eHealth Inc.’s 2nd Quarter 2021 LTV and Approved Policy Results
Telos Actuarial recently compiled key information on eHealth Inc.’s (NASDAQ: EHTH) 2nd Quarter Financial results.
One of the key metrics reported by eHealth on a quarterly basis is constrained Lifetime Value (“LTV”) per approved policy. LTV is the estimated amount of commissions the company expects to receive over the life of the policy, per approved policy.
eHealth’s LTV decreased for their Medicare lines (Medicare Advantage “MA”, Medicare Supplement “MS” and Prescription Drug Plans “PDP”) when compared to the same quarter last year. Their ACA plans and Ancillary lines all increased.
A decrease in LTV is most likely driven by a combination of the following:
Lower % of approved policies becoming paying members
Change in mix of business resulting in lower commission rates
Change in constraint being applied
Higher lapse rates (resulting in shorter average life per policy)
eHealth’s commentary on Medicare LTV mentions some of the reasons for the decrease in LTV.
The decline in constrained LTV of commissions per approved member for Medicare Advantage and Medicare Supplement plans was partially driven by a shorter average plan duration for telephonic enrollments. The shorter estimated average plan duration was partially attributable to additional opportunities for Medicare Advantage plan members to switch plans during the Medicare Advantage open enrollment period and the COVID-19 related special enrollment period in 2020. (page 32, Form 10-Q)
They go on to mention that some of the decline in average duration (persistency) was partially offset by higher commission rates for Medicare Advantage.
Another key metric reported by eHealth is approved policy counts. Overall approved policy counts increased 16% when compared to the same quarter last year.
Growth in approve policy counts continues to be largely driven by Medicare Advantage, though Dental, Vision, and Individual & Family ACA plans all increased when compared to 2nd quarter 2020.
Source data: eHealth Inc.’s quarterly Form 10-Q (https://ir.ehealthinsurance.com/financial-information/sec-filings)
Telos Actuarial helps distributors maximize the lifetime value (“LTV”) of their commissions by providing persistency analysis, industry lapse and persistency reports, projected commission cash flow analysis, and LTV calculations. Send us an email for more information. info@telosactuarial.com
