The Online Individual Insurance Market - Perspectives, Experiences and Trends

October 20, 2008

Sam Gibbs, Senior Vice PresidenteHealth, Inc.

The Online Individual Insurance Market - Perspectives, Experiences and Trends

October 20, 2008

Sam Gibbs, Senior Vice PresidenteHealth, Inc.

Today’s Talking PointsToday’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

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US Health Insurance CrisisUS Health Insurance Crisis

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Consumers Businesses

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

Layoffs

COBRA

Unknown access to affordable health insurance

US ECONOMY

- Market Innovator

eHealth – Customer AdvocateeHealth – 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

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Home PageHome Page

94043

Census PageCensus Page

Quote PageQuote Page

Plan Advisor ToolPlan Advisor Tool

Quote Page & ComparisonQuote Page & Comparison

Physician Finder ToolPhysician Finder Tool

Live AssistanceLive Assistance

Online ApplicationOnline Application

eApproval OvervieweApproval 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

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eHealth IFP Customer ProfileeHealth IFP Customer Profile

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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.

2007

Average Age 36

% Male 54%

% Single 61%

Average annual premium* $1,896

Average annual deductible* $1,971

Introducing the eHealth Business HSAIntroducing the eHealth Business HSA

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HSA Growth ForecastHSA 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.

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eHealth Business HSA - EmployerseHealth Business HSA - Employers

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eHealth Business HSA - EmployeeseHealth Business HSA - Employees

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Benefits to All ConstituentsBenefits to All Constituents

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Employees Employers

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

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

Obama Plan on Health InsuranceObama 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 Plan Health Systems Innovations (August, 2008)

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McCain Plan on Health InsuranceMcCain 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)

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Post-Election RealitiesPost-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

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Questions and AnswersQuestions and Answers

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Sam Gibbs

Senior Vice President

eHealth, Inc.

(408) 887-1488

sam.gibbs@ehealth.com