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10-K Segment Information
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Segment Reporting [Abstract]    
Segment Information Segment Information
As discussed in Note 1 “Organization”, we have changed our reportable segment presentation and its composition to reflect how we began managing our operations and monitoring performance, aligning strategies and allocating resources beginning on January 1, 2023. We now report our results of operations in the following four reportable segments: Health Benefits (aggregates our previously reported Commercial & Specialty Business and Government Business segments), CarelonRx, Carelon Services (previously included in our Other segment) and Corporate & Other. In 2022, we managed and presented our operations through the following four reportable segments: Commercial & Specialty Business, Government Business, CarelonRx and Other. Previously reported information throughout this Quarterly Report on Form 10-Q has been reclassified to conform to the new presentation.
Our Health Benefits segment offers a comprehensive suite of health plans and services to our Individual, Employer Group risk-based, Employer Group fee-based, BlueCard®, Medicare, Medicaid and FEHB program members. Our Health Benefits segment also includes our National Government Services business. The Health Benefits 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 stop loss, dental, vision, life, disability and supplemental health insurance benefits.
Our CarelonRx segment includes our pharmacy business. CarelonRx markets and offers pharmacy services to our affiliated health plan customers, as well as to external customers outside of the health plans we own. CarelonRx offers a comprehensive pharmacy services portfolio, which includes services such as formulary management, pharmacy networks, specialty and home delivery pharmacy services and member services.

Our Carelon Services segment is 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. Carelon Services offers a broad array of healthcare-related services and capabilities to internal and external customers including integrated care delivery, behavioral health, palliative care, utilization management, payment integrity services and subrogation services, as well as health and wellness programs.
Our Corporate & Other segment includes our businesses that do not individually meet the quantitative threshold for an operating segment, as well as corporate expenses not allocated to our other reportable segments.
We define operating revenues to include premium income, product revenue and service fees. Operating revenues are derived from premiums and fees received, primarily from the sale and administration of health benefits and pharmacy products and services. Operating gain is calculated as total operating revenue less benefit expense, cost of products sold and operating expense.
Affiliated revenues represent revenues or costs for services provided to our subsidiaries by CarelonRx and Carelon Services, in addition to certain back-office services provided by our international businesses, which are recorded at cost or management’s estimate of fair market value. These affiliated revenues are eliminated in consolidation.
Financial data by reportable segment for the three months ended September 30, 2023 and 2022 is as follows:
Carelon
Health
Benefits		CarelonRxCarelon
Services		TotalCorporate
& Other		EliminationsTotal
Three Months Ended September 30, 2023
Premiums$34,934 $— $422 $422 $— $(97)$35,259 
Product revenue— 5,177 — 5,177 — — 5,177 
Service fees1,810 4 196 200 34 — 2,044 
Operating revenue - unaffiliated36,744 5,181 618 5,799 34 (97)42,480 
Operating revenue - affiliated— 3,337 2,756 6,093 208 (6,301)— 
Operating revenue - total$36,744 $8,518 $3,374 $11,892 $242 $(6,398)$42,480 
Operating gain (loss)$1,847 $477 $173 $650 $(741)$— $1,756 
Three Months Ended September 30, 2022
Premiums$33,376 $— $412 $412 $— $(66)$33,722 
Product revenue— 3,972 — 3,972 — — 3,972 
Service fees1,689 — 224 224 18 — 1,931 
Operating revenue - unaffiliated35,065 3,972 636 4,608 18 (66)39,625 
Operating revenue - affiliated— 3,277 2,518 5,795 193 (5,988)— 
Operating revenue - total$35,065 $7,249 $3,154 $10,403 $211 $(6,054)$39,625 
Operating gain (loss) (restated)$1,634 $516 $125 $641 $(24)$— $2,251 
Financial data by reportable segment for the nine months ended September 30, 2023 and 2022 is as follows:
Carelon
Health
Benefits		CarelonRxCarelon
Services		TotalCorporate
& Other		EliminationsTotal
Nine Months Ended September 30, 2023
Premiums$106,701 $— $1,261 $1,261 $— $(246)$107,716 
Product revenue— 14,058 — 14,058 — — 14,058 
Service fees5,323 4 604 608 50 — 5,981 
Operating revenue - unaffiliated112,024 14,062 1,865 15,927 50 (246)127,755 
Operating revenue - affiliated— 10,946 8,262 19,208 730 (19,938)— 
Operating revenue - total$112,024 $25,008 $10,127 $35,135 $780 $(20,184)$127,755 
Operating gain (loss)$6,154 $1,485 $518 $2,003 (942)— 7,215 
Nine Months Ended September 30, 2022
Premiums$98,626 $— $1,105 $1,105 $— $(148)$99,583 
Product revenue— 10,841 — 10,841 — — 10,841 
Service fees4,862 — 670 670 37 — 5,569 
Operating revenue - unaffiliated103,488 10,841 1,775 12,616 37 (148)115,993 
Operating revenue - affiliated— 10,162 7,310 17,472 762 (18,234)— 
Operating revenue - total$103,488 $21,003 $9,085 $30,088 $799 $(18,382)$115,993 
Operating gain (loss) (restated)$5,266 $1,393 $438 $1,831 $(73)$— $7,024 
For segment reporting, we present all capitated risk arrangements on a gross basis; therefore, eliminations also include adjustments for unaffiliated capitated risk arrangements that are recognized on a net basis under GAAP, as well as affiliated eliminations.
A reconciliation of reportable segments’ operating revenue to the amounts of total revenues included in our consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 is as follows:
 Three Months Ended 
 September 30		Nine Months Ended 
 September 30
 2023202220232022
Reportable segments’ operating revenue$42,480 $39,625 $127,755 $115,993 
Net investment income493 371 1,296 1,112 
Net losses on financial instruments(124)(57)(358)(439)
Total revenues$42,849 $39,939 $128,693 $116,666 
A reconciliation of income before income tax expense to reportable segments’ operating gain included in our consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 is as follows:
 Three Months Ended 
 September 30		Nine Months Ended 
 September 30
 2023202220232022
(Restated)(Restated)
Income before income tax expense$1,654 $2,127 $6,714 $6,555 
Net investment income(493)(371)(1,296)(1,112)
Net losses on financial instruments124 57 358 439 
Interest expense259 213 771 622 
Amortization of other intangible assets212 225 668 520 
Reportable segments’ operating gain$1,756 $2,251 $7,215 $7,024 
 Segment Information
As discussed in Note 1 “Organization”, we are reorganizing our brand portfolio into three core go-to-market brands over the next several years. Our branding strategy reflects the evolution of our business from a traditional health insurance company to a lifetime, trusted health partner. Given this evolution, we reviewed and modified how we manage our business, monitor our performance and allocate resources. As a result, we changed our reportable segments to the following beginning in the first quarter of 2023: Health Benefits (aggregates our previously reported Commercial & Specialty Business and Government Business segments), CarelonRx, Carelon Services (previously included in our Other segment) and Corporate & Other (our 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).
Our Health Benefits segment offers a comprehensive suite of health plans and services to our Individual, Employer Group risk-based, Employer Group fee-based, BlueCard®, Medicare, Medicaid and FEHB program members. Our Health Benefits segment also includes our National Government Services business. The Health Benefits 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 stop loss, dental, vision, life, disability and supplemental health insurance benefits.
Our CarelonRx segment includes our pharmacy business. CarelonRx markets and offers pharmacy services to our affiliated health plan customers, as well as to external customers outside of the health plans we own. CarelonRx offers a comprehensive pharmacy services portfolio, which includes services such as formulary management, pharmacy networks, specialty and home delivery pharmacy services and member services.
Our Carelon Services segment is 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. Carelon Services offers a broad array of healthcare-related services and capabilities to internal and external customers including integrated care delivery, behavioral health, palliative care, utilization management, payment integrity services and subrogation services, as well as health and wellness programs.
Our Corporate and Other segment includes our businesses that do not individually meet the quantitative threshold for an operating segment, as well as corporate expenses not allocated to our other reportable segments.
We define operating revenues to include premium income, product revenue and service fees. Operating revenues are derived from premiums and fees received, primarily from the sale and administration of health benefits and pharmacy products and services. Operating gain is calculated as total operating revenue less benefit expense, cost of products sold and operating expense.
Affiliated revenues represent revenues or costs for services provided to our subsidiaries by CarelonRx and Carelon Services, in addition to certain back-office services provided by our international businesses, which 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 Health Benefits 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:
Carelon
Health
Benefits		CarelonRxCarelon
Services		TotalCorporate
& Other		EliminationsTotal
Year Ended December 31, 2022
Premiums$131,964 $— $1,499 $1,499 $— $(234)$133,229 
Product revenue— 14,978 — 14,978 — — 14,978 
Service fees6,520 — 882 882 51 — 7,453 
Operating revenue - unaffiliated138,484 14,978 2,381 17,359 51 (234)155,660 
Operating revenue - affiliated— 13,548 9,896 23,444 966 (24,410)— 
Operating revenue - total$138,484 $28,526 $12,277 $40,803 $1,017 $(24,644)$155,660 
Operating gain (loss)$6,061 $1,868 $455 $2,323 $(101)$— $8,283 
Year Ended December 31, 2021
Premiums$115,725 $— $1,786 $1,786 $— $(138)$117,373 
Product revenue— 12,657 — 12,657 — — 12,657 
Service fees6,003 — 842 842 68 — 6,913 
Operating revenue - unaffiliated121,728 12,657 2,628 15,285 68 (138)136,943 
Operating revenue - affiliated— 12,774 7,020 19,794 534 (20,328)— 
Operating revenue - total$121,728 $25,431 $9,648 $35,079 $602 $(20,466)$136,943 
Operating gain (loss)$5,884 $1,684 $118 $1,802 $(127)$— $7,559 
Year Ended December 31, 2020
Premiums$102,643 $— $1,466 $1,466 $— $— $104,109 
Product revenue— 10,384 — 10,384 — — 10,384 
Service fees5,628 — 643 643 44 — 6,315 
Operating revenue - unaffiliated108,271 10,384 2,109 12,493 44 — 120,808 
Operating revenue - affiliated— 11,527 3,611 15,138 293 (15,431)— 
Operating revenue - total$108,271 $21,911 $5,720 $27,631 $337 $(15,431)$120,808 
Operating gain (loss)$5,125 $1,361 $28 $1,389 $(154)$— $6,360 
 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$7,600 $7,995 $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$8,283 $7,559 $6,360