Many experts believed that eHealth Inc, the largest online health insurance broker in the US, would thrive after the introduction of the Affordable Care Act. The reasoning for this is expected growth is quite simple. The Affordable Care Act would requires the vast majority of people within this nation to have coverage. Over the course of the last few years, this law has helped boost profits and share prices for many health companies, insurers, and hospitals. However, this is far from the case for eHealth. In 2014, the Affordable Care Act’s online exchanges, which provides a platform for Americans to shop for plans, stole thousands of customers away from eHealth.
Its customer base peaked at around 800,000 at the end of 2013, just before the implementation of the Affordable Care Act. This number has gradually fallen off to below 600,000 as of March 2015. Unsurprisingly, this drop has drastically affected their bottom line. eHealth recorded a profit of nearly $2 million in 2013, but experienced a $16 million loss last year. Additionally, it stock price, which reached it zenith of $57 in 2013, now sits at just $13.
However, it appears that the company may be the beneficiary of an upcoming Supreme Court Ruling. The justices could rule against subsidies provided by the government to consumers in the states that are using the federal exchange. 90 % of the nine million Americans who purchased coverage on the exchanges this year were the recipients of subsidies. If no subsidies were provides, consumers would have little to no incentives to use the federal exchange.
While eHeatlh Inc. executives haven’t publicly stated they hope the subsidies are struck down, but they have acknowledged how the ruling could impact the future of the company and the entire industry. While the Mountain View based eHealth is by no means the only player in its field, it is the largest and the only one that is publically traded. Just last year, the company had to layoff more than 15 percent of its employees. It will be interesting to see how things play out in this industry over the coming months.