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Health Net Reports Higher 4th Quarter Net Income

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NU Online News Service, Feb. 14, 10:54 a.m. – Health Net Inc., Los Angeles, is reporting $56 million in net income for the fourth quarter of 2001 on $2.5 billion in revenue, up from $46 million in net income on $2.4 billion in revenue for the fourth quarter of 2000.

The managed care company ended 2001 providing or administering major medical coverage for 5.5 million people, about as many people as it covered at the end of 2000.

Health Net administers health plans for 1.5 million military personnel, military retirees and dependents enrolled in the federal government’s Tricare program. The company insures 1 million members of Medicaid and Medicare programs, and it also insures 3 million people enrolled in commercial health plans.

Average revenue per insured member increased 5% in 2001, to $510.

Health Net is expecting commercial premium rates per member to increase about 15% this year, and health care costs to increase about 14%.

Health Net is emphasizing its recent success at shifting from dependence on tightly managed health maintenance organization plans, toward more loosely managed point-of-service plans and preferred provider plans.

In California, Health Net’s primary market, members of the more loosely managed plans now make up 23% of commercial membership, up from 17% at the end of 2000, the company says.