8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 18, 2008

Health Net, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-12718	95-4288333
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

21650 Oxnard Street, Woodland Hills, California	91367
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (818) 676-6000

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01. Regulation FD Disclosure.

On November 18, 2008, members of the management team of Health Net, Inc. (the “Company”) met with investors and analysts in connection with the Company’s annual investor conference. This Form 8-K/A amends the Form 8-K filed by the Company on November 18, 2008 to provide revised slides for the presentation given by Jim Woys relating to “2008 – 2009 Operational Performance” at the investor conference. The revised slides for Mr. Woys’ 2008 – 2009 Operational Performance presentation, as used and provided at the conference, are attached to this Form 8-K/A as Exhibit 99.1. As previously announced, a replay of the investor conference is available on the Company’s website, www.healthnet.com.

The information in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any Company filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

CAUTIONARY STATEMENT: Certain statements made in this report 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, including but not limited to the guidance for future periods included herein and the assumptions underlying such projections, 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 guidance as to expected future period results and 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, rising health care costs, negative prior period claims reserve developments, additional investment portfolio impairment charges, changes in the economy, volatility in the financial markets, trends in medical care ratios, unexpected utilization patterns or unexpectedly severe or widespread illnesses, membership declines, rate cuts affecting our Medicare or Medicaid business, issues relating to provider contracts, litigation costs, regulatory issues, operational issues, health care reform 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 Quarterly Reports on Form 10-Q filed with the SEC and the risks discussed in the Company’s other periodic filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly revise its guidance, the assessment of the underlying assumptions or any of its forward-looking statements to reflect events or circumstances that arise after the date of this report.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Health Net, Inc. Revised Presentation Slides for Woys’ 2008-2009 Operational Performance Presentation, as presented at Annual Investor Conference, dated November 18, 2008.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Health Net, Inc.
November 21, 2008	By:	/s/    Linda V. Tiano
	Name:	Linda V. Tiano
	Title:	Senior Vice President, General Counsel and Secretary

3

EX-99.1

2008 -

2008 -

2009

2009

Operational Performance

Operational Performance

Jim Woys

Executive Vice President

and Chief Operating Officer

November 18, 2008

Exhibit 99.1

2

Cautionary Statement

All statements in this presentation, other than statements of historical information

provided herein, including but not limited to the guidance for future periods included

herein and the assumptions underlying such projections, 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, the guidance as to expected future period results and

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, rising health care costs, negative prior period claims reserve developments,

additional investment portfolio impairment charges, changes in the economy, volatility in

the financial markets, trends in medical care ratios, unexpected

utilization patterns or

unexpectedly severe or widespread illnesses, membership declines, rate cuts affecting our

Medicare or Medicaid business, issues relating to provider contracts, litigation costs,

regulatory issues, operational issues, health care reform 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 SEC.

Audience members are cautioned not to place undue reliance on these forward-looking

statements. The company undertakes no obligation to publicly revise its guidance, the

assessment of the underlying assumptions or any of its forward-looking statements to

reflect events or circumstances that arise after the date of these presentations.

3

Non-GAAP Measures

These presentations include quarterly and full-year income statement

measurements that are not calculated and presented in accordance

with

Generally Accepted Accounting Principles. Audience participants should

refer to the reconciliation table available in the company’s third quarter

2008 earnings press release, available on the company’s Web site at

www.healthnet.com, which reconciles certain non-GAAP financial

information to GAAP financial information.

These presentations also include underlying health care cost trend

metrics that reflect the impact of prior period incurred development

which has been included in the appropriate incurred period.

Management believes that the non-GAAP financial information discussed

in these presentations is useful as it provides the audience a basis to

better understand the company’s results by excluding items that are not

indicative of our core operating results for the periods presented. In

addition, the company believes that the underlying health care cost

metrics provide the audience with a more accurate assessment of these

trends which the company uses to appropriately price its products.

4

2008 and 2009 Guidance

2008 and 2009 Guidance

2008

2009

Membership

Commercial Risk

-8 to -9%

-3 to -5%

Medicaid

+6 to 7%

+2 to +3%

Medicare Advantage (incl

PFFS)

+20 to 25%

-1 to -2%

PDP

+40 to 45%

-15 to -20%

Commercial Yields

~ 8.3%

~ 9 to 9.5%

Commercial HCC Trends

~ 10.9%

~ 40 to 60 bps < yield

G&A Expense Ratio

~ 9.5%

~ 9.6 to 9.8%

5

Understanding the Underlying Trend

Understanding the Underlying Trend

Conducted in-depth analyses of:

Conducted in-depth analyses of:

•

Underlying trends for all markets and all segments

for 2007, 2008 and expected 2009

•

Actual trends based on incurred dates after

adjusting for all prior period changes

•

Prior pricing actions and product and benefit designs

•

Current pricing actions for 2009

•

Current network contract status and effect of recent

and current contract negotiations on 2009 unit costs

•

Utilization management practices including current

and prospective initiatives

6

Guidance vs. Underlying Trend

Guidance vs. Underlying Trend

2008

2009

Guidance

10.9%

8.6% -

8.9%

Effect Guardian

(2.7%)

Revised

8.2%

Effect of Prior Period

(1.4%)

.5%

Net Underlying Trend

6.8%

9.1% -

9.4%

7

2008 and 2009 Commercial

2008 and 2009 Commercial

Health Care Cost Trends

Health Care Cost Trends

Underlying health care cost trend after adjusting for prior period development and effect of Guardian transaction

(1)

(1)

Commercial

'07 -

'08

'08 -

'09

Yield

5.6%

9.0% -

9.5%

Health Care Cost

Physician

Physician -

Claims

2.4%

4.4%

Physician -

Capitation

5.5%

7.4%

Physician Total

4.0%

6.2%

Hospital

Hospital -

Inpatient

10.1%

9.5%

Hospital -

Outpatient

8.5%

10.5%

Hospital -

Capitation

3.9%

12.0%

Hospital Total

9.0%

11.1%

Pharmacy

6.3%

4.2%

Other

7.3%

15.0%

Total

6.8%

9.1%

% Change

8

2008 Commercial Unit Cost

2008 Commercial Unit Cost

and Utilization Metrics

and Utilization Metrics

Underlying operational health care cost metrics after adjusting for prior period development

(1)

(1)

Unit Cost & Utilization

Q1

Q2

Q3

Hospital

Inpatient

Days/1,000

4.4%

-2.9%

-2.3%

Admits/1,000

-1.1%

-4.2%

-2.8%

ALOS

5.6%

1.3%

2.5%

Cost/Day

10.1%

8.1%

8.3%

Outpatient Surgery

Cases/1,000

-0.4%

2.7%

5.9%

Cost/Case

7.1%

10.6%

7.2%

ER

Cases/1,000

0.1%

-1.8%

1.3%

Cost/Case

9.6%

13.9%

10.5%

% Change (year-over-year)

2008

9

Underlying Medicare Trend

Underlying Medicare Trend

2008

2009

Expected

6.4%

4.5%

Effect of Prior Period

.2%

(.1)%

Net Underlying Trend

6.6%

4.4%

Note: Metrics exclude Medicare Part D

10

2007 to 2009 Medicare

2007 to 2009 Medicare

Health Care Costs

Health Care Costs

Underlying health care cost trend after adjusting for prior period development and effect of Guardian transaction

(1)

(1)

Medicare Advanatage

'07 -

'08

'08 -

'09

Yield

2.6%

6.0%

Health

Care

Cost

Physician

Physician -

Claims

13.6%

14.1%

Physician -

Capitation

-2.1%

-6.1%

Physician Total

5.0%

3.7%

Hospital

Hospital -

Inpatient

15.4%

6.8%

Hospital -

Outpatient

3.6%

11.2%

Hospital -

Capitation

-15.7%

-12.2%

Hospital Total

6.4%

4.6%

Pharmacy

10.0%

5.3%

Other

35.3%

8.7%

Total

6.6%

4.4%

% Change

Commercial

Commercial

12

2009 Underlying Health Care Cost Trend:

2009 Underlying Health Care Cost Trend:

HNCA –

HNCA –

Commercial

Commercial

Hospital trends reflect conversion of two hospitals from capitated to noncapitated arrangements

Underlying health care cost trend after adjusting for prior period development

(1)

(2)

(1)

(2)

'07 -

'08

'08 -

'09

Yield

6.5%

9.1%

Health Care Cost

Physician

Physician -

Claims

6.1%

5.3%

Physician -

Capitation

5.0%

7.2%

Physician Total

5.3%

6.8%

Hospital

Hospital -

Inpatient

12.9%

10.3%

Hospital -

Outpatient

9.9%

12.4%

Hospital -

Capitation

1.8%

9.8%

Hospital Total

10.5%

11.0%

Pharmacy

6.5%

3.4%

Other

-11.7%

11.2%

Total

7.8%

8.8%

% Change

13

2008 Financial Performance:

2008 Financial Performance:

HNCA –

HNCA –

Commercial

Commercial

Based on membership in noncapitated hospital arrangements (approximately 82% of total membership)

Underlying operational health care cost metrics after adjusting for prior period development

(1)

(2)

(1)

(2)

Unit Cost & Utilization

Q1

Q2

Q3

Hospital

Inpatient

Days/1,000

7.2%

1.0%

3.1%

Admits/1,000

-0.1%

-2.4%

0.6%

ALOS

7.3%

3.5%

2.5%

Cost/Day

6.2%

3.1%

5.5%

Outpatient Surgery

Cases/1,000

1.1%

4.0%

5.0%

Cost/Case

4.3%

9.4%

5.1%

ER

Cases/1,000

-1.2%

-1.5%

1.1%

Cost/Case

7.7%

11.7%

5.3%

% Change (year-over-year)

2008

14

2008 Performance:

2008 Performance:

HNCA –

HNCA –

Commercial

Commercial

•

Pressure on premium yields due to

competitive environment

•

Higher health care costs

–

Flu season

–

Late development impacting unit

cost assumptions

•

Two groups converted from dual to

shared risk

•

Cancelled hospital contracts

–

Savings from cost containment activities

less than expected

15

2009 Expectations:

2009 Expectations:

HNCA –

HNCA –

Commercial

Commercial

•

Focused, clear and simple plan

block-and-tackle

•

82% book is priced at a yield of 9.1%

–

99% of Special Accounts (1/3 membership) under contract

–

Assumes 1% higher rating compared to 2008 and a lower

impact from mix changes (geography, network, and account)

•

Baseline data for pricing is known

–

Professional:   74%

–

Institutional:   57%

–

Other:            62%

•

Conservative expectations on utilization improvement

Percent under contract

16

2009 Health Care Cost Trend Expectations:

2009 Health Care Cost Trend Expectations:

Oregon -

Oregon -

Commercial

Commercial

Underlying health care cost trend after adjusting for prior period development

(1)

(1)

'07 -

'08

'08 -

'09

Yield

5.7%

7.9%

Health Care Cost

Physician

Physician -

Claims

7.3%

6.6%

Physician -

Capitation

0.0%

0.0%

Physician Total

7.3%

6.6%

Hospital

Hospital -

Inpatient

14.3%

4.5%

Hospital -

Outpatient

3.8%

2.9%

Hospital -

Capitation

0.0%

0.0%

Hospital Total

8.9%

3.7%

Pharmacy

11.6%

4.9%

Other

9.4%

8.9%

Total

8.7%

5.1%

% Change

17

2009 Health Care Cost Trend Expectations:

2009 Health Care Cost Trend Expectations:

Northeast -

Northeast -

Commercial

Commercial

Underlying health care cost trend after adjusting for prior period development and effect of Guardian transaction

(1)

(1)

'07 -

'08

'08 -

'09

Yield

6.7%

5.3%

Health Care Cost

Physician

Physician -

Claims

2.3%

4.0%

Physician -

Capitation

3.2%

9.0%

Physician Total

2.5%

4.8%

Hospital

Hospital -

Inpatient

0.0%

6.3%

Hospital -

Outpatient

6.4%

6.8%

Hospital -

Capitation

56.7%

155.1%

Hospital Total

3.3%

7.5%

Pharmacy

7.6%

5.2%

Other

52.5%

19.6%

Total

5.0%

6.5%

% Change

18

2009 Health Care Cost Trend Expectations:

2009 Health Care Cost Trend Expectations:

Arizona -

Arizona -

Commercial

Commercial

Underlying health care cost trend after adjusting for prior period development

(1)

(1)

'07 -

'08

'08 -

'09

Yield

4.7%

8.0%

Health Care Cost

Physician

Physician -

Claims

9.7%

4.3%

Physician -

Capitation

11.4%

11.1%

Physician Total

9.7%

4.5%

Hospital

Hospital -

Inpatient

6.8%

14.9%

Hospital -

Outpatient

13.2%

9.6%

Hospital

-

Capitation

9.8%

4.9%

Hospital Total

9.3%

12.6%

Pharmacy

12.0%

9.8%

Other

13.3%

26.9%

Total

9.9%

9.4%

% Change

19

2008 Performance:

2008 Performance:

Oregon, Northeast, Arizona –

Oregon, Northeast, Arizona –

Commercial

Commercial

•

Oregon

–

Continued solid performance

–

Membership = generally flat

•

Emerging strength in small group market (4Q08)

–

Revenue

•

Lower than necessary yield in mid-size and large groups

–

Health care costs

•

Higher than normal frequency of high cost cases

•

Northeast

–

Pricing discipline resulted in commercial membership losses

•

Lapsed less profitable large group business

–

Maintained competitive MCR’s

–

G&A level impacted pricing competitiveness

•

Arizona

–

Higher than expected commercial catastrophic claims and case-mix negatively

impacting 2008 run-rate

–

Overall care intensity driving higher than expected unit cost trends across all products

and segments

–

Increased physician trends driven solely by higher utilization and coding intensity

across all products and segments

–

Solid

Medicare

Advantage

growth,

but

lower

than

expected

margins

due

to

the

higher

than expected health care cost trends

20

2009 Expectations:

2009 Expectations:

Oregon, Northeast, Arizona

Oregon, Northeast, Arizona

•

Oregon

–

Continued positive performance

–

Expect some health care cost recovery by assuming normal frequency of

high cost cases

–

Positive yield on mid-size and large group business due to the pricing

corrections occurring in the market

•

Northeast

–

Stabilizing commercial membership losses

•

Implementing targeted pricing actions to improve risk selection and

stimulate middle market growth

–

Addressing expense levels to improve competitiveness

–

NJ small group margin deterioration due to minimum loss ratio regulatory

requirement of 80%

•

Arizona

–

Commercial book will be repositioned by 12/31/09

–

Pricing discipline will slow growth but improve performance

–

Provider unit cost trends expected to be single digit and the network is

expected to continue to grow

–

Continued medical management discipline seeking upside cost mitigation

opportunities with a focus on improving patient care

Medicare

Medicare

22

2009 Underlying Health Care Cost Trends:

2009 Underlying Health Care Cost Trends:

Medicare

Medicare

Underlying health care cost trend after adjusting for prior period development

(1)

(1)

Medicare Advantage

'07 -

'08

'08 -

'09

Yield

2.7%

6.2%

Health Care Cost

Physician

Physician -

Claims

13.6%

14.1%

Physician -

Capitation

-2.1%

-6.1%

Physician Total

5.0%

3.7%

Hospital

Hospital -

Inpatient

15.4%

6.8%

Hospital -

Outpatient

3.6%

11.2%

Hospital -

Capitation

-15.7%

-12.2%

Hospital Total

6.4%

4.6%

Pharmacy

10.0%

5.3%

Other

35.3%

8.7%

Total

6.6%

4.4%

% Change

23

Medicare: What Happened in 2008?

Medicare: What Happened in 2008?

•

Benefit leader in 2008

•

Experienced substantial growth across MAPD

•

Early 2008 experience led to margin deterioration

–

Rich benefits and low member out-of-pocket costs

–

Higher utilization than planned

–

Lower RAF scores than industry

Revenue

HCC

GM

Member Months

MCR (bps)

Total MA

29.5%

34.4%

-3.9%

26.1%

-331

PMPM change

2.6%

6.6%

-23.8%

2007-2008

24

•

Priced 2009 bids to address MCR concerns across

all products

–

Factored for higher-than-expected HCC in 2008

•

Adjusted premiums and benefit design (specialist

co-pay, hospital co-pay) to improve gross margin –

will result in membership deterioration in some plans

•

Contracted industry leading risk adjustment services

•

Targeted Medicare medical management practices

Revenue

HCC

GM

Member Months

MCR (bps)

Total MA

7.4%

5.6%

24.8%

1.1%

154

PMPM change

6.0%

4.4%

23.5%

2009 Expectations: Medicare

2009 Expectations: Medicare

2008-2009

Health Net, Inc.

Health Net, Inc.

Investor Conference

Investor Conference