One of the companies that brought the idea of selling health insurance through the Web to life, eHealth Inc. (Nasdaq:EHTH), says the individual and family major medical business was a little better in the first quarter than it had expected.
The Web broker is reporting a net loss of $2.1 million for the first quarter of 2015 on $61 million in revenue, compared with a net loss of $1.6 million on $51 million in revenue for the first quarter of 2014.
Some of the revenue growth had to do with a change in Medicare plan revenue recognition rules, rather than an underlying change in business.
The number of Medicare enrollees rose to 155,600, from 111,700.
The number of individual and family major medical enrollees fell to 584,900, from 800,200.
The company responded by cutting about 160 jobs, or 15 percent of its U.S. workers, including employees handling technology, content, customer service and enrollment.
But the number of individual and family enrollees approved during the quarter, increased to 186,000, from 145,100, and the average level of commission revenue per individual and family plan enrollee seems to have increased about 10 percent.
In some ways, eHealth may operate in a world quite different from the world of brick-and-mortar agents and brokers, but, in other ways, its experience may reflect the trends affecting sales, revenue and profits at the traditional, privately held agencies trying to operate in a market reshaped by the Patient Protection and Affordable Care Act (PPACA).
For a look at some of the possible reasons for optimism that eHealth reported, read on.
1. A Web broker can connect with the exchange systems and sell exchange plans.
Gary Lauer, chairman of eHealth, said during a conference call with securities analysts that he continues to see the major medical business as a core business, and that one example of a force that could create opportunities is improvements in the PPACA public exchange system infrastructure.