Struggling private health insurance exchange eHealth abruptly shuffled top leadership this week, appointing Scott Flanders as its new CEO.
For the past six years, Flanders served as CEO of Playboy Enterprises, the risqué magazine and media empire built by Hugh Hefner. Flanders replaces Gary Lauer, who has been eHealth's CEO since December 1999 and will stay on as an adviser until the end of the year. Lauer also was eHealth's executive board chairman.
eHealth did not provide reasons for the sudden CEO change, and it did not file a regulatory document indicating whether Lauer had any disagreement or dispute with the company. Lauer expressed confidence in a statement that Flanders and other executives “will build on our positive momentum.”
eHealth lost almost $5 million in 2015 after losing more than $16 million the year before. Private online health insurance marketplaces like eHealth have suffered under the Affordable Care Act, which created direct competitors in the individual market through the federal HealthCare.gov website and state-based exchanges.
eHealth's stock price has plummeted more than 70% since the start of 2014, although the company was able to turn an $18 million profit in the first quarter this year. eHealth has invested more time and money in helping people sign up for Medicare online—including Medicare Advantage, Medigap plans and Medicare Part D prescription drug plans—instead of relying solely on the individual and small-group markets. Commissions from Aetna, Humana and UnitedHealthcare represent more than half of eHealth's revenue.
The Mountain View, Calif.-based exchange operator and brokerage also laid off 15% of its workforce last year in response to the declining private sign-ups since the ACA's open enrollment changed the market.
Lauer earned $2.2 million in 2015 and $8.5 million over the past three years. eHealth did not respond to requests for how much Flanders will make.
