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In many ways, the ACA’s broad range of new regulatory and other requirements will fundamentally
alter the way the health insurance industry operates. At Health Net, we are devoting significant
resources to implementing the ACA’s new requirements. Some we have already implemented, while
others will be required over the next few years.
The economic challenges facing the United States also have driven change. Health Net’s successful
response to these challenges helped drive improved performance in 2010.
WESTERN REGION COMMERCIAL HEALTH PLANS
Health Net’s commercial enrollment was approximately 1.4 million members at the end of 2010, a
decline of 4 percent from the end of 2009.
The ongoing challenges arising from persistent economic pressures are creating greater focus on
the affordability of health plans. Businesses want to maintain comprehensive health benefits for their
employees. However, high health care cost inflation continues to pressure businesses of every size
in their quest to meet this fundamental need.
In 2010, Health Net made further noteworthy progress in addressing this concern as the company’s
tailored network, health maintenance organization (HMO) products grew yet again, gaining share in
the small group HMO market despite economic headwinds that included persistently high
unemployment in our Western Region markets. This growth helped produce enrollment stability in
the second half of the year and lay the groundwork for what we believe will be a successful 2011.
Our tailored network plans combine comprehensive benefits, increased affordability compared to
our traditional HMO products, and broad
networks of physicians and hospitals. These networks are
based on strong relationships with select providers who demonstrate an optimal combination of
quality and cost effectiveness.
At the end of 2010, enrollment in Health Net’s tailored network plans represented 23 percent of total
commercial enrollment compared with 19 percent at the end of 2009.