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 FIRST QUARTER 2011

GAAP NET LOSS OF $108.2 MILLION, OR LOSS OF $1.16 PER SHARE

WESTERN REGION OPERATIONS AND GOVERNMENT CONTRACTS SEGMENTS

GREW COMBINED EARNINGS PER DILUTED SHARE BY 30 PERCENT

TO $0.61 COMPARED WITH THE FIRST QUARTER OF 2010

HEALTH NET RAISES 2011 EARNINGS PER DILUTED SHARE GUIDANCE

FOR THE COMBINED WESTERN REGION OPERATIONS AND

GOVERNMENT CONTRACTS SEGMENTS TO BETWEEN $2.90 AND $3.00

THE COMPANY REPURCHASED 4.9 MILLION SHARES

FROM JANUARY 1 THROUGH APRIL 29, 2011 FOR $149.8 MILLION

LOS ANGELES, May 4, 2011 – Health Net, Inc. (NYSE:HNT) today announced a 2011 first quarter GAAP net loss of $108.2 million, or a loss of $1.16 per share, compared with GAAP net income of $16.1 million, or $0.16 per diluted share, for the first quarter of 2010.

The 2011 first quarter GAAP results include:

1. a $177.2 million pretax, or $157.9 million after tax, charge related to the AmCareco litigation¹; and

2. $11.0 million in pretax expenses related to the company’s administrative cost reduction efforts.

For the first quarter of 2011, the company’s Western Region Operations (Western Region) and Government Contracts segments produced combined earnings of $57.4 million, or $0.61 per diluted share, compared with $47.9 million, or $0.47 per diluted share for the first quarter of 2010.

“We are pleased that diluted earnings per share for our Western Region Operations and Government Contracts segments increased by 30 percent in the first quarter of 2011 compared with the first quarter of 2010,” said Jay Gellert, Health Net’s chief executive officer. “Our results, supported by strong commercial and Government Contracts performance, allowed us to repurchase more than five percent of our outstanding stock from January 1 through April 29, 2011.

“For the first time in several years, we achieved sequential commercial enrollment growth in the first quarter, and at the same time, the first quarter commercial medical care ratio improved year-over-year. Our results lead us to raise our annual earnings per diluted share guidance for the combined Western Region Operations and Government Contracts segments to a range of $2.90 to $3.00,” Gellert added.

CONSOLIDATED RESULTS

Health Net’s total revenues increased 3.2 percent in the first quarter of 2011 to $3.5 billion compared with $3.4 billion in the first quarter of 2010. Health plan services premium revenues increased by 3.4 percent to $2.6 billion in the first quarter of 2011 compared with $2.5 billion in the first quarter of 2010.

Investment income increased to $23.8 million in the first quarter of 2011 compared with $19.9 million in the first quarter of 2010.

WESTERN REGION OPERATIONS SEGMENT

Health Plan Membership

The company’s total health plan enrollment was approximately 2.9 million at March 31, 2011, a decrease of 0.9 percent compared with enrollment at March 31, 2010. Total enrollment in the company’s California health plan increased by 1.5 percent from March 31, 2010 to March 31, 2011.

Western Region commercial enrollment was approximately 1.4 million members at March 31, 2011, a decrease of 0.7 percent compared with enrollment at March 31, 2010, but up 0.4 percent from December 31, 2010.

“Our sequential commercial enrollment growth was driven by the growing popularity of our tailored network products, higher client retention and strong new sales in the first quarter of 2011,” said Jim Woys, Health Net’s chief operating officer.

As of March 31, 2011, tailored network products accounted for 30.0 percent of the company’s Western Region commercial enrollment compared with 20.0 percent at March 31, 2010.

Medicaid enrollment increased 7.8 percent to 941,000 members at March 31, 2011 compared with March 31, 2010.

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Enrollment in Health Net’s Medicare Advantage plans in the Western Region was 209,000 members at March 31, 2011, which represents a 4.1 percent decrease compared with enrollment at March 31, 2010.

Membership in the company’s Medicare Part D plans was 401,000 at March 31, 2011, a 12.3 percent decrease compared with enrollment at March 31, 2010.

Revenues

Total revenues for the Western Region increased 4.2 percent in the first quarter of 2011 to $2.6 billion from $2.5 billion in the first quarter of 2010.

Investment income for the Western Region was $23.8 million in the first quarter of 2011 compared with $19.6 million in the first quarter of 2010 and $15.1 million in the fourth quarter of 2010.

Health Plan Services Expenses

Health plan services expenses in the Western Region increased approximately 4.2 percent to $2.3 billion in the first quarter of 2011 compared with $2.2 billion in the first quarter of 2010.

Commercial Premium Yield and Health Care Cost Trends

In the Western Region, commercial premiums per member per month (PMPM) increased by 5.7 percent to approximately $356 in the first quarter of 2011 compared with approximately $336 in the first quarter of 2010.

Commercial health care costs PMPM in the Western Region increased 5.0 percent to approximately $305 in the first quarter of 2011 compared with approximately $290 in the first quarter of 2010.

“Our first quarter 2011 commercial yields in the Western Region were lower than our initial expectations due to faster than expected growth in tailored network products, more over-age adult dependents enrolled in our products than expected and greater than expected benefit buydowns,” said Woys.

Due to these shifts, the company revised its 2011 guidance for commercial premium yield PMPM to between 6.0 percent and 6.5 percent and health care costs PMPM to be 100 to 120 basis points lower than premium yields.

Medical Care Ratios (MCR)

The health plan services MCR in the Western Region was 87.4 percent in the first quarter of 2011 compared with 87.5 percent in the first quarter of 2010. The Western Region commercial MCR was 85.7 percent in the first quarter of 2011 compared with 86.3 percent in the first quarter of 2010.

“The 60 basis point improvement in our commercial MCR is the result of continued pricing and underwriting discipline combined with moderate utilization and unit cost trends and slower growth in pharmacy costs,” said Joseph Capezza, Health Net’s chief financial officer.

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The Medicare Advantage (MA) MCR in the Western Region was 89.0 percent in the first quarter of 2011 compared with 88.2 percent in the first quarter of 2010. The company’s Medicare Part D (PDP) MCR was 101.1 percent in the first quarter of 2011 compared with 96.9 percent in the first quarter of 2010. The increases in both the MA and PDP MCRs were due to the adverse effect of limited new member growth. The impact of this is more pronounced in the first quarter.

General & Administrative (G&A) and Selling Expenses

G&A expense in the Western Region was approximately $242.0 million in the first quarter of 2011 compared with approximately $223.9 million in the first quarter of 2010. The G&A expense ratio was 9.3 percent in the first quarter of 2011 compared with 8.9 percent in the first quarter of 2010.

“The G&A expense ratio increased 40 basis points quarter-over-quarter due to costs in the first quarter of 2011 associated with CMS compliance remediation as well as costs relating to the previously announced unaccounted-for disk drives in our data center,” said Woys. “For the full year 2011, we continue to expect our G&A ratio to be in the range of 8.7 percent to 8.9 percent.”

Selling expense in the Western Region was $60.6 million in the first quarter of 2011 compared with $57.7 million in the first quarter of 2010 due to strong new sales in the first quarter.

GOVERNMENT CONTRACTS SEGMENT

The company’s Government Contracts revenues increased 8.1 percent in the first quarter of 2011 to $875.1 million compared with $809.5 million in the first quarter of 2010.

The Government Contracts cost ratio decreased to 93.4 percent in the first quarter of 2011 from 95.3 percent in the first quarter of 2010.

“Health care delivery under the company’s new TRICARE North Region contract began April 1, 2011, and the transition to the new contract went smoothly,” said Woys.

BALANCE SHEET

Cash and investments as of March 31, 2011 were approximately $1.8 billion compared with approximately $2.0 billion at March 31, 2010.

Reserves for claims and other settlements as of March 31, 2011 were $889.9 million compared with $995.6 million at March 31, 2010 and $942.0 million at December 31, 2010. The company noted that the sequential decline in reserves is primarily the result of paid claims being approximately $100 million higher in the first quarter of 2011 compared with the fourth quarter of 2010.

Days claims payable (DCP) for the first quarter of 2011 was 35.1 days compared with 40.5 days for the first quarter of 2010 and 41.3 days for the fourth quarter of 2010.

On an adjusted² basis, DCP for the first quarter of 2011 was 51.8 days compared with 55.8 days for the first quarter of 2010 and 57.3 days for the fourth quarter of 2010.

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The company noted that, as adjusted in the attached reconciliation table², the reserve for claims and other settlements (a component of DCP) at the end of the first quarter of 2011 was approximately equal to the amounts for the same metric at the end of the second and third quarters of 2010. The sequential decrease in this metric from the fourth quarter of 2010 was due to a reduction in claims inventories in the first quarter of 2011 as a year-end buildup in claims backlog due to holiday closures was paid down in the first quarter of this year. The decrease in this metric from the first quarter of 2010 compared with the first quarter of 2011 reflects faster claims turnaround as a result of more efficient processing due to simplified tailored network product contracts with providers.

The company’s debt-to-total capital ratio was 21.1 percent as of March 31, 2011 compared with 23.5 percent as of March 31, 2010 and 19.0 percent as of December 31, 2010.

Interest expense was $7.6 million in the first quarter of 2011 compared with $9.9 million in the first quarter of 2010. This decline was due to the decrease in the company’s total outstanding debt.

CASH FLOW

Operating cash flow was negative approximately $150 million in the first quarter of 2011 due primarily to the following:

1. A sequential increase in premiums receivable and unearned premiums of approximately $106 million primarily related to Medicaid, MA and PDP.

2. A $35 million increase in the net receivable related to the company’s TRICARE North Region contract.

3. An approximate $52 million sequential decrease in reserves for claims and other settlements.

4. A quarterly payment related to the sale of the company’s Northeast operations of approximately $35 million. This amount was offset by approximately $41 million in membership-related payments that were recorded in “Cash Flow from Investing Activities.”

“By year-end 2011, we expect the Medicaid receivable to decline by approximately $80 million and the TRICARE receivable to decline by approximately $150 million,” added Capezza.

“For 2011, we continue to expect operating cash flow to exceed net income plus depreciation and amortization. We expect that any payments related to the judgment in the AmCareco litigation will be funded through our revolving credit agreement,” said Capezza. “Therefore, excluding any further share repurchases this year, we expect cash at the parent company at December 31, 2011 to be approximately $300 million.”

NORTHEAST OPERATIONS SEGMENT

Health Net continues to serve the members of the Northeast companies previously sold to UnitedHealthcare under administrative services agreements (ASAs) that were entered into 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 the second quarter of 2011. After that time, the company will continue to administer run-out claims pursuant to claims servicing agreements with UnitedHealthcare and its affiliates.

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The revenues associated with the company’s Northeast Operations in the first quarter of 2011 were $14.5 million and expenses were $19.4 million. Each item is shown separately in the Segment Information table accompanying this press release.

SHARE REPURCHASE UPDATE

From January 1 through April 29, 2011, Health Net repurchased 4.9 million shares of its common stock for aggregate consideration of approximately $149.8 million at an average price of $30.49 per share under its $300 million stock repurchase program. The company also announced today in a separate press release that its board of directors has authorized a new $300 million share repurchase program.

2011 GUIDANCE

Following is a table with specific 2011 guidance metrics.

Metric	2011 Guidance
Year-end Membership(a)	Commercial: +1% to +2% Medicaid: +9% to +11% (previously: +6% to +7%) Medicare Advantage(c): -8% to -10% (previously: -15% to -17%) Total Western Region Operations medical membership(c): +3% to +4% (previously: +2% to +3%) PDP (c): -11% to -13% (previously: -14% to -16%)
Consolidated Revenues(c)	$12.0 billion to $12.5 billion
Commercial Yields(a)	~6.0% to 6.5% (previously: ~7.8% to 8.3%)
Commercial Health Care Cost Trends(a)	~100 to 120 basis points < premium yields (previously: ~ 40 to 60 bps < premium yields)
Selling Cost Ratio(a) G&A Expense Ratio(a)	~ 2.3% to 2.4% ~ 8.7% to 8.9%
Tax Rate(b)	~39.0% (previously: 39.2%)

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2011 GUIDANCE (continued from previous page)

Metric	2011 Guidance
Weighted-average Fully Diluted Shares Outstanding	92.5 million to 93.5 million (previously: 96 million to 97 million)
GAAP EPS(c)(d)	$0.58 to $0.63 (previously: at least $2.05)
Combined Western Region Operations and Government Contracts EPS(c)	$2.90 to $3.00 (previously: at least $2.75)

(a) For the company’s Western Region Operations

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

(c) Includes the expected impact of the CMS sanctions previously announced on November 19, 2010

(d) Includes the impact of the AmCareco litigation judgment

FOOTNOTES

¹ On April 1, 2011, the Louisiana Supreme Court rendered a decision in the AmCareco litigation, which is described in Item 3 of Health Net’s Annual Report on Form 10-K for the year ended December 31, 2010, as updated by Health Net’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2011 (the “Form 8-K”). In the Form 8-K, the company noted it was continuing to assess the judgment and its impact on 2011 guidance. The charge recorded in the first quarter of 2011 represents the company’s final assessment of the compensatory and punitive damages and judicial interest to be paid in connection with the judgment as of April 1, 2011. Judicial interest will continue to accrue on the judgment until it is paid. The judgment decreased the company’s net income per diluted share by $1.69 in the first quarter of 2011 and will impact GAAP earnings per diluted share for 2011 by $1.70. The judgment will not affect the company’s earnings per diluted share from its combined Western Region Operations and Government Contracts segments for 2011.

² See the table “Disclosures Regarding Non-GAAP Financial Information” attached to this press release for a reconciliation of adjusted DCP, a non-GAAP financial measure, to the comparable GAAP financial measure.

CONFERENCE CALL

As previously announced, Health Net will discuss the company’s first quarter 2011 results during a conference call on Wednesday, May 4, 2011, 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)	800.642.1687 (Replay – Domestic)
706.643.5711 (International)	706.645.9291 (Replay – International)

The access code for the live conference call and replay is 54183929. A replay of the conference call will be available through May 9, 2011. 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, 2010, and subsequent reports filed by the company from time to time with the Securities and Exchange Commission.

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ABOUT HEALTH NET

Health Net, Inc. is a publicly traded managed care organization that delivers managed health care services through health plans and government-sponsored managed care plans. Its mission is to help people be healthy, secure and comfortable. The company provides health benefits to approximately 6.0 million individuals across the country through group, individual, Medicare (including the Medicare prescription drug benefit commonly referred to as “Part D”), Medicaid, Department of Defense, including TRICARE, and Veterans Affairs programs. Health Net’s behavioral health services subsidiary, Managed Health Network, Inc., provides behavioral health, substance abuse and employee assistance programs to approximately 5.1 million individuals, including Health Net’s own health plan members. 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 Affordable Care Act, which could materially adversely affect Health Net’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 Health Net 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 Health Net’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 Health Net’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 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, including the continued suspension of the marketing of and enrollment into Health Net’s Medicare products for a significant period of time, which could have a material adverse impact on Health Net’s Medicare

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business; operational issues; noncompliance by Health Net or Health Net’s business associates with any privacy laws or any security breach involving the misappropriation, loss or other unauthorized use or disclosure of confidential information; 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 Health Net’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 subsequent 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 quarter ended March 31, 2011.

Eight pages of tables follow.

# # #

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Health Net, Inc.

Enrollment Data—By State

(In thousands)

	March 31, 2011		Dec 31, 2010		March 31, 2010		Change from
							December 31, 2010						March 31, 2010
							Increase/ (Decrease)			% Change			Increase/ (Decrease)			% Change
California
Large Group		836		843		839		(7	)		(0.8	)%		(3	)		(0.4	)%
Small Group and Individual		338		348		362		(10	)		(2.9	)%		(24	)		(6.6	)%
Commercial Risk		1,174		1,191		1,201		(17	)		(1.4	)%		(27	)		(2.2	)%
ASO		0		0		5		0			0.0	%		(5	)		(100.0	)%
Total Commercial		1,174		1,191		1,206		(17	)		(1.4	)%		(32	)		(2.7	)%
Medicare Advantage		127		133		130		(6	)		(4.5	)%		(3	)		(2.3	)%
Medi-Cal		941		901		873		40			4.4	%		68			7.8	%
Total California		2,242		2,225		2,209		17			0.8	%		33			1.5	%
Arizona
Large Group		74		56		52		18			32.1	%		22			42.3	%
Small Group and Individual		50		41		38		9			22.0	%		12			31.6	%
Commercial Risk		124		97		90		27			27.8	%		34			37.8	%
Medicare Advantage		42		49		51		(7	)		(14.3	)%		(9	)		(17.6	)%
Total Arizona		166		146		141		20			13.7	%		25			17.7	%
Oregon
Large Group		49		51		55		(2	)		(3.9	)%		(6	)		(10.9	)%
Small Group and Individual		41		44		47		(3	)		(6.8	)%		(6	)		(12.8	)%
Commercial Risk		90		95		102		(5	)		(5.3	)%		(12	)		(11.8	)%
Medicare Advantage		40		40		37		0			0.0	%		3			8.1	%
Total Oregon		130		135		139		(5	)		(3.7	)%		(9	)		(6.5	)%
Total Health Plan Enrollment
Large Group		959		950		946		9			0.9	%		13			1.4	%
Small Group and Individual		429		433		447		(4	)		(0.9	)%		(18	)		(4.0	)%
Commercial Risk		1,388		1,383		1,393		5			0.4	%		(5	)		(0.4	)%
ASO		0		0		5		0			0.0	%		(5	)		(100.0	)%
Total Commercial		1,388		1,383		1,398		5			0.4	%		(10	)		(0.7	)%
Medicare Advantage		209		222		218		(13	)		(5.9	)%		(9	)		(4.1	)%
Medi-Cal/Medicaid		941		901		873		40			4.4	%		68			7.8	%
Medicare PDP (stand-alone)		401		427		457		(26	)		(6.1	)%		(56	)		(12.3	)%
Western Region Operations		2,939		2,933		2,946		6			0.2	%		(7	)		(0.2	)%
Northeast Operations		1		7		21		(6	)		(85.7	)%		(20	)		(95.2	)%
		2,940		2,940		2,967		0			0.0	%		(27	)		(0.9	)%
TRICARE—North Contract Eligibles		3,090		3,090		3,067		0			0.0	%		23			0.7	%

Page 10

Health Net, Inc.

Enrollment Data—Line of Business

(In thousands)

							Change from
							December 31, 2010						March 31, 2010
	March 31, 2011		Dec 31, 2010		March 31, 2010		Increase/ (Decrease)			% Change			Increase/ (Decrease)			% Change
Large Group
California		836		843		839		(7	)		(0.8	)%		(3	)		(0.4	)%
Arizona		74		56		52		18			32.1	%		22			42.3	%
Oregon		49		51		55		(2	)		(3.9	)%		(6	)		(10.9	)%
		959		950		946		9			0.9	%		13			1.4	%
Small Group and Individual
California		338		348		362		(10	)		(2.9	)%		(24	)		(6.6	)%
Arizona		50		41		38		9			22.0	%		12			31.6	%
Oregon		41		44		47		(3	)		(6.8	)%		(6	)		(12.8	)%
		429		433		447		(4	)		(0.9	)%		(18	)		(4.0	)%
Commercial Risk
California		1,174		1,191		1,201		(17	)		(1.4	)%		(27	)		(2.2	)%
Arizona		124		97		90		27			27.8	%		34			37.8	%
Oregon		90		95		102		(5	)		(5.3	)%		(12	)		(11.8	)%
		1,388		1,383		1,393		5			0.4	%		(5	)		(0.4	)%
ASO		0		0		5		0			0.0	%		(5	)		(100.0	)%
Total Commercial
California		1,174		1,191		1,206		(17	)		(1.4	)%		(32	)		(2.7	)%
Arizona		124		97		90		27			27.8	%		34			37.8	%
Oregon		90		95		102		(5	)		(5.3	)%		(12	)		(11.8	)%
		1,388		1,383		1,398		5			0.4	%		(10	)		(0.7	)%
Medicare Advantage
California		127		133		130		(6	)		(4.5	)%		(3	)		(2.3	)%
Arizona		42		49		51		(7	)		(14.3	)%		(9	)		(17.6	)%
Oregon		40		40		37		0			0.0	%		3			8.1	%
		209		222		218		(13	)		(5.9	)%		(9	)		(4.1	)%
Medi-Cal/Medicaid
California		941		901		873		40			4.4	%		68			7.8	%
Total Health Plan Enrollment
Large Group		959		950		946		9			0.9	%		13			1.4	%
Small Group and Individual		429		433		447		(4	)		(0.9	)%		(18	)		(4.0	)%
Commercial Risk		1,388		1,383		1,393		5			0.4	%		(5	)		(0.4	)%
ASO		0		0		5		0			0.0	%		(5	)		(100.0	)%
Total Commercial		1,388		1,383		1,398		5			0.4	%		(10	)		(0.7	)%
Medicare Advantage		209		222		218		(13	)		(5.9	)%		(9	)		(4.1	)%
Medi-Cal/Medicaid		941		901		873		40			4.4	%		68			7.8	%
Medicare PDP (stand-alone)		401		427		457		(26	)		(6.1	)%		(56	)		(12.3	)%
Western Region Operations		2,939		2,933		2,946		6			0.2	%		(7	)		(0.2	)%
Northeast Operations		1		7		21		(6	)		(85.7	)%		(20	)		(95.2	)%
		2,940		2,940		2,967		0			0.0	%		(27	)		(0.9	)%
TRICARE—North Contract Eligibles		3,090		3,090		3,067		0			0.0	%		23			0.7	%

Page 11

Health Net, Inc.

Consolidated Statements of Operations

($ in thousands, except per share data)

	Quarter Ended March 31, 2011			Quarter Ended December 31, 2010			Quarter Ended March 31, 2010
REVENUES:
Health plan services premiums	$	2,612,384		$	2,491,124		$	2,527,507
Government contracts		875,127			822,388			809,459
Net investment income		23,835			15,226			19,922
Administrative services fees and other income		2,721			4,953			8,856
Northeast administrative services fees and other		12,449			39,643			50,360
Total revenues		3,526,516			3,373,334			3,416,104
EXPENSES:
Health plan services		2,282,334			2,099,969			2,211,256
Government contracts		822,152			770,487			771,902
General and administrative		426,361			245,861			247,096
Selling		60,691			64,333			58,831
Depreciation and amortization		8,828			9,012			8,663
Interest		7,620			8,085			9,884
Northeast administrative services expenses		52,255			63,727			81,878
Adjustment to loss on sale of Northeast subsidiaries		(34,854	)		(12,331	)		—
Total expenses		3,625,387			3,249,143			3,389,510
(Loss) income from operations before income taxes		(98,871	)		124,191			26,594
Income tax provision		9,324			43,787			10,504
Net (loss) income	$	(108,195	)	$	80,404		$	16,090
Basic (loss) earnings per share	$	(1.16	)	$	0.84		$	0.16
Diluted (loss) earnings per share	$	(1.16	)	$	0.83		$	0.16
Weighted average shares outstanding:
Basic		93,290			95,697			101,049
Diluted		93,290			96,885			102,115

Page 12

Health Net, Inc.

Condensed Consolidated Balance Sheets

(Amounts in thousands, except ratio data)

	March 31, 2011			December 31, 2010			March 31, 2010
ASSETS
Current Assets
Cash and cash equivalents	$	142,297		$	350,138		$	537,414
Investments—available for sale		1,658,788			1,663,218			1,477,843
Premiums receivable, net		397,949			298,892			295,514
Amounts receivable under government contracts		293,646			266,456			298,827
Incurred but not reported (IBNR) health care costs receivable under TRICARE North contract		292,649			284,247			255,925
Other receivables		76,893			136,323			80,260
Deferred taxes		25,471			45,769			51,389
Other assets		229,568			182,252			205,036
Total current assets		3,117,261			3,227,295			3,202,208
Property and equipment, net		122,966			123,137			124,235
Goodwill, net		605,886			605,886			611,886
Other intangible assets, net		23,270			24,217			27,059
Deferred taxes		55,957			50,648			83,885
Investments—available for sale—  noncurrent		8,870			8,756			531
Other noncurrent assets		90,983			91,754			164,379
Total Assets	$	4,025,193		$	4,131,693		$	4,214,183
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Reserves for claims and other settlements	$	889,876		$	942,024		$	995,594
Health care and other costs payable under government contracts		106,254			113,865			95,194
IBNR health care costs payable under TRICARE North contract		292,649			284,247			255,925
Unearned premiums		151,963			158,493			152,219
Borrowings under amortizing financing facility		—			—			105,579
Accounts payable and other liabilities		514,957			402,024			412,575
Total current liabilities		1,955,699			1,900,653			2,017,086
Senior notes payable		398,736			398,685			398,532
Other noncurrent liabilities		184,159			137,939			159,036
Total Liabilities		2,538,594			2,437,277			2,574,654
Stockholders' Equity
Common stock		147			145			145
Additional paid-in capital		1,255,246			1,221,301			1,201,904
Treasury common stock, at cost		(1,753,760	)		(1,626,856	)		(1,476,327	)
Retained earnings		1,991,144			2,099,339			1,911,186
Accumulated other comprehensive (loss) income		(6,178	)		487			2,621
Total Stockholders' Equity		1,486,599			1,694,416			1,639,529
Total Liabilities and Stockholders' Equity	$	4,025,193		$	4,131,693		$	4,214,183
Debt-to-Total Capital Ratio		21.1	%		19.0	%		23.5	%

Page 13

Health Net, Inc.

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

	First Quarter Ended March 31, 2011			Fourth Quarter Ended December 31, 2010			First Quarter Ended March 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(108,195	)	$	80,404		$	16,090
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Amortization and depreciation		8,828			9,012			8,663
Share-based compensation expense		9,428			5,135			14,555
Deferred income taxes		19,135			38,661			(638	)
Excess tax benefits from share-based compensation		(1,164	)		(98	)		(473	)
Adjustment to loss on sale of business		(34,854	)		(12,331	)		—
Net realized (gain) on sale on investments		(12,298	)		(4,396	)		(6,853	)
Other changes		2,571			(5,091	)		6,058
Changes in assets and liabilities, net of the effects of dispositions:
Premiums receivable and unearned premiums		(105,587	)		113,529			9,652
Other current assets, receivables and noncurrent assets		11,907			(2,575	)		8,431
Amounts receivable/payable under government contracts		(34,801	)		1,781			(23,638	)
Reserves for claims and other settlements		(52,148	)		37,647			43,939
Accounts payable and other liabilities		147,210			(47,109	)		51,661
Net cash (used in) provided by operating activities		(149,968	)		214,569			127,447
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales of investments		398,470			210,533			444,200
Maturities of investments		74,407			43,224			36,631
Purchases of investments		(468,255	)		(543,696	)		(557,102	)
Purchases of property and equipment		(10,305	)		(9,793	)		(3,549	)
Purchase price adjustment on sale of Northeast Health Plans		41,036			80,000			—
Sales and purchases of restricted investments and other		(13,764	)		15,491			(130	)
Net cash provided by (used in) investing activities		21,589			(204,241	)		(79,950	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options and employee stock purchases		7,990			2,030			850
Repurchases of common stock		(113,510	)		(54,528	)		(94,209	)
Excess tax benefits from share-based compensation		1,164			98			473
Repayment of borrowings under financing arrangements		—			(100,000	)		(100,000	)
Net increase (decrease) in checks outstanding (net of deposits)		24,894			45,909			—
Net cash (used in) financing activities		(79,462	)		(106,491	)		(192,886	)
Net (decrease) in cash and cash equivalents		(207,841	)		(96,163	)		(145,389	)
Cash and cash equivalents, beginning of period		350,138			446,301			682,803
Cash and cash equivalents, end of period	$	142,297		$	350,138		$	537,414

Page 14

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 March 31, 2011															Quarter Ended December 31, 2010															Quarter Ended March 31, 2010
	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/ Other6			Consoli- dated
Health plan services premiums	$	2,610,380					$	2,004					$	2,612,384		$	2,481,121					$	10,003					$	2,491,124		$	2,502,358					$	25,149					$	2,527,507
Government contracts					875,127									875,127						822,388									822,388						809,459									809,459
Net investment income		23,774						61						23,835			15,138						88						15,226			19,577					$	345						19,922
Administrative services fees and other income		2,721												2,721			4,953						—						4,953			8,832						24						8,856
Northeast administrative services fees and other								12,449						12,449			—						39,643						39,643			—						50,360						50,360
Total revenues		2,636,875			875,127			14,514			—			3,526,516			2,501,212			822,388			49,734			—			3,373,334			2,530,767			809,459			75,878			—			3,416,104
Health plan services		2,281,436						898						2,282,334			2,115,099						9,746			(24,876	)		2,099,969			2,189,893						21,363						2,211,256
Government contracts					817,299						4,853			822,152						770,321						166			770,487						771,436						466			771,902
G&A excluding insurance, taxes and fees		217,622						873			183,377			401,872			211,894						1,576			13,015			226,485			204,838						9,157			14,062			228,057
Insurance, taxes and fees		24,334						155			—			24,489			19,003						373			—			19,376			19,039						—			—			19,039
G&A including insurance, taxes and fees		241,956						1,028			183,377			426,361			230,897						1,949			13,015			245,861			223,877						9,157			14,062			247,096
Selling		60,587						104						60,691			63,866						467						64,333			57,725						1,106						58,831
Depreciation and amortization		8,822						6						8,828			8,980						32						9,012			8,621						42						8,663
Interest		7,620						—						7,620			8,085						—						8,085			9,884						—						9,884
Northeast administrative services expenses								52,255						52,255									63,727						63,727									81,878						81,878
Adjustment to loss on sale of Northeast health plans								(34,854	)					(34,854	)								(12,331	)					(12,331	)								—						—
Total expenses		2,600,421			817,299			19,437			188,230			3,625,387			2,426,927			770,321			63,590			(11,695	)		3,249,143			2,490,000			771,436			113,546			14,528			3,389,510
Income (loss) from operations before income taxes		36,454			57,828			(4,923	)		(188,230	)		(98,871	)		74,285			52,067			(13,856	)		11,695			124,191			40,767			38,023			(37,668	)		(14,528	)		26,594
Income tax provision (benefit)		13,476			23,389			(3,998	)		(23,543	)		9,324			27,389			21,320			(9,830	)		4,908			43,787			15,379			15,503			(14,993	)		(5,385	)		10,504
Net income (loss)	$	22,978		$	34,439		$	(925	)	$	(164,687	)	$	(108,195	)	$	46,896		$	30,747		$	(4,026	)	$	6,787		$	80,404		$	25,388		$	22,520		$	(22,675	)	$	(9,143	)	$	16,090
Basic earnings (loss) per share	$	0.25		$	0.37		$	(0.01	)	$	(1.77	)	$	(1.16	)	$	0.49		$	0.32		$	(0.04	)	$	0.07		$	0.84		$	0.25		$	0.22		$	(0.22	)	$	(0.09	)	$	0.16
Diluted earnings (loss) per share	$	0.24		$	0.37		$	(0.01	)	$	(1.77	)	$	(1.16	)	$	0.48		$	0.32		$	(0.04	)	$	0.07		$	0.83		$	0.25		$	0.22		$	(0.22	)	$	(0.09	)	$	0.16
Basic weighted average shares outstanding		93,290			93,290			93,290			93,290			93,290			95,697			95,697			95,697			95,697			95,697			101,049			101,049			101,049			101,049			101,049
Diluted weighted average shares outstanding		94,843			94,843			93,290			93,290			93,290			96,885			96,885			95,697			96,885			96,885			102,115			102,115			101,049			101,049			102,115
Pretax margin		1.4	%		6.6	%											3.0	%		6.3	%											1.6	%		4.7	%
Commercial premium yield		5.7	%														6.8	%														8.4	%
Commercial premium PMPM	$	355.61														$	343.85														$	336.44
Commercial health care cost trend		5.0	%														5.7	%														8.3	%
Commercial health care cost PMPM	$	304.86														$	294.08														$	290.47
Commercial MCR		85.7	%														85.5	%														86.3	%
Medicare Advantage MCR		89.0	%														89.4	%														88.2	%
Medicare Part D MCR		101.1	%														53.1	%														96.9	%
Medicaid MCR		85.0	%														87.4	%														87.0	%
Health plan services MCR		87.4	%														85.2	%														87.5	%
Government contracts cost ratio					93.4	%														93.7	%														95.3	%
G&A expense ratio		9.3	%														9.3	%														8.9	%
Selling costs ratio		2.3	%														2.6	%														2.3	%
Effective tax rate		37.0	%		40.4	%											36.9	%		40.9	%											37.7	%		40.8	%

1 Includes the operations of the company’s commercial, Medicare (including Part D) and Medicaid health plans in California, Arizona, Oregon and Washington, as well as the operations of the company’s health and life insurance companies, primarily in Arizona, California, Oregon and Washington, and the operations of the company’s behavioral health and pharmaceutical services subsidiaries in several states including 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 businesses that are providing administrative services pursuant to administrative services agreements entered into with UnitedHealthcare and its affiliates, as well as the operations of the company’s health and life insurance companies in Connecticut, New Jersey and New York.

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

5 Includes expenses primarily related to litigation and the company’s overhead cost reduction efforts.

6 Includes costs related to the company’s operations strategy.

Page 15

Health Net, Inc.

Disclosures Regarding Non-GAAP Financial Information

($ in millions)

Set forth below is a reconciliation of adjusted days claims payable (DCP), a non-GAAP financial measure, to the comparable GAAP financial measure, DCP. DCP is calculated by dividing the amount of reserve for claims and other settlements (claims reserve) by health plan services cost (health plan costs) during the quarter and multiplying that amount by the number of days in the quarter. In this press release, management presents an adjusted DCP metric which subtracts capitation payable, provider and other claims settlements and Medicare Part D payables from the claims reserve and health plan costs. Management believes that adjusted DCP provides useful information to investors because the adjusted DCP calculation excludes from both claims reserve and health plan costs amounts related to health care costs for which no or minimal reserves are maintained. Therefore, management believes that adjusted DCP may present a more accurate reflection of DCP calculated from claims-based reserves than does GAAP DCP, 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. 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 nonrecurring items.

Reconciliation of Days Claims Payable:		Q1 2011			Q4 2010			Q3 2010			Q2 2010			Q1 2010
(1)	Reserve for Claims and Other Settlements	$	889.9		$	942.0		$	904.4		$	934.9		$	995.6
	Less: Capitation Payable, Provider and Other Claim Settlements and Medicare Part D		(113.0	)		(108.7	)		(130.0	)		(155.6	)		(174.0	)
(2)	Reserve for Claims and Other Settlements - Adjusted	$	776.9		$	833.3		$	774.4		$	779.3		$	821.6
(3)	Health Plan Services Cost	$	2,282.3		$	2,100.0		$	2,134.7		$	2,163.2		$	2,211.3
	Less: Capitation Payable, Provider and Other Claim Settlements and Medicare Part D		(933.4	)		(762.6	)		(804.4	)		(839.0	)		(885.2	)
(4)	Health Plan Services Cost - Adjusted	$	1,348.9		$	1,337.4		$	1,330.3		$	1,324.2		$	1,326.1
(5)	Number of Days in Period		90			92			92			91			90
= (1) / (3) * (5) Days Claims Payable - (using end of period reserve amount)			35.1			41.3			39.0			39.3			40.5
= (2) / (4) * (5) Days Claims Payable - Adjusted (using end of period reserve amount)			51.8			57.3			53.6			53.6			55.8

Page 16

Health Net, Inc.

Reconciliation of Reserves for Claims and Other Settlements

($ in millions)

	Health Plan Services
	Q1 2011			FY 2010			FY 2009
Reserve for claims (a), beginning of period	$	727.5		$	692.2		$	957.1
Incurred claims related to:
Current Year		1,213.8			4,644.2			6,422.8
Prior Years (c)		(63.8	)		(70.0	)		(80.0	)
Total Incurred (b)		1,150.0			4,574.2			6,342.8
Paid claims related to:
Current Year		663.0			3,929.3			5,572.2
Prior Years		541.2			609.6			857.8
Total Paid (b)		1,204.2			4,538.9			6,430.0
Less: Divested businesses		—			—			(177.7	)
Reserve for claims (a), end of period		673.3			727.5			692.2
Add:
Claims Payable (d)		113.7			123.6			165.6
Other (e)		102.9			90.9			93.9
Reserves for claims and other settlements, end of period	$	889.9		$	942.0		$	951.7

(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 period-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 17