Health Net 2014 Annual Report Download - page 82

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Western Region Operations Segment Results
Year Ended December 31,
2014 2013 2012
(Dollars in thousands, except PMPM data)
Commercial premiums........................................ $ 5,443,062 $ 5,175,370 $ 5,705,497
Medicare premiums............................................. 3,044,274 2,771,431 2,790,497
Medicaid premiums............................................. 4,755,897 2,430,272 1,963,104
Dual Eligibles premiums..................................... 117,937 — —
Health plan services premiums............................... 13,361,170 10,377,073 10,459,098
Net investment income ........................................... 45,166 69,613 82,434
Administrative services fees and other income ...... (1,725) 34,791 17,957
Total revenues......................................................... 13,404,611 10,481,477 10,559,489
Health plan services................................................ 11,307,751 8,886,547 9,316,922
Premium tax........................................................ 191,150 124,360 51,617
Health insurer fee................................................ 141,445 — —
Other ACA fees................................................... 97,557 2,530 1,578
Administrative expenses ..................................... 1,027,718 949,927 849,947
Total general and administrative............................. 1,457,870 1,076,817 903,142
Selling..................................................................... 262,338 239,428 245,925
Depreciation and amortization................................ 29,704 38,589 31,145
Interest .................................................................... 31,376 32,614 33,220
Total expenses......................................................... 13,089,039 10,273,995 10,530,354
Income from operations before income taxes......... 315,572 207,482 29,135
Income tax provision .............................................. 169,340 73,621 (1,034)
Net income.............................................................. $ 146,232 $ 133,861 $ 30,169
Pretax margin.......................................................... 2.4 % 2.0 % 0.3%
Commercial premium yield.................................... 0.1 % 2.7 % 4.7%
Commercial premium PMPM (d)........................... $ 385.42 $ 385.13 $ 374.99
Commercial health care cost trend ......................... (3.0)% (1.0)% 9.1%
Commercial health care cost PMPM (d) ................ $ 319.82 $ 329.75 $ 333.17
Commercial medical care ratio (MCR) (e)............. 83.0 % 85.6 % 88.8%
Medicare Advantage MCR (e)................................ 91.5 % 90.6 % 89.3%
Medicaid MCR (e).................................................. 82.1 % 80.4 % 89.4%
Dual Eligibles MCR (e).......................................... 86.1 %
Health plan services MCR (a)................................. 84.6 % 85.6 % 89.1%
Administrative expense ratio (b) ............................ 7.7 % 9.1 % 8.1%
Total G&A expense ratio (b)................................... 10.9 % 10.3 % 8.6%
Selling costs ratio (c) .............................................. 2.0 % 2.3 % 2.4%
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(a) Health plan services MCR is calculated as health plan services cost divided by health plan services premiums
revenue.
(b) Administrative expense and Total G&A expense ratios are computed as either administrative expenses or total
general and administrative expenses divided by the sum of health plan services premiums and administrative
services fees and other income.
(c) The selling costs ratio is computed as selling expenses divided by health plan services premiums revenue.
(d) Per member per month ("PMPM") is calculated based on commercial at-risk member months and excludes
administrative services only ("ASO") member months.
(e) Commercial, Medicare Advantage, Medicaid or Dual Eligibles MCR is calculated as commercial, Medicare,
Medicaid or Dual Eligibles health care cost divided by commercial, Medicare, Medicaid or Dual Eligibles
premiums, as applicable.