eHealth Announces Results of Strategic Review Process and Management Appointments

  • 100-day strategic review identifies plan to leverage existing
    strengths to expand growth in Medicare and Small Business Group
    insurance markets
  • New operating structure and executive management appointments
    aligned with strategic plan

MOUNTAIN VIEW, Calif.–(BUSINESS WIRE)–eHealth, Inc. (NASDAQ: EHTH), the nation’s first and largest private
health insurance exchange, announced today the outcome of its 100-day
strategic review process. eHealth plans to migrate and focus its
business activities on the Medicare and small business insurance markets
while continuing to operate the Individual & Family Plan business for
profitability and cash flow maximization. The company has also made
several key structural and executive changes to align its operating
structure with its strategic focus.

Scott Flanders, chief executive officer of eHealth stated, “Over the
last several months we have undertaken a thorough and exhaustive
analysis of our operating and strategic assets, our market position and
the market segments that we have available to aggressively grow the
company. We concluded that eHealth has built strong, defensible assets
that are not being fully leveraged in the changing landscape in which we
operate. These assets offer tremendous opportunity to diversify and
refocus our revenue streams into higher-growth opportunities. We do not
need to undertake a major pivot or overhaul of the company; instead, we
are migrating our core business toward the most exciting and achievable
set of growth opportunities. Our plan will require significant
investments that will impact near-term performance, but will set the
foundation for what we believe can be a larger and more profitable
company.”

Strategic Focus

Three key growth opportunities were identified as part of the review:

  • Leverage eHealth’s technology strength and marketing expertise to
    accelerate the company’s growth in Medicare product sales, including
    in the Medicare Advantage and Medicare Supplement markets.
  • Utilize the strong platform built for eHealth’s Individual & Family
    Plan business to pursue large, attractive opportunities in the Small
    Business Group insurance market.
  • Penetrate related cross-selling opportunities and adjacencies that
    Medicare and Small Business Group markets present for the company.

In the individual and family health insurance market, the company plans
to continue to focus on profitability and cash flow maximization, while
further reducing its individual and family plan-related marketing
expenses. The company will provide more detail relating to the strategic
review during its earnings conference call scheduled for later today.

Management Appointments

As a result of the strategic review process, eHealth is instituting a
new operating structure to focus on its growth opportunities and
objectives while operating the business more efficiently. Two new group
presidents are being announced today with direct revenue and profit
responsibility for each of the core revenue segments of eHealth’s
business including (1) the Medicare business and (2) the Individual &
Family Plan and emerging Small Group business. Heading the Medicare
Products business will be Bob Hurley who has served as Executive Vice
President of Sales & Operations and is a long time executive of eHealth.
Heading the Small Business, Individual & Family Products businesses will
be Tom Tsao who has served as Executive Vice President, Chief Technology
and Product Officer. Additionally, eHealth announced that David Francis
will add the responsibilities of Chief Operations Officer to his current
responsibilities as Chief Financial Officer, heading key operational
aspects of the business including telesales, product and technology
development.

Said Scott Flanders, “It has been my experience that placing key
executives in roles that create direct measurement and accountability
for revenue growth and profitability puts them and the broader company
in the best position to succeed.”

About eHealth, Inc.

eHealth, Inc. (NASDAQ: EHTH) operates eHealth.com,
the nation’s first and largest private health insurance exchange where
individuals, families and small businesses can compare health insurance
products from leading insurers side by side and purchase and enroll in
coverage online. eHealth offers thousands of individual, family and
small business health plans underwritten by many of the nation’s leading
health insurance companies. eHealth (through its subsidiaries) is
licensed to sell health insurance in all 50 states and the District of
Columbia. eHealth also offers educational resources and powerful online
and pharmacy-based tools to help Medicare beneficiaries navigate
Medicare health insurance options, choose the right plan and enroll in
select plans online through PlanPrescriber.com (www.PlanPrescriber.com),
eHealthMedicare.com (www.eHealthMedicare.com)
and Medicare.com (www.Medicare.com).

Forward-Looking Statements

This press release contains statements that are forward-looking
statements as defined within the Private Securities Litigation Reform
Act of 1995. These include statements regarding the outcome of our
strategic review process; the migration of our core business activities
to the Medicare and small business market; our strategy and plans to
aggressively grow the company; opportunities in the Medicare Advantage,
Medicare Supplement and small business insurance market; cross selling
and adjacent opportunities; our near-term performance; our plans to
focus on profitability and cash flow maximization and to reduce
marketing spend in the individual and family health business; our new
operating structure and changes in senior management responsibilities
and the expected benefits of these changes. These forward-looking
statements are inherently subject to various risks and uncertainties
that could cause actual results to differ materially from the statements
made, including our ability to successfully execute on our strategic
plans; our ability to realize the anticipated benefits of our
investment; changing market conditions in the Medicare, small business
and individual and family health insurance market; legal and regulatory
compliance risks; competition; our success in marketing and selling
health insurance plans and our unit cost of acquisition; our ability to
successfully manage our new operating structure; fluctuation of our
operating results; changes in our stock price; future cash needs and
other risks described in eHealth’s most recent Quarterly Report on Form
10-Q or Annual Report on Form 10-K filed with the Securities and
Exchange Commission and available on the investor relations page of
eHealth’s website at http://www.ehealthinsurance.com
and on the Securities and Exchange Commission’s website at www.sec.gov.
eHealth does not undertake any obligation to update any forward-looking
statement to conform the statement to actual results or changes in
expectations.

Contacts

Investor Relations Contact:
eHealth, Inc.
Kate
Sidorovich, CFA, 650-210-3111
Vice President Investor Relations
kate.sidorovich@ehealth.com
http://ir.ehealthinsurance.com