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Segments
 6 Months Ended
Jun. 30, 2021
Segment Reporting [Abstract]  
Segments Segments
In the first quarter of 2021, we realigned our reportable operating segments to reflect recent changes in our internal operating and reporting structure, which is now organized by government program. The revised reporting structure reflects the reporting and review process used by our chief executive officer (who is our chief operating decision maker) to assess performance and allocate resources, and is consistent with how we currently manage the business and view the markets we serve. These reportable segments consist of: 1) Medicaid; 2) Medicare; 3) Marketplace; and 4) Other.
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 certain corporate amounts not associated with or allocated to the Medicaid, Medicare, or Marketplace segments. Additionally, the Other segment includes service revenues and service costs associated with the long-term services and supports consultative services we now provide in Wisconsin, as a result of the Magellan Complete Care acquisition on December 31, 2020.
The key metrics used to assess the performance of our Medicaid, Medicare, and Marketplace segments are premium revenue, medical margin and 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 because this is not a metric used to assess segment performance or allocate resources.
For all tables presented below, the prior period disclosures have been recast to conform to the current period segment presentation.
The following table presents total revenue by segment. Inter-segment revenue was insignificant for all periods presented.
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(In millions)
Total revenue:
Medicaid$5,209 $3,611 $10,229 $7,128 
Medicare822 634 1,627 1,273 
Marketplace751 373 1,431 766 
Other18 — 35 — 
Total$6,800 $4,618 $13,322 $9,167 
The following table presents goodwill and intangibles assets, net by segment. For the Magellan Complete Care acquisition completed on December 31, 2020, the total purchase price was preliminarily allocated to tangible and intangible assets acquired, and liabilities assumed, based on their fair values as of the acquisition date. We expect to complete the final determination of the purchase price allocation no later than December 31, 2021, which may result in adjustments to the related goodwill and intangible assets, net.
June 30,December 31,
20212020
(In millions)
Goodwill:
Medicaid$390 $378 
Medicare247 247 
Other67 67 
Intangibles assets, net:
Medicaid143 157 
Medicare68 76 
Other14 16 
Total$929 $941 
The following table reconciles margin by segment to consolidated income before income taxes.
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(In millions)
Margin:
Medicaid$551 $553 $1,155 $918 
Medicare101 125 178 242 
Marketplace112 96 263 202 
Other 3 — 7 — 
Total margin 767 774 1,603 1,362 
Add: other operating revenues (1)
199 246 398 491 
Less: other operating expenses (2)
(693)(596)(1,393)(1,155)
Operating income273 424 608 698 
Other expenses, net30 29 60 50 
Income before income tax expense$243 $395 $548 $648 
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(1)Other operating revenues include premium tax revenue, health insurer fees reimbursed, investment income, and other revenue.
(2)Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fees, depreciation and amortization, and other operating expenses.