While politicians, business owners, and consumer advocates
continue to debate who does and doesn't benefit from the Affordable
Care Act, one clear winner emerged last week: Mountain View,
The leading online insurance exchange company, which operates the
struck a deal Wednesday
that would allow it to potentially enroll millions of people in the
36 states that will have federally run Obamacare marketplaces. The
deal covers all consumers who qualify for subsidies under the new
eHealth has experience in the field: Since its launch in 1998, it
has enrolled more than three million consumers (40% of whom were
previously uninsured) in health plans. Consumers who do not receive
insurance through work use the site to find and purchase insurance
from the close to 200 insurers that work with the company.
The idea is simple - consumers "shop" for the insurance that best
fits their health needs and their budgets. They can compare
services and prices and make decisions based on a broader selection
of plans than the average person could get from an employer.
The agreement is not exclusive, but it's the first and only one
that's been announced to date. The Fiscal Times caught up with Gary
Lauer, who has served as CEO of the company since 1999 and as
chairman since 2002, to discuss the deal, the business of online
enrollment, and his thoughts on Obamacare.
THE FISCAL TIMES (TFT):
Will you be ready for open enrollment on October 1?
GARY LAUER (GL):
I hope so. We're ready today. We're been doing this for a long
time, long before the words "health insurance" and "exchanges" were
in the same sentence. The bigger question is: Will we have all the
government connections working properly? We think so. We hope so.
We're working closely with the Centers for Medicaid and Medicare
Services. We're feeling very optimistic.
Can you talk about some challenges facing the Affordable Care Act,
and how you hope to help alleviate them?
Obamacare ultimately succeeds or fails based on enrollment. We see
millions of people, and we can help increase the ranks of those who
enroll. The more who enroll, the more balance you have in the
pools, and that's going to help to stabilize pricing.
How many additional consumers do you project will be using eHealth?
We saw about 20 million people last year. There are 18 million
people who have individual coverage. The Congressional Budget
Office estimates between 25 million and 32 million uninsured
Americans will be coming into the marketplace - so the market we
face easily doubles. We think given our presence and our expertise,
we hope to be able to enroll a significant number of people.
You get paid, of course, for every consumer who comes through
eHealth. Right now you get about a 7% commission from the insurers
for plans sold. Is that going to continue after this deal?
That will probably hold for the products we market to people who
are over 400% of the federal poverty level. For the lower-income
people, the subsidized population, these products may have a lower
commission rate, and that's OK with us because it's all incremental
How will your business model change after the Affordable Care Act?
We'll continue to do what we do and focus on the consumer
experience and doing a good job with the consumers. There's just
going to be a lot more of them.
Your company fields a lot of phone calls from consumers about
health insurance. What do you hear from them about Obamacare?
Confusion. Lack of knowledge. Surveys indicate that over half of
Americans don't even know what it is, so we're dealing with a lot
You also work with the big insurance providers. What do you hear
Different things. Some are going about it aggressively. Others have
pulled back because they're not sure what the risk pool is going to
look like and how this is going to work. What they want and they
need is enrollment. You have to have abroad pool of people to
spread the risk across.
There have been various projections about premiums. What's your
sense of how costs will change for consumers after Obamacare?
Again, it comes back to enrollment. The people who most likely are
going to enroll first are those who haven't been able to get
insurance because of health reasons. They're higher utilizers. To
keep this in balance, you've got to get younger, lower-utilizing
people into the pool. If that doesn't happen, the ways it's going
to get mitigated is through pricing, and pricing will go up. The
last thing we want is for pricing on these products to become
How will you market your services to new customers?
We do a lot today. Almost half of consumers come to us directly,
because anecdotally we [get] a lot of word of mouth. We are very
present in the world of search with
). We do really well in natural search and get a lot of media
attention. We'll continue that and then some.
But that's what you've done in the past, and reached more affluent
consumers. How will you reach out to the subsidy-eligible
We get lower-income people as well. We get to them through
community centers, churches, schools - we're talking to hospitals.
It's a long list.
What's your biggest concern about the open enrollment process?
Just getting the other 14 states on board. That's our objective. We
want to help them.
We know why that would be good for you. Why do you think it would
be in the states' best interest to work with you?
We think the residents of these states should have the same choices
as residents of states that are on the federal exchange. The irony
is that many of these states that the federal exchange is going
into are states that didn't support Obamacare and wouldn't build
exchanges, and we're going to be there, and people are going to
have choices. In some of the Democratic states, if they don't
embrace us, the residents won't have the same choices.
This interview has been edited for space and clarity.
Editor's Note: This article by Beth Braverman originally
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