Health Net, Inc. Merrill Lynch Health Services Investor Conference Merrill Lynch Health Services Investor Conference Steven P. Erwin EVP and Chief Financial Officer April 11, 2001

Cautionary Statement The matters discussed in this release contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, that involve risks and uncertainties. All statements other than statements of historical information provided herein may be deemed to be forward- looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects” and similar expressions are intended to identify forward-looking statements. 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” and “Cautionary Statements” sections included within the Company's most recent Annual Report on Form 10-K filed with the 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, which reflect management's analysis, judgment, belief or expectation only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

Overview From Turnaround to Growth 2000 Review The Growth Story Long-Term -- Issues and Targets From Turnaround to Growth 2000 Review The Growth Story Long-Term -- Issues and Targets

From Turnaround to Growth Rationalized and Focused Businesses  Divested Non-Core Businesses  Culled Unprofitable Accounts Improved Our Balance Sheet  Debt Down Substantially on TRICARE Settlement and Cash Met Earnings Expectations Over the Last Eight Quarters Dramatically Improved Cash Flow, and Prepared for Solid Earnings Growth in ‘01 Rationalized and Focused Businesses  Divested Non-Core Businesses  Culled Unprofitable Accounts Improved Our Balance Sheet  Debt Down Substantially on TRICARE Settlement and Cash Met Earnings Expectations Over the Last Eight Quarters Dramatically Improved Cash Flow, and Prepared for Solid Earnings Growth in ‘01

Finishing the Turnaround Close Florida Transaction Confirm Arizona Corrective Actions  Significant Re-pricing and Health Care Cost Containment Initiatives Close Florida Transaction Confirm Arizona Corrective Actions  Significant Re-pricing and Health Care Cost Containment Initiatives

Q4 and ‘00 Performance Highlights $.37 EPS in Q4 Met Expectations Cash Flow of $366 Million for 2000 Above Target Debt Now Below $650 Million -- TRICARE Settlement  Was $766 Million at Year-End  Was $1.4 Billion at End of Q3 ‘98 Debt-to-Capital Below 40 Percent Claims Payable Up $73 Million Sequentially Stockholders’ Equity $1.1 Billion $.37 EPS in Q4 Met Expectations Cash Flow of $366 Million for 2000 Above Target Debt Now Below $650 Million -- TRICARE Settlement  Was $766 Million at Year-End  Was $1.4 Billion at End of Q3 ‘98 Debt-to-Capital Below 40 Percent Claims Payable Up $73 Million Sequentially Stockholders’ Equity $1.1 Billion

The Growth Story California and the Northeast Profitable Enrollment Gains -- Outstanding Q4  New Products  Focused Marketing Sustain Government and Specialty Businesses Focus on SG&A and Technology Position for Consistent Annual EPS Growth of 15% to 20% California and the Northeast Profitable Enrollment Gains -- Outstanding Q4  New Products  Focused Marketing Sustain Government and Specialty Businesses Focus on SG&A and Technology Position for Consistent Annual EPS Growth of 15% to 20%

California and the Northeast Strong Positions in Largest Markets California -- Solid Market Reputation  Known for Large Group California Group Model Stabilizing  Slow Shift to Shared Risk Continues Tri-State -- PHS Open Access Aligned with Market Needs  Largest FFS Tri-State Network Strong Positions in Largest Markets California -- Solid Market Reputation  Known for Large Group California Group Model Stabilizing  Slow Shift to Shared Risk Continues Tri-State -- PHS Open Access Aligned with Market Needs  Largest FFS Tri-State Network

Profitable Enrollment Gains Favorable Pricing Outlook Solid Provider Relationships California Small Group Opportunity  Nine New PPO Products in California  Groundbreaking Latino Product New York Competitive Climate  PHS Growth Coming in New York  Joint Venture in Small Group Favorable Pricing Outlook Solid Provider Relationships California Small Group Opportunity  Nine New PPO Products in California  Groundbreaking Latino Product New York Competitive Climate  PHS Growth Coming in New York  Joint Venture in Small Group

Sustain Government/Specialty TRICARE Settlement Clears Decks Contract Extensions Secured Economics Improved  Limited Receivable Build Specialty Businesses Doing Well  MHN Still an Opportunity TRICARE Settlement Clears Decks Contract Extensions Secured Economics Improved  Limited Receivable Build Specialty Businesses Doing Well  MHN Still an Opportunity

SG&A and Technology Importance of Customer Service in More Open Product Environment  Questium, PPOs, National Accounts Use Technology to Significantly Improve Processes/Cut Costs for All  Provider Connectivity  Enrollment/Billing  Infrastructure Importance of Customer Service in More Open Product Environment  Questium, PPOs, National Accounts Use Technology to Significantly Improve Processes/Cut Costs for All  Provider Connectivity  Enrollment/Billing  Infrastructure

General Long-Term Targets Double-Digit Health Plan Revenue Growth  Pricing and Enrollment Growth Flat to Lower Health Plan MCR SG&A Down by at Least 100 Bps over 3-Year Period Debt-to-Total Capital Below 30 Percent by 2003 Consistent ROE of 20% by 2003 Double-Digit Health Plan Revenue Growth  Pricing and Enrollment Growth Flat to Lower Health Plan MCR SG&A Down by at Least 100 Bps over 3-Year Period Debt-to-Total Capital Below 30 Percent by 2003 Consistent ROE of 20% by 2003

Investment Rationale Strong Positions in the Two Largest Markets Sustainable Provider Relationships Open Access Product Expertise Enhanced Product Flexibility Willingness to Exploit Technology to Change Processes and Structures The Focus is GROWTH Strong Positions in the Two Largest Markets Sustainable Provider Relationships Open Access Product Expertise Enhanced Product Flexibility Willingness to Exploit Technology to Change Processes and Structures The Focus is GROWTH