OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength ratings (FSR) of B+ (Good) and issuer credit ratings (ICR) of "bbb-" of Health Net of California, Inc., Health Net Life Insurance Company and Health Net Health Plan of Oregon. Additionally, the ICR and debt rating of "bb-"on Health Net, Inc. and its $400 million 6.375% of senior unsecured notes due 2017 have been affirmed. The outlook for all the above ratings has been revised to negative from stable.

A.M. Best also has affirmed the FSRs of B+ (Good) and ICRs of "bbb-" of Health Net's remaining subsidiaries, Health Net of Connecticut, Inc., Health Net of New Jersey, Inc., Health Net of New York, Inc., Health Net Insurance of New York, Inc. and Health Net of Arizona, Inc. The outlook for these ratings remains negative. (See below for a detailed listing of all ratings.)

The outlook change is based on the loss of the TRICARE contract; the contract comprised 17.5% of Health Net's total 2008 revenue. Pre-tax earnings have been in the range of $130-$195 million over the past three years, and 3.0 million military-based members in 23 states and the District of Columbia will be transitioned out. The earnings from the government contracts segment have been a source of rating strength for Health Net, and the loss of the TRICARE contract and economic pressures in the marketplace may present challenges to the company in replacing the TRICARE earnings in 2010, following the current option period. That option period will end on March 31, 2010.

The FSRs of B+ (Good) and ICRs of "bbb-" have been affirmed with a revised outlook to negative from stable for the following subsidiaries of Health Net, Inc.:

• Health Net of California, Inc.
• Health Net Life Insurance Company
• Health Net Health Plan of Oregon, Inc.

The FSRs of B+ (Good) and ICRs of "bbb-" have been affirmed and the outlook remains negative for the following subsidiaries of Health Net, Inc.:

• Health Net of Connecticut, Inc.
• Health Net of New Jersey, Inc.
• Health Net of New York, Inc.
• Health Net Insurance of New York, Inc.
• Health Net of Arizona, Inc.

The ICR of "bb-" has been affirmed with a revised outlook to negative from stable for Health Net, Inc.

The following debt rating has been affirmed with a revised outlook to negative from stable:

Health Net, Inc."”

-- "bb-" on $400 million 6.375% of senior unsecured notes, due 2017

For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best Co.

Analysts

Wayne Kaminski, 908-439-2200, ext. 5061

wayne.kaminski@ambest.com

or

Sally Rosen, 908-439-2200, ext. 5280

sally.rosen@ambest.com

or

Public Relations

Jim Peavy, 908-439-2200, ext. 5644

james.peavy@ambest.com

or

Rachelle Morrow, 908-439-2200, ext. 5378

rachelle.morrow@ambest.com



Source: A.M. Best Co.