Health Net Inc. is yet another major health carrier that used its second-quarter earnings conference to emphasize that it is looking for opportunities in the newly revamped Medicare managed care program.[@@]
Health Net, Los Angeles, is reporting $54 million in net income for the latest quarter on $3 billion in revenue, up from $41 million in net income on $2.9 billion in revenue for the second quarter of 2004.
The managed care company, which has big operations in Connecticut, New Jersey and New York as well as on the West Coast, ended the quarter providing or administering health coverage for 6.5 million people, up from 5.3 million people a year earlier.
Health Net is “clearly emerging from a turnaround mode” and there are “promising signs for the future,” says Health Net President Jay Gellert.
Membership swelled partly because of a big increase in the number of people in Health Net’s TriCare plan, which provides health coverage for many military dependents, military retirees and civilian Defense Department employees.
Enrollment in the company’s commercial health plans fell 11%, to 2.5 million people, but an 11% increase in the average amount of premium per insured member, to $705, compensated for the decline in the number of people insured.
Many managed care companies, including some that were burned by the financing problems and red tape that plagued the Medicare managed care program established in the mid-1990s, have been touting new Medicare plans designed to take advantage of new rules set to take effect in 2006.
Health Net is no exception.
“We are excited about the opportunities in Medicare,” Gellert says.
Health Net already has fifth-largest Medicare Advantage managed care operation, with 175,000 members.
Health Net is introducing Medicare managed care plans in Connecticut, and it also will be participating in the new Medicare prescription drug insurance program, Gellert says.