Health Net Reaffirms Position on Rescission Guidelines

In 2007, Health Net Was the First Health Plan in the Nation to Halt Rescissions Without Third-Party Review

LOS ANGELES--(BUSINESS WIRE)-- Health Net, Inc. (NYSE:HNT) today announced that it has reaffirmed its current policy and will not rescind members unless approved by an external third-party review. This policy goes beyond what is required by the provisions of the federal health care reform law that take effect later this year. Consistent with that law, Health Net will only rescind when a member has engaged in fraud or intentional misrepresentation in order to obtain insurance.

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Health Net was the first health plan in the nation to publicly announce a halt to rescission practices until an external third-party review process is in place. Health Net stopped rescinding in 2007, and that practice has not resumed.

“Health Net did not wait for federal reform to take this action benefitting our customers,” said Steven Sell, president of Health Net’s Western Region Health Plan. “We reiterate that Health Net will not conduct rescissions except for cases of fraud or intentional misrepresentation, and only following a state or federally approved external third-party review system.”

In addition to halting rescissions, Health Net also has:

  • Undertaken the extensive processes of ensuring its applications and underwriting processes are clear and understandable, and obtaining all necessary information before issuing a policy.
  • Implemented heightened broker reviews, training and education.
  • Adopted a committee structure to review possible rescissions and provide members with ample opportunity to respond prior to the final decision.

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 6.1 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 6.5 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

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, costs, fees and expenses related to the post-closing administrative services to be provided under the administrative services agreements entered into in connection with the sale of our Northeast business; potential termination of the administrative services agreements by the service recipients should we breach such agreements or fail to perform all or a material part of the services required thereunder; any liabilities of the Northeast business that were incurred prior to the closing of its sale as well as those liabilities incurred through the winding-up and running-out period of the Northeast business; potential termination of our TRICARE North operations; health care reform; rising health care costs; continued recessionary economic conditions or a further decline in the economy; negative prior period claims reserve developments; trends in medical care ratios; unexpected utilization patterns or unexpectedly severe or widespread illnesses; membership declines; rate cuts affecting our Medicare or Medicaid businesses; litigation costs; regulatory issues; operational issues; investment portfolio impairment charges; volatility in the financial markets; and general business and market conditions. Additional factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the “Risk Factors” section included within the company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), and the risks discussed in the company’s other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements. The company undertakes no obligation to publicly revise any of its forward-looking statements to reflect events or circumstances that arise after the date of this release.


Health Net, Inc.
Margita Thompson, 818-676-7912
[email protected]
Brad Kieffer, 818-676-6833
[email protected]

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