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Life Health > Health Insurance > Your Practice

Web Broker Says Individual Health Is Still Broken

By Allison Bell

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An executive at one of the oldest Web-based health insurance brokers, eHealth Inc., says the U.S. individual major medical market is still broken,

Scott Flanders, the company’s chief executive officer, gave that assessment Thursday, during a conference call with securities analysts that was streamed live on the web.

Given how poorly the individual market is functioning, “we continue to believe that 2017 will be a tough year for our individual and family plans in terms of revenues,” Flanders said. 

(Related: Web-Based Health Broker to Stay Independent, for Now)

EHealth is hoping to rebuild the business next year, Flanders said.

EHealth held the call to go over poor second-quarter earnings.

The Mountain View, California-based company is reporting a $17 million net loss for the quarter on $28 million in revenue, compared with a $476,000 net loss on $37 million in revenue for the second quarter of 2016.

EHealth has been increasing sales of Medicare plans, and of major medical plans to very small plans, but it still depends heavily on sales of individual major medical coverage.

Individual and family plan enrollment fell to 244,900, from 481,300 a year earlier, and commission revenue for those enrollees fell to $17 million, from $28 million.

EHealth is preparing to introduce a web-based small-group health plan enrollment system for UnitedHealth Group Inc. in August

The company also has some hope for improvement in individual major medical operations.

The underlying market is still in turmoil, but managers of HealthCare.gov are hoping to let web brokers enroll consumers directly in the Affordable Care Act exchange plan subsidy programs, without requiring those consumers to shift to the HealthCare.gov website, executives said.

HealthCare.gov managers are also planning to reduce advertising spending, executives said. EHealth executives are hoping that change will give outside web brokers a chance to increase exchange plan sales.

— Check out A Q2 Insurance Earnings Release Guide for Agents on ThinkAdvisor.

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