HUM · 10-Q · 2026Q3 · Full report

Operating Expense Trends

HUMANA INC · 2026-11-06 · Importance 53 · Surprise 40 · Matches filing data

Consolidated operating costs increased 12.6% to $4.6 billion in the quarter and 14.4% to $12.6 billion in the first nine months of 2026. Despite higher dollars, the consolidated operating cost ratio improved 130 basis points to 11.3% in the quarter and 100 basis points to 10.4% for the nine months, reflecting Medicare revenue growth, cost-cutting and transformation progress, and lower value-creation charges. These improvements were partly offset by the Star Ratings headwind and a higher CenterWell operating cost ratio. CenterWell’s ratio increased 200 basis points to 95.9% in the quarter and 160 basis points to 94.3% for the nine months, due to v28 risk-model effects, higher primary-care costs in a single geography, and growth in higher-cost specialty pharmacy.

Key facts

• Consolidated operating costs increased 12.6% to $4.6 billion in the 2026 quarter from $4.1 billion in the 2025 quarter and increased 14.4% to $12.6 billion in the 2026 period from $11.0 billion in the 2025 period. source
• Humana recorded minority-interest investment impairment charges of $3 million and $24 million for the three and nine months ended September 30, 2026, respectively. source
• Humana recorded a $32 million impairment charge for indefinite-lived intangible assets in operating costs for the nine months ended September 30, 2025. source
• The consolidated operating cost ratio fell to 11.3% from 12.6% in the quarter and to 10.4% from 11.4% in the nine-month period, decreases of 130 and 100 basis points, respectively. source
• CenterWell’s operating cost ratio increased to 95.9% from 93.9% in the 2026 quarter and to 94.3% from 92.7% in the 2026 period. source
• CenterWell’s higher operating cost ratio reflected v28 risk model phase-in effects, higher primary care costs concentrated in a patient group in one geography, and increased CenterWell Specialty Pharmacy volume; maturation of mitigation activities and cost initiatives partly offset these factors. source

Impact estimates