Presentation Slides

Jay Gellert

President & Chief Executive Officer

March 10, 2010

Cowen and Company

Annual

Health Care 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, costs, fees and expenses related to the post-closing

administrative services to be provided under the administrative services agreements entered into in connection with the sale of

our Northeast business; potential termination of the administrative services agreements by the service recipients should we

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; potential termination of our TRICARE North operations; potential health care

reform; rising health care costs; continued recessionary economic conditions or a further decline in the economy; negative prior

period claims reserve developments; trends in medical care ratios; unexpected utilization patterns or unexpectedly severe or

widespread illnesses; membership declines; rate cuts affecting our Medicare or Medicaid businesses; litigation costs; regulatory

issues; 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 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.

Non-GAAP Measures

•

This presentation includes quarterly income statement

measurements that are not calculated and presented in

accordance with Generally Accepted Accounting Principles.

Audience participants should refer to the attached reconciliation

table, which reconciles certain non-GAAP financial information

to GAAP financial information.

•

Management believes that the non-GAAP financial information

discussed in this presentation 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.

2009 Summary

•

Improve Medicare performance

•

Solidify commercial base

•

Close Northeast transaction

•

Strengthen balance sheet

•

Strong TRICARE performance

•

Position for the future

2010 Earnings Guidance

Year-end Membership

•

Commercial: -1% to -2%

•

Medicaid: +5% to +6%

•

Medicare Advantage: -2% to -3%

•

PDP: +1% to +2%

Consolidated Revenues

$13 billion to $13.5 billion

Commercial

Premium

Yields

(b)

~ 8.3% to 8.8%

(Western Region 2009: ~$316 PMPM)

Commercial

Health

Care

Cost

Trends

(b)

~ 20-40 bps < Premium Yields

(Western Region 2009: ~$274 PMPM)

Selling Cost Ratio

~ 2.4%

Gov’t Contracts Ratio

~ 94.5% to 95%

G&A Expense Ratio

~ 8.8% to 9%

Tax Rate

~ 39%

Weighted-average Fully

Diluted Shares Outstanding

103 million –

104 million

GAAP EPS

Non-GAAP EPS

(a)

$1.92 to $2.02

$2.32 to $2.42

(a)

Excludes approximately $69 million in pretax charges. These charges include approximately $53 million related to the wind-down of the company’s Northeast

businesses and approximately $16 million related to the company’s operations strategy.

(b)

Commercial premium yields and commercial health care cost comparisons are on a same-store basis for the company’s Western health plans only for both

2009 and 2010.

Earnings

Guidance

Bridge

2009-2010

(a)

•

Expect pretax margin to improve by ~60 basis points

•

G&A ratio to improve by 70 to 90 basis points

•

Health plan MCR to rise by ~20 basis points

•

Selling costs improve by ~30 basis points

•

Government contracts cost ratio flat

•

Net non-operating gains lower by ~30 basis points

•

Expect typical earnings seasonality

–

40 percent in first half of 2010 and 60 percent in

second half of 2010

(a)

Excludes the impact of charges taken during 2009 and charges expected during 2010. Also excludes revenues and expenses associated with the run-out of the Northeast

business. This information is non-GAAP financial information. A reconciliation of non-GAAP financial measures is attached as an Appendix to this presentation.

Commercial Opportunities

•

Product mix aligned with market changes

•

Lower-cost, narrow network products gaining traction

–

Interest in narrow networks resulting from economy

–

Key to small group and mid-market growth

•

Further margin expansion

–

Disciplined pricing and stable health care costs

–

Beneficial product and geographic mix changes

•

Positioned for growth resulting from ongoing

environmental changes

Medicare Strategy

•

Built on network-model MA plans

•

Exited Private Fee-for-Service in 2010

•

“Staying the course”

in Part D

•

Positioned for margin stability in the future

Government & Specialty Services

•

Stable financial performance

•

TRICARE update

–

DoD

to follow GAO recommendations –

will review unfair

competitive advantage issue first; if necessary, will

evaluate other flaws identified in GAO decision

–

No timeline for concluding review given

–

DoD

has given formal intent to exercise Option Periods

under current contract through March 31, 2011

•

Growth opportunities

–

MHN (behavioral health subsidiary)

–

Veterans Affairs

Repositioning G&A

•

G&A reductions an integral part of margin expansion

•

Made necessary investments over the past few years

•

Operations strategy nearly complete --

$125 million+

in run-rate savings achieved since 2007

•

Eliminate $80 million to $100 million in run-rate G&A

expenses in 2011

•

Create leaner, more focused organization

Strong Balance Sheet

•

As of December 31, 2009:

–

Total cash and investments of $2.1 billion with an average

credit quality of AA+

–

Investment portfolio with market value of $1.4 billion

–

Total debt of $602.5 million and debt-to-total capital ratio of

26.2 percent

•

Ended 2009 with approximately $450 million of cash at parent

after increasing subsidiary capital by $100 million

•

Expect approximately $140 million to $260 million in additional

net proceeds from the Northeast transaction during an estimated

two-year transition period*

•

Resumed share repurchase program in December 2009

–

Repurchased

2.7 million shares through January 29, 2010

*See Appendix for details

Health Net: The Future

•

Positioned for value-driven demand in marketplace

•

Medicare strategy focused on margin stability and

strong markets

•

G&A reductions aligned with repositioned business

•

Building strong cash position

•

Positioned for industry changes

•

Opportunities to improve performance

Appendix

•

Northeast transaction currently valued at approximately $490 million to $610 million

–

Received $350 million in proceeds at closing ($290 million in tangible net equity*

and $60 million membership-related payments)

–

Expect approximately $160 million to $280 million in additional proceeds during

the transition period

Remaining tangible net equity payments of approximately $160 million

Additional membership payments of up to $120 million

(this amount is dependent on a number of factors, including the number of commercial

members that transition to UnitedHealthcare legacy products)

–

Net expense of $20 million from run-out, tax benefits, freed capital and other

costs

* Subject to subsequent true-up; the company is currently in discussions with UnitedHealthcare regarding the amount of the true-up.

Note: Additional information regarding the terms of the Northeast transaction is available in Health Net’s Form 10-K and Form 8-Ks on

file with the SEC.

Health Net, Inc.

Reconciliation of Non-GAAP Financial Measures

Operating Results Excluding Charges

(Amounts in thousands, except per share, PMPM and ratio data)

This table presents the company’s consolidated operations for the periods presented below and the charges recorded in the consolidated statement of operations for such periods. Information for the quarter and year-ended December 31, 2009 also includes the financial impact from the December 11, 2009 sale of our Northeast health plans. Management believes that the presentation of certain financial information in the attached press release, excluding the charges that were recorded and excluding the impact from the divestiture of our Northeast health plans, all of which is non-GAAP financial information, is important to investors as it excludes special items that are not indicative of our core operating results. Non-GAAP financial information presented below should be considered in addition to, not as a substitute for, financial information prepared in accordance with GAAP.


	Quarter Ended December 31, 2008									Year Ended December 31, 2008									Quarter Ended September 30, 2009
	As Reported			Impact of Charge¹			Excluding Impact of Charge¹ (Non- GAAP)			As Reported			Impact of Charges²			Excluding Impact of Charges² (Non- GAAP)			As Reported			Impact of Charge³			Excluding Impact of Charge³ (Non- GAAP)
REVENUES:
Health plan services premiums	$	3,082,133					$	3,082,133		$	12,392,006					$	12,392,006		$	3,166,877					$	3,166,877
Government contracts		751,604						751,604			2,835,261						2,835,261			758,507						758,507
Net investment income		24,536						24,536			91,042			(14,642	)		105,684			27,691						27,691
Administrative services fees and other income		11,209						11,209			48,280			(3,400	)		51,680			15,578						15,578

		3,869,482			—			3,869,482			15,366,589			(18,042	)		15,384,631			3,968,653			—			3,968,653


EXPENSES:
Health plan services		2,629,398			(5,700	)		2,635,098			10,762,657			37,496			10,725,161			2,734,984			(571	)		2,735,555
Government contracts		718,893						718,893			2,702,573						2,702,573			716,323						716,323
General and administrative		347,128			53,535			293,593			1,291,059			119,540			1,171,519			319,451			19,495			299,956
Selling		92,314						92,314			360,381						360,381			83,275						83,275
Depreciation and amortization		17,271						17,271			59,878						59,878			12,689						12,689
Interest		10,523						10,523			42,909						42,909			10,264						10,264
Asset impairments		—						—			—						—			170,570			170,570			—
Loss on sale of businesses		—						—			—						—			—						—

		3,815,527			47,835			3,767,692			15,219,457			157,036			15,062,421			4,047,556			189,494			3,858,062

Income (loss) from operations before income taxes		53,955			(47,835	)		101,790			147,132			(175,078	)		322,210			(78,903	)		(189,494	)		110,591
Income tax provision (benefit)		18,420			(20,227	)		38,647			52,129			(70,951	)		123,080			(12,881	)		(53,890	)		41,009

Net income (loss)	$	35,535		$	(27,608	)	$	63,143		$	95,003		$	(104,127	)	$	199,130		$	(66,022	)	$	(135,604	)	$	69,582


Basic earnings (loss) per share	$	0.34					$	0.61		$	0.89					$	1.87		$	(0.64	)				$	0.67
Diluted earnings (loss) per share	$	0.34					$	0.61		$	0.88					$	1.85		$	(0.64	)				$	0.67

Weighted average shares outstanding:
Basic		103,694						103,694			106,532						106,532			103,873						103,873
Diluted		104,063						104,063			107,610						107,610			103,873						104,432

Pretax margin		1.4	%					2.6	%		1.0	%					2.1	%		-2.0	%					2.8	%
Health plan services MCR		85.3	%					85.5	%		86.9	%					86.5	%		86.4	%					86.4	%
Government contracts cost ratio		95.6	%					95.6	%		95.3	%					95.3	%		94.4	%					94.4	%
G&A expense ratio		11.2	%					9.5	%		10.4	%					9.4	%		10.0	%					9.4	%
Selling costs ratio		3.0	%					3.0	%		2.9	%					2.9	%		2.6	%					2.6	%
Effective tax rate		34.1	%					38.0	%		35.4	%					38.2	%		16.3	%					37.1	%

1	Includes a $5.7 million pretax benefit for a litigation reserve true-up included in health plan services expenses and a $53.5 million pretax charge primarily for severance and other expenses related to the company’s operations strategy and included in G&A.

2	Includes a $175.1 million pretax charge in total of which:

(a) $119.6 million was primarily related to severance and other expenses associated with the company’s operations strategy and included in G&A expenses

(b) $37.5 million was included in health plan services expenses for estimated litigation liability and regulatory actions for the company’s rescission practices in Arizona and California and for the execution of the settlement agreement for the McCoy, et al., lawsuits

(d) $3.4 million pretax charge related to the estimated loss on the sale of the assets of a subsidiary taken in the first quarter of 2008 and included in other income

Includes a $0.6 million pretax benefit for a litigation reserve true-up included in health care costs, a $19.5 million pretax charge primarily for IT systems and other expenses related to the company’s operations strategy and included in G&A expenses and a $170.6 million pretax asset impairment charge for goodwill, intangible and IT-related assets related to the sale of our Northeast health plans.

Health Net, Inc.

Reconciliation of Non-GAAP Financial Measures

Operating Results Excluding Charges

(Amounts in thousands, except per share, PMPM and ratio data)


	Quarter Ended December 31, 2009												Year Ended December 31, 2009
	As Reported			Impact of Charges⁴			Divested Operations⁵			Excluding Impact of Charges and Divestiture^4,5 (Non- GAAP)			As Reported			Impact of Charge⁶			Divested Operations⁵			Excluding Impact of Charge and Divestiture^5,6 (Non- GAAP)
REVENUES:
Health plan services premiums	$	2,981,678					$	5,483		$	2,976,195		$	12,440,589					$	5,483		$	12,435,106
Government contracts		754,766									754,766			3,104,700									3,104,700
Net investment income		33,486						1,126			32,360			105,930						1,126			104,804
Administrative services fees and other income		28,165						15,113			13,052			62,022						15,113			46,909

		3,798,095			—			21,722			3,776,373			15,713,241			—			21,722			15,691,519


EXPENSES:
Health plan services		2,557,149						5,508			2,551,641			10,731,951			(4,805	)		5,508			10,731,248
Government contracts		707,353			3,632						703,721			2,939,722			3,632						2,936,090
General and administrative		355,407			38,723			20,588			296,096			1,361,956			124,799			20,588			1,216,569
Selling		84,068						249			83,819			330,112						249			329,863
Depreciation and amortization		8,605						589			8,016			53,042						589			52,453
Interest		9,538									9,538			40,887									40,887
Asset impairments		4,309			4,309						—			174,879			174,879						—
Loss on sale of businesses		105,931			105,931						—			105,931			105,931						—

		3,832,360			152,595			26,934			3,652,831			15,738,480			404,436			26,934			15,307,110

Income (loss) from operations before income taxes		(34,265	)		(152,595	)		(5,212	)		123,542			(25,239	)		(404,436	)		(5,212	)		384,409
Income tax provision (benefit)		10,892			(38,149	)		(2,059	)		51,100			23,765			(123,533	)		(2,059	)		149,357

Net income (loss)	$	(45,157	)	$	(114,446	)	$	(3,153	)	$	72,442		$	(49,004	)	$	(280,903	)	$	(3,153	)	$	235,052


Basic earnings (loss) per share	$	(0.43	)							$	0.70		$	(0.47	)							$	2.26
Diluted earnings (loss) per share	$	(0.43	)							$	0.69		$	(0.47	)							$	2.25

Weighted average shares outstanding:
Basic		103,902									103,902			103,849									103,849
Diluted		103,902									104,626			103,849									104,412

Pretax margin		-0.9	%								3.3	%		-0.2	%								2.4	%
Health plan services MCR		85.8	%								85.7	%		86.3	%								86.3	%
Government contracts cost ratio		93.2	%								92.8	%		94.6	%								94.5	%
G&A expense ratio		11.9	%								10.0	%		10.9	%								9.8	%
Selling costs ratio		2.8	%								2.8	%		2.7	%								2.7	%
Effective tax rate		-31.8	%								41.4	%		-94.2	%								38.9	%

Includes a $3.6 million charge for TRICARE contract procurement costs included in government contracts expenses and a $38.7 million operations strategy charge and Northeast divestiture related expenses, each of which are included in G&A expenses, and an asset impairment and loss on the sale of Northeast health plans recorded in 2009.

5	Represents revenues and expenses related to the run-off of the Northeast health plans divested on December 11, 2009.

Includes a $4.8 million pretax benefit for a litigation reserve true-up included in health care costs, $3.6 million charge for TRICARE contract procurement costs included in government contracts expenses, and $124.8 million of operations strategy and Northeast sale related expenses included in G&A expenses, and an asset impairment and loss on the sale of Northeast health plans recorded in 2009.