Approximately 70% of individual Medicare Advantage members (3.98 million) are now in value-based relationships under the integrated care delivery model, compared to 69% (3.73 million) a year ago. This indicates a continued strategic focus on integrated care.

The company is proceeding with its planned exit from the Employer Group Commercial Medical Products business, which is expected to finalize in the first half of 2025. This strategic decision reflects a shift in focus and resource allocation.

Humana was awarded the next generation of TRICARE Managed Care Support Contracts, or T-5, for the updated TRICARE East Region by the Defense Health Agency of the DoD.

Charges, primarily in asset impairments, of $55 million and $151 million were recorded for the three and nine months ended September 30, 2024, respectively, due to value creation initiatives. This suggests management is actively pursuing cost savings and productivity improvements, but at a cost.

The company believes that the Final RADV Rule fails to address adequately the statutory requirement of actuarial equivalence and violates the Administrative Procedure Act. Humana expects CMS to apply the Final RADV Rule, including the first application of extrapolated audit results to determine audit settlements without a FFS Adjuster, to CMS and HHS-OIG RADV audits conducted for PY 2018 and subsequent years.

On August 15, 2024, Humana settled the claims in the qui tam suit, and paid the United States $90 million.

The number of Medicare Advantage plans rated 4-star or higher are expected to significantly decline in 2025, which may negatively impact 2026 quality bonus payments from CMS and may also significantly adversely affect our revenues, operating results, and cash flows.

The company is involved in various lawsuits and regulatory matters, including those related to Medicare Part C risk adjustment practices and the qui tam suit. The outcome of these matters may have a material adverse effect on Humana's results of operations, financial position, and cash flows.

New laws and regulations, as well as changes to existing laws and regulations, may restrict the company's ability to manage its provider network, manage and sell its products, or otherwise operate its business, or restrict its profitability.

Medicare stand-alone PDP membership decreased 19.8% year-over-year due to continued intensified competition for Medicare stand-alone PDP offerings, indicating a challenging competitive landscape in this segment.

Individual Medicare Advantage membership increased 5.3% year-over-year, indicating a strong competitive position in this key market segment.

The consolidated operating cost ratio decreased 90 basis points year-over-year, reaching 10.9% in the nine months ended September 30, 2024, primarily due to scale efficiencies associated with growth in our Medicare Advantage membership.

Administrative cost efficiencies resulting from the company's value creation initiatives contributed to the decrease in the operating cost ratio, indicating improved operational efficiency.

The company issued $1.25 billion of 5.375% unsecured senior notes due April 15, 2031 and $1.00 billion of 5.750% unsecured senior notes due April 15, 2054, using the net proceeds for general corporate purposes, including the repayment of existing indebtedness.

The company repurchased common shares for $750 million during the nine months ended September 30, 2024, under share repurchase plans authorized by the Board of Directors.

The consolidated benefit ratio increased due to the continued impact of elevated Medicare Advantage and state-based contracts medical cost trends, indicating a challenging market environment.