Health Net 2004 Annual Report Download - page 44

Enrollment Information
(2) The selling costs ratio is computed as selling expenses divided by health plan premium revenues.
(3) PMPM is calculated based on total at-risk member months and excludes ASO member months.
2004 Health Plan Membership Compared to 2003 Health Plan Membership
Total health plan membership decreased 6% to approximately 3.6 million members at December 31, 2004 from approximately
3.8 million members at December 31, 2003.
Enrollment in our commercial health plans, including ASO members, decreased 8% at December 31, 2004 compared to the
same period in 2003. This decrease was primarily attributable to the premium pricing increases implemented in early 2004 to address
higher health care costs and network provider issues. The enrollment decline was seen in the large and small group markets in all of
our commercial health plans except our Arizona and Oregon plans. Overall, small group and individual enrollment declined 12%
from 2003 to 2004 and large group enrollment declined 6%. We expect enrollment declines to persist at least through the first half of
2005 as we continue to maintain higher premiums.
Membership in our federal Medicare Risk program increased 1% at December 31, 2004 compared to the same period in 2003,
primarily as a result of membership growth in our Oregon health plan, partially offset by membership losses from our planned
withdrawal in selected counties in California. Medicare enrollment in our Oregon health plan increased from 392 to 8,594 members
during 2004, primarily as a result of our Oregon health plan’s participation in a Medicare PPO demonstration project.
We participate in state Medicaid programs in California, Connecticut and New Jersey. California membership, where the
program is known as Medi-Cal, comprised 84% of our Medicaid membership at December 31, 2004. Overall Medicaid membership
decreased 2% at December 31, 2004 compared to the same period in 2003, primarily as a result of competition in New Jersey, a
change in law that eliminated certain members eligibility in Connecticut and the State of California’s efforts to tighten eligibility
requirements for participation in the Medi-Cal and Healthy Families program. In the third quarter of 2004, we added a new county in
California, accounting for approximately 33,000 new members. Despite ongoing concerns about the states’ ability to adequately fund
these Medicaid programs, we believe that the significant savings generated by Medicaid managed care will provide ongoing future
growth opportunities, as states may move more Medicaid enrollees into managed care plans.
The following table below summarizes our health plan membership information by program and by state at December 31, 2004
and 2003 and the change in membership by program and by state between 2004 and 2003.
41
Commercial
(including ASO members)
Medicare Risk Medicaid Health Plan Total
2004
2003 Change 2004 2003 Change 2004 2003 Change 2004 2003 Change
(Membershi
p
in thousands)
Arizona 129 119 10 35 36 (1)
—
—
—
164 155 9
Californi
a
1,564 1,673 (109) 95 99 (4) 696 702 (6) 2,355 2,474 (119)
Connecticut 284 311 (27) 27 27
—
94 98 (4) 405 436 (31)
New Jersey
228 313 (85)
—
—
—
42 45 (3) 270 358 (88)
New York 259 281 (22) 6 6
—
—
—
—
265 287 (22)
Oregon
139 120 19 9
—
9
—
—
—
148 120 28
Pennsylvania — 4 (4) — — — — — — — 4 (4)
Total 2,603 2,821 (218) 172 168 4 832 845 (13) 3,607 3,834 (227)