Health Net 2011 Annual Report Download - page 6

As of December 31, 2011, our total membership was comprised of approximately 46% commercial risk, 7%
Medicare Advantage, 13% PDP and 34% Medicaid. As of December 31, 2011, our commercial risk enrollment
was comprised of approximately 70% large group, 25% small group and 5% individual accounts.
The following table sets forth certain information regarding our employer groups in the commercial
managed care operations of our Western Region Operations segment as of December 31, 2011:
Number of Employer Groups ........................................... 37,180
Largest Employer Group as % of commercial enrollment ..................... 8.8%
10 largest Employer Groups as % of commercial enrollment .................. 23.3%
Detailed membership information regarding our health plan operations in Arizona, California, Oregon and
Washington health plans is set forth below. See “Item 7. Management’s Discussion and Analysis and Results of
Operations—Results of Operations—Western Region Operations Reportable Segment—Western Region
Operations Segment Membership” for a discussion on changes in our membership levels during 2011.
Arizona. Our Arizona health plan operations are conducted by our subsidiaries, Health Net of Arizona, Inc.
and Health Net Life Insurance Company (“HNL”). Our commercial membership in Arizona was 140,182 as of
December 31, 2011. Our Medicare Advantage membership in Arizona was 40,334 as of December 31, 2011. We
did not have any Medicaid members in Arizona as of December 31, 2011.
California. In California, our health plan operations are conducted by our subsidiaries Health Net of
California, Inc. (“HN California”), HNL and Health Net Community Solutions, Inc. (“HNCS”). HN California,
our California HMO, is one of the largest HMOs in California as measured by total membership and has one of
the largest provider networks in California. Our commercial membership in California as of December 31, 2011
was 1,133,608, including 427,174 tailored network members. Our Medicare Advantage membership in California
as of December 31, 2011 was 125,428. Our Medicaid membership in California as of December 31, 2011 was
1,008,915 members.
Oregon and Washington. Our Oregon and Washington health plan operations are conducted by our
subsidiaries, Health Net Health Plan of Oregon, Inc. (“HNOR”) and HNL. Our commercial membership in
Oregon was 80,730, including 671 tailored network members, as of December 31, 2011. Our commercial
membership in Washington was 11,093 as of December 31, 2011. Our Medicare Advantage membership in
Oregon and Washington was 39,150 as of December 31, 2011. We did not have any Medicaid members in
Oregon or Washington as of December 31, 2011.
Medicare Products
We provide a wide range of Medicare products, including Medicare Advantage plans with and without
prescription drug coverage, Medicare Part D stand-alone PDP, and Medicare supplement products that
supplement traditional fee-for-service Medicare coverage. Our subsidiaries have a number of contracts with the
Centers for Medicare & Medicaid Services (“CMS”) under the Medicare Advantage and PDP programs
authorized under Title XVIII of the Social Security Act of 1935, as amended (most recently by the Patient
Protection and Affordable Care Act of 2010).
In November 2010, CMS imposed sanctions against us suspending the marketing to and enrollment of new
members into all of our Medicare Advantage, including Medicare Advantage plans with prescription drug
coverage (“MAPD”) and PDP products. These sanctions related to our compliance with certain Medicare rules
and regulations. On August 1, 2011, CMS lifted the sanctions, and we resumed marketing our Medicare
Advantage, MAPD and PDP products and enrolling beneficiaries with effective dates on or after September 1,
2011. During the period of the sanctions, we continued to provide benefits to and serve our existing Medicare
Advantage, MAPD and PDP members. CMS continues to prohibit our PDP products from receiving auto-
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