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October 26, 2011 at 10:27 AM
The Patient Protection and Affordable Care Act of 2010 (PPACA) has already taken a bite out of the business of eHealth Inc., the parent of the eHealthInsurance.com health insurance distribution site
EHealth, Mountain View, Calif. (Nasdaq:EHTH), is reporting a net loss of $249,000 for the third quarter on $35 million in revenue, compared with $2.6 million in net income on $37 million in revenue for the third quarter of 2010.
The company has no debt and a pile of about $126 million in cash on hand, and Gary Lauer, the chief executive officer, made no complaints during the company’s earnings call about health insurers cutting commissions.
Commission revenue fell to $28 million during the quarter, from $32 million during the comparable quarter a year ago, but that seems to be primarily due to PPACA, Lauer said.
PPACA provisions that took effect Sept. 23, 2010, require group plans and individual coverage issuers that offer dependent coverage to make dependent coverage available to children up to age 26. Other provisions have made more types of other coverage available to children but reduced availability of child-only coverage in some states.
