Health Net 2002 Annual Report Download - page 29

HEALTH NET, INC. | 27
Our Government Contracts reportable segment
includes government-sponsored managed care plans
through the TRICARE programs and other government
contracts. The Government Contracts reportable segment
administers large, multi-year managed health care govern-
ment contracts. Certain components of these contracts are
subcontracted to unrelated third parties. The Company
administers health care programs covering approximately
1.5 million eligible individuals under TRICARE. The
Company has three TRICARE contracts that cover Alaska,
Arkansas, California, Hawaii, Oklahoma, Oregon,
Washington and parts of Arizona, Idaho, Louisiana
and Texas.
Revenues of our employer services group operating
segment are included in “Other income.”
Please refer to Notes 1 and 2 to the consolidated
financial statements for discussion on the changes to our
reportable segments.
Prior to 2002, we operated within two slightly
different segments: Health Plan Services and Government
Contracts/Specialty Services. During 2000 and most of
2001, the Health Plan Services segment consisted of two
regional divisions: Western Division (Arizona, California
and Oregon) and Eastern Division (Connecticut, Florida,
New Jersey, New York and Pennsylvania). During the
fourth quarter of 2001, we decided that we would no
longer view our health plan operations through these two
regional divisions. The Government Contracts/Specialty
Services reportable segment included government-spon-
sored managed care plans through the TRICARE
programs, behavioral health, dental and vision, and
managed care products related to bill review, administra-
tion and cost containment for hospitals, health plans and
other entities.
Health Net, Inc. (formerly named Foundation Health
Systems, Inc.) (together with its subsidiaries, the Company,
we, us or our) is an integrated managed care organization
that administers the delivery of managed health care
services. We are one of the nation’s largest publicly traded
managed health care companies. Our health plans and
government contracts subsidiaries provide health benefits
through our health maintenance organizations (HMOs),
preferred provider organizations (PPOs) and point of
service (POS) plans to approximately 5.4 million individ-
uals in 15 states through group, individual, Medicare,
Medicaid and TRICARE (formerly known as the Civilian
Health and Medical Program of the Uniformed Services
(CHAMPUS)) programs. Our subsidiaries also offer
managed health care products related to behavioral health,
dental, vision and prescription drugs. We also offer
managed health care product coordination for workers’
compensation insurance programs through our employer
services group subsidiary. We also own health and life
insurance companies licensed to sell PPO, POS and indem-
nity products, as well as auxiliary non-health products
such as life and accidental death and disability insurance in
35 states and the District of Columbia.
We currently operate within two reportable segments:
Health Plan Services and Government Contracts. Our
current Health Plan Services reportable segment includes
the operations of our health plans in the states of Arizona,
California, Connecticut, New Jersey, New York, Oregon
and Pennsylvania, the operations of our health and life
insurance companies and our behavioral health, dental,
vision and pharmaceutical services subsidiaries. We have
approximately 3.9 million at-risk members in our Health
Plan Services reportable segment.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations