Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Health Insurance > Medicare Planning

Medicare Plans Ask EHealth for Stickier Customers: Earnings

Your article was successfully shared with the contacts you provided.

What You Need to Know

  • EHealth is spending more time on training this quarter, in the hopes that will improve service in the all-important fourth quarter.
  • Humana and Molina are reporting solid Medicare Advantage enrollment gains.
  • Molina saw a big year-over-year increase in Medicaid enrollment.

Executives at a web-based health insurance broker, eHealth, say the insurers they work with are starting to think harder about keeping customers, not just increasing sales.

Scott Flanders, the Santa Clara, California-based company’s CEO, talked about the new focus on enrollee retention Thursday, during a conference call with securities analysts.

EHealth held the call to go over earnings for the second quarter, which ended June 30.

“Based on our recent conversations with carriers, we expect that insurance companies will be increasingly evaluating broker performance on quality of their enrollments, including retention rates and customer satisfaction in addition to volumes,” Flanders said during the call.

Flanders said eHealth is acting on that belief by having new agents spend more time getting trained, even if that cuts into third-quarter sales and earnings, in an effort to improve service in the fourth quarter.

For health brokers, the fourth quarter of a year is critical, because the annual enrollment period for Medicare Advantage plans runs from Oct. 15 through Dec. 7. The annual enrollment period gives users of traditional Medicare coverage a chance to sign up for Medicare Advantage plans, as well as giving Medicare Advantage plan enrollees an opportunity to change their coverage.

Flanders said eHealth is also working to increase the number of people who sign up for coverage through eHealth websites on their own.

Attracting customers who sign up on their own costs more than attracting other customers, but customer care and enrollment costs for those customers are lower, according to John Pierantoni, eHealth’s chief accounting officer.

Flanders said customers who sign up for Medicare plans through the web are also more likely to stick with their coverage than other customers.

Here’s a look at second-quarter earnings for eHealth and other companies that sell and create health insurance.

EHealth (EHTH)

EHealth has reported an $18 million net loss for the second quarter on $97 million in commission revenue, compared with a $3.4 million net loss on $89 million in revenue for the second quarter of 2020.

Commission revenue increased to $90 million from $81 million.

The company was helping 1.3 million people get and stay covered in the second quarter, up from 1.1 million a year earlier.

Here’s what happened to four types of health plan enrollment for the latest quarter when compared with enrollment for the year-earlier quarter:

  • Medicare Advantage: 562,905 (up from 407,243)
  • Medicare Supplement: 99,306 (up from 94,838)
  • Individual and Family Major Medical: 107,466 (down from 115,832)
  • Dental: 115,990 (down from 118,198)
  • Vision: 69,062 (up from 68,666)
  • Short-Term Health: 18,032 (down from 23,203)

The number of new enrollees Medicare Advantage plans increased 36% to 77,710 and, thanks in part to COVID-19-related period calendar changes, the number of new enrollees in Affordable Care Act public exchange plans rose 49% to 4,604.

TriNet Group (TNET)

TriNet is another kind of health coverage intermediary: a company that provides human resources services for small and medium-size businesses.

TriNet reported $91 million in net income on $1.1 billion in revenue for the second quarter, compared with $126 million in net income on $948 million in revenue for the second quarter of 2020.

TriNet acts as a professional employer organization, and it helps client companies provide health coverage, group life insurance and other employee benefits for their workers.

The company’s total insurance service revenue increased to $944 million from $827 million.

Humana (HUM)

Humana reported $588 million in net income on $21 billion in revenue for the second quarter, compared with $1.8 million in net income on $19 billion in revenue for the second quarter of 2020.

The Louisville, Kentucky-based company ended the year providing or administering health coverage for 17 million people, or 1.5% more people than it was covering a year earlier.

Here’s what happened to some key types of health plan enrollment between the year-earlier quarter and the latest quarter:

  • Individual Medicare Advantage: 3 million (up from 3.9 million)
  • Group Medicare Advantage: 557,300 (down from 608,300)
  • Medicare Supplement: 330,400 (up from 324,600)
  • Fully Insured Employer Plans: 706,100 (down from 820,800)
  • Self-insured employer plans: 497,800 (down from 506,200)
  • Military plans: 6 million (flat)

Molina Healthcare (MOH)

Molina reported $185 million in net income on $6.8 billion in revenue for the second quarter, compared with $276 million in net income on $4.6 billion in revenue for the second quarter of 2020.

The Long Beach, California-based company ended the quarter providing or administering major medical coverage for 4.6 million people, up from 3.6 million people a year earlier.

Here’s what happened to three types of health plan enrollment compared with the year-earlier quarter:

  • Medicaid: 9 million (up from 3.1 million)
  • Medicare: 130,00 (up from 115,000)
  • Affordable Care Act Public Exchange: 638,000 (up from 318,000)

(Image: Shutterstock)


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.