Segments

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segments

Segments

We currently have four reportable segments consisting of: 1) Medicaid; 2) Medicare; 3) Marketplace; and 4) Other. Our reportable segments are consistent with how we currently manage the business and view the markets we serve.

The Medicaid, Medicare, and Marketplace segments represent the government-funded or sponsored programs under which we offer managed healthcare services. The Other segment, which is insignificant to our consolidated results of operations, includes long-term services and supports consultative services in Wisconsin.

The key metrics used to assess the performance of our Medicaid, Medicare, and Marketplace segments are premium revenue, medical margin and medical care ratio (“MCR”). MCR represents the amount of medical care costs as a percentage of premium revenue. Therefore, the underlying medical margin, or the amount earned by the Medicaid, Medicare, and Marketplace segments after medical costs are deducted from premium revenue, represents the most important measure of earnings reviewed by management, and is used by our chief executive officer to review results, assess performance, and allocate resources. The key metric used to assess the performance of our Other segment is service margin. The service margin is equal to service revenue minus cost of service revenue. We do not report total assets by segment since this is not a metric used to assess segment performance or allocate resources.

The following table presents total revenue by segment. Inter-segment revenue was insignificant for all periods presented.

	Three Months Ended March 31,
	2024		2023
	(In millions)
Total revenue:
Medicaid	$	7,873	$	6,578
Medicare	1,457		1,056
Marketplace	581		497
Other	20		18
Consolidated	$	9,931	$	8,149

The following table reconciles margin by segment to consolidated income before income tax expense:

	Three Months Ended March 31,
	2024		2023
	(In millions)
Margin:
Medicaid	$	775	$	734
Medicare	163		126
Marketplace	152		154
Other	2		2
Total margin	1,092		1,016
Add: other operating revenues (1)	407		246
Less: other operating expenses (2)	(1,073)		(807)
Operating income	426		455
Less: interest expense	27		28
Income before income tax expense	$	399	$	427

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(1)Other operating revenues include premium tax revenue, investment income, and certain other revenue.

(2)Other operating expenses include general and administrative expenses, premium tax expenses, depreciation and amortization, and certain other operating expenses.