Health Net 2006 Annual Report Download - page 56
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Cash flow from operations for the year ended December 31, 2005 improved to $191.4 million compared to
($54.9) million for the year ended December 31, 2004, which was consistent with our expectations.
Consolidated Segment Results
The following table summarizes the operating results of our reportable segments for the last three fiscal
years:
Year Ended December 31,
2006 2005 2004
(Dollars in millions)
Pretax income:
Health plan services segment ......................................... $444.5 $363.4 $ 4.9
Government contracts segment ........................................ 141.5 96.2 94.3
Total segment pretax income ............................................. $586.0 $459.6 $ 99.2
Debt refinancing charge ................................................. (70.1) — —
Litigation, severance and related benefit costs and asset impairments ............. (37.1) (83.3) (32.9)
Net gain on sales of businesses and properties ................................ — — 1.1
Income from operations before income taxes as reported ....................... $478.8 $376.3 $ 67.4
Health Plan Services Segment Membership
The following table below summarizes our health plan membership information by program and by state.
Commercial ASO Medicare Risk Medicaid Health Plan Total
2006 2005 2004 2006 2005 2004 2006 2005 2004 2006 2005 2004 2006 2005 2004
(Membership in thousands)
Arizona .......... 125 117 129 — — — 35 31 35 — — — 160 148 164
California ........ 1,483 1,457 1,561 6 7 3 104 93 95 710 698 696 2,303 2,255 2,355
Connecticut ....... 183 207 233 67 69 51 34 27 27 84 88 94 368 391 405
New Jersey ....... 103 127 210 19 20 18 — — — 46 44 42 168 191 270
NewYork ........ 224 218 252 17 20 7676———247245265
Oregon .......... 133 138 138 — — 1 20 16 9 — — — 153 154 148
2,251 2,264 2,523 109 116 80 199 174 172 840 830 832 3,399 3,384 3,607
Medicare PDP
Stand-alone
(effective
January 1,
2006) .......... — — — ———300————— 300— —
Total ........ 2,251 2,264 2,523 109 116 80 499 174 172 840 830 832 3,699 3,384 3,607
December 31, 2006 Compared to December 31, 2005
Our total health plan membership increased by 9% to 3.7 million members at December 31, 2006 when
compared to December 31, 2005. The increase was driven by the addition of 300,000 Medicare Part D members
and 83,000 members from the Universal Care Acquisition. Consistent with our strategy of growing our small
group and mid-market segments, our small group and individual enrollment increased by 33,000 members in
2006, or 5%, as compared to 2005. Membership in our large group declined by 45,000 members, or 3%, from
2005 to 2006. At December 31, 2006, approximately 30% of our commercial enrollment, including ASO, was in
the small group and individual segments, up from 28% for the same period in 2005.
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