also the head of investor, creditor and counterparty relations. (7) Ms. O’Hara currently serves as Chief Human Resources Officer, having been elected to this position in January 2025. Prior to joining the Company, Ms.
She was also the head of investor, creditor and counterparty relations. (7) Ms. O’Hara currently serves as Chief Human Resources Officer, having been elected to this position in January 2025. Prior to joining the Company, Ms. O’Hara served as Executive Vice President and Chief Human Resources Officer from 2019 to 2025 at Science Applications International Corporation (SAIC).
All small group ASO customers and many large group ASO customers purchased stop loss insurance coverage from us to cover catastrophic claims or to limit aggregate annual costs. 9 Military Services Under our TRICARE contracts with the United States Department of Defense, or DoD, we provide administrative services to arrange health care services for active-duty and retired military personnel and their dependents.
In addition, we sell dental and vision specialty insurance benefits to individuals. Military Services Under our TRICARE contracts with the United States Department of Defense, or DoD, we provide administrative services to arrange health care services for active-duty and retired military personnel and their dependents. We have participated in the TRICARE program since 1996 under contracts with the DoD.
Shetty currently serves as President, CenterWell, having been elected to this position in April 2023. Prior to joining the Company, Dr. Shetty worked in health care delivery for nearly 13 years at Steward Health Care System (Steward), most recently serving as President. During his tenure at Steward, Dr.
Shetty worked in health care delivery for nearly 13 years at Steward Health Care System (Steward), most recently serving as President. During his tenure at Steward, Dr. Shetty held various roles of increasing responsibility, leading the large accountable care organization, a multispecialty group practice, and acute care hospitals. Prior to Steward, Dr.
For additional information, refer to Note 17 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" and Part I, Item 1A, "Risk Factors" of this Form 10-K. At December 31, 2024, we provided health insurance coverage under CMS contracts to approximately 5,661,800 individual Medicare Advantage members, including approximately 924,800 members in Florida.
At December 31, 2025, we provided health insurance coverage under CMS contracts to approximately 5.2 million individual Medicare Advantage members, including approximately 1.0 million members in Florida.
Removed
In addition, we sell dental and vision specialty insurance benefits to individuals. Commercial Fully-Insured and ASO In February 2023, we announced our planned exit from the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs.
Added
OneHome OneHome serves as the convener for the value-based model meeting the needs of health plans by serving their members through a full-risk model for integrated home-based services.
Removed
Following a strategic review, we determined the Employer Group Commercial Medical Products business was no longer positioned to sustainably meet the needs of commercial members over the long term or support our long-term strategic plans. We anticipate the exit of this line of business to be finalized in the first half of 2025.
Added
Hospice We completed the sale of a 60% interest in Gentiva Hospice on August 11, 2022 and we account for our remaining minority ownership in Gentiva Hospice using the equity method of accounting. At December 31, 2025 and 2024, we owned approximately 35%.
Removed
For in-force group commercial medical customers and members, our commercial products included a broad spectrum of major medical benefits with multiple in-network coinsurance levels and annual deductible choices that employers of all sizes offered to their employees on either a fully-insured, through HMO, PPO, or POS plans, or self-funded basis.
Added
Pay and Benefits Philosophy, Compensation and Financial Security We believe a fair and transparent workplace is essential for associate trust and engagement. To that end, our Company advances pay transparency and equity to ensure compensation decisions are unbiased, competitive and aligned with our commitment to support every associate’s success.
Removed
Our plans integrated clinical programs, plan designs, communication tools, and spending accounts. Our ASO products were offered to small group and large group employers who self-insured their employee health plans.
Added
Our Total Rewards program complements these efforts by providing competitive compensation, robust benefits and resources that support health, financial security and work-life balance.
Removed
We received fees to provide administrative services which generally included the processing of claims, offering access to our provider networks and clinical programs, and responding to customer service inquiries from members of self-funded employers. These products might have included all of the same benefit and product design characteristics of our fully-insured HMO, PPO, or POS products described previously.
Added
Martin served as Vice President, Healthcare for Amazon.com, Inc. for four years from 2022 through 2025. Previously, Mr. Martin was employed at Providence St. Joseph Health, where held roles of increasing responsibility from 2014 through 2022, and most recently served as EVP, Chief Digital Officer and Managing General Partner for Providence Ventures. 18 (5) Mr.
Removed
Under ASO contracts, self-funded employers generally retained the risk of financing the costs of health benefits, with large group customers retaining a greater share and small group customers a smaller share of the cost of health benefits.
Added
Mellet served as Partner and Chief Financial Officer of Global Infrastructure Partners (GIP) from February 2023 to January 2025. Prior to GIP, Ms. Mellet served as Chief Financial Officer, Senior Managing Director and an Executive Vice President at Evercore from 2021 to 2023. Before joining Evercore, Ms.
Removed
In May 2022, we established a second strategic partnership with WCAS to develop additional centers between 2023 and 2025. As of December 31, 2024, there were 133 primary care clinics operating under the partnership and we have capacity to open or acquire up to approximately 20 additional centers through the existing partnership agreements.
Removed
Hospice On August 11, 2022, we completed the sale of a 60% interest in Gentiva (formerly Kindred) Hospice, to Clayton, Dubilier & Rice, or CD&R. Upon closing, Gentiva Hospice was restructured into a new stand-alone company. We continue to own approximately 35% minority ownership in Gentiva Hospice operations.
Removed
We also have programs for prenatal and premature infant care, asthma related illness, end stage renal disease, diabetes, cancer, and certain other conditions.
Removed
Pay and Benefits Philosophy, Compensation and Financial Security W e believe all of our associates have the right to receive a competitive wage and we are committed to maintaining a pay and benefits philosophy that is market-based and recognizes an associate’s contributions so that we can attract and retain an engaged, talented team.
Removed
Prior to joining the Company, Dr. Agrawal was Senior Advisor for The Carlyle Group L.P., having held that position from October 2017 to December 2018. Previously, Dr. Agrawal was President and Chief Growth Officer of Ciox Health, the largest health information exchange and release of information services organization in the U.S. from December of 2015 to October 2018.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe Final RADV Rule, including the lack of a FFS Adjuster, and any related regulatory, industry or company reactions, could have a material adverse effect on our results of operations, financial position, or cash flows.
Biggest changeThe Final RADV Rule, including the lack of a FFS Adjuster, and any related regulatory, industry or company reactions, the expansion of CMS's auditing efforts to include all eligible MA contracts, the acceleration of RADV audits for PY 2018 through PY 2024, other changes CMS may make to the RADV audit methodology for these years, and combination of these expanded auditing efforts with the application of the Final RADV Rule, could each have a material adverse effect on our results of operations, financial position, or cash flows.
Our future performance depends in large part upon our ability to execute our strategy, including opportunities created by the expansion of our Medicare programs, our strategy with respect to state-based contracts, including those covering members dually eligible for the Medicare and Medicaid programs, the growth of our pharmacy, 21 primary care, and home solutions businesses, and the successful implementation of our integrated care delivery model.
Our future performance depends in large part upon our ability to execute our strategy, including opportunities created by the expansion of our Medicare programs, our strategy with respect to state-based contracts, including those covering members dually eligible for the Medicare and Medicaid programs, the growth of our pharmacy 21 solutions, primary care, and home solutions businesses, and the successful implementation of our integrated care delivery model.
In October 2018, however, CMS issued a proposed rule announcing possible changes to the RADV audit methodology, including elimination of the FFS Adjuster. CMS proposed applying its revised methodology, including extrapolated recoveries without application of a FFS Adjuster, to RADV audits dating back to PY 2011.
In October 2018, however, CMS issued a proposed rule announcing possible changes to the RADV audit methodology, including elimination of the FFS Adjuster. CMS proposed (the "Proposed RADV Rule") applying its revised methodology, including extrapolated recoveries without application of a FFS Adjuster, to RADV audits dating back to PY 2011.
It is critical that MA plans are paid accurately and that payment model principles, including the application of a FFS Adjuster, are in accordance with the requirements of the 26 Social Security Act, which, if not implemented correctly could have a material adverse effect on our results of operations, financial position, or cash flows.
It is critical that MA plans are paid accurately and that payment model principles, including the application of a FFS Adjuster, are in accordance with 26 the requirements of the Social Security Act, which, if not implemented correctly could have a material adverse effect on our results of operations, financial position, or cash flows.
This concentration of revenues subjects these businesses to reductions in Medicare reimbursement rates or changes in the rules governing the Medicare program, including changes to 27 CMS’s risk adjustment model that may apply to our primary care business through its contracts with third-party payors.
This concentration of revenues subjects these businesses to reductions in Medicare 27 reimbursement rates or changes in the rules governing the Medicare program, including changes to CMS’s risk adjustment model that may apply to our primary care business through its contracts with third-party payors.
In doing so, CMS recognized “that the documentation standard used in RADV audits to determine a contract’s payment error (medical records) is different from the documentation standard used to develop the Part C risk-adjustment model (FFS claims).” To correct for this difference, CMS stated that it would apply a “Fee-for-Service Adjuster (FFS Adjuster)” as “an offset to the preliminary recovery amount.” This adjuster would be “calculated by CMS based on a RADV-like review of records submitted to support FFS claims data.” CMS stated that this methodology would apply to audits beginning with PY 2011.
In doing so, CMS recognized “that the documentation standard used in RADV audits to determine a contract’s payment error (medical records) is different from the documentation standard used to develop the Part C risk-adjustment model (FFS claims).” To correct for this difference, CMS stated that it would apply a “Fee-for-Service Adjuster (FFS Adjuster)” as “an offset to the preliminary recovery amount.” This adjuster would be “calculated by CMS based on a RADV-like review of records submitted to support FFS claims data.” CMS stated that this methodology would apply to audits beginning with payment year (PY) 2011.
These systems require an ongoing commitment of significant resources to maintain, protect, and enhance existing systems and develop and integrate new systems, including systems powered by or incorporating artificial intelligence and machine learning (including generative AI) (AI/ML), to keep pace with continuing changes in information processing technology, evolving industry and regulatory standards, and changing customer preferences, and even with such resources there is no assurance that we will be 22 able to do so.
These systems require an ongoing commitment of significant resources to maintain, protect, and enhance existing systems and develop and integrate new systems, including systems powered by or incorporating artificial intelligence and machine learning (including generative AI) (AI/ML), to keep pace with continuing changes in information processing technology, evolving industry and regulatory standards, and changing customer preferences, and even with such resources there is no assurance that we will be able to do so.
Our pharmacy business is highly competitive and subjects us to regulations and distribution and supply chain risks in addition to those we face with our core health benefits businesses. Our in-house dispensing pharmacy business competes with locally owned drugstores, retail drugstore chains, supermarkets, discount retailers, membership clubs, internet companies and other mail-order and long-term care pharmacies.
Our pharmacy solutions business is highly competitive and subjects us to regulations and distribution and supply chain risks in addition to those we face with our core health benefits businesses. Our in-house dispensing pharmacy business competes with locally owned drugstores, retail drugstore chains, supermarkets, discount retailers, membership clubs, internet companies and other mail-order and long-term care pharmacies.
Our pharmacy business also subjects us to extensive federal, state, and local regulation. The practice of pharmacy is generally regulated at the state level by state boards of pharmacy. Many of the states where we deliver pharmaceuticals, including controlled substances, have laws and regulations that require out-of-state mail-order pharmacies to register with that state’s board of pharmacy.
Our pharmacy solutions business also subjects us to extensive federal, state, and local regulation. The practice of pharmacy is generally regulated at the state level by state boards of pharmacy. Many of the states where we deliver pharmaceuticals, including controlled substances, have laws and regulations that require out-of-state mail-order pharmacies to register with that state’s board of pharmacy.
Any combination of these factors could further increase our cost of doing business and adversely affect our results of operations, financial position, and cash flows. 24 See "Legal Proceedings and Certain Regulatory Matters" in Note 17 to the audited Consolidated Financial Statements included in Item 8. - Financial Statements and Supplementary Data.
Any combination of these factors could further increase our cost of doing business and adversely affect our results of operations, financial position, and cash flows. See "Legal Proceedings and Certain Regulatory Matters" in Note 17 to the audited Consolidated Financial Statements included in Item 8. - Financial Statements and Supplementary Data.
We also rely on these providers to document appropriately all medical data, including the diagnosis data submitted with claims. In addition, we 25 conduct medical record reviews as part of our data and payment accuracy compliance efforts, to more accurately reflect diagnosis conditions under the risk adjustment model.
We also rely on these providers to document appropriately all medical data, including the diagnosis data submitted with claims. In addition, we conduct medical record reviews as part of our data and payment accuracy compliance efforts, to more accurately reflect diagnosis conditions under the risk adjustment model.
However, any enforcement actions by governmental officials alleging non-compliance with these statutes, which could subject us to penalties or restructuring or reorganization of our business, may result in a material adverse effect on our results of operations, financial position, or cash flows.
However, any enforcement actions by governmental officials alleging non-compliance with these statutes, which could subject us to penalties or 29 restructuring or reorganization of our business, may result in a material adverse effect on our results of operations, financial position, or cash flows.
We believe that certain of our customers place importance on our claims paying ability, financial strength, and debt ratings, and we may lose customers and compete less successfully if our ratings were to be downgraded. In addition, our credit ratings impact our ability to obtain future borrowings and investment capital on favorable terms.
We believe that certain of our customers place importance on our claims paying ability, financial strength, and debt ratings, and we may lose customers and compete less successfully if our ratings were to be downgraded. In 33 addition, our credit ratings impact our ability to obtain future borrowings and investment capital on favorable terms.
In 2012, CMS released an MA contract-level RADV methodology that would extrapolate the results of each CMS RADV audit sample to the audited MA contract’s entire health status-related risk adjusted premium amount for the year under audit.
In 2012, CMS released an MA contract-level RADV methodology that would extrapolate the results of each CMS RADV audit sample to the audited MA contract’s entire health status-related risk adjusted 25 premium amount for the year under audit.
These factors may materially adversely affect our ability to market our products or services, may require us to change our products or services or otherwise change our business practices, may increase the regulatory burdens under which we operate, and may require us to pay large judgments or fines.
These factors may materially adversely affect our ability to market our products or services, may require us to change our products or 24 services or otherwise change our business practices, may increase the regulatory burdens under which we operate, and may require us to pay large judgments or fines.
State Regulation of our Products and Services Laws in each of the states (and Puerto Rico) in which we operate our HMOs, PPOs and other health insurance-related services regulate our operations including: capital adequacy and other licensing requirements, policy language describing benefits, mandated benefits and processes, entry, withdrawal or re-entry into a state or market, rate increases, delivery systems, utilization review procedures, quality assurance, complaint systems, enrollment requirements, claim payments, marketing, and advertising.
State Regulation of our Products and Services Laws in each of the states in which we operate our HMOs, PPOs and other health insurance-related services regulate our operations including: capital adequacy and other licensing requirements, policy language describing benefits, mandated benefits and processes, entry, withdrawal or re-entry into a state or market, rate increases, delivery systems, utilization review procedures, quality assurance, complaint systems, enrollment requirements, claim payments, marketing, and advertising.
Although the impact of such attacks has not been material to our operations or results of operations, financial position, or cash flow through December 31, 2024, we can provide no assurance that we will be able to detect, prevent, or contain the effects of such cybersecurity attacks or other information security risks or threats, or that such an attack will not be material to our business, in the future.
Although the impact of such attacks has not been material to our operations or results of operations, financial position, or cash flow through December 31, 2025, we can provide no assurance that we will be able to detect, prevent, or contain the effects of such cybersecurity attacks or other information security risks or threats, or that such an attack will not be material to our business, in the future.
We believe that our health services operations comply with applicable state 29 statutes regarding corporate practice of medicine, fee-splitting, and similar issues.
We believe that our health services operations comply with applicable state statutes regarding corporate practice of medicine, fee-splitting, and similar issues.
Each of the rating agencies reviews its ratings periodically and there can be no assurance that current 33 ratings will be maintained in the future.
Each of the rating agencies reviews its ratings periodically and there can be no assurance that current ratings will be maintained in the future.
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.
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 or Medicaid programs or in the delivery of health care services.
Any failure to achieve this growth may have a material adverse effect on our results of operations, financial position, or cash flows. The number of our Medicare Advantage plans rated 4-star or higher will significantly decline in 2025.
Any failure to achieve this growth may have a material adverse effect on our results of operations, financial position, or cash flows. The number of our Medicare Advantage plans rated 4-star or higher significantly declined in 2025.
Humana’s actuarially certified bids through PY 2023 preserved Humana’s position that CMS should apply an FFS Adjuster in any RADV audit that CMS intends to extrapolate.
Humana’s actuarially certified bids through PY 2026 preserved Humana’s position that CMS should apply an FFS Adjuster in any RADV audit that CMS intends to extrapolate.
A significant portion of our revenues relates to federal and state government health care coverage programs, including the Medicare, military services, and Medicaid programs. These programs accounted for approximately 94% of our total premiums and services revenue for the year ended December 31, 2024.
A significant portion of our revenues relates to federal and state government health care coverage programs, including the Medicare, military services, and Medicaid programs. These programs accounted for approximately 93% of our total premiums and services revenue for the year ended December 31, 2025.
It is reasonably possible that these laws and regulations, as well as other current or future legislative, judicial or regulatory changes, including restrictions on our ability to manage our provider network, market and sell our products, or otherwise operate our business, or restrictions on profitability, including reviews by regulatory bodies that may compare our Medicare Advantage business profitability to our non-Medicare Advantage business profitability, or compare the profitability of various products within our Medicare Advantage business, and require that they remain within certain ranges of each other, increases in member benefits or changes to member eligibility criteria without corresponding increases in premium payments to us, further restrictions on service arrangements and fee payments between intercompany or vertically-integrated assets, increases in regulation of our prescription drug benefit businesses, or changes to the Part D prescription drug benefit design (and uncertainty arising from the implementation of these changes) may have a material adverse effect on our results of operations (including 28 restricting revenue, enrollment and premium growth in certain products and market segments, restricting our ability to expand into new markets, increasing our medical and operating costs, further lowering our Medicare payment rates and increasing our expenses associated with assessments); our financial position (including our ability to maintain the value of our goodwill); and our cash flows.
It is reasonably possible that these laws and regulations, as well as other current or future legislative, judicial or regulatory changes, including restrictions on our ability to manage our provider network, market and sell our products, or otherwise operate our business, or restrictions on profitability, increases in member benefits or changes to member eligibility criteria without corresponding increases in premium payments to us, further restrictions on service arrangements and fee payments between intercompany or vertically-integrated assets, increases in regulation of our prescription drug benefit businesses, or changes to the Part D prescription drug benefit design (and uncertainty arising from the implementation of these changes) may have a material adverse effect on our results of operations (including restricting revenue, enrollment and premium growth in certain products and market segments, restricting our ability to expand into new markets, increasing our medical and operating costs, further lowering our 28 Medicare payment rates and increasing our expenses associated with assessments); our financial position (including our ability to maintain the value of our goodwill); and our cash flows.
Similarly, our access to funds could be limited if regulatory authorities or rating agencies were to take negative actions against us. If a combination of these factors were to occur, we may not be able to successfully obtain additional financing on favorable terms or at all.
Similarly, our access to funds could be limited if regulatory authorities or rating agencies were to take negative actions against us. If a combination of these factors were to occur, we may not be able to successfully obtain additional financing on favorable terms or at all. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
These programs involve various risks, as described further below. • At December 31, 2024, under our contracts with CMS we provided health insurance coverage to approximately 924,800 individual Medicare Advantage members in Florida. These contracts accounted for approximately 14% of our total premiums and services revenue for the year ended December 31, 2024.
These programs involve various risks, as described further below. • At December 31, 2025, under our contracts with CMS we provided health insurance coverage to approximately 1.0 million individual Medicare Advantage members in Florida. These contracts accounted for approximately 14% of our total premiums and services revenue for the year ended December 31, 2025.
In addition, we are subject to CMS rules regarding the administration of our PDP plans and intercompany pricing between our PDP plans and our pharmacy business. 32 We are also subject to risks inherent in the packaging and distribution of pharmaceuticals and other health care products, including the application of state laws and regulations related to the operation of internet and mail-order pharmacies, violations of which could expose us to civil and criminal penalties, and manufacturing, distribution or other supply chain disruptions (including disruptions that occur as a result of 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 impacts of global climate change), each of which could impact the availability or cost of supplying of such products.
We are also subject to risks inherent in the packaging and distribution of pharmaceuticals and other health care products, including the application of state laws and regulations related to the operation of internet and mail-order pharmacies, violations of which could expose us to civil and criminal penalties, and manufacturing, distribution or 32 other supply chain disruptions (including disruptions that occur as a result of 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 impacts of global climate change), each of which could impact the availability or cost of supplying of such products.
A cybersecurity attack that bypasses our information technology systems, or the security of our third-party service providers, could materially affect us due to the theft, destruction, loss, misappropriation or release of confidential information or intellectual property, operational or business delays resulting from the disruption of our IT systems, extortion attempts, or negative publicity resulting in reputation or brand damage with our members, customers, providers, and other stakeholders. 23 The costs to detect, prevent, eliminate or address cybersecurity threats and vulnerabilities before or after an incident could be substantial.
A cybersecurity attack that bypasses our information technology systems, 23 or the security of our third-party service providers, could materially affect us due to the theft, destruction, loss, misappropriation or release of sensitive personal information, confidential information or proprietary information (including intellectual property), operational or business delays resulting from the disruption of our IT systems, extortion attempts, or negative publicity resulting in reputation or brand damage with our members, customers, providers, and other stakeholders.
The success of our healthcare services businesses depends on our ability, and the ability of our affiliated physician-owned professional groups and management services organizations, to recruit, hire, acquire, contract with, and retain physicians, nurses and other medical professionals who are experienced in providing care services to older adults.
Any of these events may have a material adverse effect on the provision of services to our members and our results of operations, financial position, and cash flows. 31 The success of our healthcare services businesses depends on our ability, and the ability of our affiliated physician-owned professional groups and management services organizations, to recruit, hire, acquire, contract with, and retain physicians, nurses and other medical professionals who are experienced in providing care services to older adults.
The loss of these and other CMS contracts (which are generally renewed annually) or significant changes in the Medicare Advantage and Prescription Drug Plan programs as a result of legislative or regulatory action, including changes to the Part D prescription drug benefit design (such as the changes to plan sponsor liability across the different Part D coverage phases that will apply beginning in plan year 2025) or reductions in premium payments to us or increases in member benefits or changes to member eligibility criteria without corresponding increases in premium payments to us, may have a material adverse effect on our results of operations, financial position, and cash flows. • Our military services business, which accounted for approximately 1% of our total premiums and services revenue for the year ended December 31, 2024, primarily consisted of the TRICARE T2017 East Region contract.
The loss of these and other CMS contracts (which are generally renewed annually) or significant changes in the Medicare Advantage and Prescription Drug Plan programs as a result of legislative or regulatory action, including changes to the Part D prescription drug benefit design (such as the changes to plan sponsor liability across the different Part D coverage phases that began to apply in plan year 2025) or reductions in premium payments to us or increases in member benefits or changes to member eligibility criteria without corresponding increases in premium payments to us, may have a material adverse effect on our results of operations, financial position, and cash flows. • CMS uses a risk-adjustment model that adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members.
If we fail to properly maintain the integrity of our data, to strategically maintain existing or implement new information systems, or to protect our proprietary rights to our systems, our business may be materially adversely affected. Our business depends significantly on effective information systems and the integrity and timeliness of the data we use to run our business.
If we fail to properly maintain the integrity of our data, to strategically maintain existing or implement new information systems (including systems powered by or incorporating AI/ML), or to protect our proprietary rights to our systems, our business may be materially adversely affected.
Our business strategy involves providing members and providers with easy to use products that leverage our information to meet their needs.
Our business depends significantly on effective information systems and the integrity and timeliness of the data we use to run our business. Our business strategy involves providing members and providers with easy to use products that leverage our information to meet their needs.
To the extent laws in these CON states change, including the elimination of the CON requirement, the intangible value associated with these CONs may be impaired. Any failure by us to manage acquisitions, divestitures and other significant transactions successfully may have a material adverse effect on our results of operations, financial position, and cash flows.
Any failure by us to manage acquisitions, divestitures and other significant transactions successfully may have a material adverse effect on our results of operations, financial position, and cash flows.
These states restrict the entry of new providers or services and the expansion of existing providers or services in their state through a CON process, which is periodically evaluated and updated as required by applicable state law. 30 To the extent that we require a CON or other similar approvals to expand our operations, our expansion could be adversely affected by our inability to obtain the necessary approval.
These states restrict the entry of new providers or services and the expansion of existing providers or services in their state through a CON process, which is periodically evaluated and updated as required by applicable state law.
Based on 2025 Medicare Advantage Star Ratings released by CMS in October 2024, approximately 25% of our Medicare Advantage members are currently enrolled in plans rated 4-star or higher for 2025, as compared to 94% based on our 2024 Star Ratings.
Based on 2025 Medicare Advantage Star Ratings released by CMS in October 2024, we have experienced a significant decline in the number of our Medicare Advantage members enrolled in plans rated 4-star or higher for 2025.
Our remediation efforts may not be successful and could result in interruptions, delays, or cessation of service, and loss of existing or potential members.
The costs to detect, prevent, eliminate or address cybersecurity threats and vulnerabilities before or after an incident could be substantial. Our remediation efforts may not be successful and could result in interruptions, delays, or cessation of service, and loss of existing or potential members.
There can be no assurance that providers with whom we contract will properly manage the costs of services, maintain financial solvency or avoid disputes with 31 other providers. Any of these events may have a material adverse effect on the provision of services to our members and our results of operations, financial position, and cash flows.
There can be no assurance that providers with whom we contract will properly manage the costs of services, maintain financial solvency or avoid disputes with other providers.
Removed
We delivered services under the T2017 East Region contract from commencement on January 1, 2018 through expiration on December 31, 2024. The T2017 East Region contract comprised 32 states and approximately 6 million TRICARE beneficiaries.
Added
In addition, changes to laws, regulations and guidance regarding how we may use AI/ML could make 22 it harder for us to conduct our business using AI/ML, require us to retrain our AI/ML, delete data produced by our AI/ML, or prevent or limit our use of AI/ML.
Removed
In December 2022, we were awarded the next generation of TRICARE Managed Care Support Contracts, or T-5, for the updated TRICARE East Region by the Defense Health Agency of the DoD. The T-5 East Region contract commenced on January 1, 2025 and comprises 24 states, and Washington D.C., and approximately 4.6 million beneficiaries.
Added
Our use of AI/ML technologies could also result in additional compliance costs, regulatory investigations, actions, fines or penalties, and consumer or other lawsuits.
Removed
The transition period for the T-5 contract began in January 2024 and overlapped the final year of the T2017 contract.
Added
For example, in February 2024, Change Healthcare experienced a significant cybersecurity incident that disrupted its ability to provide services, impacting payers, providers and pharmacies nationwide, including us.
Removed
The length of the contract is one transition year followed by eight annual option periods, which, if all options are exercised, would result in a total contract length of nine years. • CMS uses a risk-adjustment model which adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members.
Added
Further, on May 21, 2025, CMS announced that it will conduct RADV audits for all eligible MA contracts for each payment year in all newly initiated audits and expedite the completion of RADV audits for PY 2018 through PY 2024 by early 2026.
Added
On September 25, 2025, the Court granted our motion for summary judgment and vacated the Final RADV Rule, finding that the Final RADV Rule was procedurally invalid under the APA because it was not a “logical outgrowth” of the Proposed RADV Rule.
Added
On November 21, 2025, the government notified the court of its appeal of that decision, which is now pending at the United States Court of Appeals for the Fifth Circuit and captioned Humana v Kennedy. There can be no assurances as to the final disposition of this lawsuit.
Added
To the extent that we require a CON or other similar approvals to expand our operations, our expansion could be adversely affected by our inability to obtain the necessary approval. To the extent laws in these CON states change, 30 including the elimination of the CON requirement, the intangible value associated with these CONs may be impaired.
Added
In addition, we are subject to CMS rules regarding the administration of our PDP plans and intercompany pricing between our PDP plans and our pharmacy business.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese processes enable cross-functional engagement from our enterprise information protection, enterprise risk management, enterprise compliance, information technology, legal, privacy, and data governance teams. As a key component of this governance framework, the Audit Committee and Technology Committee also receive regular updates regarding our cybersecurity program and cybersecurity incidents from our Chief Information Security Officer.
Biggest changeAmong our cybersecurity and risk teams, we utilize established governance mechanisms to enable a transparent and holistic approach to cybersecurity risk management, and the evaluation and remediation of cybersecurity incidents. These processes enable cross-functional engagement from our enterprise information protection, enterprise risk management, enterprise compliance, information technology, legal, privacy, and data governance teams.
Although we have been subject to breaches of our information technology systems, including breaches of the information technology systems of third-party service providers, the impact of such attacks has not been material to our business strategy, operations or results of operations, financial position, or cash flows through December 31, 2024.
Although we have been subject to breaches of our information technology systems, including breaches of the information technology systems of third-party service providers, the impact of such attacks has not been material to our business strategy, operations or results of operations, financial position, or cash flows through December 31, 2025.
Our Chief Information Security Officer reports to our 35 Chief Information Officer, who is in turn responsible for the management of Humana’s data and information technology risks more generally. Our Chief Information Officer is a senior executive with more than two decades of experience leading technology teams in large, regulated industries.
Our Chief Information Security Officer reports to our Chief Information Officer, who is in turn responsible for the management of Humana’s data and information technology risks more generally. Our Chief Information Officer and Chief Information Security Officer are each senior executives with more than two decades of experience leading technology teams in large, regulated industries.
Management is responsible for designing and implementing our governance framework and controls for managing our material risks from cybersecurity threats, under the oversight of our Board of Directors.
Management is responsible for designing and implementing our governance framework and controls for managing our material risks from cybersecurity threats, under the oversight of our Board of Directors. Our Chief Information Security Officer is responsible for assessing and managing identified cybersecurity risks, evaluating and remediating cybersecurity incidents.
Governance As part of its overall responsibility for oversight of our enterprise risk management, our Board of Directors reviews material risks to our Company, including risks from cybersecurity threats. The Board has designated our Audit Committee and Technology Committee with joint oversight over our information technology internal controls, cybersecurity, business continuity and disaster recovery programs.
Governance As part of its overall responsibility for oversight of our enterprise risk management, our Board of Directors reviews material risks to our Company, including risks from cybersecurity threats.
Department of Health and Human Services (HHS), Office for Civil Rights (OCR), and various state agencies; our reports are publicly available, free of charge, and can be obtained through the OCR Portal at https://ocrportal.hhs.gov/ocr/breach. h. Maintaining a program to identify cybersecurity risks associated with certain third-party vendors, which is one component of an overall vendor risk management program.
Reporting data breaches, as required by law, to the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR), and various state agencies; our reports are publicly available, free of charge, and can be obtained through the OCR Portal at https://ocrportal.hhs.gov/ocr/breach. h.
We also enhance our information technology infrastructure and security protocols to assess, identify, protect against, and manage material risks from cybersecurity threats following a risk-based approach. In addition, we conduct cybersecurity risk assessments at least annually, and periodically engage an independent auditor or other external assessors to aid in pro-active risk identification, prevention, detection, mitigation, and remediation.
We also enhance our information technology infrastructure and security protocols to assess, identify, protect against, and manage material risks from cybersecurity threats following a risk-based approach.
Employing a qualified Chief Information Security Officer. b. Maintaining tools to identify malicious cyber activity. c. Monitoring risks posed by threat actors, including through partnerships with industry groups and government agencies. d. Providing annual cybersecurity training to our associates. e. Testing our associates’ knowledge through internal phishing simulations. f.
Monitoring risks posed by threat actors, including through partnerships with industry groups and government agencies. d. Providing annual cybersecurity training to our associates. e. Testing our associates’ knowledge through internal phishing simulations. f. Engaging an independent third-party audit firm to perform an Annual Service Organizational Controls (SOC) 2 audit of enterprise claims platforms. g.
The protection of information and business processes is an integrated component in our overall risk management program, and reflected in our Code of Ethics, security standards, and privacy policies. We employ processes to safeguard information and protect our customers’ data, including by deploying both proactive and defensive practices against the evolving cyber threat landscape. Examples of these processes include: a.
The protection of information and business processes is a key component of our overall risk management program, and reflected in our Code of Ethics, security standards, and privacy policies.
Our Chief Information Security Officer is responsible for assessing and managing identified cybersecurity risks, evaluating and remediating cybersecurity incidents, and sharing information directly with the Audit Committee and Technology Committee, or full Board of Directors, when appropriate.
Our Enterprise Leadership Team, and our Chief Information Security Officer, regularly report to the Audit Committee, Technology 35 Committee, and full Board of Directors regarding our cybersecurity program, including reporting cybersecurity incidents as appropriate.
Removed
Engaging an independent third-party audit firm to perform an Annual Service Organizational Controls (SOC) 2 audit of enterprise claims platforms. g. Reporting data breaches, as required by law, to the U.S.
Added
We employ a comprehensive set of controls and defensive measures 34 designed to safeguard information and protect our customers’ data, including by deploying both proactive and defensive practices against the evolving cyber threat landscape. Examples of these processes include: a. Employing a qualified Chief Information Security Officer. b. Maintaining tools to identify malicious cyber activity. c.
Removed
Our Chief Information Security Officer is an experienced cybersecurity executive and leader in the field, with many years of relevant experience working in highly regulated industries. Among our cybersecurity and risk teams, we utilize established governance mechanisms to enable a transparent and holistic approach to cybersecurity risk management, and the evaluation and remediation of cybersecurity incidents.
Added
Maintaining a program to identify cybersecurity risks associated with certain third-party vendors, which is one component of an overall vendor risk management program. i. Maintaining a 24/7 Cybersecurity Operations Center to monitor, detect and respond to cyber events and incidents. j. Maintaining a program of identity and access management.
Added
In addition, we conduct cybersecurity risk assessments at least annually, test our preparedness through periodic audits, tabletop exercises, vulnerability scanning and penetration testing and periodically engage an independent auditor or other external assessors to aid in pro-active risk identification, prevention, detection, mitigation, and remediation.
Added
The Board has designated our Audit Committee and Technology Committee with joint oversight over our information technology internal controls, cybersecurity, business continuity and disaster recovery programs, and emerging technology such as artificial and augmented intelligence.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−1 removed0 unchanged
Biggest changeIn addition to the headquarters in Louisville, Kentucky, we maintain other principal operating facilities used for customer service, enrollment, and/or claims processing and certain other corporate functions in Louisville, Kentucky; Green Bay, Wisconsin; Tampa, Florida; Cincinnati, Ohio; San Antonio, Texas; San Juan, Puerto Rico; and Austin, Texas.
Biggest changeITEM 2. PROPERTIES Our principal executive office is located in the Humana Building, 101 East Main Street, Louisville, Kentucky 40202. In addition to the headquarters in Louisville, Kentucky, we maintain other principal operating facilities used for customer service, enrollment, and/or claims processing and certain other corporate functions.
We owned or leased numerous medical centers and administrative offices at December 31, 2024. The medical centers we operate are primarily located in Florida and Texas, including full-service, multi-specialty medical centers staffed by primary care providers and medical specialists. Of these medical centers, approximately 378 of these facilities are leased or subleased to our contracted providers to operate.
The medical centers we operate are primarily located in Florida and Texas, including full-service, multi-specialty medical centers staffed by primary care providers and medical specialists. Of these medical centers, approximately 372 of these facilities are leased or subleased to our contracted providers to operate.
Removed
ITEM 2. PROPERTIES Our principal executive office is located in the Humana Building, 500 West Main Street, Louisville, Kentucky 40202.
Added
Our key administrative functions are located in Louisville, Kentucky; Arlington, Virginia; and Green Bay, Wisconsin. We also have regional administrative support offices in Arizona, Florida, Georgia, Illinois, Massachusetts, New York, Tennessee and Texas. We owned or leased numerous medical centers and administrative offices at December 31, 2025.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 36 Part II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 37 Item 6. Reserved 40 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 41 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 64 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 36 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 37 Item 6. Reserved 40 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 41 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 63 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends The following table provides details of dividend payments, excluding dividend equivalent rights, in 2023 and 2024, under our Board approved quarterly cash dividend policy: Record Date Payment Date Amount per Share Total Amount (in millions) 2023 payments 12/30/2022 1/27/2023 $0.7875 $98 3/31/2023 4/28/2023 $0.8850 $111 6/30/2023 7/28/2023 $0.8850 $110 9/29/2023 10/27/2023 $0.8850 $109 2024 payments 12/29/2023 1/26/2024 $0.8850 $108 3/29/2024 4/26/2024 $0.8850 $107 6/28/2024 7/26/2024 $0.8850 $106 9/30/2024 10/25/2024 $0.8850 $107 In October 2024, the Board declared a cash dividend of $0.8850 per share payable on January 31, 2025 to stockholders of record on December 31, 2024 for an aggregate amount of $107 million.
Biggest changeDividends The following table provides details of dividend payments, excluding dividend equivalent rights, in 2024 and 2025, under our Board approved quarterly cash dividend policy: Record Date Payment Date Amount per Share Total Amount (in millions) 2024 payments 12/29/2023 1/26/2024 $0.8850 $108 3/29/2024 4/26/2024 $0.8850 $107 6/28/2024 7/26/2024 $0.8850 $106 9/30/2024 10/25/2024 $0.8850 $107 2025 payments 12/31/2024 1/31/2025 $0.8850 $107 3/28/2025 4/25/2025 $0.8850 $107 6/27/2025 7/25/2025 $0.8850 $106 9/26/2025 10/31/2025 $0.8850 $106 In October 2025, the Board declared a cash dividend of $0.8850 per share payable on January 30, 2026 to stockholders of record on December 26, 2025 for an aggregate amount of $107 million.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the New York Stock Exchange under the symbol HUM.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the New York Stock Exchange under the symbol HUM.
Declaration and payment of future quarterly dividends is at the discretion of our Board and may be adjusted as business needs or market conditions change. 37 Stock Total Return Performance The following graph compares our total return to stockholders with the returns of the Standard & Poor’s Composite 500 Index (“S&P 500”) and the Dow Jones US Select Health Care Providers Index (“Peer Group”) for the five years ended December 31, 2024.
Declaration and payment of future quarterly dividends is at the discretion of our Board and may be adjusted as business needs or market conditions change. 37 Stock Total Return Performance The following graph compares our total return to stockholders with the returns of the Standard & Poor’s Composite 500 Index (“S&P 500”) and the Dow Jones US Select Health Care Providers Index (“Peer Group”) for the five years ended December 31, 2025.
The graph assumes an investment of $100 in each of our common stock, the S&P 500, and the Peer Group on December 31, 2019, and that dividends were reinvested when paid. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 HUM $ 100 $ 113 $ 128 $ 142 $ 128 $ 72 S&P 500 $ 100 $ 118 $ 152 $ 125 $ 157 $ 196 Peer Group $ 100 $ 118 $ 147 $ 137 $ 136 $ 126 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 38 Issuer Purchases of Equity Securities The following table provides information about purchases by us during the three months ended December 31, 2024 of equity securities that are registered by us pursuant to Section 12 of the Exchange Act: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)(2) Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (2) October 2024 — $ — — $ 2,926,243,841 November 2024 — — — 2,926,243,841 December 2024 — — — 2,926,243,841 Total — $ — — (1) Excludes 0.2 million shares repurchased in connection with employee stock plans.
The graph assumes an investment of $100 in each of our common stock, the S&P 500, and the Peer Group on December 31, 2020, and that dividends were reinvested when paid. 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 HUM $ 100 $ 114 $ 126 $ 114 $ 64 $ 65 S&P 500 $ 100 $ 129 $ 105 $ 133 $ 166 $ 196 Peer Group $ 100 $ 125 $ 116 $ 115 $ 107 $ 108 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 38 Issuer Purchases of Equity Securities The following table provides information about purchases by us during the three months ended December 31, 2025 of equity securities that are registered by us pursuant to Section 12 of the Exchange Act: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)(2) Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (2) October 2025 — $ — — $ 2,826,757,902 November 2025 — — — 2,826,757,902 December 2025 — — — 2,826,757,902 Total — $ — — (1) Excludes 0.2 million shares repurchased in connection with employee stock plans.
In February 2025, the Board declared a cash dividend of $0.8850 per share payable on April 25, 2025 to stockholders of record on March 28, 2025.
In February 2026, the Board declared a cash dividend of $0.8850 per share payable on April 24, 2026 to stockholders of record on March 27, 2026.
Holders of our Capital Stock As of January 31, 2025, there were 1,511 holders of record of our common stock and 629,228 beneficial holders of our common stock .
Holders of our Capital Stock As of January 31, 2026, there were 1,424 holders of record of our common stock and 684,397 beneficial holders of our common stock .
Our remaining repurchase authorization was $2.9 billion as of February 19, 2025. 39
Our remaining repurchase authorization was $2.7 billion as of February 18, 2026. 39

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor a complete reconciliation of the federal statutory rate to the effective tax rate, refer to Note 12 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K. 48 Insurance Segment Change 2024 2023 Members % Membership: Individual Medicare Advantage 5,661,800 5,408,900 252,900 4.7 % Group Medicare Advantage 545,700 509,600 36,100 7.1 % Medicare stand-alone PDP 2,288,200 2,849,100 (560,900) (19.7) % Total Medicare 8,495,700 8,767,600 (271,900) (3.1) % Medicare Supplement 377,300 307,200 70,100 22.8 % Commercial fully-insured 300 338,700 (338,400) (99.9) % State-based contracts and other 1,459,900 1,228,800 231,100 18.8 % Military services 6,009,100 5,960,200 48,900 0.8 % Commercial ASO 4,800 255,300 (250,500) (98.1) % Total Medical Membership 16,347,100 16,857,800 (510,700) (3.0) % Total Specialty Membership 4,562,000 4,868,300 (306,300) (6.3) % Change 2024 2023 $ % (in millions) Premiums and Services Revenue: Premiums: Individual Medicare Advantage $ 88,019 $ 78,837 $ 9,182 11.6 % Group Medicare Advantage 7,731 6,869 862 12.5 % Medicare stand-alone PDP 3,137 2,189 948 43.3 % Total Medicare 98,887 87,895 10,992 12.5 % Commercial fully-insured 501 3,527 (3,026) (85.8) % Specialty benefits 955 1,007 (52) (5.2) % Medicare Supplement 846 735 111 15.1 % State-based contracts and other 10,915 8,108 2,807 34.6 % Premiums revenue 112,104 101,272 10,832 10.7 % Commercial ASO 50 237 (187) (78.9) % Military services and other 916 763 153 20.1 % Services revenue 966 1,000 (34) (3.4) % Total external revenues $ 113,070 $ 102,272 $ 10,798 10.6 % Income from operations $ 1,289 $ 2,654 $ (1,365) (51.4) % Benefit ratio 90.4 % 88.0 % 2.4 % Operating cost ratio 9.2 % 10.2 % (1.0) % Income from operations Insurance segment income from operations decreased $1.4 billion, or 51.4%, from $2.6 billion in the 2023 period to $1.3 billion in the 2024 period primarily due to the same factors impacting the segment's higher benefit ratio partially offset by the impact of the lower operating cost ratio as more fully described below. 49 Enrollment Individual Medicare Advantage membership increased 252,900 members, or 4.7%, from 5,408,900 members as of December 31, 2023 to 5,661,800 members as of December 31, 2024 primarily due to membership additions associated with the 2024 Annual Election Period, or AEP.
Biggest changeChange 2025 2024 $ % (in millions) Premiums and Services Revenue: Premiums: Individual Medicare Advantage $ 90,403 $ 88,019 $ 2,384 2.7% Group Medicare Advantage 9,014 7,731 1,283 16.6% Medicare stand-alone PDP 6,844 3,137 3,707 118.2% Total Medicare 106,261 98,887 7,374 7.5% Specialty benefits 989 955 34 3.6% Medicare Supplement 1,098 846 252 29.8% State-based contracts and other 14,477 10,915 3,562 32.6% Commercial fully-insured — 501 (501) (100.0)% Premiums revenue 122,825 112,104 10,721 9.6% Services: Military services and other 1,017 916 101 11.0% Commercial ASO — 50 (50) (100.0)% Services revenue 1,017 966 51 5.3% Total external revenues $ 123,842 $ 113,070 $ 10,772 9.5% Income from operations $ 1,664 $ 1,289 $ 375 29.1% Benefit ratio 90.4 % 90.4 % — % Operating cost ratio 9.1 % 9.2 % (0.1) % Income from operations Insurance segment income from operations increased $0.4 billion, or 29.1%, from $1.3 billion in the 2024 period to $1.7 billion in the 2025 period primarily due to the same factors impacting the Insurance segment's benefit and operating cost ratios as more fully described below. 48 Enrollment Individual Medicare Advantage membership decreased 412,500 members, or 7.3%, from 5,661,800 members as of December 31, 2024 to 5,249,300 members as of December 31, 2025 inclusive of the decision to exit certain unprofitable plans and counties in 2025.
Transactions between reportable segments primarily consist of sales of products and services rendered by our CenterWell segment, primarily pharmacy, primary care, and home solutions, to our Insurance segment customers. Intersegment sales and expenses are recorded primarily at fair value and eliminated in consolidation.
Transactions between reportable segments primarily consist of sales of products and services rendered by our CenterWell segment, primarily pharmacy solutions, primary care, and home solutions, to our Insurance segment customers. Intersegment sales and expenses are recorded primarily at fair value and eliminated in consolidation.
After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets since the time the debt securities were purchased.
After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets since the time these debt securities were purchased.
It is reasonably possible that these laws and regulations, as well as other current or future legislative, judicial or regulatory changes including restrictions on our ability to manage our provider network, manage and sell our products, or otherwise operate our business, or restrictions on profitability, including reviews by regulatory bodies that may compare our Medicare Advantage profitability to our non-Medicare Advantage business profitability, or compare the profitability of various products within our Medicare Advantage business, and require that they remain within certain ranges of each other, increases in member benefits or changes to member eligibility criteria without corresponding increases in premium payments to us, further restrictions on service arrangements and fee payments between intercompany or vertically-integrated assets, increases in regulation of our prescription drug benefit businesses, or changes to the Part D prescription drug benefit design (and uncertainty arising from the implementation of these changes) in the aggregate may have a material adverse effect on our results of operations (including restricting revenue, enrollment and premium growth in certain products and market segments, restricting our ability to expand into new markets, increasing our medical and operating costs, further lowering our Medicare payment rates and increasing our expenses associated with assessments); our financial position (including our ability to maintain the value of our goodwill); and our cash flows.
It is reasonably possible that these laws and regulations, as well as other current or future legislative, judicial or regulatory changes including restrictions on our ability to manage our provider network, manage and sell our products, or otherwise operate our business, or restrictions on profitability, including reviews by regulatory bodies that may compare our Medicare Advantage profitability to our non-Medicare Advantage business profitability, or compare the profitability of various products within our Medicare Advantage business, and require that they remain within certain ranges of each other, increases in member benefits or changes to member eligibility criteria without corresponding increases in premium payments to us, further restrictions on service arrangements and fee payments between intercompany or vertically-integrated assets, increases in regulation of our prescription drug benefit businesses, reductions in reimbursement rates, or changes to the Part D prescription drug benefit design (and uncertainty arising from the implementation of these changes) in the aggregate may have a material adverse effect on our results of operations (including restricting revenue, enrollment and premium growth in certain products and market segments, restricting our ability to expand into new markets, increasing our medical and operating costs, further lowering our Medicare payment rates and increasing our expenses associated with assessments); our financial position (including our ability to maintain the value of our goodwill); and our cash flows.
However, unfavorable changes in key assumptions or combinations of assumptions including a significant increase in the discount rate, decrease in the long-term growth rate or substantial reduction in our underlying cash flow assumptions, including revenue growth rates, operating cost trends, and projected operating income could have a significant negative impact on the estimated fair value of our home solutions reporting unit, which accounted for $4.4 billion of goodwill.
However, unfavorable changes in key assumptions or combinations of assumptions including a significant increase in the discount rate, decrease in the long-term growth rate or substantial reduction in our underlying cash flow assumptions, including revenue expectations and growth rates, operating cost trends, and projected operating income could have a significant negative impact on the estimated fair value of our home solutions reporting unit, which accounted for $4.4 billion of goodwill.
Any cash collateral, which is reinvested by the lending agent primarily in short-term, highly liquid investments, is recorded as a securities lending collateral asset within other current assets on our 62 consolidated balance sheet at the end of the reporting period.
Any cash collateral, which is reinvested by the lending agent primarily in short-term, highly liquid investments, is recorded as a securities lending collateral asset within other current assets on our consolidated balance sheet at the end of the reporting period.
Successive one notch downgrades increase the interest rate an additional 25 basis points, or annual interest expense by $1 million, up to a maximum 100 basis points, or annual interest expense by $3 million. In addition, we operate as a holding company in a highly regulated industry.
Successive one notch downgrades increase the interest rate an additional 25 basis points, or annual interest expense by approximately $1 million, up to a maximum 100 basis points, or annual interest expense by approximately $3 million. In addition, we operate as a holding company in a highly regulated industry.
Changes in premium revenues resulting from the periodic changes in risk-adjustment scores derived from medical diagnoses for our membership are estimated by projecting the ultimate annual premium and recognized ratably during the year with adjustments each period to reflect changes in the ultimate premium.
Changes in Medicare premium revenues resulting from the periodic changes in risk-adjustment scores derived from medical diagnoses for our membership are estimated by projecting the ultimate annual premium and recognized ratably during the year with adjustments each period to reflect changes in the ultimate premium.
Our primary uses of cash historically have included disbursements for claims payments, operating costs, interest on borrowings, taxes, purchases of investment securities, acquisitions, capital expenditures, repayments on borrowings, dividends, and share repurchases.
Our primary uses of cash historically have included disbursements for claims payments, operating costs, interest on 51 borrowings, taxes, purchases of investment securities, acquisitions, capital expenditures, repayments on borrowings, dividends, and share repurchases.
We record a corresponding liability to reflect our obligation to return the collateral within trade accounts payable and accrued expenses on our consolidated balance sheet at the end of the reporting period.
We record a corresponding liability to reflect our 61 obligation to return the collateral within trade accounts payable and accrued expenses on our consolidated balance sheet at the end of the reporting period.
For our CON intangible assets, unfavorable changes in key assumptions or combinations of assumptions, including a significant increase in the discount rate, decrease in the long-term growth rate or substantial reduction in the underlying cash flow assumptions, including revenue growth rates, operating cost trends, and projected operating income could have a significant negative impact on the estimated fair value of our CON intangible assets, which account for $910 million of our intangible assets.
For our CON intangible assets, unfavorable changes in key assumptions or combinations of assumptions, including a significant increase in the discount rate, decrease in the long-term growth rate or substantial reduction in the underlying cash flow assumptions, including revenue growth rates, operating cost trends, and projected operating income could have a significant negative impact on the estimated fair value of our CON intangible assets, which account for $790 million of our intangible assets.
If these assumptions differ from actual, including the impact of the Health Care Reform Law or changes in government reimbursement rates, the estimates underlying our goodwill impairment tests could be adversely affected. The fair value of our reporting units with 63 significant goodwill exceeded carrying amounts by a substantial margin.
If these assumptions differ from actual, including the impact of the Health Care Reform Law or changes in government reimbursement rates, the estimates 62 underlying our goodwill impairment tests could be adversely affected. The fair value of our reporting units with significant goodwill exceeded carrying amounts by a substantial margin.
Adverse changes in our credit rating may increase the rate of interest we pay and may impact the amount of credit available to us in the future. Our investment-grade credit rating at December 31, 2024 was BBB according to Standard & Poor’s Rating Services, or S&P, and Baa2 according to Moody’s Investors Services, Inc., or Moody’s.
Adverse changes in our credit rating may increase the rate of interest we pay and may impact the amount of credit available to us in the future. Our investment-grade credit rating at December 31, 2025 was BBB according to Standard & Poor’s Rating Services, or S&P, and Baa2 according to Moody’s Investors Services, Inc., or Moody’s.
At December 31, 2024, we did not intend to sell any debt securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these debt securities before recovery of their amortized cost basis.
At December 31, 2025, we did not intend to sell any debt securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these debt securities before recovery of their amortized cost basis.
These efforts are leading to a better quality of life for people with Medicare, Medicaid, families, individuals, military service personnel, and communities at large. Our industry relies on two key statistics to measure performance. The benefit ratio, which is computed by taking total benefits expense as a percentage of premiums revenue, represents a statistic used to measure underwriting profitability.
These efforts are leading to a better quality of life for Medicare and Medicaid participants, families, individuals, military service personnel, and communities at large. Our industry relies on two key statistics to measure performance. The benefit ratio, which is computed by taking total benefits expense as a percentage of premiums revenue, represents a statistic used to measure underwriting profitability.
Transactions between reportable segments primarily consist of sales of products and services rendered by our CenterWell segment, primarily pharmacy, primary care, and home solutions, to our Insurance segment customers and are described in Note 18 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K. 45 Comparison of Results of Operations for 2024 and 2023 The following discussion primarily details our results of operations for the year ended December 31, 2024, or the 2024 period, and the year ended December 31, 2023, or the 2023 period.
Transactions between reportable segments primarily consist of sales of products and services rendered by our CenterWell segment, primarily pharmacy solutions, primary care, and home solutions, to our Insurance segment customers and are described in Note 18 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K. 44 Comparison of Results of Operations for 2025 and 2024 The following discussion primarily details our results of operations for the year ended December 31, 2025, or the 2025 period, and the year ended December 31, 2024, or the 2024 period.
Impairment tests completed for 2024, 2023, and 2022 did not result in an impairment loss. Indefinite-lived intangible assets relate to Certificate of Needs (CON) and Medicare licenses acquired in connection with our CenterWell Home Health (formerly Kindred at Home) acquisition with a carrying value of $1.2 billion at December 31, 2024.
Impairment tests completed for 2025, 2024, and 2023 did not result in an impairment loss. Indefinite-lived intangible assets relate to Certificate of Needs (CON) and Medicare licenses acquired in connection with our CenterWell Home Health (formerly Kindred at Home) acquisition with a carrying value of $1.1 billion at December 31, 2025.
The fair value of investment securities were as follows at December 31, 2024 and 2023: 12/31/2024 Percentage of Total 12/31/2023 Percentage of Total (dollars in millions) U.S. Treasury and other U.S. government corporations and agencies: U.S.
The fair value of investment securities were as follows at December 31, 2025 and 2024: 12/31/2025 Percentage of Total 12/31/2024 Percentage of Total (dollars in millions) U.S. Treasury and other U.S. government corporations and agencies: U.S.
Our investment policy limits investments in a single issuer and requires diversification among various asset types. 61 Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at December 31, 2024: Less than 12 months 12 months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in millions) U.S.
Our investment policy limits investments in a single issuer and requires diversification among various asset types. 60 Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at December 31, 2025: Less than 12 months 12 months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in millions) U.S.
Our use of operating cash derived from our non-insurance subsidiaries, such as our CenterWell segment, is generally not restricted by departments of insurance (or comparable state regulators). Our regulated insurance subsidiaries paid dividends to our parent company of $1.5 billion in 2024, $1.8 billion in 2023, and $1.3 billion in 2022.
Our use of operating cash derived from our non-insurance subsidiaries, such as our CenterWell segment, is generally not restricted by departments of insurance (or comparable state regulators). Our regulated insurance subsidiaries paid dividends to our parent company of $1.1 billion in 2025, $1.5 billion in 2024, and $1.8 billion in 2023.
Guarantees and Indemnifications For a detailed discussion of our guarantees and indemnifications, please refer to Note 17 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K. 57 Government Contracts For a detailed discussion of our government contracts, including our Medicare, military services, and Medicaid and state-based contracts, please refer to Note 17 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
Government Contracts For a detailed discussion of our government contracts, including our Medicare, military services, and Medicaid and state-based contracts, please refer to Note 17 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
Additionally, we did not record any material credit allowances for debt securities that were in an unrealized loss position at December 31, 2024, 2023 or 2022.
Additionally, we did not record any material credit allowances for debt securities that were in an unrealized loss position at December 31, 2025, 2024 or 2023.
Subsidiary capital requirements from significant premium growth may impact the amount of regulated subsidiary dividends. Refer to our parent company financial statements and accompanying notes in Schedule I - Parent Company Financial Information. The amount of ordinary dividends that may be paid to our parent company in 2025 is approximately $1.3 billion, in the aggregate.
Subsidiary capital requirements from significant premium growth may impact the amount of regulated subsidiary dividends. Refer to our parent company financial statements and accompanying notes in Schedule I - Parent Company Financial Information. The amount of ordinary dividends that may be paid to our parent company in 2026 is approximately $1.1 billion, in the aggregate.
Net purchases of investment securities were $2.2 billion, $2.5 billion and $2.3 billion in the 2024, 2023 and 2022 periods, respectively. 54 Cash Flow from Financing Activities Our financing cash flows are significantly impacted by the timing of claims payments and the related receipts from CMS associated with Medicare Part D claim subsidies for which we do not assume risk.
Net purchases of investment securities were $2.2 billion and $2.5 billion in the 2024 and 2023 periods, respectively. 53 Cash Flow from Financing Activities Our financing cash flows are significantly impacted by the timing of claims payments and the related receipts from CMS associated with Medicare Part D claim subsidies for which we do not assume risk.
Claim payments were higher than receipts from CMS associated with Medicare Part D claim subsidies for which we do not assume risk by $1.8 billion in the 2024 period and receipts from CMS associated with Medicare Part D claim subsidies for which we do not assume risk were higher than claim payments by $0.8 billion and $2 billion in the 2023 and 2022 periods, respectively.
Claim payments were higher than receipts from CMS associated with Medicare Part D claim subsidies for which we do not assume risk by $1 billion and $1.8 billion in the 2025 and 2024 periods, respectively, and receipts from CMS associated with Medicare Part D claim subsidies for which we do not assume risk were higher than claim payments by $0.8 billion in the 2023 period.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For discussion of 2022 items and year-over-year comparisons between 2023 and 2022 that are not included in this 2024 Form 10-K, refer to "Item 7. – Management Discussion and Analysis of Financial Condition and Results of Operations" found in our Form 10-K for the year ended December 31, 2023, that was filed with the Securities and Exchange Commission on February 15, 2024.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For discussion of 2023 items and year-over-year comparisons between 2024 and 2023 that are not included in this 2025 Form 10-K, refer to "Item 7. – Management Discussion and Analysis of Financial Condition and Results of Operations" found in our Form 10-K for the year ended December 31, 2024, that was filed with the Securities and Exchange Commission on February 20, 2025.
All issuers of debt securities we own that were trading at an unrealized loss at December 31, 2024 remain current on all contractual payments.
All issuers of debt securities we own that were trading at an unrealized loss at December 31, 2025 remain current on all contractual payments.
Debt For a detailed discussion of our debt, including our senior notes, term loans, revolving credit agreements, commercial paper program and other short-term borrowings, please refer to Note 13 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
Debt For a detailed discussion of our debt, including our senior notes, term loans, revolving credit agreements, commercial paper program and other short-term borrowings, please refer to Note 13 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K. 55 Acquisitions & Divestitures For a detailed discussion regarding acquisitions and divestitures, refer to Note 3 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
Under our administrative services only TRICARE contract, health care costs payments for which we do not assume risk exceeded reimbursements from the federal government by $92 million in the 2024 period and reimbursements from the federal government exceeded health care costs payments for which we do not assume risk by $57 million and $25 million in the 2023 and 2022 periods, respectively.
Under our administrative services only TRICARE contract, health care costs payments for which we do not assume risk exceeded reimbursements from the federal government by $74 million and $92 million in the 2025 and 2024 periods, respectively, and reimbursements from the federal government exceeded health care costs payments for which we do not assume risk by $57 million in the 2023 period.
Premiums received prior to the service period are recorded as unearned revenues. 60 Medicare Risk-Adjustment Provisions CMS uses a risk-adjustment model which adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members.
Premiums received prior to the service period are recorded as unearned revenues. 59 Medicare Risk-Adjustment Provisions CMS uses a risk-adjustment model that adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members.
Cash, cash equivalents, and short-term investments at the parent company were $0.6 billion at December 31, 2024 compared to $0.5 billion at December 31, 2023.
Cash, cash equivalents, and short-term investments at the parent company were $1.5 billion at December 31, 2025 compared to $0.6 billion at December 31, 2024.
(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.
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.
Tax-exempt municipal securities were diversified among general obligation bonds of states and local municipalities in the United States as well as special revenue bonds issued by municipalities to finance specific public works projects such as utilities, water and sewer, transportation, or education.
Most of the debt securities that were below investment-grade were rated B. Tax-exempt municipal securities were diversified among general obligation bonds of states and local municipalities in the United States as well as special revenue bonds issued by municipalities to finance specific public works projects such as utilities, water and sewer, transportation, or education.
The value creation initiative charges primarily relate to $256 million and $237 million in asset impairments in 2024 and 2023, respectively, as well as $25 million and $199 million in severance charges in connection with workforce optimization in 2024 and 2023, respectively.
The value creation initiative charges primarily relate to $329 million, $25 million and $199 million in severance and other employee related charges in connection with workforce optimization in 2025, 2024 and 2023, respectively, as well as $40 million, $256 million and $237 million in asset impairments in 2025, 2024 and 2023, respectively.
As previously described, our key assumptions consist of trend and completion factors estimated using an assumption of moderately adverse conditions. The amounts below represent the difference between our original estimates and the actual benefits expense ultimately incurred as determined from subsequent claim payments.
As previously described, our key assumptions consist of trend and completion factors. The amounts below represent the difference between our original estimates and the actual benefits expense ultimately incurred as determined from subsequent claim payments.
In March 2024, we issued $1.3 billion of 5.375% unsecured senior notes due April 15, 2031 and $1.0 billion of 5.750% unsecured senior notes due April 15, 2054. Our net proceeds, reduced for the underwriters' discounts and commissions paid, were $2.2 billion.
In November 2024, we repaid our $500 million 5.700% unsecured senior notes due March 13, 2026. In March 2024, we issued $1.5 billion of 5.375% unsecured senior notes due April 15, 2031 and $1.0 billion of 5.750% unsecured senior notes due April 15, 2054. Our net proceeds, reduced for the underwriters' discounts and commissions paid, were $2.2 billion.
Favorable Development by Changes in Key Assumptions 2024 2023 2022 Amount Factor Change (a) Amount Factor Change (a) Amount Factor Change (a) (dollars in millions) Trend factors $ (473) (2.6) % $ (586) (3.5) % $ (387) (2.8) % Completion factors (228) (0.3) % (286) (0.4) % (28) — % Total $ (701) $ (872) $ (415) (a) The factor change indicated represents the percentage point change.
Favorable Development by Changes in Key Assumptions 2025 2024 2023 Amount Factor Change (a) Amount Factor Change (a) Amount Factor Change (a) (dollars in millions) Trend factors $ (541) (2.8) % $ (473) (2.6) % $ (586) (3.5) % Completion factors (488) (0.5) % (228) (0.3) % (286) (0.4) % Total $ (1,029) $ (701) $ (872) (a) The factor change indicated represents the percentage point change.
At December 31, 2024, approximately 3,994,300 members, or 71%, of our individual Medicare Advantage members were in value-based relationships under our integrated care delivery model, as compared to 3,764,300 members, or 70%, at December 31, 2023. • Net income attributable to Humana was $1.2 billion, or $9.98 per diluted common share, and $2.5 billion, or $20.00 per diluted common share, in 2024 and 2023, respectively.
At December 31, 2025, approximately 3,586,100 members, or 68%, of our individual Medicare Advantage members were in value-based relationships under our integrated care delivery model, as compared to 3,994,300 members, or 71%, at December 31, 2024. • Net income attributable to Humana was $1.2 billion, or $9.84 per diluted common share, and $1.2 billion, or $9.98 per diluted common share, in 2025 and 2024, respectively.
The favorable medical claims reserve development for 2024, 2023, and 2022 primarily reflects the consistent application of trend and completion factors estimated using an assumption of moderately adverse conditions. 59 Our favorable development for each of the years presented above is discussed further in Note 11 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
The favorable medical claims reserve development for 2025, 2024, and 2023 primarily reflects the consistent application of trend and completion factors. 58 Our favorable development for each of the years presented above is discussed further in Note 11 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
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 information about incurred and paid claims development as of December 31, 2024 as well as cumulative claim frequency and the total of IBNR included within the net incurred claims amounts. 2024 2023 2022 (in millions) Balances at January 1 $ 10,241 $ 9,264 $ 8,289 Acquisitions — 62 — Incurred related to: Current year 101,365 89,266 76,105 Prior years (701) (872) (415) Total incurred 100,664 88,394 75,690 Paid related to: Current year (91,281) (79,545) (67,287) Prior years (9,184) (7,934) (7,428) Total paid (100,465) (87,479) (74,715) Balances at December 31 $ 10,440 $ 10,241 $ 9,264 The following table summarizes the changes in estimate for incurred claims related to prior years attributable to our key assumptions.
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 information about incurred and paid claims development as of December 31, 2025 as well as cumulative claim frequency and the total of IBNR included within the net incurred claims amounts. 2025 2024 2023 (in millions) Balances at January 1 $ 10,440 $ 10,241 $ 9,264 Acquisitions — — 62 Incurred related to: Current year 111,841 101,365 89,266 Prior years (1,029) (701) (872) Total incurred 110,812 100,664 88,394 Paid related to: Current year (102,215) (91,281) (79,545) Prior years (9,070) (9,184) (7,934) Total paid (111,285) (100,465) (87,479) Balances at December 31 $ 9,967 $ 10,440 $ 10,241 The following table summarizes the changes in estimate for incurred claims related to prior years attributable to our key assumptions.
We repurchased common shares for $0.8 billion, $1.6 billion and $2.1 billion in 2024, 2023 and 2022, respectively, under share repurchase plans authorized by the Board of Directors and in connection with employee stock plans. We paid dividends to stockholders of $431 million in 2024, $431 million in 2023, and $392 million in 2022.
We repurchased common shares for $151 million, $817 million and $1.6 billion in 2025, 2024 and 2023, respectively, under share repurchase plans authorized by the Board of Directors and in connection with employee stock plans. We paid dividends to stockholders of $430 million in 2025, $431 million in 2024, and $431 million in 2023.
Our net receivable from CMS for subsidies and brand name prescription drug discounts was $0.5 billion at December 31, 2024 compared to a net payable of $1.3 billion at December 31, 2023.
Our net receivable from CMS for subsidies and brand name prescription drug discounts was $1.5 billion at December 31, 2025 compared to a net receivable of $530 million at December 31, 2024.
In August 2023, we entered into a Rule 10b5-1 Repurchase Plan to repurchase a portion of our $750 million aggregate principal amount of 1.350% senior notes maturing in February 2027, our $600 million aggregate principal amount of 3.950% senior notes maturing in March 2027, our $750 million aggregate principal amount of 3.700% senior notes maturing in March 2029, and our $500 million aggregate principal amount of 3.125% senior notes 55 maturing in August 2029 during the period beginning on August 7, 2023 and ending on November 15, 2023.
For the period ended December 31, 2025, we repurchased $200 million principal amount of these senior notes for approximately $177 million cash. 54 In August 2023, we entered into a Rule 10b5-1 Repurchase Plan to repurchase a portion of our $750 million aggregate principal amount of 1.350% senior notes maturing in February 2027, our $600 million aggregate principal amount of 3.950% senior notes maturing in March 2027, our $750 million aggregate principal amount of 3.700% senior notes maturing in March 2029, and our $500 million aggregate principal amount of 3.125% senior notes maturing in August 2029 during the period beginning on August 7, 2023 and ending on November 15, 2023.
Net proceeds from the issuance of commercial paper were $211 million in 2023 and the maximum principal amount outstanding at any one time during 2023 was $3.3 billion. Net repayments from issuance of commercial paper were $376 million in 2022 and the maximum principal amount outstanding at any one time during 2022 was $1.5 billion.
Net repayments from the issuance of commercial paper were $907 million in 2024 and the maximum principal amount outstanding at any one time during 2024 was $2.7 billion. Net proceeds from issuance of commercial paper were $211 million in 2023 and the maximum principal amount outstanding at any one time during 2023 was $3.3 billion.
Seasonality One of the product offerings of our Insurance segment is Medicare stand-alone prescription drug plans, or PDP, under the Medicare Part D program. Our quarterly Insurance segment earnings and operating cash flows are impacted by the Medicare Part D benefit design and changes in the composition of our membership.
Our quarterly Insurance segment earnings and operating cash flows are impacted by the Medicare Part D benefit design and changes in the composition of our stand-alone prescription drug plan, or PDP, membership.
Employer Group Commercial Medical Products Business Exit In February 2023, we announced our planned exit from the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs. No other Humana health plan offerings are materially affected.
Employer Group Commercial Medical Products Business Exit During 2025, we finalized our exit from the Employer Group Commercial Medical Products business, which included all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs. No other Humana health plan offerings were materially affected.
Following a strategic review, we determined the Employer Group Commercial Medical Products business was no longer positioned to sustainably meet the needs of commercial members over the long term or support our long-term strategic plans. We anticipate the exit of this line of business to be finalized in the first half of 2025.
Following a strategic review, we determined the Employer Group Commercial Medical Products business was no longer positioned to sustainably meet the needs of commercial members over the long term or support our long-term strategic plans.
Consolidated benefits expense included $701 million of favorable prior-period medical claims reserve development in the 2024 period and $872 million of favorable prior-period medical claims reserve development in the 2023 period.
Consolidated benefits expense included $1.0 billion of favorable prior-period medical claims reserve development in the 2025 period and $701 million of favorable prior-period medical claims reserve development in the 2024 period.
Investment Securities Investment securities totaled $18.6 billion, or 40% of total assets at December 31, 2024, and $17.0 billion, or 36% of total assets at December 31, 2023. The investment portfolio was primarily comprised of debt securities, detailed below, at December 31, 2024 and December 31, 2023.
Investment Securities Investment securities totaled $16.2 billion, or 33% of total assets at December 31, 2025, and $18.6 billion, or 40% of total assets at December 31, 2024. The investment portfolio was primarily comprised of debt securities, detailed below, at December 31, 2025 and December 31, 2024.
Services revenue CenterWell services revenue increased $0.4 billion, or 14.2%, from $3.0 billion in the 2023 period to $3.5 billion in the 2024 period primarily due to higher revenues associated with growth in the primary care business, partially offset by the impact of the v28 risk model revision.
Services revenue CenterWell services revenue increased $1.4 billion, or 39.0%, from $3.5 billion in the 2024 period to $4.8 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.
As a result of these initiatives, we recorded charges of $281 million and $436 million in 2024 and 2023, respectively, primarily within operating costs in the consolidated statements of income.
As a result of these initiatives, we recorded charges of $449 million, $281 million and $436 million in 2025, 2024 and 2023, respectively, primarily within operating costs in the consolidated statements of income. We expect to incur additional charges over the course of the program.
Revenue Recognition We generally establish one-year commercial membership contracts with employer groups, subject to cancellation by the employer group on 30-day written notice. Our Medicare contracts with CMS renew annually. Our military services contracts with the federal government and certain contracts with various state Medicaid programs generally are multi-year contracts subject to annual renewal provisions.
We generally establish one-year specialty membership contracts, subject to cancellation on a 30-day written notice. Our military services contracts with the federal government and certain contracts with various state Medicaid programs generally are multi-year contracts subject to annual renewal provisions.
Cash and cash equivalents decreased to $2.2 billion at December 31, 2024 from $4.7 billion at December 31, 2023.
Cash and cash equivalents increased to $4.2 billion at December 31, 2025 from $2.2 billion at December 31, 2024.
The Medicare 42 Part D benefit design results in coverage that varies as a member’s cumulative out-of-pocket costs pass through successive stages of a member’s plan period, which begins annually on January 1 for renewals.
The Medicare Part D benefit design results in coverage that varies as a member’s cumulative out-of-pocket costs pass through successive stages of a member’s plan period, which begins annually on January 1 for renewals. Effective January 1, 2025, the Medicare Part D coverage gap was eliminated as mandated by the Inflation Reduction Act of 2022, or IRA.
Treasury and agency obligations $ 3,227 17.3 % $ 2,667 15.7 % Mortgage-backed securities 3,995 21.4 % 3,522 20.7 % Tax-exempt municipal securities 526 2.8 % 858 5.0 % Mortgage-backed securities: Residential 522 2.8 % 400 2.4 % Commercial 1,206 6.5 % 1,345 7.9 % Asset-backed securities 1,403 7.5 % 1,771 10.4 % Corporate debt securities 7,756 41.7 % 6,445 37.9 % Total debt securities 18,635 100.0 % 17,008 100.0 % Approximately 97% of our debt securities were investment-grade quality, with a weighted average credit rating of AA- by S&P at December 31, 2024.
Treasury and agency obligations $ 2,278 14.1 % $ 3,227 17.3 % Mortgage-backed securities 3,651 22.5 % 3,995 21.4 % Tax-exempt municipal securities 428 2.6 % 526 2.8 % Mortgage-backed securities: Residential 388 2.4 % 522 2.8 % Commercial 1,012 6.2 % 1,206 6.5 % Asset-backed securities 783 4.8 % 1,403 7.5 % Corporate debt securities 7,656 47.4 % 7,756 41.7 % Total debt securities 16,196 100.0 % 18,635 100.0 % Approximately 97% of our debt securities were investment-grade quality, with a weighted average credit rating of AA- by S&P at December 31, 2025.
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 $0.5 billion, or 3.9%, from $13.2 billion in the 2023 period to $13.7 billion in the 2024 period.
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 $1.8 billion, or 12.8%, from $13.7 billion in the 2024 period to $15.5 billion in the 2025 period.
We received a short-term cash advance of $100 million from FHLB with certain of our marketable securities as collateral and subsequently repaid the outstanding balance in December 2023. In August 2022, we repaid the $2.0 billion October 2021 Term Loan Agreement without a prepayment penalty due.
We received a short-term cash advance of $100 million from FHLB with certain of our marketable securities as collateral and subsequently repaid the outstanding balance in December 2023.
Acquisitions & Divestitures For a detailed discussion regarding acquisitions and divestitures, refer to Note 3 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K. 56 Liquidity Requirements We believe our cash balances, investment securities, operating cash flows, and funds available under our credit agreement and our commercial paper program or from other public or private financing sources, taken together, provide adequate resources to fund ongoing operating and regulatory requirements, acquisitions, future expansion opportunities, and capital expenditures for at least the next twelve months, as well as to refinance or repay debt, and repurchase shares.
Liquidity Requirements We believe our cash balances, investment securities, operating cash flows, and funds available under our credit agreement and our commercial paper program or from other public or private financing sources, taken together, provide adequate resources to fund ongoing operating and regulatory requirements, acquisitions, future expansion opportunities, and capital expenditures for at least the next twelve months, as well as to refinance or repay debt, and repurchase shares.
The impact of these adjustments to our consolidated income before income taxes and equity in net earnings and diluted earnings per common share was as follows for the 2024 and 2023 periods: 43 2024 2023 (in millions) Consolidated income before income taxes and equity in net losses: Put/call valuation adjustments associated with our non-consolidating minority interest investments $ 296 $ 320 Transaction and integration costs — (48) Accrued charge related to certain anticipated litigation expenses — 105 Value creation initiatives 281 436 Impairment charges 200 91 Total $ 777 $ 904 2024 2023 Diluted earnings per common share: Put/call valuation adjustments associated with our non-consolidating minority interest investments $ 2.45 $ 2.57 Transaction and integration costs — (0.38) Accrued charge related to certain anticipated litigation expenses — 0.84 Value creation initiatives 2.33 3.50 Impairment charges 1.65 0.73 Net tax impact of transactions (1.50) (1.67) Total $ 4.93 $ 5.59 44 Regulatory Environment We are and will continue to be regularly subject to new laws and regulations, changes to existing laws and regulations, and judicial determinations that impact the interpretation and applicability of those laws and regulations.
The impact of these adjustments to our consolidated income before income taxes and equity in net earnings and diluted earnings per common share was as follows for the 2025 and 2024 periods: 2025 2024 (in millions) Consolidated income before income taxes and equity in net losses: Put/call valuation adjustments associated with our non-consolidating minority interest investments $ 513 $ 296 Value creation initiatives 449 281 Impairment charges 253 200 Loss on sale of business 67 — Settlement of certain litigation expenses 15 — Total $ 1,297 $ 777 2025 2024 Diluted earnings per common share: Put/call valuation adjustments associated with our non-consolidating minority interest investments $ 4.25 $ 2.45 Value creation initiatives 3.72 2.33 Impairment charges 2.09 1.65 Loss on sale of business 0.55 — Settlement of certain litigation expenses 0.13 — Cumulative net tax impact (3.36) (1.50) Total $ 7.38 $ 4.93 43 Regulatory Environment We are and will continue to be regularly subject to new laws and regulations, changes to existing laws and regulations, and judicial determinations that impact the interpretation and applicability of those laws and regulations.
Because our reserving practice is to consistently recognize the actuarial best point estimate using an assumption of moderately adverse conditions as required by actuarial standards, there is a reasonable possibility that variances between actual trend and completion factors and those assumed in our December 31, 2024 estimates would fall towards the middle of the ranges previously presented in our sensitivity table.
Because our reserving practice is to consistently recognize the actuarial best point estimate as required by actuarial standards, there is a reasonable possibility that variances between actual trend and completion factors and those assumed in our December 31, 2025 estimates would fall within the ranges previously presented in our sensitivity table. Revenue Recognition Our Medicare contracts with CMS renew annually.
At the core of this strategy is our integrated care delivery model, which unites quality care, high member engagement, and sophisticated data analytics. Our approach to primary, physician-directed care for our members aims to provide quality care that is consistent, integrated, cost-effective, and member-focused, provided by both employed physicians and physicians with network contract arrangements.
Our approach to primary, physician-directed care for our members aims to provide quality care that is consistent, integrated, cost-effective, and member-focused, provided by both employed physicians and physicians with network contract arrangements.
Premiums revenue is estimated by multiplying the membership covered under the various contracts by the contractual rates. Premiums revenue is recognized as income in the period members are entitled to receive services, and is net of estimated uncollectible amounts, retroactive membership adjustments, and adjustments to recognize rebates under the minimum benefit ratios required under the Health Care Reform Law.
Premiums revenue is recognized as income in the period members are entitled to receive services, and is net of estimated uncollectible amounts, retroactive membership adjustments, and adjustments to recognize rebates under the minimum benefit ratios required under the Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010, which we collectively refer to as the Health Care Reform Law.
Estimated calendar year rebates recognized ratably during the year are revised each period to reflect current experience. Retroactive membership adjustments result from enrollment changes not yet processed, or not yet reported by an employer group or the government.
Medicare Advantage and Medicaid products are subject to minimum benefit ratio requirements. Estimated calendar year rebates recognized ratably during the year are revised each period to reflect current experience. Retroactive membership adjustments result from enrollment changes not yet processed, or not yet reported by the federal government and various states.
This comparison was significantly impacted by put/call valuation adjustments associated with non-consolidating minority interest investments, charges associated with value creation initiatives, transaction and integration costs, impairment charges and an accrual related to certain anticipated litigation expenses.
This comparison was significantly impacted by put/call valuation adjustments associated with non-consolidating minority interest investments, charges associated with value creation initiatives, impairment charges, loss on sale of business and settlement of certain litigation expenses.
The change in cash and cash equivalents for the years ended December 31, 2024, 2023 and 2022 is summarized as follows: 2024 2023 2022 (in millions) Net cash provided by operating activities $ 2,966 $ 3,981 $ 4,587 Net cash used in investing activities (2,952) (3,492) (1,006) Net cash used in financing activities (2,487) (856) (1,914) (Decrease) increase in cash and cash equivalents $ (2,473) $ (367) $ 1,667 53 Cash Flow from Operating Activities Cash flows provided by operations of $3.0 billion in the 2024 period decreased $1.0 billion from cash flows provided by operations of $4.0 billion in the 2023 period primarily due to lower earnings in the 2024 period compared to the 2023 period, partially offset by the favorable impact of working capital changes.
The change in cash and cash equivalents for the years ended December 31, 2025, 2024 and 2023 is summarized as follows: 2025 2024 2023 (in millions) Net cash provided by operating activities $ 921 $ 2,966 $ 3,981 Net cash provided by (used in) investing activities 2,273 (2,952) (3,492) Net cash used in financing activities (1,215) (2,487) (856) Increase (decrease) in cash and cash equivalents $ 1,979 $ (2,473) $ (367) 52 Cash Flow from Operating Activities Cash flows provided by operations of $0.9 billion in the 2025 period decreased $2.0 billion from cash flows provided by operations of $3.0 billion in the 2024.
Impairment tests completed for 2024 and 2023 resulted in impairment charges of $200 million and $55 million, respectively. Impairment test completed for 2022 did not result in a material impairment charge. These charges reflect the amount by which the carrying value exceeded its estimated fair value.
Impairment tests completed on our indefinite-lived intangible assets for 2025, 2024 and 2023 resulted in impairment charges of $128 million, $200 million and $55 million, respectively. These charges reflect the amount by which the carrying value exceeded its estimated fair value.
Premiums revenue Insurance segment premiums revenue increased $10.8 billion, or 10.7%, from $101.3 billion in the 2023 period to $112.1 billion in the 2024 period primarily due to higher per member Medicare premiums as well as Medicare Advantage and state-based contracts membership growth.
Premiums revenue Insurance segment premiums revenue increased $10.7 billion, or 9.6%, from $112.1 billion in the 2024 period to $122.8 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.
Off-Balance Sheet Arrangements As of December 31, 2024, we were not involved in any special purpose entity, or SPE, transactions. For a detailed discussion of off-balance sheet arrangements, please refer to Note 17 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
For a detailed discussion of off-balance sheet arrangements, please refer to Note 17 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K. 56 Guarantees and Indemnifications For a detailed discussion of our guarantees and indemnifications, please refer to Note 17 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
Total net capital expenditures, excluding acquisitions, were $568 million, $794 million and $1.1 billion in the 2024, 2023 and 2022 periods, respectively.
Total net capital expenditures, excluding acquisitions, were $523 million, $568 million and $794 million in the 2025, 2024 and 2023 periods, respectively. Net proceeds of investment securities were $2.8 billion in the 2025 period.
Interest Expense Interest expense increased $167 million, or 33.9%, from $493 million in the 2023 period to $660 million in the 2024 period primarily due to an increase in interest rates and higher average debt balances. Income Taxes Our effective tax rate was 25.5% and 25.2% for the 2024 period and 2023 period, respectively.
Interest Expense Interest expense decreased $29 million, or 4.4%, from $660 million in the 2024 period to $631 million in the 2025 period primarily due to decrease in interest rates and average debt balances. 46 Income Taxes Our effective tax rate was 17.4% and 25.5% for the 2025 period and 2024 period, respectively.
Actual dividends paid may vary due to consideration of excess statutory capital and surplus and expected future surplus requirements related to, for example, premium volume and product mix.
Actual dividends paid may vary due to consideration of excess statutory capital and surplus and expected future surplus requirements related to, for example, premium volume and product mix. On February 13, 2026, we completed the acquisition of a primary care business for consideration of approximately $941 million.
This increase primarily reflects working capital changes, net proceeds from the issuance of senior notes and commercial paper, proceeds from the sale and maturities of investment securities, dividends from insurance subsidiaries and cash from certain non-insurance subsidiaries within our CenterWell segment partially offset by common stock repurchases, repayment of maturing senior notes, repayment of borrowings under the commercial paper program, purchases of investment securities, capital expenditures, capital contributions to certain subsidiaries, cash dividends to shareholders and acquisitions.
This increase primarily reflects working capital changes, net proceeds from the issuance of senior notes, and proceeds from sale of business, partially offset by repayments of senior notes, capital contributions to certain subsidiaries, cash dividends to shareholders, capital expenditures, and common stock repurchases.
We receive monthly premiums from the federal government and various states according to government specified payment rates and various contractual terms. We bill and collect premiums from employer groups and members in our Medicare and other individual products monthly.
We receive monthly premiums from the federal government and various states according to government specified payment rates and various contractual terms. We bill and collect member premiums on a monthly basis.
I ndividual Medicare Advantage membership includes 937,100 D-SNP members as of December 31, 2024, a net increase of 65,800 D-SNP members, or 7.6%, from 871,300 members as of December 31, 2023. For the full year 2025, we anticipate net membership decline in our individual Medicare Advantage offerings of approximately 550,000 members.
I ndividual Medicare Advantage membership includes 760,500 D-SNP members as of December 31, 2025, a net decrease of 176,600 D-SNP members, or 18.8%, from 937,100 members as of December 31, 2024. For the full year 2026, we anticipate net membership growth in our individual Medicare Advantage offerings of approximately 25%.
Value Creation Initiatives and Impairment Charges In order to create capacity to fund growth and investment in our Medicare Advantage business and further expansion of our healthcare services capabilities beginning in 2022, we committed to drive additional value for the enterprise through cost saving, productivity initiatives, and value acceleration from previous investments.
Value Creation Initiatives and Impairment Charges In order to create capacity to fund growth in our businesses, we committed to drive additional value for the enterprise through cost saving and productivity initiatives.
The segment also includes our strategic partnerships with WCAS to develop and operate senior-focused, payor-agnostic, primary care centers, as well as our minority ownership interest in hospice operations. Services offered by this segment are designed to enhance the overall healthcare experience. These services may lead to lower utilization associated with improved member health and/or lower drug costs.
The CenterWell segment includes our pharmacy solutions, primary care, and home solutions operations. Services offered by this segment are designed to enhance the overall healthcare experience. These services may lead to lower utilization associated with improved member health and/or lower drug costs.
In addition, we recorded impairment charges of $200 million, relating to indefinite-lived intangible assets, in 2024 and $91 million, including $55 million relating to indefinite-lived intangible assets, in 2023. The indefinite-lived intangible asset impairment charges were included within operating costs in our consolidated statements of income with the remaining impairment charges included within investment income.
The impairment charges included impairment of indefinite-lived intangible assets for $128 million, $200 million and $55 million in 2025, 2024 and 2023, respectively, included within operating costs in our consolidated statements of income.
During the 2024, 2023 and 2022 periods, we acquired various businesses for approximately $89 million, $233 million and $337 million, respectively, net of cash and cash equivalents received.
Cash Flow from Investing Activities During the 2025, 2024 and 2023 periods, we acquired various businesses for approximately $81 million, $89 million and $233 million, respectively, net of cash and cash equivalents received. Net proceeds from the sale of business were $115 million in the 2025 period.
In addition, the number of low income senior members as well as year-over-year changes in the mix of membership in our stand-alone PDP products affects the quarterly benefit ratio pattern.
In addition, the number of low income senior members as well as year-over-year changes in the mix of membership in our stand-alone PDP products affects the quarterly benefit ratio pattern. 42 The Insurance segment also experiences seasonality in the operating cost ratio as a result of costs incurred in the second half of the year associated with the Medicare marketing season.
Medic are stand-alone PDP membership decreased 560,900 members, or 19.7% , from 2,849,100 members as of December 31, 2023 to 2,288,200 members as of December 31, 2024 primarily due to continued intensified competition for Medicare stand-alone PDP offerings. For the full year 2025, we anticipate net membership growth in our Medicare stand-alone PDP offerings of approximately 200,000 members.
Medicare stand-alone PDP membership increased 174,400 members, or 7.6%, from 2,288,200 members as of December 31, 2024 to 2,462,600 members as of December 31, 2025 reflecting shifting competitive dynamics. For the full year 2026, we anticipate net membership growth in our Medicare stand-alone PDP offerings of approximately 1,000,000 members.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeIncrease (decrease) in pretax earnings given an interest rate decrease of X basis points Increase (decrease) in pretax earnings given an interest rate increase of X basis points (300) (200) (100) 100 200 300 (in millions) As of December 31, 2024 Investment income (a) $ (322) $ (210) $ (105) $ 106 $ 207 $ 308 Interest expense (b) 123 82 41 (41) (82) (123) Pretax $ (199) $ (128) $ (64) $ 65 $ 125 $ 185 As of December 31, 2023 Investment income (a) $ (338) $ (222) $ (111) $ 111 $ 224 $ 336 Interest expense (b) 129 86 43 (43) (86) (129) Pretax $ (209) $ (136) $ (68) $ 68 $ 138 $ 207 (a) As of December 31, 2024 and 2023, none of our investments had interest rates below 1%.
Biggest changeIncrease (decrease) in pretax earnings given an interest rate decrease of X basis points Increase (decrease) in pretax earnings given an interest rate increase of X basis points (300) (200) (100) 100 200 300 (in millions) As of December 31, 2025 Investment income (a) $ (286) $ (196) $ (97) $ 98 $ 196 $ 294 Interest expense (b) 195 130 65 (65) (130) (195) Pretax $ (91) $ (66) $ (32) $ 33 $ 66 $ 99 As of December 31, 2024 Investment income (a) $ (322) $ (210) $ (105) $ 106 $ 207 $ 308 Interest expense (b) 123 82 41 (41) (82) (123) Pretax $ (199) $ (128) $ (64) $ 65 $ 125 $ 185 (a) As of December 31, 2025 and 2024, none of our investments had interest rates below 1%.
We have also evaluated the impact on our investment income and interest expense resulting from a hypothetical change in interest rates of 100, 200, and 300 basis points over the next twelve-month period, as reflected in the following table. The evaluation was based on our investment portfolio, outstanding indebtedness, and outstanding swap contract portfolio at December 31, 2024 and 2023.
We have also evaluated the impact on our investment income and interest expense resulting from a hypothetical change in interest rates of 100, 200, and 300 basis points over the next twelve-month period, as reflected in the following table. The evaluation was based on our investment portfolio, outstanding indebtedness, and outstanding swap contract portfolio at December 31, 2025 and 2024.
There were no borrowings outstanding under our credit agreements at December 31, 2024 or December 31, 2023. Interest rate risk also represents a market risk factor affecting our consolidated financial position due to our significant investment portfolio, consisting primarily of fixed maturity securities of investment-grade quality with a weighted average S&P credit rating of AA- at December 31, 2024.
There were no borrowings outstanding under our credit agreements at December 31, 2025 or December 31, 2024. Interest rate risk also represents a market risk factor affecting our consolidated financial position due to our significant investment portfolio, consisting primarily of fixed maturity securities of investment-grade quality with a weighted average S&P credit rating of AA- at December 31, 2025.
However, actual fair values may differ significantly from estimates based on duration. The average duration of our investment portfolio, including cash and cash equivalents, was approximately 3.8 years as of December 31, 2024 and 3.0 years as of December 31, 2023.
However, actual fair values may differ significantly from estimates based on duration. The average duration of our investment portfolio, including cash and cash equivalents, was approximately 3.6 years as of December 31, 2025 and 3.8 years as of December 31, 2024.
At December 31, 2024, we had gross unrealized losses of $1.4 billion on our investment portfolio primarily due to an increase in market interest rates since the time the securities were purchased. We did not record any material credit allowances for debt securities that were in an unrealized loss position during 2024 and 2023.
At December 31, 2025, we had gross unrealized losses of $0.9 billion on our investment portfolio primarily due to an increase in market interest rates since the time the securities were purchased. We did not record any material credit allowances for debt securities that were in an unrealized loss position during 2025 and 2024.
(b) The interest rate under our senior notes, which represent 100% and 93% at December 31, 2024 and 2023, respectively, of total debt, is fixed, unaffected by changes in interest rates. We did not have any variable rate term loans at December 31, 2024 and December 31, 2023.
(b) The interest rate under our senior notes, which represents 100% at December 31, 2025 and 2024, respectively, of total debt, is fixed, unaffected by changes in interest rates. We did not have any variable rate term loans at December 31, 2025 and December 31, 2024.
Based on the duration including cash equivalents, a 1% increase in interest rates would generally decrease the December 31, 2024 fair value of our securities by approximately $783 million.
Based on the duration including cash equivalents, a 1% increase in interest rates would generally decrease the December 31, 2025 fair value of our securities by approximately $723 million.
Our net unrealized loss position increased $89 million from a net unrealized loss position of $1.3 billion at December 31, 2023 to a net unrealized loss position of 64 $1.4 billion at December 31, 2024.
Our net unrealized loss position decreased $562 63 million from a net unrealized loss position of $1.4 billion at December 31, 2024 to a net unrealized loss position of $0.8 billion at December 31, 2025.
There were no borrowings outstanding under the credit agreement at December 31, 2024 or December 31, 2023. There was $871 million outstanding under our commercial paper program at December 31, 2023 with none outstanding at December 31, 2024. At December 31, 2023, our interest rates under our commercial paper program was not less than 1%. 65
There were no borrowings outstanding under the credit agreement at December 31, 2025 or December 31, 2024. There were no commercial paper outstanding under our commercial paper program at December 31, 2025 or December 31, 2024. 64