HEALTH NET INC - FORM 8-K - EX-99.1 - PRESENTATION SLIDES FOR 29TH ANNUAL J.P. MORGAN HEALTHCARE CONFERENCE

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Jay Gellert

President &

Chief Executive Officer

January 10, 2011

Annual

J.P. Morgan

Healthcare Conference

Exhibit 99.1

Cautionary Statement

All statements in this presentation, other than statements of historical information provided herein, may be deemed to be forward-looking statements and as

such are subject to a number of risks and uncertainties. These statements are based on management’s analysis, judgment, belief and expectation only as of the

date hereof, and are subject to uncertainty and changes in circumstances. Without limiting the foregoing, statements including the words “believes,” “anticipates,”

“plans,” “expects,” “may,” “should,” “could,” “estimate,” “intend” and other similar expressions are intended to identify forward-looking statements. Actual results

could differ materially due to, among other things, health care reform, including the ultimate impact of the Patient Protection and Affordable Care Act, which could

materially adversely affect the company’s financial condition, results of operations and cash flows through, among other things, reduced revenues, new taxes,

expanded liability, and increased costs (including medical, administrative, technology or other costs), or require changes to the ways in which the company does

business; rising health care costs; continued slow economic growth or a further decline in the economy; negative prior period claims reserve developments; trends

in medical care ratios; membership declines; unexpected utilization patterns or unexpectedly severe or widespread illnesses; rate cuts affecting the Health Net’s

Medicare or Medicaid businesses; costs, fees and expenses related to the post-closing administrative services provided under the administrative services

agreements entered into in connection with the sale of Health Net’s Northeast business; potential termination of the administrative services agreements by the

service recipients should Health Net breach such agreements or fail to perform all or a material part of the services required thereunder; any liabilities of the

Northeast business that were incurred prior to the closing of its sale as well as those liabilities incurred through the winding-up and running-out period of the

Northeast business; litigation costs; regulatory issues with agencies such as the California Department of Managed Health Care, the Centers for Medicare and

Medicaid Services and state departments of insurance, including the continued suspension of the marketing of and enrollment into Health Net’s Medicare products

for a significant period of time, which could have a material adverse impact on Health Net’s Medicare business; operational issues; investment portfolio

impairment charges; volatility in the financial markets; and general business and market conditions. Additional factors that could cause actual results to differ

materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the “Risk Factors” section included within

the company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission

(“SEC”), and the risks discussed in the company’s other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking

statements. The company undertakes no obligation to publicly revise any of its forward-looking statements to reflect events or circumstances that arise after the

date of this presentation.

Emerging Environment

•

Economy is driving change

•

Federal and state budget pressures

will affect health care

•

Future implementation of Affordable

Care Act remains to be defined

•

Diverse book of business with value

differentiation is key

HNT: Positioned for the Future

•

Value-based products

–

Adequate coverage an emerging issue

–

Network and product differentiation key

•

Diverse book of stable businesses

–

Important with health care reform

–

Commercial balanced with multiple

government programs

•

Expect consistent and predictable financial performance

–

Can operate with MCR and have targeted G&A

–

Focus on cost containment

Diverse Businesses: Commercial

•

Move to lower price point products

–

Back to the future: return of HMO products

–

Efficient networks focused on high quality,

cost-effective providers

–

Built on medical group model

•

Sustain broad coverage

–

Benefit designs that meet customers’

needs

and health care reform requirements

•

Provider partnerships key

–

Drive to innovation in product design and

financial structures

Diverse Businesses: Medicare

•

Traditional strength: network-model HMO markets

•

Sustain margins through product design and premiums

–

Benefit flexibility

–

Many counties still at zero dollar premium

–

Revenue opportunities

•

Ongoing assessment of special needs plans

•

Provider partnership opportunities

Diverse Businesses: Medicaid

•

Enrollment flexes with employment

•

Stable financial performance despite

rate pressure

•

Expansion potential due to health care reform

•

Low-cost, capitated network presents product

development opportunities

Diverse Businesses:

Government Contracts

•

Consistent and predictable TRICARE performance

•

New contract implementation on schedule for

April 1, 2011 launch

–

Accounting treatment being evaluated

–

Reimbursable costs with deployment

•

MFLC behavioral health program growing

•

New opportunities

–

Department of Defense cost pressures

–

Veterans Affairs health and others

Financial Performance

•

Stable enrollment

•

Expanding commercial margins

•

Managing general and administrative costs

•

Strong cash position

•

Share repurchase program

2010 Earnings Guidance

Year-end Membership

(a)

•

Commercial: -3% to -4%

•

Medicaid: +5% to +6%

•

Medicare Advantage: Flat

•

Total Western Region

medical membership: Flat

•

PDP: -6% to -7%

Consolidated Revenues

(b)

$13.0 to $13.5 billion

Commercial Yields

(a)

~ 8.0% to 8.3%

Commercial Health Care Cost Trends

(a)

~ 80 to 100 bps < Premium Yields

Selling Cost Ratio

~ 2.4%

Government Contracts Ratio

~ 94.5% to 95.0%

G&A Expense Ratio

~ 8.8% to 9.0%

Tax Rate

(b)

~ 39.0%

Weighted-average Fully

Diluted Shares Outstanding

98 million –

100 million

GAAP EPS

Combined Western Region Operations

and Government Contracts EPS

$2.07 to $2.17

$2.55 to $2.58

(a)

For the company’s Western Region Operations segment

(b)

For the combined Western Region Operations and Government Contracts segments

2011 Earnings Guidance

Year-end Membership

(a)

•

Commercial: +1% to +2%

•

Medicaid: +6% to +7%

•

Medicare Advantage

(d)

: -15% to -17%

•

Total Western Region Operations

medical membership: +2% to +3%

•

PDP

(d)

: -14% to -16%

Consolidated Revenues

(b)(d)

$12.0 to $12.5 billion

Commercial Yields

(a)

~ 7.8% to 8.3%

Commercial Health Care Cost Trends

(a)

~ 40 to 60 bps < Premium Yields

Selling Cost Ratio

(a)

~ 2.3% to 2.4%

G&A Expense Ratio

(a)

~ 8.7% to 8.9%

Tax Rate

(b)

~ 39.2%

Weighted-average Fully

Diluted Shares Outstanding

(c)

96 million –

97 million

GAAP EPS

(c)(d)

Combined Western Region Operations

and Government Contracts EPS

(c)(d)

At least $2.05

At least $2.75

(a)

For the company’s Western Region Operations segment

(b)

For the combined Western Region Operations and Government Contracts segments

(c)

The company’s guidance does not include the impact of share repurchases other than to counter dilution.

(d)

Includes

the

impact

the

CMS

sanctions

previously

announced

November

19,

2010

HNT: Building Shareholder Value

•

Strategic response to changing environment

•

Diverse book of stable businesses

•

Opportunities for growth and further

G&A reductions

•

Financial flexibility

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