Humana 2014 Annual Report Download - page 61
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53
Operating costs
• The Healthcare Services segment operating cost ratio of 95.5% for 2014 decreased 30 basis points from 95.8%
for 2013 primarily due to an improvement in the ratio for our pharmacy solutions business partially offset by
our investment in home based services and other businesses across the segment.
Other Businesses
Our Other Businesses pretax income of $78 million for 2014 compared to a pretax loss of $193 million for 2013.
The pretax loss in 2013 included net expense of $243 million for reserve strengthening for our closed-block of long-
term care insurance policies further discussed in Note 18 to the consolidated financial statements included in Item 8.
– Financial Statements and Supplementary Data. In addition, from time to time, we evaluate alternatives for our
businesses that do not meet our strategic, growth or profitability objectives. Among the businesses that we are currently
evaluating is our closed block of long-term care insurance policies business. While no decision has been made with
respect to any course of action, if we were to divest this business it is reasonably likely that we would have to recognize
a material loss that will have a material adverse effect on our results of operations. Year-over-year comparisons also
reflect the loss of our Medicaid contracts in Puerto Rico effective September 30, 2013 as well as a reduction in benefits
expense in 2013 related to a favorable settlement of contract claims with the DoD associated with previously disclosed
litigation.