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Health Net, Inc.

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The adverse effects of health insurer fee, high attrition in health plans, MLR rebate payment and negative impact of the timing of payments are headwinds for Health Net. Health Net is due to be acquired by Centene Corporation by early 2016. The merger should create a diversified multi-national healthcare enterprise that will cater to more than 10 million members nationwide. The company’s divestiture of non-profitable businesses, improvement in liquidity, new program launches and strong ratings are positives. The earnings guidance reiteration for 2015 is another tailwind. Health Net’s third-quarter 2015 earnings were in line with the Zacks Consensus Estimate but improved year over year. The results are attributable to higher memberships and moderate health care costs.

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