Exhibit 99.1

Health Net, Inc. 21650 Oxnard Street Woodland Hills, CA 91367 818.676.6000 800.291.6911 www.healthnet.com

Investor Contact	Media Contact
Angie McCabe	Margita Thompson
818.676.8692	818.676.7912
angie.mccabe@healthnet.com	margita.thompson@healthnet.com

HEALTH NET REPORTS THIRD QUARTER 2010

GAAP NET INCOME OF $62.7 MILLION, OR $0.64 PER DILUTED SHARE

WESTERN REGION OPERATIONS AND GOVERNMENT CONTRACTS SEGMENTS

PRODUCE COMBINED EARNINGS OF $0.74 PER DILUTED SHARE

COMMERCIAL RISK ENROLLMENT GROWS SEQUENTIALLY

LOS ANGELES, November 4, 2010 – Health Net, Inc. (NYSE: HNT) today announced 2010 third quarter GAAP net income of $62.7 million, or $0.64 per diluted share, compared with a GAAP net loss of $66.0 million, or $0.64 per diluted share, for the third quarter of 2009.

The third quarter 2010 GAAP results include $8.6 million in expenses primarily related to severance costs.

The company’s Western Region Operations and Government Contracts segments produced combined net earnings of $0.74 per diluted share in the third quarter of 2010 and $0.75 per diluted share in the third quarter of 2009.

“We are pleased that the third quarter of 2010 produced further evidence of our solid and consistent financial performance,” said Jay Gellert, president and chief executive officer of Health Net, Inc. “Our commercial risk enrollment grew by 3,000 members sequentially, reversing recent trends and demonstrating that our focus on efficient-network products is working.”

The company announced that it is raising its full year 2010 guidance for earnings per diluted share to $2.07 to $2.17 on a GAAP basis, and $2.55 to $2.58 for the combined Western Region Operations and Government Contracts segments.

“Based on our current outlook, we believe that operating income for the full year 2011 will be greater than in 2010,” said Gellert. “In addition, we currently anticipate continued share repurchase activity in 2011.”

CONSOLIDATED RESULTS

Health Net’s total revenues decreased 14.5 percent in the third quarter of 2010 to $3.4 billion from $4.0 billion in the third quarter of 2009. Health plan services premium revenues decreased by approximately 22.0 percent to $2.5 billion in the third quarter of 2010 compared with $3.2 billion in the third quarter of 2009. Health plan services expenses decreased to $2.1 billion in the third quarter of 2010 from $2.7 billion in the third quarter of 2009.

Investment income decreased to $19.5 million in the third quarter of 2010 compared with $27.7 million in the third quarter of 2009.

The decreases on these year-over-year comparisons are primarily the result of the company’s sale of its Northeast businesses in December 2009.

WESTERN REGION OPERATIONS SEGMENT

Health Plan Membership

Total enrollment in the Western Region Operations segment at September 30, 2010 was approximately 2.5 million members, a decrease of approximately 1.7 percent compared with enrollment at September 30, 2009. Total enrollment in the company’s California health plan decreased approximately 0.5 percent from September 30, 2009 to September 30, 2010.

Western Region commercial risk enrollment grew by 3,000 members from June 30, 2010 to September 30, 2010.

“In light of the current economic environment, we find this growth in our Western Region commercial risk products very encouraging,” said James Woys, Health Net’s chief operating officer. “Also, our strategy of emphasizing efficient-network products continues to produce share gains in our key markets. These products grew by 11.2 percent, or 30,000 new members, from September 30, 2009 to September 30, 2010.”

As of September 30, 2010, efficient-network products accounted for 22 percent of the company’s Western Region commercial enrollment compared with 19 percent at September 30, 2009.

Commercial enrollment in the Western Region declined by 6.4 percent from September 30, 2009 to approximately 1.4 million members on September 30, 2010. The decline in commercial enrollment is consistent with the overall weak economy in the company’s western markets.

Medicaid enrollment in California at September 30, 2010 was 896,000 members, an increase of 55,000 members, or 6.5 percent, from September 30, 2009.

Enrollment in the company’s Medicare Advantage plans in the Western Region at September 30, 2010 was 221,000 members, a decrease of 1.8 percent compared with September 30, 2009.

Membership in the company’s Medicare Part D plans was 432,000 at the end of the third quarter of 2010, a 7.3 percent decrease compared with the end of the third quarter of 2009. The company’s Medicare Part D plans are currently offered in 49 states and the District of Columbia and were offered in all 50 states and the District of Columbia in the third quarter of 2009.

Revenues

Total revenues for the Western Region in the third quarter of 2010 were flat at approximately $2.5 billion compared with the third quarter of 2009.

Investment income for the Western Region was $19.2 million in the third quarter of 2010 compared with $21.2 million in the third quarter of 2009 and $16.3 million in the second quarter of 2010.

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Health Plan Services Expenses

Health plan services expenses in the Western Region were flat at approximately $2.1 billion in the third quarter of 2010 compared with the third quarter of 2009.

Commercial Premium Yield and Health Care Cost Trends

In the Western Region, commercial premiums per member per month (PMPM) increased by 7.2 percent to approximately $343 in the third quarter of 2010 compared with $320 in the third quarter of 2009.

Commercial health care costs PMPM in the Western Region increased by 5.2 percent to approximately $296 in the third quarter of 2010 compared with approximately $281 in the third quarter of 2009.

“The positive spread between commercial premium yields PMPM and health care costs PMPM and the resulting year-over-year increase in the commercial gross margin PMPM in the Western Region is further affirmation of both our product strategy and pricing discipline,” said Woys.

Medical Care Ratios (MCR)

The health plan services MCR in the Western Region was 86.3 percent in the third quarter of 2010 compared with 86.9 percent in the third quarter of 2009.

The Western Region commercial MCR was 86.3 percent in the third quarter of 2010 compared with 87.9 percent in the third quarter of 2009 and was flat sequentially.

“The year-over-year improvement in our commercial MCR is the result of continued pricing discipline and more moderate health care cost increases,” Woys added.

The Medicare Advantage MCR in the Western Region was 89.4 percent in the third quarter of 2010 compared with 88.4 percent in the third quarter of 2009 and was in-line with company expectations.

The Medicare Part D MCR was 64.6 percent in the third quarter of 2010 compared with 65.9 percent in the third quarter of 2009. The 130 basis point improvement is consistent with the company’s 2010 bid strategy.

General & Administrative (G&A) and Selling Expenses

G&A expense in the Western Region was $214.3 million in the third quarter of 2010 compared with $201.8 million in the third quarter of 2009. The G&A expense ratio increased 60 basis points from 8.1 percent in the third quarter of 2009 and 20 basis points sequentially from 8.5 percent in the second quarter of 2010 to 8.7 percent in the third quarter of 2010.

“The year-over-year increase in the G&A ratio in the Western Region segment was consistent with our expectations,” said Woys. “We continue to expect that the G&A ratio for the full year 2010 will be 8.8 percent to 9.0 percent.”

Selling expense in the Western Region was $58.3 million in the third quarter of 2010 compared with $58.0 million in the third quarter of 2009.

GOVERNMENT CONTRACTS SEGMENT

The company’s Government Contracts revenues increased 13.5 percent in the third quarter of 2010 to $860.7 million from $758.5 million in the third quarter of 2009.

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The Government Contracts cost ratio increased slightly from 94.4 percent in the third quarter of 2009 to 94.5 percent in the third quarter of 2010.

BALANCE SHEET

Health Net’s Condensed Consolidated Balance Sheets, attached as an exhibit to this press release, included the Northeast businesses in the third quarter of 2009. The company sold its Northeast businesses in December 2009, and as a result, the balance sheets exclude those businesses in the fourth quarter of 2009 and the first, second and third quarters of 2010.

Cash and investments as of September 30, 2010 were $1.9 billion compared with $1.8 billion as of September 30, 2009.

Reserves for claims and other settlements as of September 30, 2010 were $904.4 million compared with $951.8 million as of September 30, 2009 and $934.9 million as of June 30, 2010. The year-over-year decline is primarily due to a reduction in claims inventory. The sequential decline is primarily due to a $22.0 million payment to providers related to Medicare risk adjusters and a $15.0 million decline in claims inventory.

Days claims payable (DCP) for the third quarter of 2010 was 39.0 days compared with 40.2 days in the third quarter of 2009 and 39.3 days in the second quarter of 2010.

On an adjusted¹ basis, DCP in the third quarter of 2010 was 53.6 days compared with 53.7 days in the third quarter of 2009 and 53.6 days in the second quarter of 2010.

The company’s debt-to-total capital ratio was 22.7 percent as of September 30, 2010 compared with 26.2 percent as of December 31, 2009 and 23.4 percent as of June 30, 2010.

Interest expense was $8.2 million in the third quarter of 2010 compared with $10.3 million in the third quarter of 2009. The decline was due to the decrease in the company’s total outstanding debt.

CASH FLOW

Operating cash flow was negative $54.3 million in the third quarter of 2010 due to delays in the receipt of approximately $164 million in Medicaid payments. The company received these payments in October 2010.

“If we had received the Medicaid payments during the third quarter of 2010, operating cash flow would have been approximately $109.7 million, or 1.5 times net income plus depreciation and amortization,” said Joseph Capezza, Health Net’s chief financial officer.

NORTHEAST OPERATIONS SEGMENT

Health Net continues to serve the members of the sold Northeast companies under administrative services agreements (ASAs) that the company entered into with UnitedHealthcare and its affiliates on the closing date of the transaction. Health Net will serve these members until they are either transitioned to other UnitedHealthcare products or not renewed. The company expects the ASAs to remain in effect through 2011.

The revenues and expenses associated with the company’s Northeast Operations in the third quarter of 2010 were $50.1 million and $57.8 million, respectively, and they are shown separately in the accompanying Segment Information table.

¹ See “Disclosures Regarding Non-GAAP Financial Information” attached to this press release for a reconciliation of this information to the comparable GAAP financial measure.

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SHARE REPURCHASE UPDATE

In the third quarter of 2010, Health Net repurchased 722,900 shares for approximately $19.4 million at an average price of $26.82 per share. At September 30, 2010, approximately $208.7 million of authorization under the company’s existing $300 million share repurchase program remained.

“We are pleased that our strong cash position at the parent has supported our ongoing share repurchase efforts,” said Capezza.

2010 GUIDANCE

Health Net is increasing its 2010 annual guidance for GAAP earnings per diluted share to a range of $2.07 to $2.17, or $2.55 to $2.58 per diluted share for the combined Western Region Operations and Government Contracts segments.

Metric	2010 Guidance
Year-end Membership(a)	Commercial: -3% to -4% (previously -1% to -2%) Medicaid: +5% to +6% Medicare Advantage: Flat (previously -2% to -3%) Total Western Region medical membership: Flat PDP: -6% to -7%
Consolidated Revenues(b)	$13.0 to $13.5 billion
Commercial Yields(a)	~8.0% to 8.3% (previously ~8.3% to 8.8%)
Commercial Health Care Cost Trends(a)	~80 to 100 basis points < premium yields (previously: ~60 to 80 basis points < premium yields)
Selling Cost Ratio Government Contracts Ratio G&A Expense Ratio	~2.4% ~94.5% to 95.0% ~8.8% to 9.0%
Tax Rate(b)	~39.0%
Weighted-average Fully Diluted Shares Outstanding	98 million to 100 million (previously 99 million to 100 million)
GAAP EPS Combined Western Region Operations and Government Contracts EPS	$2.07 to $2.17 $2.55 to $2.58 (previously $2.50 to $2.55)

(a) For the company’s Western Region Operations

(b) For the combined Western Region and Government Contracts segments

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CONFERENCE CALL

As previously announced, Health Net will discuss the company’s third quarter 2010 results during a conference call on Thursday, November 4, 2010, beginning at approximately 11:00 a.m. Eastern time. The conference call should be accessed at least 15 minutes prior to its start with the following numbers:

866.393.1637 (Domestic) 706.643.5711 (International) 800.642.1687 (Replay – Domestic) 706.645.9291 (Replay – International)

The access code for the live conference call and replay is 10742408. A replay of the conference call will be available through November 9, 2010. A live webcast and replay of the conference call also will be available at www.healthnet.com under “Investor Relations.” The conference call webcast is open to all interested parties. Anyone listening to the company’s conference call will be presumed to have read Health Net’s Annual Report on Form 10-K for the year ended December 31, 2009 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010 and June 30, 2010, and other reports filed by the company from time to time with the Securities and Exchange Commission.

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 health plans and government contracts subsidiaries provide health benefits to approximately 6.0 million individuals across the country through group, individual, Medicare, Medicaid and TRICARE and Veterans Affairs programs. Health Net’s behavioral health subsidiary, MHN, provides mental health benefits to approximately 5.4 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 website at www.healthnet.com.

CAUTIONARY STATEMENTS

All statements in this press release, 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, health care reform, including the ultimate impact of the Patient Protection and Affordable Care Act, which could materially adversely affect the company’s financial condition, results of operations and cash flows through, among other things, reduced revenues, new taxes, expanded liability, and increased costs (including medical, administrative, technology or other costs), or require changes to the ways in which the company does business; rising health care costs; continued slow economic growth or a further decline in the economy; negative prior period claims reserve developments; trends in medical care ratios; membership declines; unexpected utilization patterns or unexpectedly severe or widespread illnesses; rate cuts affecting the company’s Medicare or Medicaid businesses; costs, fees and expenses related to the post-closing administrative services provided under the administrative services agreements entered into in connection with the sale of the company’s Northeast business; potential termination of the administrative services agreements by the service recipients should Health Net 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

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running-out period of the Northeast business; litigation costs; regulatory issues with agencies such as the California Department of Managed Health Care, the Centers for Medicare and Medicaid Services and state departments of insurance; 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 and subsequent Quarterly Reports on Form 10-Q 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 release.

The financial information presented in this press release is unaudited and is subject to change as a result of subsequent events or adjustments, if any, arising prior to the filing of the company’s Form 10-Q for the period ended September 30, 2010.

Eight pages of tables follow.

# # #

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Health Net, Inc.

Enrollment Data - By State

(In thousands)

							Change from
							June 30, 2010						September 30, 2009
	Sept 30, 2010		June 30, 2010		Sept 30, 2009		Increase/ (Decrease)			% Change			Increase/ (Decrease)			% Change
California
Large Group		844		836		888		8			1.0	%		(44	)		(5.0	)%
Small Group and Individual		351		355		365		(4	)		(1.1	)%		(14	)		(3.8	)%
Commercial Risk		1,195		1,191		1,253		4			0.3	%		(58	)		(4.6	)%
ASO		0		5		5		(5	)		(100.0	)%		(5	)		(100.0	)%
Total Commercial		1,195		1,196		1,258		(1	)		(0.1	)%		(63	)		(5.0	)%
Medicare Advantage		133		132		136		1			0.8	%		(3	)		(2.2	)%
Medi-Cal		896		877		841		19			2.2	%		55			6.5	%
Total California		2,224		2,205		2,235		19			0.9	%		(11	)		(0.5	)%
Arizona
Large Group		53		53		59		0			0.0	%		(6	)		(10.2	)%
Small Group and Individual		39		39		38		0			0.0	%		1			2.6	%
Commercial Risk		92		92		97		0			0.0	%		(5	)		(5.2	)%
Medicare Advantage		49		49		65		0			0.0	%		(16	)		(24.6	)%
Total Arizona		141		141		162		0			0.0	%		(21	)		(13.0	)%
Oregon
Large Group		52		52		78		0			0.0	%		(26	)		(33.3	)%
Small Group and Individual		46		47		47		(1	)		(2.1	)%		(1	)		(2.1	)%
Commercial Risk		98		99		125		(1	)		(1.0	)%		(27	)		(21.6	)%
Medicare Advantage		39		38		24		1			2.6	%		15			62.5	%
Total Oregon		137		137		149		0			0.0	%		(12	)		(8.1	)%
Total Health Plan Enrollment
Large Group		949		941		1,025		8			0.9	%		(76	)		(7.4	)%
Small Group and Individual		436		441		450		(5	)		(1.1	)%		(14	)		(3.1	)%
Commercial Risk		1,385		1,382		1,475		3			0.2	%		(90	)		(6.1	)%
ASO		0		5		5		(5	)		(100.0	)%		(5	)		(100.0	)%
Total Commercial		1,385		1,387		1,480		(2	)		(0.1	)%		(95	)		(6.4	)%
Medicare Advantage		221		219		225		2			0.9	%		(4	)		(1.8	)%
Medi-Cal/Medicaid		896		877		841		19			2.2	%		55			6.5	%
Total Western Region		2,502		2,483		2,546		19			0.8	%		(44	)		(1.7	)%
Medicare PDP (stand-alone)		432		434		466		(2	)		(0.5	)%		(34	)		(7.3	)%
All Other States		10		19		586		(9	)		(47.4	)%		(576	)		(98.3	)%
		2,944		2,936		3,598		8			0.3	%		(654	)		(18.2	)%
TRICARE - North Contract Eligibles		3,077		3,077		3,040		0			0.0	%		37			1.2	%

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Health Net, Inc.

Enrollment Data - Line of Business

(In thousands)

							Change from
							June 30, 2010						September 30, 2009
	Sept  30, 2010		June  30, 2010		Sept  30, 2009		Increase/ (Decrease)			% Change			Increase/ (Decrease)			% Change
Large Group
California		844		836		888		8			1.0	%		(44	)		(5.0	)%
Arizona		53		53		59		0			0.0	%		(6	)		(10.2	)%
Oregon		52		52		78		0			0.0	%		(26	)		(33.3	)%
		949		941		1,025		8			0.9	%		(76	)		(7.4	)%
Small Group and Individual
California		351		355		365		(4	)		(1.1	)%		(14	)		(3.8	)%
Arizona		39		39		38		0			0.0	%		1			2.6	%
Oregon		46		47		47		(1	)		(2.1	)%		(1	)		(2.1	)%
		436		441		450		(5	)		(1.1	)%		(14	)		(3.1	)%
Commercial Risk
California		1,195		1,191		1,253		4			0.3	%		(58	)		(4.6	)%
Arizona		92		92		97		0			0.0	%		(5	)		(5.2	)%
Oregon		98		99		125		(1	)		(1.0	)%		(27	)		(21.6	)%
		1,385		1,382		1,475		3			0.2	%		(90	)		(6.1	)%
ASO		0		5		5		(5	)		(100.0	)%		(5	)		(100.0	)%
Total Commercial
California		1,195		1,196		1,258		(1	)		(0.1	)%		(63	)		(5.0	)%
Arizona		92		92		97		0			0.0	%		(5	)		(5.2	)%
Oregon		98		99		125		(1	)		(1.0	)%		(27	)		(21.6	)%
		1,385		1,387		1,480		(2	)		(0.1	)%		(95	)		(6.4	)%
Medicare Advantage
California		133		132		136		1			0.8	%		(3	)		(2.2	)%
Arizona		49		49		65		0			0.0	%		(16	)		(24.6	)%
Oregon		39		38		24		1			2.6	%		15			62.5	%
		221		219		225		2			0.9	%		(4	)		(1.8	)%
Medi-Cal/Medicaid
California		896		877		841		19			2.2	%		55			6.5	%
Total Health Plan Enrollment
Large Group		949		941		1,025		8			0.9	%		(76	)		(7.4	)%
Small Group and Individual		436		441		450		(5	)		(1.1	)%		(14	)		(3.1	)%
Commercial Risk		1,385		1,382		1,475		3			0.2	%		(90	)		(6.1	)%
ASO		0		5		5		(5	)		(100.0	)%		(5	)		(100.0	)%
Total Commercial		1,385		1,387		1,480		(2	)		(0.1	)%		(95	)		(6.4	)%
Medicare Advantage		221		219		225		2			0.9	%		(4	)		(1.8	)%
Medi-Cal/Medicaid		896		877		841		19			2.2	%		55			6.5	%
Total Western Region		2,502		2,483		2,546		19			0.8	%		(44	)		(1.7	)%
Medicare PDP (stand-alone)		432		434		466		(2	)		(0.5	)%		(34	)		(7.3	)%
All Other States		10		19		586		(9	)		(47.4	)%		(576	)		(98.3	)%
		2,944		2,936		3,598		8			0.3	%		(654	)		(18.2	)%
TRICARE - North Contract Eligibles		3,077		3,077		3,040		0			0.0	%		37			1.2	%

Page 9

Health Net, Inc.

Consolidated Statements of Operations

($ in thousands, except per share data)

	Quarter Ended September  30, 2010			Quarter Ended June  30, 2010			Quarter Ended September  30, 2009
REVENUES:
Health plan services premiums	$	2,470,939		$	2,507,318		$	3,166,877
Government contracts		860,697			851,939			758,507
Net investment income		19,466			16,567			27,691
Administrative services fees and other income		5,487			1,837			15,578
Northeast administrative services fees and other		36,863			59,301			—
		3,393,452			3,436,962			3,968,653
EXPENSES:
Health plan services		2,134,701			2,163,191			2,734,984
Government contracts		814,385			811,386			716,323
General and administrative		225,929			237,378			319,451
Selling		59,021			56,574			83,275
Depreciation and amortization		8,659			8,466			12,689
Interest		8,150			8,761			10,264
Northeast administrative services expenses		61,878			71,951			—
Adjustment to loss on sale of Northeast subsidiaries		(21,457	)		(8,171	)		—
Asset impairments		—			6,000			170,570
Early debt extinguishment		—			3,532			—
		3,291,266			3,359,068			4,047,556
Income (loss) from operations before income taxes		102,186			77,894			(78,903	)
Income tax provision (benefit)		39,503			32,828			(12,881	)
Net income (loss)	$	62,683		$	45,066		$	(66,022	)
Basic earnings (loss) per share	$	0.64		$	0.46		$	(0.64	)
Diluted earnings (loss) per share	$	0.64		$	0.45		$	(0.64	)
Weighted average shares outstanding:
Basic		97,349			98,896			103,873
Diluted		98,304			99,687			103,873

Page 10

Health Net, Inc.

Condensed Consolidated Balance Sheets

($ in thousands)

	September 30, 2010			June 30, 2010			March 31, 2010
ASSETS
Current Assets
Cash and cash equivalents	$	446,301		$	425,663		$	537,414
Investments - available for sale		1,420,124			1,487,497			1,477,843
Premiums receivable, net		407,467			351,953			295,514
Amounts receivable under government contracts		213,000			277,465			298,827
Incurred but not reported (IBNR) health care costs receivable under TRICARE North contract		348,249			280,151			255,925
Other receivables		107,156			101,602			80,260
Deferred taxes		63,573			39,217			51,389
Other assets		207,545			188,578			205,036
Total current assets		3,213,415			3,152,126			3,202,208
Property and equipment, net		125,039			119,356			124,235
Goodwill, net		605,886			605,886			611,886
Other intangible assets, net		25,164			26,111			27,059
Deferred taxes		56,987			83,403			83,885
Investments - available for sale- noncurrent		—			2,985			531
Other noncurrent assets		165,922			161,098			164,379
Total Assets	$	4,192,413		$	4,150,965		$	4,214,183
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Reserves for claims and other settlements	$	904,377		$	934,879		$	995,594
Health care and other costs payable under government contracts		58,628			91,930			95,194
IBNR health care costs payable under TRICARE North contract		348,249			280,151			255,925
Unearned premiums		153,539			145,590			152,219
Borrowings under amortizing financing facility		—			—			105,579
Accounts payable and other liabilities		379,414			410,961			412,575
Total current liabilities		1,844,207			1,863,511			2,017,086
Senior notes payable		398,634			398,583			398,532
Borrowings under revolving credit facility		100,000			100,000			—
Other noncurrent liabilities		156,098			155,131			159,036
Total Liabilities		2,498,939			2,517,225			2,574,654
Stockholders’ Equity
Common stock		145			145			145
Additional paid-in capital		1,214,253			1,209,130			1,201,904
Treasury common stock, at cost		(1,567,603	)		(1,548,166	)		(1,476,327	)
Retained earnings		2,018,935			1,956,252			1,911,186
Accumulated other comprehensive income		27,744			16,379			2,621
Total Stockholders’ Equity		1,693,474			1,633,740			1,639,529
Total Liabilities and Stockholders’ Equity	$	4,192,413		$	4,150,965		$	4,214,183
Debt-to-Total Capital Ratio		22.7	%		23.4	%		23.5	%

Page 11

Health Net, Inc.

Condensed Consolidated Statements of Cash Flows

($ in thousands)

	Quarter Ended September  30, 2010			Quarter Ended June  30, 2010			Quarter Ended September  30, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	62,683		$	45,066		$	(66,022	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Amortization and depreciation		8,659			8,466			12,689
Share-based compensation		4,856			8,566			(5,025	)
Deferred income taxes		(4,875	)		4,016			(45,976	)
Net realized (gain) on sale on investments		(7,742	)		(4,028	)		(12,312	)
Loss on sale of Northeast subsidiaries		—			—			170,570
Asset impairments		—			6,000
Other changes		(6,554	)		(15,826	)		6,950
Changes in assets and liabilities, net of the effects of dispositions:
Premiums receivable and unearned premiums		(47,565	)		(63,068	)		48,341
Other current assets, receivables and noncurrent assets		(34,674	)		(7,167	)		(30,470	)
Amounts receivable/payable under government contracts		31,163			18,098			39,123
Reserves for claims and other settlements		(30,502	)		(60,715	)		(48,570	)
Accounts payable and other liabilities		(29,740	)		44,289			85,055
Net cash (used in) provided by operating activities		(54,291	)		(16,303	)		154,353
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales of investments		248,354			215,870			465,732
Maturities of investments		47,243			72,327			37,355
Purchases of investments		(203,530	)		(278,523	)		(520,733	)
Proceeds from sale of property and equipment		—			19			12
Purchases of property and equipment		(15,989	)		(5,460	)		(8,018	)
Net cash received (paid) for business divestitures		4,541			(8,415	)		—
Sales and purchases of restricted investments and other		2,567			4,594			6,558
Net cash provided by (used in) investing activities		83,186			412			(19,094	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options and employee stock purchases		568			196			485
Repurchases of common stock		(8,825	)		(79,285	)		(29	)
Borrowings under financing arrangements		—			100,000			—
Repayment of borrowings under financing arrangements		—			(116,771	)		—
Net cash (used in) provided by financing activities		(8,257	)		(95,860	)		456
Net increase (decrease) in cash and cash equivalents		20,638			(111,751	)		135,715
Net change in cash and cash equivalents classified as assets held for sale		—			—			(238,260	)
Cash and cash equivalents, beginning of period		425,663			537,414			565,856
Cash and cash equivalents, end of period	$	446,301		$	425,663		$	463,311

Page 12

Health Net, Inc.

SEGMENT INFORMATION

($ in thousands, except per share and PMPM data)

The following table presents Health Net’s operating segment information.

	Quarter Ended September 30, 2010															Quarter Ended June 30, 2010															Quarter Ended September 30, 2009
	Western Region Opera- tions1			Govern- ment Contracts2			Northeast Opera- tions3			Cor- porate/ Other4, 5			Consoli- dated			Western Region Opera- tions1			Govern- ment Contracts2			Northeast Opera- tions3			Cor- porate/ Other4, 5			Consoli- dated			Western Region Opera- tions1			Govern- ment Contracts2			Northeast Opera- tions3			Cor- porate/ Other4, 5			Consoli- dated
Health plan services premiums	$	2,457,977					$	12,962					$	2,470,939		$	2,484,282					$	23,036					$	2,507,318		$	2,467,023					$	699,854					$	3,166,877
Government contracts					860,697									860,697						851,939									851,939						758,507									758,507
Net investment income		19,240						226						19,466			16,324					$	243						16,567			21,182						6,509						27,691
Administrative services fees and other income		5,487						0						5,487			7,275						22			(5,460	)		1,837			13,662						1,916						15,578
Northeast administrative services fees and other		—						36,863						36,863			—						59,301						59,301															—
Total revenues		2,482,704			860,697			50,051			—			3,393,452			2,507,881			851,939			82,602			(5,460	)		3,436,962			2,501,867			758,507			708,279			—			3,968,653
Health plan services		2,122,005						12,696						2,134,701			2,164,164						20,660			(21,633	)		2,163,191			2,143,481						592,067			(564	)		2,734,984
Government contracts					813,524						861			814,385						810,466						920			811,386						716,323									716,323
G&A excluding insurance, taxes and fees		196,014						3,466			7,771			207,251			194,704						687			23,992			219,383			175,342						97,516			19,495			292,353
Insurance, taxes and fees		18,272						406			—			18,678			17,995						—			—			17,995			26,457						641			—			27,098
G&A including insurance, taxes and fees		214,286						3,872			7,771			225,929			212,699						687			23,992			237,378			201,799						98,157			19,495			319,451
Selling		58,267						754						59,021			55,750						824						56,574			57,966						25,309						83,275
Depreciation and amortization		8,585						74						8,659			8,448						18						8,466			9,692						2,997						12,689
Interest		8,150												8,150			8,761												8,761			10,069						195						10,264
Early debt extinguishment														0												3,532			3,532
Asset impairments								0						—									6,000						6,000												170,570			170,570
Northeast administrative services expenses								61,878						61,878									71,951						71,951															—
Adjustment to loss on sale of Northeast health plans								(21,457	)					(21,457	)								(8,171	)					(8,171	)														—
Total expenses		2,411,293			813,524			57,817			8,632			3,291,266			2,449,822			810,466			91,969			6,811			3,359,068			2,423,007			716,323			718,725			189,501			4,047,556
Income (loss) from operations before income taxes		71,411			47,173			(7,766	)		(8,632	)		102,186			58,059			41,473			(9,367	)		(12,271	)		77,894			78,860			42,184			(10,446	)		(189,501	)		(78,903	)
Income tax provision (benefit)		26,974			19,332			(3,090	)		(3,713	)		39,503			21,967			17,042			(1,343	)		(4,838	)		32,828			25,073			17,351			(1,414	)		(53,891	)		(12,881	)
Net income (loss)	$	44,437		$	27,841		$	(4,676	)	$	(4,919	)	$	62,683		$	36,092		$	24,431		$	(8,024	)	$	(7,433	)	$	45,066		$	53,787		$	24,833		$	(9,032	)	$	(135,610	)	$	(66,022	)
Basic earnings (loss) per share	$	0.46		$	0.29		$	(0.05	)	$	(0.05	)	$	0.64		$	0.36		$	0.25		$	(0.08	)	$	(0.08	)	$	0.46		$	0.52		$	0.24		$	(0.09	)	$	(1.31	)	$	(0.64	)
Diluted earnings (loss) per share	$	0.45		$	0.29		$	(0.05	)	$	(0.05	)	$	0.64		$	0.36		$	0.25		$	(0.08	)	$	(0.08	)	$	0.45		$	0.52		$	0.24		$	(0.09	)	$	(1.31	)	$	(0.64	)
Basic weighted average shares outstanding		97,349			97,349			97,349			97,349			97,349			98,896			98,896			98,896			98,896			98,896			103,873			103,873			103,873			103,873			103,873
Diluted weighted average shares outstanding		98,304			98,304			97,349			97,349			98,304			99,687			99,687			98,896			98,896			99,687			104,432			104,432			103,873			103,873			103,873
Pretax margin		2.9	%		5.5	%											2.3	%		4.9	%											3.2	%		5.6	%
Commercial premium yield		7.2	%														9.3	%														9.6	%
Commercial premium PMPM	$	342.63														$	340.38														$	319.71
Commercial health care cost trend		5.2	%														9.1	%														8.3	%
Commercial health care cost PMPM	$	295.73														$	293.81														$	280.99
Commercial MCR		86.3	%														86.3	%														87.9	%
Medicare Advantage MCR		89.4	%														88.5	%														88.4	%
Medicare Part D MCR		64.6	%														85.9	%														65.9	%
Medicaid MCR		87.9	%														88.5	%														86.7	%
Health plan services MCR		86.3	%														87.1	%														86.9	%
Government contracts cost ratio					94.5	%														95.1	%														94.4	%
G&A expense ratio		8.7	%														8.5	%														8.1	%
Selling costs ratio		2.4	%														2.2	%														2.3	%
Effective tax rate		37.8	%		41.0	%											37.8	%		41.1	%											31.8	%		41.1	%

1 Includes the operations of the company’s commercial, Medicare (including Part D) and Medicaid health plans in California, Arizona and Oregon.

2 Includes the operations of government-sponsored managed care plans through the TRICARE program and other health care-related Department of Defense and Veterans Affairs government contracts.

3 Includes the operations of the company’s Northeast health plans that were sold on December 11, 2009 and the operations of the company’s health and life insurance companies in Connecticut, New Jersey and New York. Subsequent to the sale, it also includes the operations of the administrative services provided to the buyer.

4 Includes a litigation reserve true-up related to a previously accrued for class action lawsuit.

5 Includes costs related to the company’s operations strategy and corporate overhead cost reduction efforts resulting from the sale of the Northeast health plans.

Page 13

Health Net, Inc.

Disclosures Regarding Non-GAAP Financial Information

($ in millions)

Management believes that adjusted days claims payable (adjusted for divested businesses, capitation, provider and other claim settlements and Medicare Part D), a non-GAAP financial measure, provides useful information to investors because the adjusted days claims payable calculation excludes amounts related to divested businesses and health care costs for which no or minimal reserves are maintained. Therefore, management believes that adjusted days claims payable may present a more accurate reflection of days claims payable calculated from claims-based reserves than does GAAP days claims payable, which includes such costs. This non-GAAP financial information should be considered in addition to, not as a substitute for, financial information prepared in accordance with GAAP. The following table provides a reconciliation of the differences between adjusted days claims payable and days claims payable, the most directly comparable GAAP financial measure. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating the adjusted amounts, you should be aware that we have incurred expenses that are the same as or similar to some of the adjustments in the current presentation and we may incur them again in the future.

Our presentation of the adjusted amounts should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

	Q3 2010			Q2 2010			Q3 2009
Reconciliation of Days Claims Payable:
(1)     Reserve for Claims and Other Settlements	$	904.4		$	934.9		$	1,194.9
Less: Reserve for Claims and Other Settlements for Divested Businesses		—			—			(233.6	)
Less: Capitation Payable, Provider and Other Claim Settlements and Medicare Part D		(130.0	)		(155.6	)		(159.2	)
(2)     Reserve for Claims and Other Settlements - Adjusted	$	774.4		$	779.3		$	802.1
(3)     Health Plan Services Cost	$	2,134.7		$	2,163.2		$	2,735.0
Less: Health Plan Services Cost for Divested Businesses		—			—			(570.1	)
Less: Capitation Payable, Provider and Other Claim Settlements and Medicare Part D		(804.4	)		(839.0	)		(791.3	)
(4)     Health Plan Services Cost - Adjusted	$	1,330.3		$	1,324.2		$	1,373.6
(5)     Number of Days in Period		92			91			92
= (1) / (3) * (5) Days Claims Payable - (using end of period reserve amount)		39.0			39.3			40.2
= (2) / (4) * (5) Days Claims Payable - Adjusted (using end of period reserve amount)		53.6			53.6			53.7

Page 14

Health Net, Inc.

Reconciliation of Reserves for Claims and Other Settlements

($ in millions)

	Health Plan Services
	YTD 9/2010			Year 2009			Year 2008
Reserve for claims (a), beginning of period	$	692.2		$	957.1		$	838.7
Incurred claims related to:
Current Year		3,481.9			6,422.8			6,372.2
Prior Years (c)		(63.8	)		(80.0	)		(8.3	)
Total Incurred (b)		3,418.1			6,342.8			6,363.9
Paid claims related to:
Current Year		2,837.7			5,572.2			5,443.2
Prior Years		600.2			857.8			802.3
Total Paid (b)		3,437.9			6,430.0			6,245.5
Less: Divested businesses		—			(177.7	)		—
Reserve for claims (a), end of period		672.4			692.2			957.1
Add:
Claims Payable (d)		141.9			165.6			284.8
Other (e)		90.1			93.9			96.2
Reserves for claims and other settlements, end of period	$	904.4		$	951.7		$	1,338.1

(a) Consists of incurred but not reported claims and received but unprocessed claims and reserves for loss adjustment expenses.

(b) Includes medical claims only. Capitation, pharmacy and other payments including provider settlements are not included.

(c) This line represents the change in reserves attributable to the difference between the original estimate of incurred claims for prior years and the revised estimate. In developing the revised estimate, there have been no changes in the approach used to determine the key actuarial assumptions, which are the completion factor and medical cost trend. Claims liabilities are estimated under actuarial standards of practice and generally accepted accounting principles. The majority of the reserve balance held at each quarter-end is associated with the most recent months’ incurred services because these are the services for which the fewest claims have been paid. The majority of the adjustments to reserves relate to variables and uncertainties associated with actuarial assumptions. The degree of uncertainty in the estimates of incurred claims is greater for the most recent months’ incurred services. Revised estimates for prior years are determined in each quarter based on the most recent updates of paid claims for prior years.

(d) Includes amount accrued for litigation and regulatory-related expenses.

(e) Includes accrued capitation, shared risk settlements, provider incentives and other reserve items.

Page 15