Health Net of ArizonaIndividual & Family PlanPlan Year Kick Off

September 2005

Agenda

Welcome Introductions Accolades & Service Improvements Product Portfolio Renewal Information Broker Contest

Welcome & Introductions

Glen Padula

Plan Year Kick Off

Introductions

Health Net Senior Management

– Roger Greaves, chairman of the board– Mark El-Tawil, president, Health Net of

Arizona, Inc.

Introductions

Individual & Family Plan Sales Team– Chris Porterfield, manager

• Account Executives– Jim Walsh, Phoenix– Griselle Signorelli, Phoenix– Audrey English, Phoenix– Chris Keel, Tucson

• Broker Support– Emely Ortiz– Leslie Williams– Trish Farkas– Gail Sedgewick– Patti Houle– Tobi Perham

Introductions

Individual & Family Plan Underwriting Team

– Nancy Fugiel, manager• Underwriters

– Cheryl Balhorn

– Sorinela Dima

– Leticia Torres

– Steve Macias, director of sales Medicare

Health Net National Perspective

Roger Greaves

Plan Year Kick Off

Health Net of Arizona

Financial SnapshotMark El-Tawil

Plan Year Kick Off

HNAZ Financial Snapshot

HNAZ has made significant operational improvements driving Net income improvements by over $2.0 million for the same period last year

YTD Net Income – June 30, 2005 $3,176,616 Prior Year To Date $1,048,545

Reported Net Premium Income rose to $211 million vs. $208 million for the same period last year

YTD MCR including Medicare Advantage improved slightly to 87.1% vs. 87.9% for the same period

Health Net of Arizona is financial strong with Capital of over 400% of the Risk-Based need

Note: All numbers are presented on statutory basis and reflect the Arizona company business only and do no reflect Health Net Life members or products managed by Health Net of Arizona.

Accolades & Service Improvements

Mark El-Tawil

Plan Year Kick Off

Accolades & Service Improvements

Announcing Excellent Accreditation by NCQA

– “NCQA’s ‘Excellent’ Accreditation status is reserved for the best health plans in the nation. It is only awarded to those plans that meet or exceed NCQA’s rigorous requirements for consumer protection and quality improvement and deliver excellent clinical care.” – Margaret E. O’Kane, president

Accolades & Service Improvements

Ranking Arizona

– Ranked #1 HMO in Arizona by Ranking Arizona Magazine

Accolades & Service Improvements

Top tier claims payer

– Health Net of Arizona was ranked in the top three claims payers in Arizona

• Arizona Hospital and Healthcare Association Survey

• Ranked by percentage of claims paid within 60 days

Accolades & Service Improvements

Average speed of answer – 20– Average number of seconds it takes to answer an

incoming call Abandonment rate – 1%

– Number of callers who voluntarily hang up before answer

Financial claim quality – 99.57%– Percentage of incorrect payments or claim denials

that result in financial errors Payment (claims) quality – 98.58%

– Percentage found by subtracting the number of claims with a payment error from the total number of reviewed claims

November RenewalChris Porterfield

Plan Year Kick Off

November Renewal

No Benefit Changes Rate changes effective November 1, 2005 All in-force membership

November Renewal

HMO Average Increase In-force prior to 6/1/05

– 14.75% New 6/1/05 to present

– 6.75%

PPO Average Increase In-force prior to 6/1/05

– 14.75% New 6/1/05 to present

– 6.75%

Product PortfolioChris Porterfield

Plan Year Kick Off

Product Portfolio

HMO and PPO 90% Plans

– Membership in 90% plans has been frozen as of November 1, 2005

– Current members can continue this coverage

• Current members will not be forced into another plan

Product Portfolio

Introducing Health Savings Accounts Now Selling for November 1, 2005 effective dates

– Health Net’s HSA Compatible, High-Deductible PPO Plans offer advantages and choice

• Convenience of automated reimbursement to the member

• Option to save

– Advantage of one of the largest and most stable

banking partners, Wells Fargo

Product Portfolio

High-Deductible HSA Plan Designs

– Three plan designs at the individual level and three at the family level

Individual

• Individual plan 1 - $1,750, 100/50

• Individual plan 2 - $2,600, 100/50

• Individual plan 3 - $2,600, 80/50 + Rx

Family

• Family plan 1 - $3, 500, 100/50

• Family plan 2 - $5,150, 100/50

• Family plan 3 - $5,150, 80/50 + Rx

Product Portfolio

Marketing Materials for HSA

– HSA Brochure • Describes how the Health Net High-

Deductible PPO plan works in conjunction with the Wells Fargo Health Savings Account

• Goes into the overall plan brochure in the back pocket

Product Portfolio

Marketing Materials

– Plan Brochure • Pocket folder • High-Deductible PPO plans are shown

in the brochure

Product Portfolio

Marketing Materials

– Application• The new plans

are found in a third column where the applicant selects the type of coverage for which they are applying

Product Portfolio

Marketing Materials

– Overview • This folded brochure shows each of the

Health Net plan designs side-by-side• This brochure will be included with renewal

packets Marketing the Health Net HSA programs

– Health Net U• Classes scheduled

Underwriting Enhancements

Nancy Fugiel

Plan Year Kick Off

Underwriting Enhancements Rate Ups

– Rate ups are available for November 1, 2005 effective dates for the following conditions

• Hypercholesterolmia

• Depression

• Anxiety/Panic Attacks

• Hypertension

• Irritable Bowel Syndrome

• Pancreatitis

• Psoriasis

• Chiropractic Maintenance Care

Multiple exclusion riders available for November 1, 2005 business

Medicare Producer ProgramsSteve Macias

Plan Year Kick Off

Medicare Producer Programs

Placeholder

Producer RewardsChris Porterfield

Plan Year Kick Off

Producer RewardsBonus Opportunity $50 per approved application November, December & January effectives

Introducing new broker commissions Progressive commission structure

– Based on producer’s total Health Net book– 10% - 1-99 new and in-force contracts– 11% - 100 – 199 new and in-force contracts– 12% - 200 – 299 new and in-force contracts– 13% - 300+ new and in-force contracts

Bonus payments will be based on quarterly book review in January, April, June and October

Contest

Announcing the Race for Cabo Contest

– Individual and Family Plan production can be combined with Medicare production

– Top Seven producers with at least 150 new members

– Effective dates September 1, 2005 thru February 1, 2006

• Casa Del Mar, Cabo San Lucas, Mexico