Health Net to Offer Prescription Drug Plan Nationally in 2007
Will Enter Private Fee-For-Service Markets in Seven States Intends to Expand Retail Stores to Service Senior Health Insurance Needs
LOS ANGELES, Oct 06, 2006 (BUSINESS WIRE) — Health Net, Inc. (NYSE:HNT) today announced that it intends to expand its Medicare Part D prescription drug plan (PDP) offerings to all 50 states and the District of Columbia in 2007. In addition, the company intends to enter the private fee-for-service Medicare Advantage market by offering such plans in seven states. Health Net also will expand its traditional Medicare Advantage plans into four new counties in 2007 and will open additional retail outlets.
“As one of the largest health plans serving Medicare beneficiaries, we are pleased with the success of our Medicare plans in 2006,” said Jay Gellert, president and CEO of Health Net, Inc.
“We added approximately 290,000 new Medicare members in Part D in 2006, along with more than 20,000 new Medicare Advantage members. We expect to add even more enrollment next year as a result of our expansion into all 50 states and the District of Columbia and our entry into private fee-for-service,” Gellert added. (See detail in attached table.)
For 2007, Health Net plans to offer:
– Expanded Medicare PDP stand-alone coverage (referred to as Part D) to all 50 states and the District of Columbia beginning in January 2007, up from 10 states in 2006. Growth is expected to come, in part, from the auto-enrollment of eligible beneficiaries, those who are covered by both Medicaid and Medicare, in the new markets because Health Net’s pricing is below the Medicare benchmark in all the new markets;
– Improved Medicare Advantage + Prescription Drug products that will provide benefits through the so-called “doughnut hole;” a coverage gap specifically built into the Medicare Part D program that requires Medicare patients to pay 100 percent of their drug costs after they reach a certain spending threshold until catastrophic coverage begins;
– New Special Needs Plans for those beneficiaries with chronic diseases such as congestive heart failure and chronic obstructive pulmonary disease; and
– Private fee-for-service for the first time in seven states: California, Connecticut, Hawaii, New Mexico, New York, Texas and Washington.
“Health Net has a nearly 20-year history of meeting the personal health care needs of seniors and disabled persons,” said Sam Srivastava, chief Medicare officer, Health Net, Inc.
“We pride ourselves on anticipating the needs of our Medicare customers and providing them with a diversified portfolio of health care solutions that are affordable, accessible and designed to improve their health and well being,” Srivastava explained. “We look forward to our continued commitment to the senior and Medicare customer segment.”
One example of the company’s ability to anticipate the needs of its Medicare members is the introduction of its private fee-for-service product. “The concept of private fee-for-service is gaining momentum around the country and our customers are asking for it,” stated Srivastava. “By offering this option, Health Net believes it is meeting its long-term commitment to provide Medicare beneficiaries with access to a wide variety of affordable health care options that effectively meet their needs.” Earlier this year Health Net opened a Medicare retail outlet in Mesa, Ariz. The company believes it is the first such storefront approach to selling and servicing Medicare health care products.
“We fully intend to continue this strategy. It is clear from our Arizona experience that Medicare beneficiaries are receptive to shopping for health insurance products in a retail setting,” Srivastava added. “We also have a store in East Los Angeles, and the company expects to open several more such outlets before the end of 2007.”
U.S. citizens who are at least 65 years old, or who are disabled, or who are dual-eligible members on both Medicare and Medicaid, can enroll in Health Net’s Part D coverage plans beginning November 15, 2006. Information about Health Net’s plans is available at its Web site (www.healthnet.com) or by calling toll free 1-800-903-0944.
About Health Net
Health Net, Inc. is among the nation’s largest publicly traded managed health care companies. Its mission is to help people be healthy, secure and comfortable. The company’s HMO, POS, insured PPO and government contracts subsidiaries provide health benefits to approximately 6.6 million individuals in 27 states and the District of Columbia through group, individual, Medicare, Medicaid and TRICARE and Veterans Affairs programs. Health Net’s behavioral health subsidiary, MHN, provides mental health benefits to approximately 7.3 million individuals in all 50 states. The company’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.
For more information on Health Net, Inc., please visit the company’s Web site at www.healthnet.com.
Cautionary Statements
Certain matters discussed in this release contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, that involve a number of risks and uncertainties. All statements, other than statements of historical information provided herein, may be deemed to be forward-looking statements. 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, 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, rising health care costs, negative prior period claims reserve developments, trends in medical care ratios, issues relating to provider contracts, operational issues, health care reform and general business 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 filed with the SEC and the risks discussed in the company’s other periodic 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 these forward-looking statements to reflect events or circumstances that arise after the date of this release.