HealthNet Reports $49 Million Net Loss in 2009
HealthNet Inc., today announced a net loss of $49 million for 2009, as well as fourth-quarter earnings losses, which the company attributed to the sale of its Northeast business and company strategies related to other transactions, according to the company.
The reported adjusted net income for the full year of 2009 was $235.1 million, which is compared to adjusted net income for the full year of 2008 of $199.1 million.
The fourth-quarter report in 2009 showed a net loss of $45.2 million, or $.43 per share.
The fiscal losses in the fourth quarter related to:
- $137.3 million in charges related to the Northeast businesses, including $105.9 million for the loss on the sale, as well as $27 million in cash charges, primarily for legal and regulatory costs, and fees and severance related to the sale. The company finalized the sale of the Northeast businesses on December 11, and received $350 million in cash at closing, according to Health Net.
- $15.3 million in cash charges related to the company's operations strategy and other expenses.
Despite the news, HealthNet officials are upbeat.
"We are pleased with our fourth quarter and full-year 2009 results," said Jay Gellert, president and chief executive officer of Health Net Inc, the Woodland Hills, CA-based health insurer with more than 6 million members. "We completed our strategic review and closed the sale of the Northeast businesses. Also, as expected, our Medicare Advantage and Part D businesses returned to a solid level of performance after a difficult 2008."
"We are very pleased with our operating performance in 2009, especially in light of a challenging environment," said James Woys, Health Net's chief operating officer. "For example, commercial healthcare costs in the fourth quarter were adversely affected by higher utilization related to both the H1N1 flu and COBRA. Excluding these two effects, the commercial medical care ratio in the Western health plans improved both quarter-over-quarter and year-over-year."
"We believe we are well-positioned to attract customers seeking value in these challenging economic times with our low-cost, narrow network products. We continue to believe that we can achieve our 2010 full-year earnings guidance," said Gellert.
Joe Cantlupe is a senior editor with HealthLeaders Media Online.
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