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Segment Information
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Segment Information Segment Information
Through December 31, 2022, we managed and presented our operations through four reportable segments: Commercial & Specialty Business, Government Business, CarelonRx (formerly known as IngenioRx) and Other.
Our Commercial & Specialty Business segment offers plans and services to our Individual, Group risk-based, Group fee-based and BlueCard® members. The Commercial & Specialty Business segment offers health products on a full-risk basis; provides a broad array of administrative managed care services to our fee-based customers; and provides a variety of specialty and other insurance products and services such as dental, vision, life, disability and supplemental health insurance benefits.
Our Government Business segment includes our Medicare and Medicaid businesses, National Government Services (“NGS”) and services provided to the federal government in connection with the FEHB business.
Our CarelonRx segment includes our PBM business. CarelonRx markets and offers PBM services to our affiliated health plan customers, as well as to external customers outside of the health plans we own. CarelonRx has a comprehensive PBM services portfolio, which includes services such as formulary management, pharmacy networks, prescription drug database, member services and mail order capabilities.
Our Other segment includes our Diversified Business Group, now known as Carelon Services, which is our health services business focused on lowering the cost and improving the quality of healthcare by enabling and creating new care delivery and payment models, with a special emphasis on serving those with complex and chronic conditions. This segment also includes certain eliminations and corporate expenses not allocated to our other reportable segments.
As discussed in Note 1 “Organization”, we will be organizing our brand portfolio into three core go-to-market brands over the next several years. As we continue our journey to evolve our business from a traditional health insurance company into a lifetime, trusted health partner, we are evaluating and making changes to how we manage our business. This included a review of the products in each of our operating segments, which resulted in restructurings between some of our operating segments. Therefore, our reportable segment presentation in 2023 and its composition will reflect how we began managing our operations and monitoring performance, aligning strategies and allocating resources on January 1, 2023. As a result of these changes, beginning with our Quarterly Report on Form 10-Q for the first quarter of 2023, we will report our results in the following four reportable segments: (i) Health Benefits, which will combine our existing Commercial & Specialty Business and Government Business segments; (ii) our existing CarelonRx segment; (iii) Carelon Services (our former Diversified Business Group), which will be carved out from our existing Other segment; and (iv) Corporate and Other, which will include businesses that do not individually meet the quantitative thresholds for an operating segment, as well as corporate expenses not allocated to our other reportable segments. We expect to reclassify previously reported information to conform to the new presentation.
We define operating revenues to include premium income, product revenue and administrative fees and other revenues. Operating revenues are derived from premiums and fees received, primarily from the sale and administration of health benefit and pharmacy products and services. Operating gain is calculated as total operating revenue less benefit expense, cost of products sold and selling, general and administrative expense.
Affiliated revenues represent revenues or costs for services provided to our subsidiaries by CarelonRx and Carelon Services, as well as certain back-office services provided by our international businesses, and are recorded at cost or management’s estimate of fair market value. These affiliated revenues are eliminated in consolidation. For segment reporting, we present all capitation risk arrangements on a gross basis; therefore, eliminations also include adjustments for capitated risk arrangements that are recognized on a net basis under GAAP.
Through our participation in various federal government programs, we generated approximately 28% of our total consolidated revenues from agencies of the U.S. government for each of the years ended December 31, 2022, 2021, and 2020. The majority of these revenues are contained in our Government Business segment. An immaterial amount of our total consolidated revenues is derived from activities outside of the U.S. and Puerto Rico.
The accounting policies of the segments are consistent with those described in the summary of significant accounting policies in Note 2, “Basis of Presentation and Significant Accounting Policies,” except that all capitation risk arrangements are reported on a gross basis with an adjustment included in eliminations for capitated risk arrangements that are presented on a net basis under GAAP. We evaluate performance of the reportable segments based on operating gain or loss as defined above. We evaluate net investment income, net gains (losses) on financial instruments, interest expense, amortization expense, gain or loss on extinguishment of debt, income taxes and assets and liabilities on a consolidated basis, as these items are managed in a corporate shared service environment and are not the responsibility of segment operating management.
Financial data by reportable segment for the years ended December 31, 2022, 2021 and 2020 is as follows:
Commercial & Specialty BusinessGovernment BusinessCarelonRxOtherEliminationsTotal
Year ended December 31, 2022
Operating revenue - unaffiliated
$41,674 $96,810 14,974 $2,202 $— $155,660 
Operating revenue - affiliated
— — 13,552 11,092 (24,644)— 
Operating gain2,933 3,297 1,868 354 — 8,452 
Depreciation and amortization of property and equipment
— — — 784 — 784 
Year ended December 31, 2021
Operating revenue - unaffiliated
$38,809 $82,919 12,655 $2,560 $— $136,943 
Operating revenue - affiliated
— — 12,776 7,690 (20,466)— 
Operating gain (loss)
2,753 3,061 1,684 (9)— 7,489 
Depreciation and amortization of property and equipment
— — — 668 — 668 
Year ended December 31, 2020
Operating revenue - unaffiliated
$36,699 $71,572 10,384 $2,153 $— $120,808 
Operating revenue - affiliated
— — 11,527 3,904 (15,431)— 
Operating gain (loss)
2,681 2,444 1,361 (126)— 6,360 
Depreciation and amortization of property and equipment
— — — 638 — 638 
 The major product revenues for each of the reportable segments for the years ended December 31, 2022, 2021 and 2020 are as follows:
202220212020
Commercial & Specialty Business
Managed care products$33,927 $31,564 $29,815 
Managed care services6,152 5,711 5,296 
Dental/Vision products and services1,434 1,363 1,231 
Other161 171 357 
Total Commercial & Specialty Business41,674 38,809 36,699 
Government Business
Managed care products96,322 82,519 71,188 
Managed care services488 400 384 
Total Government Business96,810 82,919 71,572 
CarelonRx
Pharmacy products and services28,526 25,431 21,911 
Other
Integrated health services12,274 9,645 5,787 
Other1,020 605 270 
Total Other Business13,294 10,250 6,057 
Eliminations
Eliminations(24,644)(20,466)(15,431)
Total product revenues$155,660 $136,943 $120,808 
The classification between managed care products and managed care services in the above table primarily distinguishes between the levels of risk assumed. Managed care products represent insurance products where we bear the insurance risk, whereas managed care services represent fee-based product offerings where we provide claims adjudication and other administrative services to the customer, but the customer principally bears the insurance risk. 
Asset, liability and equity details by reportable segment have not been disclosed, as we do not internally report such information. 
A reconciliation of reportable segments’ operating revenue to the amounts of total revenues included in our consolidated statements of income for the years ended December 31, 2022, 2021 and 2020 is as follows:
202220212020
Reportable segments’ operating revenues$155,660 $136,943 $120,808 
Net investment income1,485 1,378 877 
Net (losses) gains on financial instruments(550)318 182 
Total revenues$156,595 $138,639 $121,867 
A reconciliation of reportable segments’ operating gain to income before income tax expense included in our consolidated statements of income for the years ended December 31, 2022, 2021 and 2020 is as follows:
202220212020
Income before income tax expense$7,769 $7,925 $6,238 
Net investment income(1,485)(1,378)(877)
Net losses (gains) on financial instruments550 (318)(182)
Interest expense851 798 784 
Amortization of other intangible assets767 441 361 
Loss on extinguishment of debt— 21 36 
Reportable segments’ operating gain$8,452 $7,489 $6,360