EHealth suffers financial blow following launch of public health exchanges

EHealth--the nation's largest online health insurance broker--suffered a financial blow from the launch of the Affordable Care Act's health insurance exchanges but sees Medicare Advantage growth as a way to rebound, reported Kaiser Health News

As the industry's only publicly traded online health insurance broker, eHealth is required to report its performance. In December 2013, right before public exchange policies went into effect, eHealth covered 796,000 individuals. That number dropped to 585,000 in March. The company, which earns a commission from health insurers for each plan it sells, experienced a $16 million loss in 2014, while its share price dropped by more than 75 percent.

But there may be a saving grace for the struggling company. Should the Supreme Court rule subsidized coverage sold on to be illegal, and should states decide to establish their own exchanges, many consumers would have little to no reason to use

"Folks who may not be able to get a subsidy may go back to eHealth," said David Styblo, an analyst with Jefferies LLC in Nashville, told KHN. However, eHealth isn't betting on this scenario, since it's unclear if subsidies will disappear.

Health insurance brokers such as eHealth also find it difficult to connect with consumers, noted KHN. For instance, since online brokers must send consumers' information through the state and federal exchanges to apply for subsidies, they cannot offer consumers an easy purchasing experience. What's more, when consumers think of purchasing plans online, they usually think of

Despite the emergence of the government-run individual and small business insurance exchanges, health insurance brokers can still play a role in the way consumers buy insurance, FierceHealthPayer previously reported.

For example, eHealth has turned its focus to on selling Medicare Advantage plans. The company believes this population could provide a source of growth--close to 10,000 Americans a day turn 65 and thus become eligible for Medicare. At the end of March, eHealth had 155,600 Medicare members, up from 111,700 a year ago, KHN said.

For more:
- here's the KHN piece