| SEGMENT INFORMATION | SEGMENT INFORMATION Our two reportable segments, Insurance and CenterWell, are based on a combination of the type of health plan customer and adjacent businesses centered on well-being solutions for our health plans and other customers, as described below. These segment groupings are consistent with information used by our Chief Executive Officer, the Chief Operating Decision Maker, to assess performance and allocate resources. The Insurance segment consists of Medicare benefits, marketed to individuals or directly via group Medicare accounts, as well as our contract with CMS to administer the Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program and contracts with various states to provide Medicaid, dual eligible demonstration, and Long-Term Support Services benefits, which we refer to collectively as our state-based contracts. This segment also includes products consisting of employer group commercial fully-insured medical and specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health benefits, as well as administrative services only, or ASO. In addition, our Insurance segment includes our Military services business, primarily our T-2017 East Region contract, as well as the operations of our PBM business. The CenterWell segment includes our pharmacy, primary care, and home solutions operations. 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. Our CenterWell intersegment revenues primarily relate to the operations of CenterWell Pharmacy (our mail- order pharmacy business), CenterWell Specialty Pharmacy, and retail pharmacies jointly located within CenterWell Senior Primary Care clinics. In addition, our CenterWell intersegment revenues include revenues earned by certain owned providers derived from certain value-based arrangements with our health plans. Under these value-based arrangements, our owned providers enter into agreements with our health plans to stand ready to deliver, integrate, direct and control the administration and management of certain health care services for our members. In exchange, the owned provider receives a premium that is typically paid on a per-member per-month basis. These value-based arrangements represent a single performance obligation where revenues are recognized in the period in which we are obligated to provide integrated health care services to our members. Fee-for-service revenue is recognized at agreed upon rates, net of contractual allowances, as the performance obligation is completed on the date of service. We present our condensed consolidated results of operations from the perspective of the health plans. As a result, the cost of providing benefits to our members, whether provided via a third party provider or internally through a stand-alone subsidiary, is classified as benefits expense and excludes the portion of the cost for which the health plans do not bear responsibility, including member co-share amounts and government subsidies of $5.6 billion and $5.7 billion for the three months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024 and 2023, these amounts were $14.1 billion and $14.7 billion respectively. In addition, depreciation and amortization expense associated with certain businesses delivering benefits to our members, primarily associated with our primary care and pharmacy operations, are included with benefits expense. The amount of this expense was $32 million and $35 million for the three months ended September 30, 2024 and 2023, respectively, and $96 million and $102 million for the nine months ended September 30, 2024 and 2023, respectively. Other than those described previously, the accounting policies of each segment are the same. For additional information regarding our accounting policies refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2023 Form 10-K. 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. Members served by our segments often use the same provider networks, enabling us in some instances to obtain more favorable contract terms with providers. Our segments also share indirect costs and assets. As a result, the profitability of each segment is interdependent. We allocate most operating expenses to our segments. Assets and certain corporate income and expenses are not allocated to the segments, including the portion of investment income not supporting segment operations, interest expense on corporate debt, and certain other corporate expenses. These items are managed at a corporate level. These corporate amounts are reported separately from our reportable segments and are included with intersegment eliminations in the tables presenting segment results below. Our segment results were as follows for the three and nine months ended September 30, 2024 and 2023: Insurance CenterWell Eliminations/ Consolidated Three months ended September 30, 2024 (in millions) External revenues Premiums: Individual Medicare Advantage $ 21,856 $ — $ — $ 21,856 Group Medicare Advantage 1,913 — — 1,913 Medicare stand-alone PDP 721 — — 721 Total Medicare 24,490 — — 24,490 Commercial fully-insured 85 — — 85 Specialty benefits 238 — — 238 Medicare Supplement 217 — — 217 State-based contracts and other 2,921 — — 2,921 Total premiums 27,951 — — 27,951 Services revenue: Home solutions — 326 — 326 Primary care — 319 — 319 Pharmacy solutions — 232 — 232 Commercial ASO 12 — — 12 Military services and other 214 — — 214 Total services revenue 226 877 — 1,103 Total external revenues 28,177 877 — 29,054 Intersegment revenues Services 1 1,463 (1,464) — Products — 2,701 (2,701) — Total intersegment revenues 1 4,164 (4,165) — Investment income 192 — 151 343 Total revenues 28,370 5,041 (4,014) 29,397 Operating expenses: Benefits 25,319 — (199) 25,120 Operating costs 2,595 4,602 (3,858) 3,339 Depreciation and amortization 182 57 (29) 210 Total operating expenses 28,096 4,659 (4,086) 28,669 Income from operations 274 382 72 728 Interest expense — 2 167 169 Other income, net — — (92) (92) Income (loss) before income taxes and equity in net earnings 274 380 (3) 651 Equity in net losses (1) (15) — (16) Segment earnings (loss) $ 273 $ 365 $ (3) $ 635 Net loss attributable to noncontrolling interests — — — — Segment earnings (loss) attributable to Humana $ 273 $ 365 $ (3) $ 635 Insurance CenterWell Eliminations/ Consolidated Three months ended September 30, 2023 (in millions) External revenues Premiums: Individual Medicare Advantage $ 19,637 $ — $ — $ 19,637 Group Medicare Advantage 1,695 — — 1,695 Medicare stand-alone PDP 493 — — 493 Total Medicare 21,825 — — 21,825 Commercial fully-insured 842 — — 842 Specialty benefits 252 — — 252 Medicare Supplement 185 — — 185 State-based contracts and other 1,995 — — 1,995 Total premiums 25,099 — — 25,099 Services revenue: Home solutions — 342 — 342 Primary care — 214 — 214 Pharmacy solutions — 203 — 203 Commercial ASO 55 — — 55 Military services and other 202 — — 202 Total services revenue 257 759 — 1,016 Total external revenues 25,356 759 — 26,115 Intersegment revenues Services 1 1,307 (1,308) — Products — 2,594 (2,594) — Total intersegment revenues 1 3,901 (3,902) — Investment income 154 — 154 308 Total revenues 25,511 4,660 (3,748) 26,423 Operating expenses: Benefits 21,976 — (231) 21,745 Operating costs 2,634 4,207 (3,570) 3,271 Depreciation and amortization 179 53 (31) 201 Total operating expenses 24,789 4,260 (3,832) 25,217 Income from operations 722 400 84 1,206 Interest expense — 1 113 114 Other income, net — — (6) (6) Income (loss) before income taxes and equity in net earnings 722 399 (23) 1,098 Equity in net losses — (12) — (12) Segment earnings (loss) $ 722 $ 387 $ (23) $ 1,086 Net loss (income) attributable to noncontrolling interests 3 (1) — 2 Segment earnings (loss) attributable to Humana $ 725 $ 386 $ (23) $ 1,088 Insurance CenterWell Eliminations/ Consolidated Nine months ended September 30, 2024 (in millions) External revenues Premiums: Individual Medicare Advantage $ 66,519 $ — $ — $ 66,519 Group Medicare Advantage 5,840 — — 5,840 Medicare stand-alone PDP 2,409 — — 2,409 Total Medicare 74,768 — — 74,768 Commercial fully-insured 493 — — 493 Specialty benefits 717 — — 717 Medicare Supplement 620 — — 620 State-based contracts and other 7,756 — — 7,756 Total premiums 84,354 — — 84,354 Services revenue: Home solutions — 996 — 996 Primary care — 882 — 882 Pharmacy solutions — 672 — 672 Commercial ASO 44 — — 44 Military services and other 671 — — 671 Total services revenue 715 2,550 — 3,265 Total external revenues 85,069 2,550 — 87,619 Intersegment revenues Services 3 4,293 (4,296) — Products — 7,963 (7,963) — Total intersegment revenues 3 12,256 (12,259) — Investment income 522 — 407 929 Total revenues 85,594 14,806 (11,852) 88,548 Operating expenses: Benefits 75,752 — (469) 75,283 Operating costs 7,354 13,638 (11,463) 9,529 Depreciation and amortization 553 166 (88) 631 Total operating expenses 83,659 13,804 (12,020) 85,443 Income from operations 1,935 1,002 168 3,105 Interest expense — 4 492 496 Other expense, net — — 26 26 Income (loss) before income taxes and equity in net losses 1,935 998 (350) 2,583 Equity in net losses (2) (55) — (57) Segment earnings (loss) $ 1,933 $ 943 $ (350) $ 2,526 Net loss attributable to noncontrolling interests 3 — — 3 Segment earnings (loss) attributable to Humana $ 1,936 $ 943 $ (350) $ 2,529 Insurance CenterWell Eliminations/ Consolidated Nine Months Ended September 30, 2023 (in millions) External Revenues Premiums: Individual Medicare Advantage $ 59,195 $ — $ — $ 59,195 Group Medicare Advantage 5,192 — — 5,192 Medicare stand-alone PDP 1,677 — — 1,677 Total Medicare 66,064 — — 66,064 Commercial fully-insured 2,810 — — 2,810 Specialty benefits 758 — — 758 Medicare Supplement 546 — — 546 State-based contracts and other 5,966 — — 5,966 Total premiums 76,144 — — 76,144 Services revenue: Home solutions — 997 — 997 Primary care — 605 — 605 Pharmacy solutions — 661 — 661 Commercial ASO 190 — — 190 Military services and other 540 — — 540 Total services revenue 730 2,263 — 2,993 Total external revenues 76,874 2,263 — 79,137 Intersegment revenues Services 30 3,584 (3,614) — Products — 7,848 (7,848) — Total intersegment revenues 30 11,432 (11,462) — Investment income 385 — 390 775 Total revenues 77,289 13,695 (11,072) 79,912 Operating expenses: Benefits 66,096 — (484) 65,612 Operating costs 7,597 12,526 (10,762) 9,361 Depreciation and amortization 516 152 (90) 578 Total operating expenses 74,209 12,678 (11,336) 75,551 Income from operations 3,080 1,017 264 4,361 Interest expense — 2 345 347 Other expense, net — — 40 40 Income (loss) before income taxes and equity in net losses 3,080 1,015 (121) 3,974 Equity in net losses (2) (37) — (39) Segment earnings (loss) $ 3,078 $ 978 $ (121) $ 3,935 Net loss (income) attributable to noncontrolling interests 7 (1) — 6 Segment earnings (loss) attributable to Humana $ 3,085 $ 977 $ (121) $ 3,941 |
