eHealth: Obamacare Beneficiary

10/08/2013 7:00 am EST

Focus: STOCKS

James Oberweis

President, Oberweis Asset Management, Inc.

From Medicare to the new Affordable Care Act, this company provides online systems to help people choose health insurance options, notes Jim Oberweis, Jr. in The Oberweis Report.

eHealth, Inc. (EHTH) is the parent company of eHealthInsurance, America'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.

The company offers thousands of individual, family, and small business health plans, underwritten by more than 200 of the nation's leading health insurance companies through their Web sites and through their network of marketing partners.

eHealth is licensed to sell health insurance in all 50 states and the District of Columbia.

Their e-commerce technology also enables them to deliver consumers' health insurance applications electronically to health insurance carriers, which simplifies and streamlines the complex, and traditionally paper-intensive, health insurance sales and purchasing process.

In addition, through their eHealthTechnology solution, they provide a suite of hosted e-commerce solutions that enable health plan providers and resellers to market and distribute health insurance products online.

The company also makes powerful online and pharmacy-based tools available to help seniors navigate Medicare health insurance options, choose the right plan, and enroll in select plans online through their wholly-owned subsidiary, PlanPrescriber, and through their Medicare Web site.

On August 16, 2013, eHealth announced that they received approval from the federal government to begin selling health plans offered under the Affordable Care Act (ACA). This approval will allow eHealth to compete for the millions of Americans receiving federal tax subsidies to buy health coverage, effective January 1, 2014.

In the company's latest reported second quarter, sales increased approximately 12% to $39.8 million from $35.5 million in the second quarter of last year. eHealth reported earnings per share of $0.12 in the latest reported second quarter, versus $0.11 in the same quarter of last year.

We expect an acceleration in growth in the coming quarters in both revenues and earnings, as the company benefits from several initiatives, including their recent approval to participate through the Affordable Care Act.

Clients of Oberweis Asset Management own approximately 35,000 shares. These shares may be appropriate for risk-oriented investors.

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