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Segment Information
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Segment Information
Segment Information
We have three reportable segments. These segments include our Health Plans segment, which comprises the vast majority of our operations; our Molina Medicaid Solutions segment; and our Other segment, which includes our behavioral health and social services subsidiary, Pathways. As of December 31, 2015, we changed our reporting structure as a result of the Pathways acquisition in November 2015. All prior periods reported conform to this presentation.
Our reportable segments are consistent with how we currently manage our business and view the markets we serve. The Health Plans segment consists of our health plans and our direct delivery business. Our health plans are operating segments that have been aggregated for reporting purposes because they share similar economic characteristics. The Molina Medicaid Solutions segment provides support to state government agencies in the administration of their Medicaid programs including business processing, information technology development, and administrative services. The Other segment includes businesses, such as our Pathways behavioral health and social services provider, which do not meet the quantitative thresholds for a reportable segment as defined by U.S. generally accepted accounting principles (GAAP), as well as corporate amounts not allocated to other reportable segments.
Gross margin is the appropriate earnings measure for our reportable segments, based on how our chief operating decision maker currently reviews results, assesses performance, and allocates resources.
Gross margin for our Health Plans segment is referred to as "Medical margin," and for our Molina Medicaid Solutions and Other segments, as "Service margin." Medical margin represents the amount earned by the Health Plans segment after medical costs are deducted from premium revenue. The medical care ratio represents the amount of medical care costs as a percentage of premium revenue, and is one of the key metrics used to assess the performance of the Health Plans segment. Therefore, the underlying medical margin is the most important measure of earnings reviewed by the chief operating decision maker. The service margin is equal to service revenue minus cost of service revenue.
 
 
Health Plans
 
Molina Medicaid Solutions
 
Other
 
Consolidated
 
 
 
 
 
 
 
(In millions)
Three Months Ended September 30, 2016
 
 
 
 
 
 
 
 
Total revenue (1)
 
$
4,412

 
$
48

 
$
86

 
$
4,546

Gross margin
 
443

 
6

 
8

 
457

 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2016
 
 
 
 
 
 
 
 
Total revenue (1)
 
$
12,835

 
$
146

 
$
267

 
$
13,248

Gross margin
 
1,285

 
17

 
29

 
1,331

 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2015
 
 
 
 
 
 
 
 
Total revenue (1)
 
$
3,562

 
$
47

 
$
2

 
$
3,611

Gross margin
 
361

 
13

 
—

 
374

 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2015
 
 
 
 
 
 
 
 
Total revenue (1)
 
$
10,155

 
$
146

 
$
6

 
$
10,307

Gross margin
 
1,071

 
43

 
—

 
1,114

 
 
 
 
 
 
 
 
 
Total Assets
 
 
 
 
 
 
 
 
September 30, 2016
 
$
5,891

 
$
267

 
$
1,412

 
$
7,570

December 31, 2015
 
4,707

 
213

 
1,656

 
6,576


______________________
(1)
Total revenue consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments.
The following table reconciles gross margin by segment to consolidated income before income tax expense:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
 
(In millions)
Gross margin:
 
 
 
 
 
 
 
Health Plans
$
443

 
$
361

 
$
1,285

 
$
1,071

Molina Medicaid Solutions
6

 
13

 
17

 
43

Other
8

 
—

 
29

 
—

Total gross margin
457

 
374

 
1,331

 
1,114

Add: other operating revenues (1)
222

 
187

 
625

 
509

Less: other operating expenses (2)
(561
)
 
(448
)
 
(1,644
)
 
(1,312
)
Operating income
118

 
113

 
312

 
311

Other expenses, net
(26
)
 
(15
)
 
(76
)
 
(45
)
Income before income tax expense
$
92

 
$
98

 
$
236

 
$
266

______________________
(1)
Other operating revenues include premium tax revenue, health insurer fee revenue, investment income and other revenue.
(2)
Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fee expenses and depreciation and amortization.