Health Net 2007 Annual Report Download - page 7

approximately 34% during 2007 and our Medicaid membership in Connecticut was 90,053 as of December 31,
2007. For more information on our withdrawal from Connecticut’s Medicaid program, see “—Recent
Developments and Other Company Information—Withdrawal from Connecticut Medicaid Program” and
“—Segment Information—Health Plan Services Segment—Medicaid and Related Products.”
Our commercial membership in New Jersey was 90,575 as of December 31, 2007, which represented a
decrease of approximately 12% during 2007. This decrease was primarily due to the mix shift from large group
to small group/individual enrollment in 2007. Our Medicaid membership in New Jersey was 43,923 as of
December 31, 2007, which represented a decrease of approximately 5% during 2007. We did not have any
Medicare members in New Jersey as of December 31, 2007.
Our New York operations make us one of the top ten largest managed care providers in New York as
measured by total membership in our operating area and provider network. In New York, we had 233,747
commercial members as of December 31, 2007, which represented an increase of approximately 4% during 2007.
Our Medicare membership in New York was 2,819 and 6,388 as of December 31, 2007 and 2006, respectively.
Effective October 1, 2007, we sold 6,180 Medicare Advantage members in New York City to Touchstone Health
HMO, Inc. We did not have any Medicaid members in New York as of December 31, 2007.
Medicare Products
We offer our Medicare products directly to individuals and through employer/union groups. To enroll in one
of our Medicare plans, covered persons must be entitled to both Parts A and B of Medicare. We provide or
arrange health care services normally covered by Medicare, plus a broad range of health care services not
covered by traditional Medicare. Any additional benefits in our plans are covered by a monthly premium charged
to the enrollee or through portions of CMS payments that may be allocated, per CMS regulations and guidance,
for these purposes.
We were one of the nation’s largest Medicare Advantage contractors based on membership of 236,301
members as of December 31, 2007 compared to membership of 198,633 as of December 31, 2006. We were also
a major participant in the “Part D” stand-alone drug benefit with 379,560 members in all 50 states and the
District of Columbia as of December 31, 2007. Our entire group of Medicare plans focuses on simplicity so that
members can sign up and use benefits with minimal paperwork and coverage that starts immediately upon
enrollment. We also provide Medicare supplemental coverage to 37,852 members through either individual
Medicare supplement policies or employer group sponsored coverage.
In 2007, we offered Medicare Advantage plans in select counties in nine states (Arizona, California,
Connecticut, Hawaii, New Mexico, New York, Oregon, Texas, Washington).
Effective October 1, 2007, Health Net of New York, Inc. sold its 6,180-member Medicare Advantage line of
business in New York City. In October of 2007, we announced an expansion of our Medicare Advantage product
line through our Private Fee For Service (“PFFS”) plans. Effective January 1, 2008, we began offering plans in
Virginia, North Carolina, Massachusetts, and Georgia, bringing the total number of states where we offer
Medicare Advantage plans from nine to thirteen. PFFS plans are non-network based Medicare Advantage plans
that allow Medicare-eligible consumers to participate in a private Medicare health insurance plan with the
flexibility of original Medicare and better benefits than the standard Medicare Part A/Part B coverage.
We also offer Medicare Advantage Special Needs Plans in several of the thirteen states where we offer
Medicare Advantage Plans. These plans offer beneficiaries with chronic obstructive pulmonary disease,
congestive heart failure, and hypercholesterolemia access to additional health care and prescription drug
coverage. See “—Government Regulation—Federal Legislation and Regulation—Medicare Legislation” and
“Item 1A. Risk Factors—Our efforts to capitalize on Medicare business opportunities could prove to be
unsuccessful” for additional information regarding our Medicare program.
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