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The Online Individual Insurance Market - Perspectives, Experiences and Trends October 20, 2008 Sam Gibbs, Senior Vice President eHealth, Inc.
Today’s Talking Points Insurance Industry – Crisis or Opportunity? The eHealth online solution Innovation for small business health care – Business HSA What’s in store for Health Insurance after the election Questions and Answers 5
US Health Insurance Crisis Consumers Businesses US ECONOMY • Layoffs • COBRA • Unknown access to affordable health insurance • 47 million uninsured • 6.1% unemployment • Shrinking employer sponsored health insurance over last seven years • Extremely High Health Care Costs • Can no longer afford to offer traditional health insurance - Market Innovator 3
eHealth – Customer Advocate • Representing over 180 health insurance carriers nationwide • Through choice consumers find affordable plans • “Get insured for the price of a latte per day” • Highly-configurable policies • Pay only for what you need • Simplifies complex decision process • Compare plans side-by-side based on key features • Consumer-friendly, intuitive interface 4
94043 Home Page
eApproval Overview • Complete online experience - instant underwriting • Via direct connection to carriers’ underwriting systems • If approved, coverage starts immediately • Permanent Policy Number Issued • Temporary Coverage ID immediately available to print 14
eHealth IFP Customer Profile • Key demographic groups: self-employed, early retirees, SMB employees w/o company-based coverage, students. • As of August 2007 average monthly premiums on active policies ranged from $83 to $388 depending on state of residence * For Individual Plans. 5
HSA Growth Forecast • Over the next decade, the growth in consumer-directed health plans and HSAs could be one of the most powerful trends affecting the U.S. economy • HSA adoption expected to grow significantly over 3-5 years: • The number of Americans covered by HSA qualified plans had grown to 6.1 million as of January 2008 from 4.5 million as of January 20071 • Diamond Consulting estimates 15 million HSAs by 20102 • HSA’s are fast becoming an important offering for banks and thrifts: • HSA’s are a critical lever for financial institutions seeking to maintain profitable long-term relationships2 • The number of banks offering HSA’s has more than tripled between the end of 2005 and June of 20072 • 1. Survey of health insurers performed by America’s Health Insurance Plans (AHIP) • 2. Diamond Consulting ,Seismic Shifts in the Health/Wealth Landscape. 18
Benefits to All Constituents Employees Employers • Health insurance option for employees not covered through group plans • Access to a broad selection of HSA-eligible plans in many states • Allows pre-tax contributions • Easy-to-navigate account center • Fully portable plans within state of residence • Enhances market opportunity with small businesses • Expected to drive application volume • Same recurring commission-based revenue model • Expected to deepen marketing partner relationships • Gain control over healthcare expenses • Hire and retain workers by enhancing benefits package • Streamline benefit management through easy to use account center • Earn Federal Business Income Tax deductions 21
Obama Plan on Health Insurance National Health Policy Offering Guaranteed eligibility, FEHBP style benefits, subsidies for low income National Health Insurance Exchange Guaranteed issue; no underwriting; coverage > national plan Requirements/incentives for employers offer or pay for “meaningful” coverage Mandated kid coverage Catastrophic reinsurance Price Tag: Estimates range from $160* to $452** Billion per year. *One year average of Tax Policy Center Urban Institute/Brookings Institution estimate An Updated Analysis of the 2008 Presidential Candidates' Tax Plans: Updated September 12, 2008 ** Assessment of Barack Obama 2008 Health Reform PlanHealth Systems Innovations (August, 2008) 3
McCain Plan on Health Insurance Replaces employee health benefit tax exclusion with flat refundable credit $5000 family; $2500 individual Cross-state purchasing of health insurance Expanded availability of HSAs GAP plan to cover high risk/hard to insure Price Tag: Estimates range from $130* to 160** Billion per year *One year average of Tax Policy Center Urban Institute/Brookings Institution estimate An Updated Analysis of the 2008 Presidential Candidates' Tax Plans: Updated September 12, 2008 ** Health Systems Innovations estimate of similar proposal Analysis of 2007 Republican Health Reform Proposals (September 2007) 4
Post-Election Realities Political Realities in 2009: Momentum for reform not guaranteed (among policymakers and outside groups) President McCain must face Democratic Congress President Obama likely to need 6 to 10 Republican votes in Senate Affordability: Record deficit $438 billion projected by CBO $325 billion even after all Bush tax cuts allowed to expire Likely to go higher with Fannie Mae/Freddie Mac takeover, AMT Relief, and $700 Billion "RTC2" proposal 5
Questions and Answers Sam Gibbs Senior Vice President eHealth, Inc. (408) 887-1488 email@example.com 23