Healthcare Business News

EHealth aims for larger share of subsidized insurance market

By Paul Demko
Posted: July 30, 2014 - 7:30 pm ET

Online brokerage eHealth is planning to be much more active in signing up individuals for coverage who qualify for subsidies during the 2015 open-enrollment period, company officials said during a call with investors Wednesday. The company was largely thwarted in its efforts to sign up subsidized customers during the 2014 open-enrollment period because of technical problems.

Gary Lauer, the CEO of eHealth, said that significant technical problems remain in working with and the state exchanges, and that he doesn't expect them to be resolved before the next open enrollment period begins Nov. 15. But Lauer believes manual workarounds have been developed that will allow the company to be much more successful in signing up individuals with incomes up to 400% of the federal poverty threshold.

Nearly 90% of the individuals who purchased coverage through the federal exchange during the 2014 enrollment period qualified for subsidies, according to the CMS.

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“Really pretty archaic” is how Lauer described the system, “but that's what we have.”

EHealth reported revenue of $42.6 million for the second quarter of 2014. That was up 7% compared with the comparable period of 2013, but below expectations.

The Mountain View, Calif.-based company also reported net income of $3 million in the second quarter of this year, compared with $1.1 million during the comparable period in 2013. During the first quarter of this year, the company reported losses of $1.6 million.

EHealth downgraded its financial forecast for the full year. It now expects to have revenue of $185 million to $194 million in 2014, down from a previous projection of $206 million to $213 million. In addition, it decreased its earnings per share projection for the year from a range of $0.30 to $0.43, compared to previous guidance of $0.43 to $0.51

Lauer blamed the financial malaise in part on individuals who signed up for coverage earlier this year but who haven't made their first premium payments. He said it's unclear how much of that can be attributed to processing problems with insurance companies and how much is due to individuals simply failing to pay their bills.

“At this stage we still need information from carriers to understand,” Lauer said.

EHealth bills itself as the country's oldest and largest private health insurance exchange. The company reported membership of 1.25 million at the end of June, a 14% increase from a year ago. That included 751,000 individual and family plans and 113,200 Medicare plans.

Follow Paul Demko on Twitter: @MHpdemko

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