1. 19th Annual J.P. Morgan H&Q Healthcare Conference
Health Net, Inc.
19th Annual J.P. Morgan H&Q
Healthcare Conference
Jay M. Gellert
President and Chief Executive Officer
January 9, 2001

2. 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.

3. Overview Where We’ve Been Where We Are Today and . . .
Where We’re Going

4. In the Last 24 Months, We... Rationalized and Focused Businesses
Divested Non-Core Businesses
Priced Products Appropriately
Improved Our Balance Sheet
Debt Down Substantially on TRICARE Settlement
Met Earnings Expectations Over the Last Seven Quarters
Dramatically Improved Cash Flow, and
Prepared for Solid Earnings Growth in ‘01

5. Operating Goals Perform Strongly in California and the Northeast
Grow Profitable Enrollment
Keep Government Business Solid
Turn Arizona Around
Divest in Florida
Position for Consistent Annual EPS Growth of 15% to 20%

6. Performance Highlights
$.36 EPS in Q3 Exceeded Expectations
Normalized Cash Flow of $144 Million Above Target
Debt Now Below $700 Million
Was $950 Million at Q3 End
Was $1.4 Billion at End of Q3 ‘98
Debt-to-Capital to 39 Percent Pro Forma
Claims Payable Up $85 Million Sequentially
Stockholders’ Equity Exceeds $1 Billion

7. Finishing the Turnaround
Show Profitable Growth
Meet Expectations in Q4
Continue Pursuit of Florida Transaction
Closely Monitor Arizona Corrective Actions
Significant Re-pricing and Health Care Cost Containment Initiatives

8. Key Priorities for ‘01 Profitable Growth Further SG&A Efficiencies
MCR Stability
Favorable Outlook for Improved Capital Structure
Term Significant Portion of Debt in ‘01
Implement Infrastructure/E-Business Projects Successfully
TRICARE Consistency

9. It’s All About the Basics
A Future of Consistent Growth with Improving Margins
Broader Range of Products
Nine New PPO Products in California
Groundbreaking Latino Product

10. Role of Technology A Strong Focus on Customer Service
Questium
Using Technology to Significantly Improve Processes
Connectivity
Enrollment/Billing
Infrastructure

11. 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

12. Our Strengths Open Access Product Expertise
Strong Positions in the Two Largest Markets
Sustaining Provider Relationships as Reimbursement Model Shifts Continue
Open, Experienced, Change-Oriented Management Team
Willingness to Exploit Technology and Change Processes and Structures