2012 GUIDANCE

Health Net is reducing its 2012 full-year guidance for GAAP earnings per diluted share to a range of $1.45 to $1.55, or $1.00 to $1.10 for the combined Western Region and Government Contracts segments.

Following is a table with specific 2012 guidance metrics.

Metric
               

2012 Guidance

Year-end membership (a)
               

Commercial
-9% to -10% (previously -7% to -9%)

Medicaid
+7% to +8% (previously +3% to +5%)

Medicare Advantage
+11% to +13%
 

Total Western Region
                -1% to -2%
 

Consolidated revenues (b)(c)
               

~$11.0 billion to $11.5 billion
 
Commercial premium yields

PMPM (a)
                ~ +4.8% to +5.3%
 
Commercial health care costs 350 to 400 bps > premium yields PMPM

PMPM (a)
               

(previously ~200 to 220 basis points > premium yields PMPM)
 

Selling cost ratio (a)
~2.3% to 2.4%
 

G&A expense ratio (a)(c)
                ~8.5% to 8.7%
 

Tax rate (b)
30.0% to 31.0%

 
                (previously 37.0% to 38.0%)
 
Weighted-average fully

diluted shares outstanding (d)
                ~83.0 million to 84.0 million
 

GAAP EPS (c)(d)

$1.45 to $1.55 (previously $2.85 to $3.00)
 
Combined Western Region
and Government Contracts

EPS (c)(d)
               

$1.00 to $1.10 (previously $2.35 to $2.50)
(a)   For the company’s Western Region Operations segment
(b) For the combined Western Region Operations and Government Contracts segments
(c) These metrics include the impact of the sale of the company’s Medicare PDP business that closed on April 1, 2012.
(d) The company’s guidance does not include the impact of share repurchases other than those to counter dilution.
 

CONFERENCE CALL

As previously announced, Health Net will discuss the company’s second quarter 2012 results during a conference call on Friday, August 3, 2012, beginning at approximately 11:00 a.m. Eastern time. The conference call should be accessed at least 15 minutes prior to its start with the following numbers:
866.393.1637 (Domestic)         855.859.2056 (Replay – Domestic)
706.643.5711 (International) 404.537.3406 (Replay – International)
 

The access code for the live conference call and replay is 96830520. A replay of the conference call will be available through August 10, 2012. A live webcast and replay of the conference call also will be available at www.healthnet.com under “Investor Relations.” The conference call webcast is open to all interested parties. Anyone listening to the company’s conference call or webcast will be presumed to have read Health Net’s Annual Report on Form 10-K for the year ended December 31, 2011, Form 10-Q for the quarter ended March 31, 2012, and other reports filed by the company from time to time with the Securities and Exchange Commission.

ABOUT HEALTH NET

Health Net, Inc. is a publicly traded managed care organization that delivers managed health care services through health plans and government-sponsored managed care plans. Its mission is to help people be healthy, secure and comfortable. Health Net, through its subsidiaries, provides and administers health benefits to approximately 5.5 million individuals across the country through group, individual, Medicare (including the Medicare prescription drug benefit commonly referred to as “Part D”), Medicaid, U.S. Department of Defense, including TRICARE, and Veterans Affairs programs. Health Net’s behavioral health services subsidiary, Managed Health Network, Inc., provides behavioral health, substance abuse and employee assistance programs to approximately 4.8 million individuals, including Health Net’s own health plan members. Health Net’s subsidiaries also offer managed health care products related to prescription drugs, and offer managed health care product coordination for multi-region employers and administrative services for medical groups and self-funded benefits programs.

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