A.M. Best Places Ratings of Health Net Under Review.

OLDWICK, N.J. -- A.M. Best Co. has placed the financial strength ratings of Health Net Inc.'s (Health Net) (NYSE:HNT) (Woodland Hills, CA) life/health and health maintenance organizations (HMO) subsidiaries and the debt rating of Health Net under review with negative implications. A.M. Best has also assigned an issuer credit rating (ICR) of "bbb" to Health Net of California, placing the rating under review with negative implications. (See list below.)

These rating actions follow the disclosure of lower consolidated risk-based capital levels than previously disclosed, specifically impacting Health Net of California, the organization's flagship entity.

A.M. Best acknowledges that Health Net's operating results improved in the first quarter of 2005 and that the resolution of provider disputes is on track. Flexibility is also presently deemed good, given a borrowing capacity of over $700 million from an unused bank line of credit.

A.M. Best will continue to monitor the status of the organization through additional discussions with management, focusing its review on corrective actions to restore expected capital levels, future business strategy, financial flexibility and continued efforts to improve the operating performance and the business profile of the respective entities. A.M. Best acknowledges that Health Net has committed to restoring the aggregate capitalization to 300% of NAIC risk-base capital. The full analysis is expected to be completed by mid-July 2005 and could possibly lead to other rating actions.

The financial strength rating of B++ (Very Good) has been placed under review with negative implications for the following subsidiaries of Health Net, Inc.:

--Health Net of California, Inc.

--Health Net Life Insurance Company

--Health Net of Arizona, Inc.

--Health Net Health Plan of Oregon, Inc.

The financial strength rating of B+ (Very Good) has been placed under review with negative implications for the following subsidiaries of Health Net, Inc.:

--Health Net of Connecticut, Inc.

--Health Net Insurance of Connecticut, Inc.

--Health Net of New Jersey, Inc.

--Health Net of New York, Inc.

--Health Net Insurance of New York, Inc.

An issuer credit rating of "bbb" has been assigned and placed under review with negative implications for Health Net of California.

The following debt rating has been placed under review with negative implications:

Health Net, Inc.

--"bb" on $400 million 8.375% senior notes, due 2011

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.

For current Best's Ratings, independent data and analysis on more than 1,050 health companies and A.M. Best groups, please visit http://www.ambest.com/health.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.