Government and the Private Sector: The Case of eHealth, Inc.
For years now, Wall Street has cheered as Obamacare fuelled the stock prices of corporations in the healthcare industry. One of them was eHealth, Inc., a private health-insurance exchange that was founded in 1997.
Obamacare – in case you need reminding – mandates the purchase of private health insurance for working-age Americans above a low income. Last April, The Motley Fool’s Keith Speights speculated that eHealth might have been “Obamacare’s biggest winner”.
Well, that’s not how things turned out.
eHealth, has announced that it will lay off 15 percent of its workforce and take a restructuring charge of up to $4.7 million. This announcement followed horrific fourth quarter earnings.
The stock has been crushed. Investors’ sentiment about eHealth’s ability to enroll people in Obamacare has been turned completely on its head, as I discuss at my latest Forbes column.
Obamacare’s exchanges are the DMV of American health care – frustrating for consumers and completely unnecessary. In a column for Townhall.com, NCPA CEO Allen West and I point out that this is hardly unique to Obamacare. Decades ago, the government seized the commanding heights of mortgage lending, leading to recurring housing crises. The Obama Administration has also expelled financial institutions from student loans. That monopoly won’t end well, either.
eHealth should have dominated the market. It started with investors’ money and did what the government couldn’t do with billions in taxpayers’ funds. Why the government didn’t just contract out the exchange to eHealth is a question for HHS.
My understanding is that the Feds refused to allow ehealth to access the IRS databases to calculate subsidies.
This right away left ehealth with only those customers who did not need subsidies.
Trust a health insurance agent, this is not a large number of persons.
Then, some carriers decided not to offer a non-exchange product. A firm like ehealth could only send people back to health care.gov after giving them a quote.
Thank you but why would you want the federal government to allow a broker access to IRS data on taxpayers?
This goes back to your advocacy of more or less flat tax credits, maybe adjusted by age.
This would remove the need to consult the IRS data base at all, and ehealth would come back into the picture.
The ACA was built on the premise of super exact subsidies based on hard-to-track family incomes. Some government types have always defended this process as more fair than flat tax credits. Technically they might be right, but the mess of enforcing this kind of defeats their argument.