Health Net 2009 Annual Report Download - page 6

California and Health Net Life Insurance Company to respond to the health care needs of
uninsured Latino immigrants and their families. These products include group and individual
coverage. The individual health care plans are the first-ever cross-border health care plans made
available to individual consumers who purchase benefits directly from insurers.
• Decision PowerSM, a series of programs designed to directly involve patients in their health care
decisions.
• Community enrollment and customer service centers in East Los Angeles, California and
Modesto, California.
The pricing of our products is designed to reflect the varying costs of health care based on the benefit
alternatives in our products. We provide employers and employees the ability to select and enroll in products
with greater managed health care and cost containment elements. In general, our HMOs provide comprehensive
health care coverage for a fixed fee or premium that does not vary with the extent or frequency of medical
services actually received by the member. PPO enrollees obtain their medical care from a panel of contracting
providers or choose a non-contracting provider and are reimbursed on a traditional indemnity plan basis after
reaching an annual deductible. POS enrollees choose, each time they receive care, from conventional HMO or
indemnity-like (in-network and out-of-network) coverage, with payments and/or reimbursement depending on
the coverage chosen. We assume both underwriting and administrative expense risk in return for the premium
revenue we receive from our HMO, POS and PPO products. We have contractual relationships with health care
providers for the delivery of health care to our enrollees in each product category.
In 2009, we continued to focus on adding small group (generally defined as employer groups with 2 to 50
employees) members and, as of December 31, 2009, approximately 30% of our commercial risk enrollment was
in small group and individual accounts. The following table contains membership information relating to our
commercial large group (generally defined as an employer group with more than 50 employees) members,
commercial small group and individual members, Medicare members, Medicaid members, ASO members and
Part D members as of December 31, 2009 (our Medicare and Medicaid businesses are discussed below under
“—Medicare Products” and “—Medicaid and Related Products”):
Commercial—Large Group .......................................... 1,000,626(a)
Commercial—Small Group & Individual ............................... 439,287(b)
Medicare (Medicare Advantage only) ................................. 226,868
Medicaid ........................................................ 857,388
ASO............................................................ 5,150
Stand-alone PDP .................................................. 460,216
(a) Includes 698,361 HMO members, 157,568 POS members, 120,922 PPO members, 742 exclusive provider
organization members and 23,033 Fee-for-Service members.
(b) Includes 195,200 HMO members, 37,947 POS members, 206,136 PPO members and 4 Fee-for-Service
members.
The following table sets forth certain information regarding our employer groups in the commercial
managed care operations of our West Operations segment as of December 31, 2009:
Number of Employer Groups ........................................... 38,287
Largest Employer Group as % of commercial enrollment ..................... 8.6%
10 largest Employer Groups as % of commercial enrollment .................. 23.3%
Detailed membership information regarding our Arizona, California and Oregon health plans is set forth
below. See “Item 7. Management’s Discussion and Analysis and Results of Operations—Health Plan Services
Membership” for a discussion on changes in our membership levels during 2009.
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