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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

OR

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-5975

HUMANA INC.

(Exact name of registrant as specified in its charter)

Delaware						61-0647538
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

500 West Main Street

Louisville, Kentucky 40202

(Address of principal executive offices, including zip code)

(502) 580-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol			Name of each exchange on which registered
Common stock, $0.16 2/3 par value			HUM			New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer			☒						Accelerated filer			☐
Non-accelerated filer			☐						Smaller reporting company			☐
Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

Class of Common Stock			Outstanding at March 31, 2025
$0.16 2/3 par value			120,693,475 shares

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Humana Inc.

FORM 10-Q

MARCH 31, 2025

INDEX

						Page
Part I: Financial Information
Item 1.			Financial Statements
			Condensed Consolidated Balance Sheets (Unaudited) at March 31, 2025 and December 31, 2024			3
			Condensed Consolidated Statements of Income (Unaudited) for the three months ended March 31, 2025 and 2024			4
			Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the three months ended March 31, 2025 and 2024			5
			Condensed Consolidated Statements of Stockholders' Equity (Unaudited) for the three months ended March 31, 2025 and 2024			6
			Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2025 and 2024			7
			Notes to Condensed Consolidated Financial Statements (Unaudited)			9
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			31
Item 3.			Quantitative and Qualitative Disclosures about Market Risk			44
Item 4.			Controls and Procedures			44
Part II: Other Information
Item 1.			Legal Proceedings			45
Item 1A.			Risk Factors			45
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			45
Item 3.			Defaults Upon Senior Securities			45
Item 4.			Mine Safety Disclosures			45
Item 5.			Other Information			46
Item 6.			Exhibits			47
			Signatures			48
			Certifications

Humana Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

			March 31, 2025						December 31, 2024
			(in millions, except share amounts)
ASSETS
Current assets:
Cash and cash equivalents			$	4,250					$	2,221
Investment securities			17,888						18,214
Receivables, net of allowances of $121 in 2025 and $98 in 2024			4,459						2,704
Other current assets			7,825						6,676
Total current assets			34,422						29,815
Property and equipment, net			2,427						2,532
Long-term investment securities			410						421
Equity method investments			659						697
Goodwill			9,631						9,631
Other long-term assets			3,381						3,383
Total assets			$	50,930					$	46,479
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Benefits payable			$	11,451					$	10,440
Trade accounts payable and accrued expenses			5,380						5,259
Book overdraft			370						403
Unearned revenues			265						260
Short-term debt			577						577
Total current liabilities			18,043						16,939
Long-term debt			12,729						11,144
Other long-term liabilities			2,339						1,951
Total liabilities			33,111						30,034
Commitments and Contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $1 par; 10,000,000 shares authorized; none issued			—						—
Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 198,719,321 shares issued at March 31, 2025 and 198,718,810 shares issued at December 31, 2024			33						33
Capital in excess of par value			3,497						3,463
Retained earnings			29,453						28,317
Accumulated other comprehensive loss			(868)						(1,067)
Treasury stock, at cost, 78,025,846 shares at March 31, 2025 and 78,077,195 shares at December 31, 2024			(14,364)						(14,371)
Total stockholders' equity			17,751						16,375
Noncontrolling interests			68						70
Total equity			17,819						16,445
Total liabilities and equity			$	50,930					$	46,479

See accompanying notes to condensed consolidated financial statements.

Humana Inc.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

			Three months ended March 31,
			2025						2024
			(in millions, except per share results)
Revenues:
Premiums			$	30,514					$	28,261
Services			1,334						1,062
Investment income			264						288
Total revenues			32,112						29,611
Operating expenses:
Benefits			26,535						25,124
Operating costs			3,380						3,042
Depreciation and amortization			183						209
Total operating expenses			30,098						28,375
Income from operations			2,014						1,236
Interest expense			160						159
Other expense, net			163						63
Income before income taxes and equity in net losses			1,691						1,014
Provision for income taxes			406						251
Equity in net losses			(43)						(24)
Net income			$	1,242					$	739
Net loss attributable to noncontrolling interests			2						2
Net income attributable to Humana			$	1,244					$	741
Basic earnings per common share			$	10.31					$	6.13
Diluted earnings per common share			$	10.30					$	6.11

See accompanying notes to condensed consolidated financial statements.

Humana Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

			Three months ended March 31,
			2025						2024
			(in millions)
Net income attributable to Humana			$	1,244					$	741
Other comprehensive income (loss):
Change in gross unrealized investment gains (losses)			258						(114)
Effect of income taxes			(58)						28
Total change in unrealized investment gains (losses), net of tax			200						(86)
Reclassification adjustment for net realized gains			(2)						(1)
Effect of income taxes			1						—
Total reclassification adjustment, net of tax			(1)						(1)
Other comprehensive income (loss), net of tax			199						(87)
Comprehensive income attributable to Humana			$	1,443					$	654

See accompanying notes to condensed consolidated financial statements.

Humana Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

			Common Stock												Capital In Excess of Par Value						Retained Earnings						Accumulated Other Comprehensive Loss						Treasury Stock						Total Stockholders' Equity						Noncontrolling Interests						Total Equity
			Issued Shares						Amount
			(dollars in millions, share amounts in thousands)
Three months ended March 31, 2025
Balances, December 31, 2024			198,719						$	33					$	3,463					$	28,317					$	(1,067)					$	(14,371)					$	16,375					$	70					$	16,445
Net income																					1,244																		1,244						(2)						1,242
Other comprehensive income																											199												199												199
Common stock repurchases															—																		(9)						(9)												(9)
Dividends and dividend equivalents															—						(108)																		(108)												(108)
Stock-based compensation															50																								50												50
Restricted stock unit vesting			—						—						(16)																		16						—												—
Balances, March 31, 2025			198,719						$	33					$	3,497					$	29,453					$	(868)					$	(14,364)					$	17,751					$	68					$	17,819
Three months ended March 31, 2024
Balances, December 31, 2023			198,690						$	33					$	3,346					$	27,540					$	(999)					$	(13,658)					$	16,262					$	56					$	16,318
Net income																					741																		741						(2)						739
Distribution from noncontrolling interest holders, net																																													2						2
Other comprehensive loss																											(87)												(87)												(87)
Common stock repurchases															—																		(723)						(723)												(723)
Dividends and dividend equivalents															—						(108)																		(108)												(108)
Stock-based compensation															45																								45												45
Restricted stock unit vesting			1						—						(22)																		22						—												—
Balances, March 31, 2024			198,691						$	33					$	3,369					$	28,173					$	(1,086)					$	(14,359)					$	16,130					$	56					$	16,186

See accompanying notes to condensed consolidated financial statements.

Humana Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

			For the three months ended March 31,
			2025						2024
			(in millions)
Cash flows from operating activities
Net income			$	1,242					$	739
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on investment securities, net			(2)						(1)
Equity in net losses			43						24
Stock-based compensation			49						45
Depreciation			200						226
Amortization			15						16
Impairment of property and equipment			9						33
Changes in operating assets and liabilities, net of effect of businesses acquired and disposed:
Receivables			(1,755)						(1,890)
Other assets			(686)						97
Benefits payable			1,011						1,488
Other liabilities			193						(422)
Unearned revenues			5						35
Other			7						33
Net cash provided by operating activities			331						423
Cash flows from investing activities
Acquisitions, net of cash and cash equivalents acquired			—						(14)
Purchases of property and equipment, net			(95)						(177)
Purchases of investment securities			(827)						(1,259)
Proceeds from maturities of investment securities			889						645
Proceeds from sales of investment securities			522						391
Changes in securities lending collateral receivable			(175)						—
Net cash provided by (used in) investing activities			314						(414)
Cash flows from financing activities
(Payments) receipts from contract deposits, net			(35)						499
Proceeds from issuance of senior notes, net			1,481						2,232
Repayments from issuance of commercial paper, net			(4)						(644)
Debt issue costs			(3)						(5)
Change in book overdraft			(33)						(20)
Common stock repurchases			(9)						(717)
Dividends paid			(108)						(109)
Changes in securities lending payable			175						—
Changes in rebate factor payable			(68)						—
Other			(12)						(29)
Net cash provided by financing activities			1,384						1,207
Increase in cash and cash equivalents			2,029						1,216
Cash and cash equivalents at beginning of period			2,221						4,694
Cash and cash equivalents at end of period			$	4,250					$	5,910

See accompanying notes to condensed consolidated financial statements.

Humana Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)

(Unaudited)

			For the three months ended March 31,
			2025						2024
			(in millions)
Supplemental cash flow disclosures:
Interest payments			$	143					$	158
Income tax (refunds) payments, net			$	(12)					$	1
Details of businesses acquired in purchase transactions:
Fair value of assets acquired, net of cash and cash equivalents acquired			$	—					$	22
Less: Fair value of liabilities assumed			—						(8)
Cash paid for acquired businesses, net of cash and cash equivalents acquired			$	—					$	14

See accompanying notes to condensed consolidated financial statements.

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Humana Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION AND SIGNIFICANT EVENTS

The accompanying unaudited condensed consolidated financial statements are presented in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America, or GAAP, or those normally made in an Annual Report on Form 10-K. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. This Form 10-Q should be read in conjunction with our audited Consolidated Financial Statements and Notes as of and for the year ended December 31, 2024 included in our 2024 Annual Report on Form 10-K that was filed with the Securities and Exchange Commission, or the SEC, on February 20, 2025. We refer to this Form 10-K as the “2024 Form 10-K” in this document. References throughout this document to “we,” “us,” “our,” “Company,” and “Humana” mean Humana Inc. and its subsidiaries.

The preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill and indefinite-lived intangible assets. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. For additional information regarding accounting policies considered in preparing our consolidated financial statements, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

The financial information has been prepared in accordance with our customary accounting practices and has not been audited. In our opinion, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature.

Value Creation Initiative****s

In order to create capacity to fund growth and investment in our Medicare Advantage business and further expansion of our healthcare services capabilities, we have committed to driving additional value for the enterprise through cost saving, productivity initiatives, and value acceleration from previous investments. As a result of these initiatives, we recorded charges of $24 million for the three months ended March 31, 2025 and $29 million for the three months ended March 31, 2024 within operating costs in the condensed consolidated statements of income. These charges primarily relate to asset impairments in the 2024 and 2025 quarters, as well as severance charges in connection with workforce optimization and external consulting spend for these initiatives in the 2025 quarter.

Revenue Recognition

Our revenues include premiums and services revenue. Services revenue includes administrative service fees that are recorded based upon established per member per month rates and the number of members for the month and are recognized as services are provided for the month. Additionally, services revenue includes net patient services revenue that are recorded based upon established billing rates, less allowances for contractual adjustments, and are recognized as services are provided. For additional information regarding our revenues, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K. For additional information regarding disaggregation of revenue by segment and type, refer to Note 14 to the unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, "Financial Statements" of this Form 10-Q.

At March 31, 2025, accounts receivable related to services were $365 million. For the three months ended March 31, 2025, we had no material bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the condensed consolidated balance sheet at March 31, 2025.

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Humana Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

For the three months ended March 31, 2025, services revenue recognized from performance obligations related to prior periods, such as due to changes in transaction price, was not material. Further, services revenue expected to be recognized in any future year related to remaining performance obligations was not material.

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Effective in Future Periods

In December 2023, the FASB issued Accounting Standards Update No. 2023-09 — Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new guidance requires significant additional disclosures about income taxes, primarily focused on the disclosure of income taxes paid and the rate reconciliation table. The new guidance requires prospective application (with retrospective application permitted). The new guidance will be effective for us beginning with our annual 2025 year-end financial statements, with early adoption permitted. We are currently evaluating the impact on our income tax footnote disclosures.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03 — Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance requires significant additional disclosures disaggregating certain costs and expenses including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The new guidance requires prospective application (with retrospective application permitted). The new guidance will be effective for us beginning with our annual 2027 year-end financial statements, with early adoption permitted. We are currently evaluating the impact on our disclosures.

There are no other recently issued accounting standards that apply to us or that are expected to have a material impact on our results of operations, financial condition, or cash flows.

3. ACQUISITIONS

Acquisition related activities during the first quarter of 2025 were not material. During the first quarter of 2024, we acquired various health and wellness related businesses which, individually or in the aggregate, have not had a material impact on our results of operations, financial condition, or cash flows. The results of operations and financial condition of these businesses acquired have been included in our condensed consolidated statements of income and condensed consolidated balance sheets from the respective acquisition dates. Acquisition-related costs recognized in the first quarter of 2024 were not material to our results of operations. For asset acquisitions, the goodwill acquired is partially amortizable as deductible expenses for tax purposes. The pro forma financial information assuming the acquisitions had occurred as of the beginning of the calendar year prior to the year of acquisition, as well as the revenues and earnings generated during the quarter of acquisition, were not material for disclosure purposes.

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Humana Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

4. INVESTMENT SECURITIES

Investment securities classified as current and long-term were as follows at March 31, 2025 and December 31, 2024, respectively:

			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
			(in millions)
March 31, 2025
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations			$	3,058					$	2					$	(61)					$	2,999
Mortgage-backed securities			4,399						2						(428)						3,973
Tax-exempt municipal securities			521						—						(24)						497
Mortgage-backed securities:
Residential			599						1						(55)						545
Commercial			1,226						1						(72)						1,155
Asset-backed securities			1,367						5						(18)						1,354
Corporate debt securities			8,255						25						(505)						7,775
Total debt securities			$	19,425					$	36					$	(1,163)					$	18,298
December 31, 2024
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations			$	3,336					$	1					$	(110)					$	3,227
Mortgage-backed securities			4,504						—						(509)						3,995
Tax-exempt municipal securities			548						—						(22)						526
Mortgage-backed securities:
Residential			586						—						(64)						522
Commercial			1,290						1						(85)						1,206
Asset-backed securities			1,424						3						(24)						1,403
Corporate debt securities			8,330						21						(595)						7,756
Total debt securities			$	20,018					$	26					$	(1,409)					$	18,635

We own certain corporate debt securities of Gentiva Hospice. The book value and fair value are $381 million and $391 million, respectively, at March 31, 2025. The book value and fair value were $381 million and $396 million, respectively, at December 31, 2024.

We participate in a securities lending program where we loan certain investment securities for short periods of time in exchange for collateral, consisting of cash or U.S. Government securities, initially equal to at least 102% of the fair value of the investment securities on loan. Collateral with a fair value of $594 million was held at March 31, 2025. At March 31, 2025, collateral from lending our investment securities has been reinvested in short-term, highly liquid assets. In addition, we participated in non-cash securities lending with a fair value of $237 million at March 31, 2025.

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Humana Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Gross unrealized losses and fair values aggregated by investment category and length of time of individual debt securities that have been in a continuous unrealized loss position for which no allowances for credit loss has been recorded were as follows at March 31, 2025 and December 31, 2024, respectively:

			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)
March 31, 2025
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations			$	1,790					$	(28)					$	432					$	(33)					$	2,222					$	(61)
Mortgage-backed securities			1,471						(23)						2,200						(405)						3,671						(428)
Tax-exempt municipal securities			71						(1)						393						(23)						464						(24)
Mortgage-backed securities:
Residential			42						(1)						341						(54)						383						(55)
Commercial			108						(1)						930						(71)						1,038						(72)
Asset-backed securities			327						(3)						388						(15)						715						(18)
Corporate debt securities			1,784						(25)						4,104						(480)						5,888						(505)
Total debt securities			$	5,593					$	(82)					$	8,788					$	(1,081)					$	14,381					$	(1,163)
December 31, 2024
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations			$	2,343					$	(68)					$	456					$	(42)					$	2,799					$	(110)
Mortgage-backed securities			1,766						(50)						2,203						(459)						3,969						(509)
Tax-exempt municipal securities			97						(1)						405						(21)						502						(22)
Mortgage-backed securities:
Residential			130						(2)						343						(62)						473						(64)
Commercial			58						(1)						992						(84)						1,050						(85)
Asset-backed securities			419						(5)						436						(19)						855						(24)
Corporate debt securities			2,385						(51)						4,269						(544)						6,654						(595)
Total debt securities			$	7,198					$	(178)					$	9,104					$	(1,231)					$	16,302					$	(1,409)

Approximately 97% of our debt securities were investment-grade quality, with a weighted average credit rating of AA- by Standard & Poor's Rating Service, or S&P, at March 31, 2025. Our remaining debt securities below investment-grade were primarily rated B+, the higher end of the below investment-grade rating scale. 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. Our general obligation bonds are diversified across the United States with no individual state exceeding approximately 1% of our total debt securities. Our investment policy limits investments in a single issuer and requires diversification among various asset types.

Our unrealized losses from all debt securities were generated from approximately 1,530 positions out of a total of approximately 2,190 positions at March 31, 2025. All issuers of debt securities we own that were trading at an unrealized loss at March 31, 2025 remain current on all contractual payments. 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. At March 31, 2025,

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Humana Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

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. Additionally, we did not record any material credit allowances for debt securities that were in an unrealized loss position for the three months ended March 31, 2025 or 2024.

The detail of gains (losses) related to investment securities and included within investment income was as follows for the three months ended March 31, 2025 and 2024:

			Three months ended March 31,
			2025						2024
			(in millions)
Gross gains on investment securities			$	5					$	2
Gross losses on investment securities			(3)						(1)
Net recognized gains on investment securities			$	2					$	1

The contractual maturities of debt securities available for sale at March 31, 2025, regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

			Amortized Cost						Fair Value
			(in millions)
Due within one year			$	988					$	985
Due after one year through five years			5,344						5,212
Due after five years through ten years			4,339						4,112
Due after ten years			1,163						962
Mortgage and asset-backed securities			7,591						7,027
Total debt securities			$	19,425					$	18,298

For additional information regarding our investment securities, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

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Humana Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

5. FAIR VALUE

Financial Assets

The following table summarizes our fair value measurements at March 31, 2025 and December 31, 2024, respectively, for financial assets measured at fair value on a recurring basis:

			Fair Value Measurements Using
			Fair Value						Quoted Prices in Active Markets (Level 1)						Other Observable Inputs (Level 2)						Unobservable Inputs (Level 3)
			(in millions)
March 31, 2025
Cash equivalents			$	4,074					$	4,074					$	—					$	—
Debt securities:
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations			2,999						—						2,999						—
Mortgage-backed securities			3,973						—						3,973						—
Tax-exempt municipal securities			497						—						497						—
Mortgage-backed securities:
Residential			545						—						545						—
Commercial			1,155						—						1,139						16
Asset-backed securities			1,354						—						1,266						88
Corporate debt securities			7,775						—						7,493						282
Total debt securities			18,298						—						17,912						386
Securities lending invested collateral			594						594						—						—
Total invested assets			$	22,966					$	4,668					$	17,912					$	386
December 31, 2024
Cash equivalents			$	2,048					$	2,048					$	—					$	—
Debt securities:
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations			3,227						—						3,227						—
Mortgage-backed securities			3,995						—						3,995						—
Tax-exempt municipal securities			526						—						526						—
Mortgage-backed securities:
Residential			522						—						522						—
Commercial			1,206						—						1,199						7
Asset-backed securities			1,403						—						1,330						73
Corporate debt securities			7,756						—						7,514						242
Total debt securities			18,635						—						18,313						322
Securities lending invested collateral			418						418						—						—
Total invested assets			$	21,101					$	2,466					$	18,313					$	322

Our Level 3 assets had a fair value of $386 million, or 1.7% of total invested assets, and $322 million, or 1.5% or total invested assets, at March 31, 2025 and December 31, 2024, respectively. During the three months ended

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March 31, 2025 and 2024, the changes in the fair value of the assets measured using significant unobservable inputs (Level 3) were comprised of the following:

			Private Placements
			For the three months ended March 31, 2025			For the three months ended March 31, 2024
			(in millions)
Beginning balance at January 1			$	322		$	218
Total gains or losses:
Realized in earnings			—			—
Unrealized in other comprehensive income			3			(2)
Purchases			63			11
Maturities			(2)			—
Sales			—			—
Settlements			—			(1)
Balance at March 31			$	386		$	226

During the three months ended March 31, 2025 and 2024, there were no transfers into or out of Level 3.

Interest Rate Swaps

We have entered into interest-rate swap agreements with major financial institutions to convert our interest-rate exposure on some of our senior notes payable from fixed rates to variable rates, based on Secured Overnight Financing Rate (SOFR), to align interest costs more closely with floating interest rates received on our cash equivalents and investment securities. These swap agreements were qualified and designated as a fair value hedge. Our interest rate swaps are recognized in other assets or other liabilities, as appropriate, in our condensed consolidated balance sheets at fair value as of the reporting date. Our interest rate swaps are highly effective at reflecting the fair value of our hedged fixed rate senior notes payable. We utilize market-based financing rates, forward yield curves and discount rates in determining fair value of these swaps at each reporting date, a Level 2 measure within the fair value hierarchy. The cumulative, aggregate adjustment to the carrying value of the senior notes was a decrease of approximately $26 million at March 31, 2025. The swap liability, included within other long-term liabilities on our condensed consolidated balance sheet, was approximately $58 million at March 31, 2025. The swap asset, included within other long-term assets on our condensed consolidated balance sheet, was approximately $32 million at March 31, 2025. The swap liability, included within other long-term liabilities on our condensed consolidated balance sheets, was approximately $129 million at December 31, 2024. We include the gain or loss on the swap agreements in interest expense on our condensed consolidated income statement, the same line item as the offsetting loss or gain on the related senior notes. The gain or loss due to hedge ineffectiveness was not material for the three months ended March 31, 2025 and 2024.

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The following table summarizes the notional amounts at March 31, 2025 and December 31, 2024, respectively, for our senior notes under the swap agreements:

			Notional amount at
Senior Notes Under Swap Agreements			March 31, 2025			December 31, 2024
			(in millions)
$1,500 million, 5.375% due April 15, 2031			$	700		$	700
$750 million, 5.875% due March 1, 2033			650			650
$850 million, 5.950% due March 15, 2034			800			800
$750 million, 5.550% due May 1, 2035			200			—
$400 million, 4.625% due December 1, 2042			400			400
$750 million, 4.950% due October 1, 2044			400			400
$400 million, 4.800% due March 15, 2047			200			200
$500 million, 3.950% due August 15, 2049			450			450
$750 million, 5.500% due March 15, 2053			700			700
$1,000 million, 5.750% due April 15, 2054			700			700
Total Senior Notes Under Swap Agreements			$	5,200		$	5,000

Financial Liabilities

Our debt is recorded at carrying value in our condensed consolidated balance sheets. The carrying value of our senior notes debt outstanding, net of unamortized debt issuance costs, was $13.3 billion at March 31, 2025 and $11.7 billion at December 31, 2024. The fair value of our senior notes debt was $12.8 billion at March 31, 2025 and $11.2 billion at December 31, 2024. The fair value of our senior notes debt is determined based on Level 2 inputs, including quoted market prices for the same or similar debt, or if no quoted market prices are available, on the current prices estimated to be available to us for debt with similar terms and remaining maturities. Carrying value approximates fair value for our commercial paper borrowings. We had no outstanding commercial paper borrowings at March 31, 2025 and December 31, 2024.

Put and Call Options Measured at Fair Value

The put and call options fair values associated with our primary care strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, which are exercisable at a fixed revenue exit multiple and provide a minimum return on WCAS' investment if exercised, are measured at fair value each reporting period using a Monte Carlo simulation. The put and call options fair values, derived from the Monte Carlo simulation, were $1,043 million and $7 million, respectively, at March 31, 2025. The put and call options fair values, derived from the Monte Carlo simulation, were $883 million and $10 million, respectively, at December 31, 2024. The put liability and call asset are included within other long-term liabilities and other long-term assets, respectively, within our condensed consolidated balance sheets. Fair value changes to the put and call options are included within Other expense, net within our condensed consolidated income statement.

The significant unobservable inputs utilized in these Level 3 fair value measurements (and selected values) include the enterprise value, annualized volatility and credit spread. Enterprise value was derived from a discounted cash flow model, which utilized significant unobservable inputs for long-term revenue, to measure underlying cash flows, weighted average cost of capital and long term growth rate. The table below presents the assumptions used for each reporting period.

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			March 31, 2025			December 31, 2024
Annualized volatility			17.4% - 18.9%			17.5% - 18.9%
Credit spread			0.9% - 1.6%			0.9% - 1.5%
Revenue exit multiple			1.5x - 2.5x			1.5x - 2.5x
Weighted average cost of capital			11.0% - 14.5%			11.0% - 14.5%
Long term growth rate			3.0		%	3.0		%

The assumptions used for annualized volatility, credit spread and weighted average cost of capital reflect the lowest and highest values where they differ significantly across the series of put and call options due to their expected exercise dates.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a non-recurring basis subject to fair value adjustment only in certain circumstances. As disclosed in Note 3, we acquired various health and wellness related businesses during 2024. Acquisition related activities during the first quarter of 2025 were not material. The values of net tangible assets acquired and resulting goodwill and other intangible assets were recorded at fair value primarily using Level 3 inputs. The majority of the related tangible assets acquired and liabilities assumed were recorded at their carrying value as of the respective dates of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in these acquisitions were internally estimated primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. We developed internal estimates for expected cash flows and discount rates in the present value calculations. There were no material asset or liabilities measured at fair value on a nonrecurring basis during 2025 and 2024 other than the assets and liabilities assumed in these acquisitions and any subsequent impairments. We recorded a $200 million charge relating to our indefinite-lived intangible assets during the fourth quarter of 2024.

For additional information regarding our fair value measurements, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

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6. MEDICARE PART D

We cover prescription drug benefits in accordance with Medicare Part D under multiple contracts with the Centers for Medicare and Medicaid Services, or CMS. The accompanying condensed consolidated balance sheets include the following amounts associated with Medicare Part D at March 31, 2025 and December 31, 2024. CMS subsidies/discounts include the reinsurance and low-income cost subsidies funded by CMS for which we assume no risk as well as brand name prescription drug discounts for Part D plan participants funded by CMS and pharmaceutical manufacturers.

Effective January 1, 2025, the Medicare Part D coverage gap was eliminated as mandated by the Inflation Reduction Act of 2022. The standard Part D benefit now comprises three phases: the deductible phase, the initial coverage phase and the catastrophic coverage phase. Beneficiaries' out-of-pocket expenses for covered prescription drugs are capped at $2,000, after which they incur no additional cost sharing for the remainder of the year. In addition, the Coverage Gap Discount Program was replaced by the Manufacturer Discount Program, requiring pharmaceutical manufacturers to provide discounts on brand name drugs during both the initial coverage and catastrophic phases. These changes are anticipated to reduce out-of-pocket costs for beneficiaries and impact plan liabilities accordingly.

The accompanying condensed consolidated balance sheets include $455 million of net assets and $530 million of net assets associated with subsidy programs at March 31, 2025 and December 31, 2024, respectively.

The accompanying condensed consolidated balance sheets also include $167 million of net liabilities and $126 million of net assets associated with cost sharing programs at March 31, 2025 and December 31, 2024, respectively.

For additional information regarding our prescription drug benefits coverage in accordance with Medicare Part D, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

7. GOODWILL AND OTHER INTANGIBLE ASSETS

There were no changes in the carrying amount of goodwill for our reportable segments for the three months ended March 31, 2025.

			Insurance						CenterWell																		Total
			(in millions)
Balance at January 1, 2025			$	2,663					$	6,968																	$	9,631
Acquisitions			—						—																		—
Balance at March 31, 2025			$	2,663					$	6,968																	$	9,631

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The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at March 31, 2025 and December 31, 2024:

			Weighted Average Life						March 31, 2025																		December 31, 2024
						Cost						Accumulated Amortization						Net						Cost						Accumulated Amortization						Net
									($ in millions)
Other intangible assets:
Certificates of need			Indefinite						$	910					$	—					$	910					$	910					$	—					$	910
Medicare licenses			Indefinite						270						—						270						270						—						270
Customer contracts/relationships			9.4 years						963						770						193						965						759						206
Trade names and technology			6.7 years						139						120						19						139						119						20
Provider contracts			11.9 years						67						64						3						67						64						3
Noncompetes and other			8.4 years						85						53						32						85						51						34
Total other intangible assets			9.2 years						$	2,434					$	1,007					$	1,427					$	2,436					$	993					$	1,443

For the three months ended March 31, 2025 and 2024, amortization expense for other intangible assets was approximately $15 million and $16 million, respectively. The following table presents our estimate of amortization expense remaining for 2025 and each of the next five succeeding years at March 31, 2025:

			(in millions)
For the years ending December 31,
2025			$	44
2026			44
2027			34
2028			30
2029			28
2030			28

For additional information regarding our goodwill and intangible assets, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

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8. BENEFITS PAYABLE

On a consolidated basis, which represents our Insurance segment net of eliminations, activity in benefits payable was as follows for the three months ended March 31, 2025 and 2024:

						For the three months ended March 31,
						2025						2024
						(in millions)
Balances, beginning of period						$	10,440					$	10,241
Incurred related to:
Current year						27,012						25,659
Prior years						(477)						(535)
Total incurred						26,535						25,124
Paid related to:
Current year						(17,605)						(16,061)
Prior years						(7,919)						(7,575)
Total paid						(25,524)						(23,636)
Balances, end of period						$	11,451					$	11,729

The total estimate of benefits payable for claims incurred but not reported, or IBNR, is included within the incurred claims amounts. At March 31, 2025 and March 31, 2024, benefits payable included IBNR of approximately $7.2 billion and $7.3 billion, primarily associated with claims incurred in each respective period.

Amounts incurred related to prior periods vary from previously estimated liabilities as the claims ultimately are settled. Negative amounts reported for incurred related to prior years result from claims being ultimately settled for amounts less than originally estimated (favorable development).

Our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for claims. Actuarial standards require the use of assumptions based on moderately adverse experience, which generally results in favorable reserve development, or reserves that are considered redundant. For additional information regarding our benefits payable and benefits expense recognition, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

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9. EARNINGS PER COMMON SHARE COMPUTATION

Detail supporting the computation of basic and diluted earnings per common share was as follows for the three months ended March 31, 2025 and 2024:

			Three months ended March 31,
			2025						2024
			(dollars in millions, except per common share results; number of shares in thousands)
Net income available for common stockholders			$	1,244					$	741
Weighted average outstanding shares of common stock used to compute basic earnings per common share			120,666						120,978
Dilutive effect of:
Employee stock options			—						6
Restricted stock			178						284
Shares used to compute diluted earnings per common share			120,844						121,268
Basic earnings per common share			$	10.31					$	6.13
Diluted earnings per common share			$	10.30					$	6.11
Number of antidilutive stock options and restricted stock excluded from computation			1,807						1,165

For additional information regarding earnings per common share, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

10. STOCKHOLDERS’ EQUITY

Dividends

The following table provides details of dividend payments, excluding dividend equivalent rights for unvested stock awards, during 2025 under our Board approved quarterly cash dividend policy:

Record Date						Payment Date						Amount per Share						Total Amount
																		(in millions)
2025 payments
12/31/2024						1/31/2025						$	0.8850					$	107

In February 2025, the Board declared a cash dividend of $0.885 per share payable on April 25, 2025 to stockholders of record as of the close of business on March 28, 2025. In April 2025, the Board declared a cash dividend of $0.885 per share payable on July 25, 2025 to stockholders of record as of the close of business on June 27, 2025. Declaration and payment of future quarterly dividends are at the discretion of our Board and may be adjusted as business needs or market conditions change.

Stock Repurchases

Our Board of Directors may authorize the purchase of our common stock shares. Under the share repurchase authorization, shares may be purchased from time to time at prevailing prices in the open market, by block purchases, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as

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amended, or in privately-negotiated transactions, including pursuant to accelerated share repurchase agreements with investment banks, subject to certain regulatory restrictions on volume, pricing, and timing.

Effective February 16, 2024, the Board of Directors replaced the February 2023 repurchase authorization (of which approximately $824 million remained unused) with a new share repurchase authorization for repurchases of up to $3 billion of our common shares exclusive of shares repurchased in connection with employee stock plans, expiring as of February 15, 2027, which we refer to as the 2024 repurchase authorization. During the three months ended March 31, 2025, we did not repurchase shares in open market transactions under the February 2024 share repurchase authorization. During the three months ended March 31, 2024, we repurchased 1.8 million shares in open market transactions for $702 million. These shares were repurchased at an average price of $388.78 under the February 2023 and 2024 share repurchase authorizations.

Our remaining repurchase authorization was $2.9 billion as of April 29, 2025.

In connection with employee stock plans, we acquired 0.03 million common shares for $9 million and 0.04 million common shares for $15 million during the three months ended March 31, 2025 and 2024, respectively.

For additional information regarding our stockholders' equity, refer to Note 16 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

11. INCOME TAXES

The effective income tax rate was 24.6% and 25.3% for the three months ended March 31, 2025 and 2024, respectively. The year-over-year decrease in the effective income tax rate is primarily due to reduced state tax expense.

For additional information regarding income taxes, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

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12. DEBT

The carrying value of debt outstanding, net of unamortized debt issuance costs, was as follows at March 31, 2025 and December 31, 2024:

			March 31, 2025						December 31, 2024
			(in millions)
Short-term debt:
Senior notes:
$600 million, 4.500% due April 1, 2025			$	577					$	577
Total senior notes			577						577
Total short-term debt			$	577					$	577
Long-term debt:
Senior notes:
$750 million, 1.350% due February 3, 2027			$	690					$	689
$600 million, 3.950% due March 15, 2027			538						538
$500 million, 5.750% due March 1, 2028			490						490
$500 million, 5.750% due December 1, 2028			496						496
$750 million, 3.700% due March 23, 2029			586						585
$500 million, 3.125% due August 15, 2029			434						433
$500 million, 4.875% due April 1, 2030			497						497
$1,500 million, 5.375% due April 15, 2031			1,485						1,226
$750 million, 2.150% due February 3, 2032			744						744
$750 million, 5.875% due March 1, 2033			742						726
$850 million, 5.950% due March 15, 2034			822						806
$750 million, 5.550% due May 1, 2035			743						—
$250 million, 8.150% due June 15, 2038			257						260
$400 million, 4.625% due December 1, 2042			375						366
$750 million, 4.950% due October 1, 2044			723						714
$400 million, 4.800% due March 15, 2047			397						392
$500 million, 3.950% due August 15, 2049			514						505
$750 million, 5.500% due March 15, 2053			721						705
$1,000 million, 5.750% due April 15, 2054			987						972
$500 million, 6.000% due May 1, 2055			488						—
Total senior notes			12,729						11,144
Total long-term debt			$	12,729					$	11,144

Senior Notes

In March 2025, we issued $750 million of 5.550% unsecured senior notes due May 1, 2035, $500 million of 6.000% unsecured senior notes due May 1, 2055, and an additional $250 million of our existing 5.375% unsecured senior notes due April 15, 2031. Our net proceeds, reduced for the underwriters' discounts and commissions paid, were $1.481 billion. We used the net proceeds of these offerings to repay outstanding amounts from the 4.500% Senior Notes due on April 1, 2025. The remaining net proceeds will be used for general corporate purposes, which may include the repayment of our existing indebtedness, including borrowings under our commercial paper program.

We have entered into interest-rate swap agreements with major financial institutions to convert our interest-rate exposure on some of our senior notes payable from fixed rates to variable rates, based on Secured Overnight

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Financing Rate (SOFR), to align interest costs more closely with floating interest rates received on our cash equivalents and investment securities, as further described in Note 5. As a result, the carrying value of these senior notes has been adjusted to reflect changes in value caused by an increase or decrease in interest rates. The cumulative, aggregate decrease to the carrying value of the senior notes was approximately $26 million at March 31, 2025.

For additional information regarding our Senior Notes, refer to Note 13 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

Revolving Credit Agreements

In June 2023, we entered into an amended and restated 5-year, $2.5 billion unsecured revolving credit agreement (replacing the 5-year, $2.5 billion unsecured revolving credit agreement entered in June 2021). In May 2024, we entered into an amendment to increase commitments $0.142 billion resulting in a $2.642 billion borrowing capacity.

In May 2024, we entered into a 364-day $2.1 billion unsecured revolving credit agreement (replacing the 364-day $1.5 billion unsecured revolving credit agreement entered in June 2023, which expired in accordance with its terms).

Under the credit agreements, at our option, we can borrow on either a competitive advance basis or a revolving credit basis. The revolving credit portion bears interest at Term SOFR or the base rate plus a spread. The competitive advance portion of any borrowings will bear interest at market rates prevailing at the time of borrowing on either a fixed rate or a floating rate based Term SOFR, at our option.

The SOFR spread varies depending on our credit ratings ranging from 92.0 to 130.0 basis points under the 5-year revolving credit agreement and 94.0 to 135.0 basis points under the 364-day revolving credit agreement. As of March 31, 2025, our SOFR was 114.0 basis points under the 5-year revolving credit agreement and 116.0 basis points under the 364-day revolving credit agreement. We also pay an annual facility fee regardless of utilization. This facility fee varies depending on our credit ratings ranging from 8.0 to 20.0 basis points under the 5-year revolving credit agreement and 6.0 to 15.0 basis points under the 364-day revolving credit agreement. As of March 31, 2025, our facility fee was 11.0 basis points under the 5-year revolving credit agreement and 9.0 basis points under the 364-day revolving agreement.

The terms of our revolving credit agreements include standard provisions related to conditions of borrowing which could limit our ability to borrow additional funds. In addition, our credit agreements contain customary restrictive covenants and a financial covenant regarding maximum debt to capitalization of 60%, as well as customary events of default. We are in compliance with this financial covenant, with actual debt to capitalization of 42.8% as measured in accordance with the revolving credit agreements as of March 31, 2025. Upon our agreement with one or more financial institutions, we may expand the aggregate commitments under the revolving credit agreements by up to $500 million, to a maximum of $5.2 billion, across the 5-year and 364-day revolving credit agreements.

At March 31, 2025, we had no borrowings and approximately $18 million of letters of credit outstanding under the revolving credit agreements. Accordingly, as of March 31, 2025, we had $2.624 billion of remaining borrowing capacity under the 5-year revolving credit agreement and $2.1 billion of remaining borrowing capacity under the 364-day revolving credit agreement (which excludes the uncommitted $500 million of incremental loan facilities), none of which would be restricted by our financial covenant compliance requirement.

We have other customary relationships, including financial advisory and banking, with some parties to the revolving credit agreements.

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For additional information regarding our Revolving Credit Agreements, refer to Note 13 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

Commercial Paper

Under our commercial paper program, we may issue short-term, unsecured commercial paper notes privately placed on a discount basis through certain broker dealers at any time. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The net proceeds of issuances have been and are expected to be used for general corporate purposes. The maximum principal amount outstanding at any one time during the three months ended March 31, 2025 was $1.2 billion, with no outstanding amount at March 31, 2025 and December 31, 2024.

For additional information regarding our Commercial Paper refer to Note 13 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in our 2024 Form 10-K.

Other Short-term Borrowings

We are a member, through one subsidiary, of the Federal Home Loan Bank of Cincinnati, or FHLB. As a member we have the ability to obtain short-term cash advances, subject to certain minimum collateral requirements. At March 31, 2025 we had no outstanding short-term FHLB borrowings.

13. COMMITMENTS, GUARANTEES AND CONTINGENCIES

Government Contracts

Our Medicare products, which accounted for approximately 83% of our total premiums and services revenue for the three months ended March 31, 2025, primarily consisted of products covered under the Medicare Advantage and Medicare Part D Prescription Drug Plan contracts with the federal government. These contracts are renewed generally for a calendar year term unless CMS notifies us of its decision not to renew by May 1 of the calendar year in which the contract would end, or we notify CMS of our decision not to renew by the first Monday in June of the calendar year in which the contract would end. All material contracts between Humana and CMS relating to our Medicare products have been renewed for 2025, and all of our product offerings filed with CMS for 2025 have been approved.

CMS uses a risk-adjustment model which adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members. The risk-adjustment model, which CMS implemented pursuant to the Balanced Budget Act of 1997 (BBA) and the Benefits Improvement and Protection Act of 2000 (BIPA), generally pays more where a plan's membership has higher expected costs. Under this model, rates paid to MA plans are based on actuarially determined bids, which include a process whereby our prospective payments are based on our estimated cost of providing standard Medicare-covered benefits to an enrollee with a "national average risk profile." That baseline payment amount is adjusted to account for certain demographic characteristics and health status of our enrolled members. Under the risk-adjustment methodology, all MA plans must collect from providers and submit the necessary diagnosis code information to CMS within prescribed deadlines. The CMS risk-adjustment model uses the diagnosis data, collected from providers, to calculate the health status-related risk-adjusted premium payment to MA plans, which CMS further adjusts for coding pattern differences between the health plans and the government fee-for-service (FFS) program. We generally rely on providers, including certain providers in our network who are our employees, to code their claim submissions with appropriate diagnoses, which we send to CMS as the basis for our health status-adjusted payment received from CMS under the actuarial 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.

CMS and the Office of the Inspector General of Health and Human Services, or HHS-OIG, perform audits of various companies’ risk adjustment diagnosis data submissions. We refer to these audits as Risk-Adjustment Data

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Validation Audits, or RADV audits. RADV audits review medical records in an attempt to validate provider medical record documentation and coding practices that influence the calculation of health status-related premium payments to MA plans.

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 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. Humana relied on CMS’s 2012 guidance in submitting MA bids to CMS. Humana also launched a “Self-Audits” program in 2013 that applied CMS’s 2012 RADV audit methodology and included an estimated FFS Adjuster. Humana completed Self-Audits for PYs 2011-2016 and reported results to CMS.

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. On January 30, 2023, CMS published a final rule related to the RADV audit methodology (Final RADV Rule). The Final RADV Rule confirmed CMS’s decision to eliminate the FFS Adjuster. The Final RADV Rule states CMS’s intention to extrapolate results from CMS and HHS-OIG RADV audits beginning with PY 2018, rather than PY 2011 as proposed. However, CMS’s Final RADV Rule does not adopt a specific sampling, extrapolation or audit methodology. CMS instead stated its general plan to rely on “any statistically valid method . . . that is determined to be well-suited to a particular audit.”

We believe that the Final RADV Rule fails to address adequately the statutory requirement of actuarial equivalence and violates the Administrative Procedure Act (“APA”). CMS failed to meet its legal obligations in the federal rulemaking process to give a reasoned justification for the rule or provide a meaningful opportunity for public comment. They also chose to apply the rule retroactively rather than prospectively, as required by law. 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. CMS confirmed its intent to apply the Final RADV Rule, including the first application of extrapolated audit results to determine audit settlements without the use of a FFS Adjuster, to CMS audits conducted for PY 2018 and subsequent years when it selected certain of Humana's MA contracts for PY 2018 RADV Audits. The 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.

On September 1, 2023, Humana Inc. and Humana Benefit Plan of Texas, Inc. filed suit against the United States Department of Health and Human Services, and Xavier Becerra in his official capacity as Secretary, in the United States District Court, Northern District of Texas, Fort Worth Division seeking a determination that the Final RADV Rule violates the APA and should be set aside. We remain committed to working alongside CMS to promote the integrity of the MA program as well as affordability and cost certainty for our members. 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 Social Security Act, which, if not implemented correctly could have a material adverse effect on our results of operations, financial position, or cash flows.

In addition, as part of our internal compliance efforts, we routinely perform ordinary course reviews of our internal business processes related to, among other things, our risk coding and data submissions in connection with the risk adjustment model. These reviews may also result in the identification of errors and the submission of corrections to CMS that may, either individually or in the aggregate, be material. As such, the result of these reviews may have a material adverse effect on our results of operations, financial position, or cash flows.

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Our state-based Medicaid business, which accounted for approximately 10% of our total premiums and services revenue for the three months ended March 31, 2025 primarily serving members enrolled in Medicaid, and in certain circumstances members who qualify for both Medicaid and Medicare, under contracts with various states.

The loss of any of the contracts above or significant changes in these programs as a result of legislative or regulatory action, including reductions in premium payments to us, regulatory 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, or increases in member benefits or 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.

Legal Proceedings and Certain Regulatory Matters

From time to time, the Civil Division of the United States Department of Justice has provided us with information requests, concerning our Medicare Part C risk adjustment practices. These requests relate to our oversight and submission of risk adjustment data generated by providers, as well as to our business and compliance practices related to risk adjustment data generated by our providers and by our Medicare Advantage Organizations. We continue to cooperate with the Department of Justice on these requests.

On September 1, 2023, Humana Inc. and Humana Benefit Plan of Texas, Inc. filed suit against the United States Department of Health and Human Services, and Xavier Becerra in his official capacity as Secretary, in the United States District Court, Northern District of Texas, Fort Worth Division seeking a determination that the Final RADV Rule violates the APA and should be set aside. There is no assurance that we will prevail in the lawsuit. See “Government Contracts” in this footnote to the unaudited Consolidated Financial Statements of this Form 10-Q for additional information regarding this matter.

In June 2024, a putative stockholder class action was filed against Humana Inc. and certain of our current and former executive officers under the federal securities laws in the United States District Court for the District of Delaware. The case, now captioned In re Humana Inc. Securities Litigation, alleges that between July 2022 and October 2024, Humana made false or misleading statements in its periodic SEC filings and statements to the financial markets about our financial performance and the medical costs and Star Ratings in our Medicare Advantage business. The action seeks, among other things, unspecified compensatory damages and attorneys' fees. Between July 2024 and March 2025, parallel stockholder derivative actions captioned Silva v. Broussard, Spikes v. Broussard, Noble v. Broussard and Combs v. Broussard, respectively, were filed in the United States District Court for the Western District of Kentucky, and Nicolaou v. Broussard, was filed in Commonwealth of Kentucky, Jefferson Circuit Court, alleging that the same claimed acts and omissions underlying the federal securities law case also constitute a breach of fiduciary duty by certain of our current and former directors and executive officers. The actions seek, among other things, reforms to the Company's corporate governance and internal procedures, unspecified damages and attorneys' fees. We will vigorously defend against the allegations in all cases.

On October 18, 2024, Humana Inc., along with co-plaintiff Americans for Beneficiary Choice, filed suit against the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services, Xavier Becerra in his official capacity as Secretary, and Chiquita Brooks-LaSure, in her official capacity as Administrator, in the United States District Court, Northern District of Texas, Fort Worth Division, seeking a determination that they violated the Administrative Procedure Act in administering the Medicare Advantage and Part D Star Ratings program. We seek to set aside and vacate Humana’s 2025 Star Ratings and remand the matter to CMS for recalculation and to declare that CMS’s policy refusing to disclose all relevant data and information is arbitrary, capricious, and unlawful. There is no assurance that we will prevail in the lawsuit. For additional information on this matter, refer to Part II, Item 1A, "Risk Factors" of this Form 10-Q.

Other Lawsuits and Regulatory Matters

Our current and past business practices are subject to review or other investigations by various state insurance and health care regulatory authorities and other state and federal regulatory authorities. These authorities regularly

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scrutinize the business practices of health insurance, health care delivery and benefits companies. These reviews focus on numerous facets of our business, including claims payment practices, statutory capital requirements, provider and vendor contracting and oversight, risk adjustment, competitive practices, commission payments, marketing payments, privacy issues, utilization management practices, pharmacy benefits, access to care, sales practices, and provision of care by our healthcare services businesses, among others. Some of these reviews have historically resulted in fines imposed on us and some have required changes to some of our practices. We continue to be subject to these reviews, which could result in additional fines or other sanctions being imposed on us or additional changes in some of our practices.

We also are involved in various other lawsuits that arise, for the most part, in the ordinary course of our business operations, certain of which may be styled as class-action lawsuits. Among other matters, this litigation may include employment matters, claims of medical malpractice, bad faith, personal injury, nonacceptance or termination of providers, anticompetitive practices, improper rate setting, provider contract rate and payment disputes, including disputes over reimbursement rates required by statute, disputes arising from competitive procurement process, general contractual matters, intellectual property matters, and challenges to subrogation practices. Under state guaranty assessment laws, including those related to state cooperative failures in the industry, we may be assessed (up to prescribed limits) for certain obligations to the policyholders and claimants of insolvent insurance companies that write the same line or lines of business as we do.

As a government contractor, we may also be subject to false claims litigation, such as qui tam lawsuits brought by individuals who seek to sue on behalf of the government, alleging that the government contractor submitted false claims to the government or related overpayments from the government, including, among other allegations, those resulting from coding and review practices under the Medicare risk adjustment model. Qui tam litigation is filed under seal to allow the government an opportunity to investigate and to decide if it wishes to intervene and assume control of the litigation. If the government does not intervene, the individual may continue to prosecute the action on his or her own, on behalf of the government. We also are subject to other allegations of nonperformance of contractual obligations to providers, members, and others, including failure to properly pay claims, improper policy terminations, challenges to our implementation of the Medicare Part D prescription drug program and other litigation.

A limited number of the claims asserted against us are subject to insurance coverage. Personal injury claims, claims for extra contractual damages, care delivery malpractice, and claims arising from medical benefit denials are covered by insurance from our wholly owned captive insurance subsidiary and excess carriers, except to the extent that claimants seek punitive damages, which may not be covered by insurance in certain states in which insurance coverage for punitive damages is not permitted. In addition, insurance coverage for all or certain forms of liability has become increasingly costly and may become unavailable or prohibitively expensive in the future.

We record accruals for the contingencies discussed in the sections above to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made at this time regarding the matters specifically described above because of the inherently unpredictable nature of legal proceedings, which also may be exacerbated by various factors, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; (vi) there are a large number of parties (including where it is uncertain how liability, if any, will be shared among multiple defendants); or (vii) there is a wide range of potential outcomes.

The outcome of any current or future litigation or governmental or internal investigations, including the matters described above, cannot be accurately predicted, nor can we predict any resulting judgments, penalties, fines or other sanctions that may be imposed at the discretion of federal or state regulatory authorities or as a result of actions by third parties. Nevertheless, it is reasonably possible that any such outcome of litigation, judgments, penalties, fines or other sanctions could be substantial, and the outcome of these matters may have a material adverse effect on our results of operations, financial position, and cash flows, and may also affect our reputation.

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14. 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. Our Chief Executive Officer, the Chief Operating Decision Maker, utilizes these segment groupings and results of each segment, measured by income (loss) from operations, to assess performance and allocate resources primarily during our annual budget process and periodic forecast updates.

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 specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health benefits. In addition, our Insurance segment includes our Military services business, primarily our T-5 East Region contract, as well as the operations of our PBM business.

The CenterWell segment includes our pharmacy, 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.

Our CenterWell intersegment revenues includes 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 and our home solutions business, including fee-for-service and certain value-based arrangements with our health plans.

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 $3.2 billion and $4.0 billion for the three months ended March 31, 2025 and 2024, 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 $33 million and $32 million for the three months ended March 31, 2025 and 2024, 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 2024 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.

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Our segment results were as follows for the three months ended March 31, 2025 and 2024:

			Insurance						CenterWell						Eliminations/ Corporate						Consolidated
Three months ended March 31, 2025			(in millions)
External revenues
Premiums revenue			$	30,514					$	—					$	—					$	30,514
Services revenue			252						1,082						—						1,334
Total external revenues			30,766						1,082						—						31,848
Intersegment revenues			1						4,013						(4,014)						—
Investment income			170						—						94						264
Total revenues			30,937						5,095						(3,920)						32,112
Operating expenses:
Benefits			26,675						—						(140)						26,535
Operating costs			2,534						4,644						(3,798)						3,380
Depreciation and amortization			154						59						(30)						183
Total operating expenses			29,363						4,703						(3,968)						30,098
Income from operations			$	1,574					$	392					$	48					$	2,014

			Insurance						CenterWell						Eliminations/ Corporate						Consolidated
Three months ended March 31, 2024			(in millions)
External revenues
Premiums revenue			$	28,261					$	—					$	—					$	28,261
Services revenue			275						787						—						1,062
Total external revenues			28,536						787						—						29,323
Intersegment revenues			1						4,031						(4,032)						—
Investment income			162						—						126						288
Total revenues			28,699						4,818						(3,906)						29,611
Operating expenses:
Benefits			25,251						—						(127)						25,124
Operating costs			2,364						4,483						(3,805)						3,042
Depreciation and amortization			186						53						(30)						209
Total operating expenses			27,801						4,536						(3,962)						28,375
Income from operations			$	898					$	282					$	56					$	1,236

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