Health Net Attributes Net Loss To Sale Of Florida Plan

By Staff Writer

July 31, 2001 at 08:00 PM

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NU Online News Service, July 31, 7:34 p.m. – Health Net Inc., Woodland Hills, Calif., is reporting a $14 million net loss for the second quarter on $2.5 billion in revenue, compared with net income of $39 million on $2.3 billion in revenue for the second quarter of 2000.

Health Net is taking $76 million in losses on a Florida health plan that was sold during the quarter. Net income for continuing operations, which excludes the Florida losses, was $47 million.

Operating revenue was up because Health Net cut operating expenses and increased enrollment in California and other key markets, the company says.

Total insured major medical enrollment rose 8%, to 4.1 million million.

The average Health Net major medical member generated a $3.40 net loss and $610 in revenue, compared with an average of $10 million in net income and $579 in revenue for the second quarter of 2000.

Excluding results for Florida, Health Net brought in an average of $12 in net income and $579 in revenue per member.

In California and other core markets, rate increases have been "consistent with" increases in the underlying cost of medical services, Health Net says.

Some managed care companies have reported having problems with raising capital in recent months, but Health Net says it was able to set up a new, $700 million credit facility in June.

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