March 25, 2010

Health Net, Inc.

Investor Presentation

Exhibit 99.1

2

Cautionary Statement

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;

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.

3

Non-GAAP Measures

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.

4

2009 Summary

2009 Summary

•

Improve Medicare performance

•

Solidify commercial base

•

Close Northeast transaction

•

Strengthen balance sheet

•

Strong TRICARE performance

•

Position for the future

5

2010 Earnings Guidance

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

Earnings

Guidance

Guidance

Bridge

Bridge

2009-2010

2009-2010

(a)

(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

6

(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.

7

Commercial Opportunities

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

8

Medicare Strategy

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

9

Government & Specialty Services

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

-

Current contract extended through March 31, 2011

•

Growth opportunities

–

MHN (behavioral health subsidiary)

–

Veterans Affairs

10

Repositioning G&A

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

11

Financial Flexibility

Financial Flexibility

and Share Repurchases

and Share Repurchases

•

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

*

•

Share repurchase programs

-

Completed previously existing program in February 2010

-

Board authorized new program with $300 million in share

repurchase authority in March 2010; share repurchases are

subject to board approval

* See Appendix for details

12

Health Net: The Future

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

13

Appendix

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

(c) $14.6 million investment impairment charge taken in the third quarter of 2008 and included in net investment income

(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

3 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.

14

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 Divestiture4,5 (Non- GAAP)			As Reported			Impact of Charge6			Divested Operations5			Excluding Impact of Charge and Divestiture5,6 (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	%

4 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.

6 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.

15