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Segment Information
 12 Months Ended
Dec. 31, 2016
Segment Reporting [Abstract]  
Segment Information
Segment Information
We have three reportable segments. These segments consist of 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.
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 primarily our Pathways behavioral health and social services provider, and 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)
2016
 
 
 
 
 
 
 
 
Total revenue (1)
 
$
17,234

 
$
195

 
$
353

 
$
17,782

Gross margin
 
1,618

 
21

 
33

 
1,672

Depreciation and amortization (2)
 
122

 
45

 
15

 
182

Goodwill, and intangible assets, net
 
513

 
72

 
175

 
760

Total assets
 
5,897

 
267

 
1,285

 
7,449

2015
 
 
 
 
 
 
 
 
Total revenue (1)
 
13,917

 
195

 
66

 
14,178

Gross margin
 
1,447

 
55

 
5

 
1,507

Depreciation and amortization (2)
 
95

 
25

 
6

 
126

Goodwill, and intangible assets, net
 
393

 
73

 
175

 
641

Total assets
 
4,707

 
213

 
1,656

 
6,576

2014
 
 
 
 
 
 
 
 
Total revenue (1)
 
9,449

 
210

 
8

 
9,667

Gross margin
 
947

 
53

 
—

 
1,000

Depreciation and amortization (2)
 
83

 
46

 
5

 
134

Goodwill, and intangible assets, net
 
286

 
75

 
—

 
361

Total assets
 
3,355

 
185

 
895

 
4,435

______________________
(1)
Total revenue consists primarily of premium revenue, premium tax revenue and health insurer fee revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments.
(2)
Depreciation and amortization reported in accompanying consolidated statements of cash flows.
The following table reconciles gross margin by segment to consolidated income before income tax expense:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In millions)
Gross margin:
 
 
 
 
 
Health Plans
$
1,618

 
$
1,447

 
$
947

Molina Medicaid Solutions
21

 
55

 
53

Other
33

 
5

 
—

Total gross margin
1,672

 
1,507

 
1,000

Add: other operating revenues (1)
851

 
684

 
434

Less: other operating expenses (2)
(2,217
)
 
(1,804
)
 
(1,241
)
Operating income
306

 
387

 
193

Other expenses, net
101

 
65

 
58

Income before income tax expense
$
205

 
$
322

 
$
135

______________________
(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.