Health Net
American health insurance brand serving individual, employer, Medicare and Medicaid markets as a Centene subsidiary.
Last updated November 1, 2026
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Overview
Health Net is an American health insurance brand and operating business of Centene Corporation. Its roots extend to 1977, when Blue Cross established Health Net of California as a nonprofit health plan. The organization later transitioned into a for-profit structure, expanded through mergers and acquisitions, and became a publicly traded insurance company before being acquired by Centene in 2016. The business has historically served several major segments of the United States health-insurance market. These include individual and family coverage, employer-sponsored plans, small-business insurance, Medicare products, Medicaid programs and other government-sponsored or regulated health plans. Its offerings have also included dental and vision coverage, either as standalone products or as complementary benefits associated with medical plans. The exact products and operating entities have changed over time as Health Net divested certain businesses, reorganized regional operations and integrated with Centene's broader portfolio. A significant early turning point occurred in 1992, when California regulators approved the conversion of Health Net from a nonprofit organization to a for-profit company. The conversion order provided for the California Wellness Foundation, the successor charitable entity associated with the nonprofit structure, to receive $300 million and 80 percent of the equity of the parent holding company. Health Net subsequently became part of a succession of larger corporate combinations. In 1993 it merged with Qualmed to create Health Systems International. Health Systems International later merged with Foundation Health Corporation in 1997, forming Foundation Health Systems, which also acquired PACC Health Plans and Physicians Health Services. In 2000, Foundation Health Systems adopted the Health Net name and began trading on the New York Stock Exchange under the symbol HNT. The company subsequently adjusted its portfolio through asset sales. In 2009, UnitedHealth Group acquired Health Net's northeastern licensed subsidiaries and separately purchased its Medicare and Medicaid businesses. Health Net also agreed in 2012 to sell its Medicare Prescription Drug Plan business to CVS Caremark, while retaining prescription-drug coverage within Medicare Advantage offerings. Health Net has operated in a heavily regulated industry and has faced legal, compliance and customer-data issues. These included litigation concerning coverage rescission and medically necessary care, a settlement involving reimbursement practices, a federal compliance suspension related to marketing and enrollment, and an investigation after an unencrypted drive containing customer information was lost. These events illustrate the operational risks associated with underwriting, claims administration, privacy protection and government-program participation. Centene announced the acquisition of Health Net in 2015, and the transaction was completed in March 2016 for approximately $6.8 billion. After the transaction, Health Net ceased to be an independent publicly traded company and became part of Centene's national health-plan portfolio. Health Net Federal Services became a separate Centene subsidiary, while regional Health Net operations continued under the brand in selected markets. In Arizona, Health Net's operations were combined with other Centene holdings in 2018 to form Arizona Complete Health. In California, Health Net has remained an important Centene-branded health-plan business, with products spanning commercial insurance, Medi-Cal and Medicare-related offerings.
History
Health Net was established in 1977 as Health Net of California, a nonprofit health plan created by Blue Cross. Its original identity was rooted in the California health-insurance market and in the provision of organized medical coverage rather than in a diversified national consumer brand. A major structural change came in 1992, when a California order authorized the organization to convert from nonprofit to for-profit status. The conversion terms directed substantial value to the California Wellness Foundation, the successor charity associated with the nonprofit entity: the foundation received $300 million and 80 percent of the equity of Health Net's parent holding company. Health Net then grew through corporate combinations. In August 1993, it merged with Qualmed to form Health Systems International. In April 1997, Health Systems International merged with Foundation Health Corporation, creating Foundation Health Systems. That company also acquired PACC Health Plans and Physicians Health Services during 1997, broadening its managed-care and health-plan portfolio. In November 2000, Foundation Health Systems changed its name to Health Net, Inc. and began trading on the New York Stock Exchange under the ticker HNT. The Health Net name thus became the public-facing identity of a larger health-insurance organization assembled through successive mergers. During the 2000s, the company operated across commercial and government-sponsored insurance markets but also faced scrutiny typical of a regulated insurer. In 2007, a California patient brought litigation alleging that Health Net had improperly terminated coverage during chemotherapy treatment. Evidence disclosed during the dispute included an employee performance review linking an analyst's compensation to the rate at which enrollee coverage was rescinded. In February 2008, a court awarded the patient more than $9 million. That year Health Net also agreed to pay $215 million to settle allegations concerning the reimbursement of out-of-network providers between 1995 and 2007. Health Net restructured its portfolio in 2009. UnitedHealth Group bought the company's northeastern licensed subsidiaries for $510 million and acquired its Medicare and Medicaid businesses for an additional $60 million. Later in 2009, Connecticut authorities investigated the loss of an unencrypted hard drive containing customer information; Health Net responded by offering affected customers two years of credit-protection services. In November 2010, the Centers for Medicare and Medicaid Services suspended Health Net from marketing and enrolling new members because of compliance issues. The sanctions were lifted in August 2011. In January 2012, Health Net agreed to sell its Medicare Prescription Drug Plan business to CVS Caremark for approximately $160 million in cash. The company continued to provide prescription-drug benefits through its Medicare Advantage plans. In September 2012, the Los Angeles County Medical Association and two patients sued Health Net over alleged denials of medically necessary care, including cancer treatment. The plaintiffs argued that the insurer applied its own interpretation of medical necessity rather than standards required by California law. A judge ruled in Health Net's favor in July 2013. Centene announced its acquisition of Health Net on July 2, 2015, and completed the transaction in March 2016. The deal was valued at approximately $6.8 billion. Health Net became a wholly owned Centene subsidiary, and its former public-company identity ended. Health Net Federal Services became a separate Centene subsidiary. In 2018, Arizona operations were combined with other Centene holdings to create Arizona Complete Health, while Health Net continued as a significant regional brand, particularly in California. In September 2019, Brian Ternan was appointed chief executive of Health Net California. In 2021, Health Net Federal Services agreed to pay $97 million to settle allegations concerning duplicated or inflated claims submitted to the Department of Veterans Affairs during 2013–2019.
- 2018
Arizona operations reorganized
[1]Health Net's Arizona operations were combined with other Centene businesses to form Arizona Complete Health.
- 2016
Acquired by Centene
[1]Centene completed its approximately $6.8 billion acquisition of Health Net.
- 2012
Medicare prescription-drug-plan business sold
[1]Health Net agreed to sell its Medicare Prescription Drug Plan business to CVS Caremark.
- 2009
Major portfolio divestitures
[1]UnitedHealth Group acquired Health Net's northeastern licensed subsidiaries and its Medicare and Medicaid businesses.
- 2000
Foundation Health Systems adopted the Health Net name
[1]The company changed its name to Health Net, Inc. and began trading on the New York Stock Exchange under HNT.
- 1997
Foundation Health Systems formed
[1]Health Systems International merged with Foundation Health Corporation, and the resulting group acquired PACC Health Plans and Physicians Health Services.
- 1993
Merger with Qualmed
[1]Health Net merged with Qualmed to form Health Systems International.
- 1992
Conversion to a for-profit company approved
[1]California regulators authorized Health Net's conversion from nonprofit to for-profit status under terms benefiting the California Wellness Foundation.
- 1977
Health Net of California established
[1]Blue Cross established Health Net of California as a nonprofit health plan.
Products and positioning
Regional and government-program-focused health insurer offering commercial, individual, Medicare and Medicaid coverage.
Medical insurance
Individual and family health plans
Health Net has offered medical insurance for individuals and families, including plans distributed through regulated commercial and affordable-care channels. These products are designed for people purchasing coverage outside traditional employer-sponsored arrangements and may include associated provider networks, preventive-care benefits and optional supplemental coverage depending on the market and plan design.
Commercial health insurance
Employer and small-business plans
The brand's commercial portfolio has included health plans for employers and small businesses. These plans provide group medical coverage through contracted networks and may be paired with administrative, wellness, dental or vision benefits. Availability and plan structure vary by state and by the Centene operating entity using the Health Net brand.
Medicare insurance
Medicare Advantage
Health Net has provided Medicare Advantage plans for eligible Medicare beneficiaries. These plans combine Medicare-covered medical services with plan-specific provider networks and may include additional benefits. Health Net continued to provide prescription-drug coverage through Medicare Advantage after selling its standalone Medicare Prescription Drug Plan business.
Government-sponsored health insurance
Medicaid and Medi-Cal plans
The brand has participated in Medicaid markets, including California's Medi-Cal program. These plans serve qualifying low-income and otherwise eligible populations through state-regulated contracts, provider networks and care-management programs. Health Net's government-program footprint has changed over time as businesses were sold, reorganized or integrated into other Centene entities.
Supplemental insurance
Dental and vision insurance
Health Net offers or has offered dental and vision coverage as supplemental insurance products. These benefits complement medical plans by covering routine and specialized oral-health services and eligible vision care. Product availability, network design and underwriting terms depend on the state, customer segment and applicable Centene operating company.
Controversies
2021
Health Net Federal Services claims settlement
Health Net Federal Services agreed to pay $97 million to resolve allegations that it duplicated or inflated claims submitted to the Department of Veterans Affairs between 2013 and 2019.
2021
San Diego sues health insurers over provider directories
In 2021, San Diego City Attorney Mara Elliott filed lawsuits against Kaiser Foundation Health Plan, Molina Healthcare of California and HealthNet. The suits alleged that the insurers' provider directories listed providers who were not covered by consumers' plans and included false or misleading information. The filings concerned the accuracy of the directories as presented to consumers.
2012
Medical-necessity denial lawsuit
The Los Angeles County Medical Association and two patients sued Health Net over alleged denials of medically necessary treatment, including cancer care. A judge ruled in Health Net's favor in July 2013.
2010
CMS marketing and enrollment suspension
CMS suspended Health Net from marketing and enrolling new members because of compliance concerns. The suspension was lifted in August 2011.
2009
Lost customer-data drive
Connecticut authorities investigated the loss of an unencrypted hard drive containing customer information. Health Net offered affected customers two years of credit protection.
2008
Out-of-network reimbursement settlement
Health Net agreed to pay $215 million to settle allegations that it had unfairly reimbursed out-of-network providers for services provided between 1995 and 2007.
2007
Coverage-rescission and chemotherapy-treatment litigation
A California patient sued Health Net after alleging that the company improperly terminated coverage during chemotherapy. Evidence in the case included a performance review linking an analyst's bonus to the rate of policy rescissions. In February 2008, the court ruled for the patient and ordered more than $9 million in damages.
Brand decisions
2018
Combine Arizona operations into Arizona Complete HealthStrategyBackground
Centene was integrating and reorganizing regional health-plan businesses after acquiring Health Net.
Action taken
Health Net's Arizona operations were combined with other Centene holdings to form Arizona Complete Health.
Aftermath
Martha Smith was named plan president and chief executive for the reorganized Arizona operation.
2015
Agree to acquisition by CenteneM&ABackground
Health Net was an established health insurer with commercial and government-program operations, while Centene was expanding its managed-care platform.
Action taken
Centene announced an agreement to acquire Health Net for approximately $6.8 billion.
Aftermath
The transaction closed in March 2016, making Health Net a Centene subsidiary and ending its independent public-company status.
Announced acquisition value. $6.8 billion (2015 announcement; completed March 2016)
2012
Sell standalone Medicare prescription-drug-plan businessM&ABackground
Health Net continued to participate in Medicare while reassessing the structure of its standalone prescription-drug operations.
Action taken
The company agreed to sell its Medicare Prescription Drug Plan business to CVS Caremark.
Aftermath
Health Net continued to provide prescription-drug benefits through Medicare Advantage plans.
Cash transaction value. Approximately $160 million (2012)
2009
Sell northeastern and government-plan assets to UnitedHealth GroupM&ABackground
Health Net adjusted its portfolio during a period of consolidation in the American health-insurance industry.
Action taken
UnitedHealth Group acquired Health Net's northeastern licensed subsidiaries and separately purchased its Medicare and Medicaid businesses.
Aftermath
Health Net retained other commercial and government-related operations while reducing the scope of the businesses it directly operated.
Transaction consideration. $510 million for northeastern licensed subsidiaries and $60 million for Medicare and Medicaid businesses (2009)
1992
Convert from nonprofit to for-profit statusStrategyBackground
Health Net's California organization had operated as a nonprofit health plan since its establishment.
Action taken
The company obtained a California order permitting conversion to a for-profit structure, with specified financial and equity benefits for the successor charitable foundation.
Aftermath
The conversion enabled subsequent corporate expansion and the creation of a publicly traded health-insurance group.
Charitable conversion payment and equity allocation. $300 million plus 80% of the equity of the parent holding company allocated to the California Wellness Foundation (1992 conversion order)
Recent events
Octave joins Health Net's provider network[4]
Reported:
Octave announced that it was joining Health Net’s provider network to offer mental health services in-network to members with Health Net plans.
San Diego sues health insurers over provider directories[3]
Reported:
San Diego City Attorney Mara Elliott filed lawsuits against Kaiser Foundation Health Plan, Molina Healthcare of California and HealthNet, alleging that their directories listed providers who were not covered by consumers’ plans and included false or misleading information.
Sources4 sources
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