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Web Health Broker Gives Peek at Per-Enrollee Commissions

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One of the pioneers in efforts to sell health insurance through the web, eHealth Inc., has given investors a peek at the commissions it receives for the products it sells.

One obvious conclusion: eHealth now makes a lot more from selling Medicare plans than from selling major medical coverage.

(Related: Trump’s ACA World)

The Mountain View, California-based company posted estimates of the “constrained lifetime value” of the commissions it expects to receive, per enrollee, for a number of products:

  • Medicare supplement insurance: of $1,029.
  • Medicare Advantage: $880.
  • Individual major medical (Affordable Care Act public exchange): $134,
  • Individual major medical (off-exchange): $140.
  • Dental: $74.
  • Short-term health insurance: $60.
  • Vision: $51.

Dave Francis, the company’s chief operating officer, said Thursday, during a conference call with securities analysts, that getting insurers to pay commissions on sales of ACA exchange plans is difficult.

“We are working with the carriers with whom we work in the non-ACA space to get us as strong a commission trend as possible,” Francis said.

The company expects commission levels on short-term health insurance products to rise later in the year, if the Trump administration goes ahead with plans to lift the current 90-day cap on the duration of short-term health insurance, executives said.

The company is getting ready to focus more on selling short-term health insurance, executives said.

EHealth held the conference call to go over first-quarter earnings with securities analysts.

The company is reporting a $4.8 million net loss for the quarter on $43 million in revenue, compared with $1.1 million in net income on $42 million in revenue for the first quarter of 2017.

The company has been trying to shift more toward sales of Medicare plans, and away from turmoil-plagued major medical plans.

Here’s how application flow changed:

  • Medicare Advantage applications increased 14%,, to about 25,000.
  • Medicare supplement applications increased 41%, to 6,388.
  • The number of people on applications for individual and family major coverage fell 70%, to 6,570.

The number of applicants for individual and family coverage fell so sharply partly because the open enrollment period for 2018 major medical coverage ended Dec. 15, 2017, in most of the country.

For 2017, the open enrollment period ended Jan. 31, 2017, in most of the country.

The drop in major medical sales may have contributed to a sharp drop in eHealth sales of dental and vision coverage.

The number of dental policies sold fell 44%, to 12,993.

The number of vision policies sold fell 43%, to 5,584.

— Read  Insurers May Still Sell Major Medical in 2019: eHealth on ThinkAdvisor.

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