May 26, 2013
Health Net, Inc. (HNT) provides health plan coverage through private and government programs, ranking 13th in total enrollment among all U.S. health plan providers.[1] HNT also ranks among the top 10 health plan providers by managed Medicaid enrollment and commercial HMO enrollment. Its business is heavily concentrated in California, with 42% of revenues coming from California operations.[2][3]
HNT's profitability is measured by the benefits cost ratio (BCR), which is the percentage of medical claims the company paid divided by the premiums it received. By aggressively increasing premiums on private health plans and dropping unprofitable members, HNT improved (decreased) its BCR by 400 basis points to 85.4% in 2005 and by another 130 basis points to 83.0% in 2006. However, HNT's BCR increased to 85.4% in 2007, reflecting an increase in the cost of health care services[4] On March 11, 2008, HNT's share price fell 20% from $41.50 to $34.58 after WellPoint, a competing managed care organization, cut its earnings outlook for 2008, citing higher than expected medical costs, lower than expected enrollment, and a difficult economic environment.[5]
(Read more at Wikinvest
) - Overview
- HNT Health Plan Services Segment Membership by State, as of December 31, 2007
- Revenue and Operating Income 2005-2007, in thousands of dollars
- Trends & Forces
- HNT's Revenue is Largely Dependent on Government Programs and Subject to Federal and State Legislation
- The Company's Focus on California Restricts its Ability to Rescind Health Coverage, Increasing its Expenses
- Large Scale Public Health Epidemics Cause Unexpected Increases in HNT's Operating Expenses
- Competition
- Benefits Expense Ratio for HNT and Major Competitors, 2005 - 2007
- Top 15 U.S. Health Plans, Ranked by Total Enrollment (as of December 31, 2007)
- References
