With more people gaining commercial health coverage through the Patient Protection and Affordable Care Act, health insurers and brokers have been looking for new methods to attract potential members. By 2018, Connecture said it expects about 100 million people will be shopping for and enrolling in health plans every year on some type of online public or private exchange.
Some payers are turning to third parties to help design the health insurance shopping experience. Connecture said its advantage is its ability to provide customized health plan pricing options based on a consumer's preferences, health status and preferred providers. The company also said it can connect with the ACA's state and federal exchanges to help determine subsidies.
Despite the big-name clients and bullish outlook, Connecture has not been profitable. The company lost $16.8 million and $26.4 million in 2012 and 2013, respectively. In the first six months of 2014, ended June 30, Connecture tallied $12.1 million in losses, according to the SEC filing. The company cited its history of losses as a risk factor, saying: “We may be unable to achieve or sustain profitability.”
However, Connecture has been growing at a fast clip. Revenue doubled from 2012 to 2013, totaling $58.3 million. Through the first six months of 2014, revenue reached $35.3 million. Executives also said Connecture has almost $88 million in backlogged business.
The pricing and number of shares have yet to be determined. Connecture CEO Doug Schneider made almost $439,000 in 2013.
Follow Bob Herman on Twitter: @MHbherman