Health Net Inc. (HNT)

HNT 
$51.78
*  
1.15
2.27%
Get HNT Alerts
*Delayed - data as of Dec. 17, 2014  -  Find a broker to begin trading HNT now
Exchange: NYSE
Industry: Health Care
Community Rating:
 
 
Symbol List Views
FlashQuotes InfoQuotes
Stock Details
Summary Quote Real-Time Quote After Hours Quote Pre-market Quote Historical Quote Option Chain
CHARTS
Basic Chart Interactive Chart
COMPANY NEWS
Company Headlines Press Releases Market Stream
STOCK ANALYSIS
Analyst Research Guru Analysis Stock Report Competitors Stock Consultant Stock Comparison
FUNDAMENTALS
Call Transcripts Annual Report Income Statement Revenue/EPS SEC Filings Short Interest Dividend History
HOLDINGS
Ownership Summary Institutional Holdings Insiders
(SEC Form 4)
 Save Stocks

Health Net, Inc. (HNT)

Barclays Global Healthcare Conference

March 13, 2013 11:15 am ET

Executives

Jay M. Gellert - Chief Executive Officer, President and Director

Analysts

Joshua R. Raskin - Barclays Capital, Research Division

Presentation

Joshua R. Raskin - Barclays Capital, Research Division

So before I introduce Jay, let's do some audience response questions here. So everyone grab your clicker. Angie, you're even allowed to respond, but once you tell me what you wrote.

So the first question: Broadly, across all their businesses, do you think that health reform will be a positive or a negative for Health Net, specifically in 2014, 1, very negative; 5, very positive.

[Voting]

Joshua R. Raskin - Barclays Capital, Research Division

There we go. So interesting. I don't know how to interpret that. We'll have to crunch the numbers, I guess. Number two, contracting rates on the exchanges, do you think Health Net will be successful in getting Medicaid-like rates, or will they have to pay commercial-like rates, somewhere between 1 and 5?

[Voting]

Joshua R. Raskin - Barclays Capital, Research Division

Wow. That I am surprised about. But okay. All right. Next question: Utilization trends, I think we were thinking more specifically around the commercial book for '13. So would you expect a significant increase in utilization or a significant decrease in utilization or somewhere in between?

[Voting]

Joshua R. Raskin - Barclays Capital, Research Division

They are flat to slightly up. Sounds reasonable. Next one: How would you like Jay to deploy his capital in '13? Would we like to see some M&A, repurchase shares, increase the dividend, repay the debt or invest in the core business?

[Voting]

Joshua R. Raskin - Barclays Capital, Research Division

[indiscernible] realtime feedback. This is good stuff. So you've got to do everything. That's got to make sense, except for invest in your business. That's interesting. Do you think the company will grow earnings? We're defining that as EPS. What's '14 look like? Hopefully, this is an easier question for these guys.

[Voting]

Joshua R. Raskin - Barclays Capital, Research Division

Wow, all right. I'm a little surprised by that. Two more. Do you currently own shares in Health Net?

[Voting]

Joshua R. Raskin - Barclays Capital, Research Division

All right. So a little bit more yes than no. That probably reflects current market trends. And the next one, is your current bias in the stock, regardless of ownership, more positive, neutral or negative?

[Voting]

Joshua R. Raskin - Barclays Capital, Research Division

Interesting. Split the other way. That we have not seen before. All right. So we got that out of the way. We're going to aggregate the results for all the companies, as we said. We'll get you the reports.

So it's my pleasure to sit down today with Jay Gellert, the CEO of Health Net. Jay has been doing the Barclays Conference in that role for, let's just say, as long as I've been doing the conference for Barclays/Lehman as well. So I've got a series of questions that I'm going to ask Jay, and then we're going to hold the audience questions until we get to the breakout room after. I promised him I wouldn't start with a Kobe Bryant question. We're going to save that for the breakout. So get some of your stats ready and go online and look.

Question-and-Answer Session

Joshua R. Raskin - Barclays Capital, Research Division

But there's been a little bit of a discussion around these preliminary MA rates. I don't know if you noticed, on February 15, there was an announcement. I know you were a very integral part of the AHIP preparations and how they work. I know you and Karen speak a lot. I know you've been the chair of AHIP before and stuff [ph].

So how should we think about the impact of these rates? What's the industry's response? What is Health Net doing specifically?

Jay M. Gellert

First of all, I think, industry wide, that we're kind of back to the BBA. I mean, we've gone through this stance before in 1998 when we had rates that didn't reflect the real costs that were over-shifted and overcompensated. And I think that the net result is very negative for seniors. It had to be rectified. It was rectified, and we go through this volatility in MA. I don't think this is a good thing. I think it's a bad thing particularly in the year, where we're going to have a lot of volatility with the ACA anyway. I mean, there's only a certain amount of stuff people really can tolerate. And stability for seniors would be the right thing to do. There's no one who doesn't think there's going to be a doc fix. So the thought that there isn't going to be a doc fix is just counterintuitive, so that's a clear way to rectify this. So I think overall that the administration clearly articulated their concern by the feedback -- comment in the notice. I think their concern is valid and real. I think it will be very negative for the program, and there's a clear route to rectify it and I hope that route is taken. For us, it's a little bit muted by the fact that we have 0.33% of premium-type contracts that were generally in areas where there's potentially some room to adjust benefits and premiums, but it will still hurt people who are relying on the program. So I think that not rectifying it is, in the long term, very, very negative for the program. As I said, we've seen it before. For us, in the short term, we probably, because of being less profitable, having a percent of premium arrangements and the like have probably a way to do more rectification than some others.

Read the rest of this transcript for free on seekingalpha.com