Health Net 2004 Annual Report Download - page 4

PART I
Item 1. Business.
General
We are an integrated managed care organization that delivers managed health care services through health plans and government
sponsored managed care plans. We operate and conduct our businesses through subsidiaries of Health Net, Inc., which is among the
nation’s largest publicly traded managed health care companies. In this Annual Report on Form 10-K, unless the context otherwise
requires, the terms “Company,” “we,” “us,” and “our” refer to Health Net, Inc. and its subsidiaries.
Our health plans and government contracts subsidiaries provide health benefits through our health maintenance organizations
(“HMOs”), insured preferred provider organizations (“PPOs”) and point-of-service (“POS”) plans to approximately 6.5 million
individuals in 27 states and the District of Columbia through group, individual, Medicare, Medicaid and TRICARE programs. We
also offer managed health care products related to behavioral health and prescription drugs. In addition, we own health and life
insurance companies licensed to sell exclusive provider organization (“EPO”), PPO, POS and indemnity products, as well as auxiliary
non-health products such as life and accidental death and dismemberment, dental, vision, behavioral health and disability insurance,
in 37 states and the District of Columbia.
Our executive offices are located at 21650 Oxnard Street, Woodland Hills, California 91367, and our Internet web site address is
www.healthnet.com.
We make available free of charge on or through our Internet web site, www.healthnet.com, all of our reports on Forms 10-K, 10-
Q and 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with, or
furnished to, the Securities and Exchange Commission (“SEC”). Copies of our Corporate Governance Guidelines, Code of Business
Conduct and Ethics and charters for the Audit Committee, Compensation Committee, Governance Committee and Finance
Committee of our Board of Directors are also available on our Internet web site. We will provide electronic or paper copies free of
charge upon request. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and
other information regarding issuers that file electronically with the SEC.
Segment Information
We currently operate within two reportable segments, Health Plan Services and Government Contracts, each of which is
described below. For additional financial information regarding our reportable segments, see Note 15 in the Notes to Consolidated
Financial Statements included as part of this Annual Report on Form 10-K.
Health Plan Services Segment
Our Health Plan Services segment includes the operations of our health plans in Arizona, California, Connecticut, New Jersey,
New York and Oregon, the operations of our health and life insurance companies and our behavioral health and pharmaceutical
services subsidiaries. We have approximately 3.5 million at-risk and 0.1 million administrative services only (“ASO”) members in
our Health Plan Services segment.
Managed Health Care Operations
We offer a full spectrum of managed health care products and services. Our strategy is to offer to employers and individuals a
wide range of managed health care products and services that, among other things, provide comprehensive coverage and contain
health care costs increases. Over the past five years, we have focused on expanding our POS and PPO product lines, which we believe
will enable us to offer greater flexibility to employer groups and individual insureds. As of December 31, 2004, 46% of our
commercial members were covered by POS and PPO products, 51% were covered by conventional HMO products and 3% were
covered by EPO and fee-for-service products.
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