Health Net 2007 Annual Report Download - page 6

(b) Includes 247,143 HMO members, 282,665 PPO members, 214,976 POS members, 24,780 EPO members
and 16 FFS members.
The following table sets forth certain information regarding our employer groups in the commercial
managed care operations of our Health Plan Services segment as of December 31, 2007:
Number of Employer Groups ........................................... 48,407
Largest Employer Group as % of commercial enrollment ..................... 4.0%
10 largest Employer Groups as % of commercial enrollment .................. 17.5%
A general description of our health plan operations in Arizona, California, Oregon, Connecticut, New Jersey
and New York is set forth below. See “Item 7. Management’s Discussion and Analysis and Results of
Operation—Health Plan Services Segment Membership” for a discussion on changes in our membership levels.
Arizona. Our Arizona operations make us one of the largest commercial managed care providers in Arizona
as measured by total membership and commercial provider network. Our commercial membership in Arizona
was 136,903 as of December 31, 2007, which represented an increase of approximately 9% during 2007. This
increase was primarily due to an increase in PPO membership. Our Medicare membership in Arizona was 50,765
as of December 31, 2007, which represented an increase of approximately 45% during 2007. We did not have
any Medicaid members in Arizona as of December 31, 2007.
California. Health Net of California, Inc., our California HMO (“HN California”), 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, 2007 was 1,467,694, which represented a
decrease of approximately 1% during 2007. The decrease in commercial membership was primarily due to a
decrease of 52,028 HMO members and 17,219 POS members offset by an increase of 50,444 PPO members. Our
Medicare membership in California as of December 31, 2007 was 112,342, which represented an increase of
approximately 8% during 2007. Our Medicaid membership in California as of December 31, 2007 was 711,777
members, which represented an increase of less than 1% during 2007.
Oregon. Our Oregon operations make us one of the largest managed care providers in Oregon as measured
by total membership and provider network. Our commercial membership in Oregon was 134,808 as of
December 31, 2007, which represented an increase of approximately 1% during 2007. Of these members,
approximately 17,675 are covered under policies issued in Washington. Our Medicare membership in Oregon
increased by 2,258 members to 21,746 as of December 31, 2007 from 19,488 as of December 31, 2006. We did
not have any Medicaid members in Oregon as of December 31, 2007.
Northeast. Our Northeast operations are conducted in Connecticut, New Jersey and New York. For our large
employer group business, we directly market commercial HMO, PPO and POS products in New Jersey,
Connecticut and New York, as well as an EPO product in New York. For our small employer group business in
Connecticut, New Jersey and New York from January 1, 2007 through May 31, 2007, we offered HMO, PPO and
POS products through marketing and risk-sharing arrangements with The Guardian under the trade name
HealthCare Solutions (“HCS”). On May 31, 2007, we completed the acquisition of The Guardian’s 50% interest
in HCS (“Guardian Transaction”). For additional information regarding the Guardian Transaction, see “Recent
Developments and Other Company Information—Purchase of The Guardian’s Interest in HealthCare Solutions.”
Our Connecticut operations make us one of the largest managed care providers in Connecticut as measured
by total membership and provider network. Our commercial membership in Connecticut was 161,250 as of
December 31, 2007, which represented a decrease of approximately 12% since December 31, 2006. This
decrease was primarily due to continued pricing discipline and competition in our HMO and POS products. Our
Medicare membership in Connecticut was 45,006 as of December 31, 2007 which represented an increase of
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