By Alex Wayne
Bloomberg, July 31, 2013
Online health insurance broker EHealth Inc. (EHTH) won permission from the U.S. government to enroll customers for subsidized plans offered under the federal health-care law.
EHealth will be able to tap into a government computer system allowing the company to determine whether people shopping for plans at its website are eligible for tax subsidies for their health insurance, the Mountain View, California company said today in a statement. The information will enable EHealth to offer customers subsidized plans available in their state.
The company has been lobbying the federal government for the agreement (for 36 states not electing to establish their own exchanges), as well as urging similar permission from 14 states that are building their own marketplaces called exchanges to sell insurance to people who don’t get it at work.
It won’t cost the government or customers anything extra when people enroll through EHealth, (Chief Executive Officer Gary) Lauer said in a May 14 conference call with reporters. The company will instead collect a commission from insurance companies such as UnitedHealth Group Inc. (UNH) when it enrolls people in their plans.
EHealth collects about 7 percent of monthly premiums as commission for the plans it sells now, Lauer said. Carriers will probably negotiate a lower commission for plans sold in government exchanges because “the risk is a little bit more unknown,” he said.
EHealth shares gained 28 percent to $30.74 at the close in New York, the biggest single-day increase since October 2006.
By Don McCanne, M.D.
Today’s comment is a repeat of the Quote of the Day comment from November 9, 2009. It is more evidence that we have been trying to warn the nation about the intolerable flaws in the Affordable Care Act and that there is a far better alternative, but the people who can do something about it are not listening.
eHealth is ready to connect America
Quote of the Day, November 9, 2009
eHealth is ready to become the nation’s broker for private health insurance.
This is yet one more reason why the model of reform selected by Congress and the Obama administration is the most expensive of all. With all of the other wasteful administrative expenses, brokers’ fees are added on top, though often hidden in the premium as a commission rather than a fee.
Compare this to Medicare enrollment. The administrative costs for automatic enrollment in Medicare, at that only once in a lifetime, are negligible for the government and its taxpayers.
Imagine the simplicity and efficiency of automatic, lifetime Medicare enrollment at birth for everyone. But Congress won’t go there… not until the nation demands it.