HUMANA INC

Previous wording

Beginning in 2022, in order to create capacity to fund growth and investment in our Medicare Advantage business and further expansion of our healthcare services capabilities, we committed to drive 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, primarily in asset impairments, of $29 million for the three months ended March 31, 2024 within operating costs in the consolidated statements of income. These charges were recorded at the corporate level and not allocated to the segments. We expect to incur additional charges through the end of 2024. We did not record any charges for the three months ended March 31, 2023.

Current wording

Beginning in 2022, in order to create capacity to fund growth and investment in our Medicare Advantage business and further expansion of our healthcare services capabilities, we committed to drive 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, primarily in asset impairments, of $68 million and $97 million for the three and six months ended June 30, 2024, respectively, within operating costs in the condensed consolidated statements of income. These charges were recorded at the corporate level and not allocated to the segments. We expect to incur additional charges through the end of 2024. We did not record any charges for the three and six months ended June 30, 2023.

Previous wording

The results of each segment are measured by income (loss) from operations. Transactions between reportable segments primarily consist of sales of products and services rendered by our CenterWell segment, primarily pharmacy, primary care, and home services, 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.

Current wording

The results of each segment are measured by income (loss) from operations. 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.

Previous wording

The Insurance segment also experiences seasonality in the commercial fully-insured product offering. The effect on the Insurance segment benefit ratio is opposite of the Medicare stand-alone PDP impact, with the benefit ratio increasing as fully-insured members progress through their annual deductible and maximum out-of-pocket expenses. The Employer Group Commercial Fully-Insured business decreased the Insurance segment benefit ratio by 10 basis points and decreased the Insurance segment benefit ratio by 30 basis points for the three months ended March 31, 2024 and 2023, respectively.

Current wording

The Insurance segment also experiences seasonality in the commercial fully-insured product offering. The effect on the Insurance segment benefit ratio is opposite of the Medicare stand-alone PDP impact, with the benefit ratio increasing as fully-insured members progress through their annual deductible and maximum out-of-pocket expenses. The Employer Group Commercial Fully-Insured business increased the Insurance segment benefit ratio by 10 basis points and increased the Insurance segment benefit ratio by 20 basis points for the three months ended June 30, 2024 and 2023, respectively. The Employer Group Commercial Fully-Insured business did not impact the Insurance segment benefit ratio for the six months ended June 30, 2024 and decreased the Insurance segment benefit ratio by 10 basis points for the six months ended 2023.

Previous wording

The Insurance segment also experiences seasonality in the operating cost ratio as a result of costs incurred in the second half of the year associated with the Medicare marketing season. The Insurance segment may experience adverse impacts in the operating cost ratio as a result of our Employer Group Commercial Medical Products exit phased over the 18-24 months following our February 2023 announcement. The Employer Group Commercial Fully-Insured business increased the Insurance segment operating cost ratio by 10 basis points and increased the Insurance segment operating cost ratio by 40 basis points for the three months ended March 31, 2024 and 2023, respectively.

Current wording

The Insurance segment also experiences seasonality in the operating cost ratio as a result of costs incurred in the second half of the year associated with the Medicare marketing season. The Insurance segment may experience adverse impacts in the operating cost ratio as a result of our Employer Group Commercial Medical Products exit phased over the 18-24 months following our February 2023 announcement. The Employer Group Commercial Fully-Insured business did not impact the Insurance segment operating cost ratio for the three months ended June 30, 2024 and increased the Insurance segment operating cost ratio by 30 basis points for the three months ended 2023. The Employer Group Commercial Fully-Insured business increased the Insurance segment operating cost ratio by 10 basis points and increased the Insurance segment operating cost ratio by 30 basis points for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

•Our strategy offers our members affordable health care combined with a positive consumer experience in growing markets. At the core of this strategy is our integrated care delivery model, which unites quality care, high member engagement, and sophisticated data analytics. Our approach to primary, physician-directed care for our members aims to provide quality care that is consistent, integrated, cost-effective, and member-focused, provided by both employed physicians and physicians with network contract arrangements. The model is designed to improve health outcomes and affordability for individuals and for the health system as a whole, while offering our members a simple, seamless healthcare experience. We believe this strategy is positioning us for long-term growth in both membership and earnings. We offer providers a continuum of opportunities to increase the integration of care and offer assistance to providers in transitioning from a fee-for-service to a value-based arrangement. These include performance bonuses, shared savings and shared risk relationships. At March 31, 2024, approximately 3,837,300 members, or 69%, of our individual Medicare Advantage members were in value-based relationships under our integrated care delivery model, as compared to 3,505,100 members, or 68%, at March 31, 2023.

Current wording

•Our strategy offers our members affordable health care combined with a positive consumer experience in growing markets. At the core of this strategy is our integrated care delivery model, which unites quality care, high member engagement, and sophisticated data analytics. Our approach to primary, physician-directed care for our members aims to provide quality care that is consistent, integrated, cost-effective, and member-focused, provided by both employed physicians and physicians with network contract arrangements. The model is designed to improve health outcomes and affordability for individuals and for the health system as a whole, while offering our members a simple, seamless healthcare experience. We believe this strategy is positioning us for long-term growth in both membership and earnings. We offer providers a continuum of opportunities to increase the integration of care and offer assistance to providers in transitioning from a fee-for-service to a value-based arrangement. These include performance bonuses, shared savings and shared risk relationships. At June 30, 2024, approximately 3,923,200 members, or 70%, of our individual Medicare Advantage members were in value-based relationships under our integrated care delivery model, as compared to 3,618,500 members, or 69%, at June 30, 2023.

Previous wording

•Net income attributable to Humana was $0.7 billion, or $6.11 per diluted common share, and $1.2 billion, or $9.87 per diluted common share, for the three months ended March 31, 2024 and 2023, respectively. These comparisons were significantly impacted by put/call valuation adjustments associated with non-consolidating minority interest investments, transaction and integration costs, and charges associated with value creation initiatives. The impact of these adjustments to our consolidated income before income taxes and equity in net earnings and diluted earnings per common share was as follows for the 2024 and 2023 quarter:

Current wording

•Net income attributable to Humana was $679 million, or $5.62 per diluted common share, and $959 million, or $7.66 per diluted common share, for the three months ended June 30, 2024 and 2023, respectively. Net income attributable to Humana was $1.4 billion, or $11.74 per diluted common share, and $2.2 billion, or $17.54 per diluted common share for the six months ended June 30, 2024, and 2023, respectively. These comparisons were significantly impacted by put/call valuation adjustments associated with non-consolidating minority interest investments, transaction and integration costs, and charges associated with value creation initiatives. The impact of these adjustments to our consolidated income before income taxes and equity in net earnings and diluted earnings per common share was as follows for the 2024 and 2023 quarter and period:

Previous wording

We intend for the discussion of our financial condition and results of operations that follows to assist in the understanding of our financial statements and related changes in certain key items in those financial statements from year to year, including the primary factors that accounted for those changes. Transactions between reportable segments primarily consist of sales of products and services rendered by our CenterWell segment, primarily pharmacy, primary care, and home services, to our Insurance segment customers and are described in Note 14 to the condensed consolidated financial statements included in this report.

Current wording

We intend for the discussion of our financial condition and results of operations that follows to assist in the understanding of our financial statements and related changes in certain key items in those financial statements from year to year, including the primary factors that accounted for those changes. Transactions between reportable segments primarily consist of sales of products and services rendered by our CenterWell segment, primarily pharmacy, primary care, and home solutions, to our Insurance segment customers and are described in Note 14 to the condensed consolidated financial statements included in this report.

Previous wording

The following discussion primarily details our results of operations for the three months ended March 31, 2024, or the 2024 quarter and the three months ended March 31, 2023, or the 2023 quarter.

Current wording

The following discussion primarily deals with our results of operations for the three months ended June 30, 2024, or the 2024 quarter, the three months ended June 30, 2023, or the 2023 quarter, the six months ended June 30, 2024, or the 2024 period, and the six months ended June 30, 2023, or the 2023 period.

Previous wording

Consolidated premiums revenue increased $2.7 billion, or 10.6%, from $25.6 billion in the 2023 quarter to $28.3 billion in the 2024 quarter primarily due to higher per member Medicare premiums and individual and group Medicare Advantage membership growth. These factors were partially offset by the continued decline in the our group commercial medical and stand-alone PDP membership, as well as a decline in state-based contracts membership as a result of the end of the suspension of state eligibility redetermination efforts previously enacted as part of the Public Health Emergency.

Current wording

Medicare Advantage and state-based contracts membership growth. These factors were partially offset by the continued decline in our group commercial medical and stand-alone PDP membership.

Previous wording

Investment income increased $95 million, or 49.2%, from $193 million in the 2023 quarter to $288 million in the 2024 quarter primarily due to increase in interest income on our debt securities.

Current wording

Investment income increased $24 million, or 8.8%, from $274 million in the 2023 quarter to $298 million in the 2024 quarter and increased $119 million, or 25.5%, from $467 million in the 2023 period to $586 million in the 2024 period primarily due to increase in interest income on our debt securities.

Previous wording

Consolidated benefits expense increased $3.3 billion, or 14.9%, from $21.9 billion in the 2023 quarter to $25.1 billion in the 2024 quarter. The consolidated benefit ratio increased 340 basis points from 85.5% for the 2023 quarter to 88.9% for the 2024 quarter primarily due to higher Medicare Advantage medical cost trends in the 2024 quarter compared to the 2023 quarter partially offset by the impact of pricing and benefit design of our 2024 Medicare Advantage products, which included a reduction in benefits in response to the net impact of the final rate notice and the initial emergence of increased medical cost trends. Further, the year-over-year comparison continues to reflect a shift in line of business mix, with growth in Medicare Advantage and state-based contracts and other membership, which can carry a higher benefit ratio.

Current wording

Consolidated benefits expense increased $3.0 billion, or 13.8%, from $22.0 billion in the 2023 quarter to $25.0 billion in the 2024 quarter and increased $6.3 billion, or 14.4%, from $43.9 billion in the 2023 period to $50.2 billion in the 2024 period. The consolidated benefit ratio increased 270 basis points from 86.3% for the 2023 quarter to 89.0% for the 2024 quarter and increased 300 basis points from 85.9% for the 2023 period to 88.9% for the 2024 period primarily due to the continued impact of elevated Medicare Advantage medical cost trends in the 2024 quarter and period and a lesser favorable impact from prior-period medical claims reserve development in 2024. These factors were partially offset by the impact of the pricing and benefit design of our 2024 Medicare Advantage products, which included a reduction in benefits in response to the net impact of the 2024 final rate notice and the initial emergence of increased medical cost trends in 2023. Further, the year-over-year comparison continues to reflect a shift in line of business mix, with growth in Medicare Advantage and state-based contracts and other membership, which can carry a higher benefit ratio.

Previous wording

Consolidated benefits expense included $535 million of favorable prior-period medical claims reserve development in the 2024 quarter and $522 million of favorable prior-period medical claims development in the 2023 quarter. Prior-period medical claims reserve development decreased the consolidated benefit ratio by approximately 190 basis points in the 2024 quarter and decreased the consolidated benefit ratio by approximately 200 basis points in the 2023 quarter.

Current wording

Consolidated benefits expense included $134 million of favorable prior-period medical claims reserve development in the 2024 quarter and $232 million of favorable prior-period medical claims development in the 2023 quarter. Consolidated benefits expense included $669 million of favorable prior-period medical claims reserve development in the 2024 period and $754 million of favorable prior-period medical claims reserve development in the 2023 period. Prior-period medical claims reserve development decreased the consolidated benefit ratio by approximately 50 basis points in the 2024 quarter and decreased the consolidated benefit ratio by approximately 90 basis points in the 2023 quarter. Prior-period medical claims reserve development decreased the consolidated benefit ratio by approximately 120 basis points in the 2024 period and decreased the consolidated benefit ratio by approximately 150 basis points in the 2023 period.

Previous wording

Consolidated operating costs increased $0.06 billion, or 2.1%, from $2.98 billion in the 2023 quarter to $3.04 billion in the 2024 quarter. The consolidated operating cost ratio decreased 80 basis points from 11.2% for the 2023 quarter to 10.4% for the 2024 quarter primarily due to scale efficiencies associated with growth in our individual Medicare Advantage membership, administrative cost efficiencies resulting from our value creation initiatives, and lower commission expense for brokers in the 2024 quarter compared to the 2023 quarter as a result of significant individual Medicare Advantage membership growth in 2023. These factors were partially offset by the impact from charges related to value creation initiatives in the 2024 quarter.

Current wording

Consolidated operating costs increased $37 million, or 1.2%, from $3.1 billion in the 2023 quarter to $3.1 billion in the 2024 quarter and increased $100 million, or 1.6%, from $6.1 billion in the 2023 period to $6.2 billion in the 2024 period. The consolidated operating cost ratio decreased 100 basis points from 11.8% for the 2023 quarter to 10.8% for the 2024 quarter and decreased 90 basis points from 11.5% for the 2023 period to 10.6% for the 2024 period primarily due to scale efficiencies associated with growth in our Medicare Advantage membership, administrative cost efficiencies resulting from our value creation initiatives, lower commission expense for brokers in the 2024 quarter and period compared to the 2023 quarter and period as a result of significant individual Medicare Advantage membership growth in 2023, and the impact of the accrued charge related to certain anticipated litigation expenses included in the 2023 quarter and period results. These factors were partially offset by the impact from charges related to value creation initiatives in the 2024 quarter and period.

Previous wording

Depreciation and amortization increased $23 million, or 12.4%, from $186 million in the 2023 quarter to $209 million in the 2024 quarter primarily due to capital expenditures.

Current wording

Depreciation and amortization increased $21 million, or 11.0%, from $191 million in the 2023 quarter to $212 million in the 2024 quarter and increased $44 million, or 11.7%, from $377 million in the 2023 period to $421 million in the 2024 period primarily due to capital expenditures.

Previous wording

Interest expense increased $46 million, or 40.7%, from $113 million in the 2023 quarter to $159 million in the 2024 quarter primarily due to increase in interest rates and higher average debt balances.

Current wording

Interest expense increased $48 million, or 40.0%, from $120 million in the 2023 quarter to $168 million in the 2024 quarter and increased $94 million, or 40.3%, from $233 million in the 2023 period to $327 million in the 2024 period primarily due to increase in interest rates and higher average debt balances.

Previous wording

The effective income tax rate was 25.3% and 22.5% for the three months ended March 31, 2024, and 2023, respectively. The year-over-year increase in the effective income tax rate is primarily due to a change in the mix of current year earnings between our Insurance segment and our CenterWell health services segment, as the latter incurs a higher effective domestic tax rate than the former. In addition, the prior year income tax rate was favorably impacted by the recognition of a non-taxable gain.

Current wording

The effective income tax rate was 24.7% and 23.6% for the three months ended June 30, 2024, and 2023, respectively, and 25.0% and 23.0% for the six months ended June 30, 2024 and 2023, respectively. The year-over-year increase in the effective income tax rate is primarily due to a change in the mix of current year earnings between our Insurance segment and our CenterWell health services segment, as the latter incurs a higher effective domestic tax rate than the former. In addition, the prior year income tax rate was favorably impacted by the recognition of a non-taxable gain.

Previous wording

Insurance segment income from operations decreased $0.4 billion, or 32.3%, from $1.3 billion in the 2023 quarter to $0.9 billion in the 2024 quarter primarily due to the same factors impacting the segment's higher benefit ratio partially offset by the lower operating cost ratio as more fully described below.

Current wording

Insurance segment income from operations decreased $268 million, or 26.0%, from $1.0 billion in the 2023 quarter to $763 million in the 2024 quarter and decreased $697 million, or 29.6%, from $2.4 billion in the 2023 period to $1.7 billion in the 2024 period primarily due to the same factors impacting the segment's higher benefit ratio partially offset by the lower operating cost ratio as more fully described below.

Previous wording

Individual Medicare Advantage membership increased 395,900 members, or 7.7%, from March 31, 2023 to March 31, 2024 primarily due to membership additions associated with the most recent Annual Election Period, or AEP. Individual Medicare Advantage membership includes 922,200 D-SNP members as of March 31, 2024, a net increase of 140,100 D-SNP members, or 18%, from 782,100 D-SNP members as of March 31, 2023.

Current wording

Individual Medicare Advantage membership increased 348,500 members, or 6.6%, from June 30, 2023 to June 30, 2024 primarily due to membership additions associated with the most recent Annual Election Period, or AEP. Individual Medicare Advantage membership includes 952,800 D-SNP members as of June 30, 2024, a net increase of 121,400 D-SNP members, or 14.6%, from 831,400 D-SNP members as of June 30, 2023.

Previous wording

Group Medicare Advantage membership increased 40,300 members, or 7.9%, from March 31, 2023 to March 31, 2024 primarily due to growth in small and medium group accounts.

Current wording

Group Medicare Advantage membership increased 35,400 members, or 6.9%, from June 30, 2023 to June 30, 2024 primarily due to growth in small and medium group accounts.

Previous wording

Medicare stand-alone PDP membership decreased 609,300 members, or 20.6%, from March 31, 2023 to March 31, 2024 primarily due to continued intensified competition for Medicare stand-alone PDP offerings.

Current wording

Medicare stand-alone PDP membership decreased 574,100 members, or 19.7%, from June 30, 2023 to June 30, 2024 primarily due to continued intensified competition for Medicare stand-alone PDP offerings.

Previous wording

Commercial fully-insured medical membership decreased 412,900 members, or 79.0%, from March 31, 2023 to March 31, 2024 and commercial ASO medical membership decreased 337,100 members, or 81.3%, from March 31, 2023 to March 31, 2024. These decreases reflect our planned exit of the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs. The exit from this line of business will be phased over the 18 to 24 months following our February 2023 announcement.

Current wording

Commercial fully-insured medical membership decreased 413,300 members, or 86.9%, from June 30, 2023 to June 30, 2024 and commercial ASO medical membership decreased 348,300 members, or 88.1%, from June 30, 2023 to June 30, 2024. These decreases reflect our planned exit of the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs. The exit from this line of business will be phased over the 18 to 24 months following our February 2023 announcement.

Previous wording

Specialty membership decreased 461,500 members, or 9.0%, from March 31, 2023 to March 31, 2024 primarily due to non-renewal of dental and vision plans as a result of exit from the Employer Group Commercial Medical Products business partially offset by growth in dental and vision plans as a result of Medicare Advantage enrollment.

Current wording

Specialty membership decreased 439,100 members, or 8.7%, from June 30, 2023 to June 30, 2024 primarily due to non-renewal of dental and vision plans as a result of exit from the Employer Group Commercial Medical Products business partially offset by growth in dental and vision plans as a result of Medicare Advantage enrollment.

Previous wording

Insurance segment premiums revenue increased $2.7 billion, or 10.6%, from $25.6 billion in the 2023 quarter to $28.3 billion in the 2024 quarter primarily due to higher per member Medicare premiums and individual and group Medicare Advantage membership growth. These factors were partially offset by the continued decline in the our group commercial medical and stand-alone PDP membership, as well as a decline in state-based contracts membership as a result of the end of the suspension of state eligibility redetermination efforts previously enacted as part of the Public Health Emergency.

Current wording

Insurance segment premiums revenue increased $2.6 billion, or 10.4%, from $25.5 billion in the 2023 quarter to $28.1 billion in the 2024 quarter and increased $5.4 billion, or 10.5%, from $51.0 billion in the 2023 period to $56.4 billion in the 2024 period primarily due to higher per member Medicare premiums as well as individual and group Medicare Advantage and state-based contracts membership growth. These factors were partially offset by the continued decline in our group commercial medical and stand-alone PDP membership.

Previous wording

The Insurance segment benefit ratio increased 320 basis points from 86.1% for the 2023 quarter to 89.3% for the 2024 quarter primarily due to higher Medicare Advantage medical cost trends in the 2024 quarter compared to the 2023 quarter partially offset by the impact of pricing and benefit design of our 2024 Medicare Advantage products, which included a reduction in benefits in response to the net impact of the final rate notice and the initial emergence of increased medical cost trends. Further, the year-over-year comparison continues to reflect a shift in line of business mix, with growth in Medicare Advantage and state-based contracts and other membership, which can carry a higher benefit ratio.

Current wording

The Insurance segment benefit ratio increased 270 basis points from 86.8% for the 2023 quarter to 89.5% for the 2024 quarter and increased 300 basis points from 86.4% for the 2023 period to 89.4% for the 2024 period primarily due to the continued impact of elevated Medicare Advantage medical cost trends in the 2024 quarter and period and a lesser favorable impact from prior-period medical claims reserve development in 2024. These factors were partially offset by the impact of the pricing and benefit design of our 2024 Medicare Advantage products, which included a reduction in benefits in response to the net impact of the 2024 final rate notice and the initial emergence of increased medical cost trends in 2023. Further, the year-over-year comparison continues to reflect a shift in line of business mix, with growth in Medicare Advantage and state-based contracts and other membership, which can carry a higher benefit ratio.

Previous wording

The Insurance segment operating cost ratio decreased 110 basis points from 9.4% for the 2023 quarter to 8.3% for the 2024 quarter primarily due to scale efficiencies associated with growth in our individual Medicare Advantage membership, administrative cost efficiencies resulting from our value creation initiatives, and lower commission expense for brokers in the 2024 quarter compared to the 2023 quarter as a result of significant individual Medicare Advantage membership growth in 2023.

Current wording

The Insurance segment operating cost ratio decreased 150 basis points from 9.9% for the 2023 quarter to 8.4% for the 2024 quarter and decreased 120 basis points from 9.6% for the 2023 period to 8.4% for the 2024 period primarily due to scale efficiencies associated with growth in our individual Medicare Advantage membership, administrative cost efficiencies resulting from our value creation initiatives, lower commission expense for brokers in the 2024 quarter and period compared to the 2023 quarter and period as a result of significant individual Medicare Advantage membership growth in 2023, and the impact of the accrued charge related to certain anticipated litigation expenses included in the 2023 quarter and period results.

Previous wording

CenterWell income from operations decreased $48 million, or 14.5%, from $330 million in the 2023 quarter to $282 million in the 2024 quarter primarily due to the same factors impacting the segment's higher operating cost ratio as more fully described below.

Current wording

CenterWell income from operations increased $51 million, or 17.8%, from $287 million in the 2023 quarter to $338 million in the 2024 quarter and increased $3 million, or 0.5%, from $617 million in the 2023 period to $620 million in the 2024 period primarily due to the same factors impacting the segment's operating cost ratio as more fully described below.

Previous wording

CenterWell services revenue increased $30 million, or 4.0%, from $757 million in the 2023 quarter to $787 million in the 2024 quarter primarily due to higher revenues associated with growth in the primary care and home solutions businesses partially offset by a decline in revenues associated with the pharmacy solutions business and the impact of the v28 risk model revision.

Current wording

CenterWell services revenue increased $139 million, or 18.6%, from $747 million in the 2023 quarter to $886 million in the 2024 quarter and increased $169 million, or 11.2%, from $1.5 billion in the 2023 period to $1.7 billion in the 2024 period primarily due to higher revenues associated with growth in the primary care business, partially offset by the impact of the v28 risk model revision.

Previous wording

CenterWell intersegment revenues increased $0.3 billion, or 7.6%, from $3.7 billion in the 2023 quarter to $4.0 billion in the 2024 quarter primarily due to greater intersegment revenues associated with the home solutions business in the 2024 quarter as compared to the 2023 quarter as a result of the expansion of the value-based care home model and higher intersegment revenues associated with growth in the primary care business, partially offset by the impact of the v28 risk model revision.

Current wording

CenterWell intersegment revenues increased $0.3 billion, or 7.3%, from $3.8 billion in the 2023 quarter to $4.1 billion in the 2024 quarter and increased $0.6 billion, or 7.4%, from $7.5 billion in the 2023 period to $8.1 billion in the 2024 period primarily due to greater intersegment revenues associated with the home solutions business in the 2024 quarter and period as compared to the 2023 quarter and period as a result of the expansion of the value-based home care mode and higher intersegment revenues associated with growth in the primary care business, partially offset by the impact of the v28 risk model revision.

Previous wording

The CenterWell segment operating cost ratio increased 140 basis points from 91.6% for the 2023 quarter to 93.0% for the 2024 quarter primarily due tothe unfavorable impact of the v28 risk model revision to the primary care business.

Current wording

The CenterWell segment operating cost ratio decreased 60 basis points from 92.6% for the 2023 quarter to 92.0% for the 2024 quarter primarily due to administrative cost efficiencies resulting from the our value creation initiatives and favorable prior-period medical claims reserve development within the primary care business, partially offset by the impact of the v28 risk model revision. The CenterWell segment operating cost ratio increased 40 basis points from 92.1% for the 2023 period to 92.5% for the 2024 period primarily due tothe unfavorable impact of the v28 risk model revision to the primary care business.

Previous wording

Cash and cash equivalents increased to approximately $5.9 billion at March 31, 2024 from $4.7 billion at December 31, 2023. The change in cash and cash equivalents for the three months ended March 31, 2024 and 2023 is summarized as follows:

Current wording

Cash and cash equivalents increased to approximately $5.5 billion at June 30, 2024 from $4.7 billion at December 31, 2023. The change in cash and cash equivalents for the six months ended June 30, 2024 and 2023 is summarized as follows:

Previous wording

Cash flows provided by operations of $423 million in the 2024 quarter decreased $6.3 billion from cash flows provided by operations of $6.7 billion in the 2023 quarter. Our operating cash flows for the 2023 quarter were significantly impacted by the early receipt of the Medicare premium remittance of $6.6 billion in March 2023 because the payment date for April 2023 fell on a weekend. Generally, when the first day of a month falls on a weekend or holiday, with the exception of January 1 (New Year's Day), we receive this payment at the end of the previous month. This also resulted in an increase to unearned revenues in our condensed consolidated balance sheet at March 31, 2023.

Current wording

Cash flows provided by operations of $1.6 billion in the 2024 period decreased $8.2 billion from cash flows provided by operations of $9.9 billion in the 2023 period. Our operating cash flows for the 2023 period were significantly impacted by the early receipt of the Medicare premium remittance of $7.0 billion in June 2023 because the payment date for July 2023 fell on a weekend. This also resulted in an increase to unearned revenues in our condensed consolidated balance sheet at June 30, 2023. Additionally, the 2023 period includes the CMS mid-year settlement of $2.2 billion which was received in June 2023. The 2024 period does not include the CMS mid-year settlement as it was received in July 2024.

Previous wording

The detail of total net receivables at March 31, 2024 and December 31, 2023 and reconciliation to cash flow for the three months ended March 31, 2024 and 2023 was as follows:

Current wording

The detail of total net receivables at June 30, 2024 and December 31, 2023 and reconciliation to cash flow for the six months ended June 30, 2024 and 2023 was as follows:

Previous wording

The changes in Medicare receivables for both the 2024 quarter and the 2023 period reflect individual Medicare Advantage membership growth and the typical pattern caused by the timing of accruals and related collections associated with the CMS risk-adjustment model. Significant collections occur with the mid-year and final settlements with CMS in the second and third quarter.

Current wording

The changes in Medicare receivables for both the 2024 period and the 2023 period reflect individual Medicare Advantage membership growth and the typical pattern caused by the timing of accruals and related collections associated with the CMS risk-adjustment model. Significant collections occur with the mid-year and final settlements with CMS in the second and third quarter. We received the 2024 mid-year settlement of approximately $2.3 billion in July 2024. The 2023 period was impacted by the early receipt of the 2023 mid-year payment in June 2023.

Previous wording

During the 2024 quarter and 2023 quarter, we acquired various businesses for approximately $14 million and $73 million, net of cash and cash equivalents received, respectively.

Current wording

During the 2024 period and 2023 period, we acquired various businesses for approximately $17 million and $189 million, net of cash and cash equivalents received, respectively.

Previous wording

Our ongoing capital expenditures primarily relate to our information technology initiatives, support of services in our primary care operations including medical and administrative facility improvements necessary for activities such as the provision of care to members, claims processing, billing and collections, wellness solutions, care coordination, regulatory compliance and customer service. Total net capital expenditures, excluding acquisitions, were $177 million in the 2024 quarter and $223 million in the 2023 quarter.

Current wording

Our ongoing capital expenditures primarily relate to our information technology initiatives, support of services in our primary care operations including medical and administrative facility improvements necessary for activities such as the provision of care to members, claims processing, billing and collections, wellness solutions, care coordination, regulatory compliance and customer service. Total net capital expenditures, excluding acquisitions, were $291 million in the 2024 period and $487 million in the 2023 period.

Previous wording

Net purchases of investment securities were $223 million and $996 million in the 2024 quarter and 2023 quarter, respectively.

Current wording

Net purchases of investment securities were $1.1 billion and $1.3 billion in the 2024 period and 2023 period, respectively.

Previous wording

Receipts from CMS associated with Medicare Part D claim subsidies for which we do not assume risk were higher than claim payments by $569 million and $3.03 billion in the 2024 and 2023 quarters, respectively.

Current wording

Receipts from CMS associated with Medicare Part D claim subsidies for which we do not assume risk were higher than claim payments by $0.3 billion and $3.5 billion in the 2024 and 2023 periods, respectively.

Previous wording

Under our administrative services only TRICARE contracts, health care costs payments for which we do not assume risk exceeded reimbursements from the federal government by $70 million and $29 million in the 2024 and 2023 quarters, respectively.

Current wording

Under our administrative services only TRICARE contracts, health care costs payments for which we do not assume risk exceeded reimbursements from the federal government by $63 million and $27 million in the 2024 and 2023 periods, respectively.

Previous wording

In March 2024, we issued $1.3 billion of 5.375% unsecured senior notes due April 15, 2031 and $1.0 billion of 5.750% unsecured senior notes due April 15, 2054. Our net proceeds, reduced for the underwriters' discounts and commissions paid, were $2.2 billion. We used the net proceeds for general corporate purposes, which include the repayment of existing indebtedness, including borrowings under our commercial paper program.

Current wording

In March 2024, we 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. Our net proceeds, reduced for the underwriters' discounts and commissions paid, were $2.23 billion. We used the net proceeds for general corporate purposes, which include the repayment of existing indebtedness, including borrowings under our commercial paper program.

Previous wording

In March 2023, we entered into a Rule 10b5-1 Repurchase Plan, or the Plan, to repurchase a portion of our $1.5 billion aggregate principal amount of 0.650% senior notes maturing in August 2023 and our $600 million aggregate principal amount of 3.850% senior notes maturing in October 2024 during the Plan period beginning on March 13, 2023 and ending on June 15, 2023. At March 31, 2023, we repurchased $61 million, for cash totaling approximately $60 million.

Current wording

In March 2023, we entered into a Rule 10b5-1 Repurchase Plan, or the Plan, to repurchase a portion of our $1.5 billion aggregate principal amount of 0.650% senior notes maturing in August 2023 and our $600 million aggregate principal amount of 3.850% senior notes maturing in October 2024 during the Plan period beginning on March 13, 2023 and ending on July 21, 2023. During the six months ended June 30, 2023, we repurchased $325 million principal amount of our $1.5 billion, 0.650% senior notes for approximately $322 million cash and $28 million principal amount of our $600 million, 3.850% senior notes for approximately $27 million cash.