Ehealth, Inc. · NASDAQ:EHTH
Ehealth — Investor Day (May 2023)
74 slides from Ehealth's investor day presentation, May 2023
Slide 1: eHealth, Inc. Investor & Analyst Day
eHealth, Inc. Investor & Analyst Day May 2023 2023 Copyright eHealth Insurance. 1
Slide 2: Mission and vision
Our mission is to expertly guide consumers through their health insurance and related options, when, where and how they prefer. Our vision: Through strategic relationships with insurance carriers, eHealth will become the nation’s leading and most trusted source for consumer purchasing of health insu
Slide 3: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this
Slide 4: Chief Executive Officer
Click to edit Master title style Chief Executive Officer
Slide 5: Great People + Great Teams = Great Outcomes
GREAT PEOPLE + GREAT TEAMS = Great Outcomes 5
Slide 6: Fran Soistman, Chief Executive Officer
Educational background Prior work experience Fran Extensive Driven by the goal of Committed to Soistman managed care providing Americans shareholder Chief Executive background and with access to quality, value creation Officer relationships affordable healthcare 2023 Copyright eHealth Insurance. 6
Slide 7: Enrollment growth in direct-to-consumer products is outpacing group products
Enrollment growth in direct-to-consumer products (MA & IFP) is outpacing group products 1 Growing consumerism of healthcare Favorable demographic trends Carriers rely on a diversified distribution model 2 Financially & operationally challenging to hit enrollment and acquisition cost targets through
Slide 8: eHealth Operates in a Large and Growing Market
eHealth Operates in a Large and Growing Market Enrollment by type of plan(1) (millions) DTC markets are growing 13 14 MA MA & MS enrollment increasing 61M 72M MS as % of total Medicare 18 25 29 34 IFP • Favorable health outcomes for beneficiaries • Big focus area for carriers 2022 2025 (projected) D
Slide 9: Sector at an Inflection Point
Sector at an Inflection Point DTC channel is growing as % of total MA enrollment but has not built lasting consumer relationships Open space for category leaders to emerge Broker channel remains an important element of carriers’ growth strategy Increased emphasis on enrollment quality/ customer expe
Slide 10: Taking stock of the company and implementing a plan
Taking stock of the company and implementing a plan TAKEAWAY In-depth assessment of operations and talent against market realities We had a valuable Meeting with top carriers/partners asset in an attractive and growing market Developing 3-year strategy plan but change was needed strategically, opera
Slide 11: Capture meaningful market share in a profitable way
The transformation plan underway is designed to enable us to Capture meaningful market share in a profitable way 11
Slide 12: Transformation Plan. Multi-year focus
Transformation Plan. Multi-year focus Launched Q2 of 2022 Financial Reengineering Bridged discipline across of the Tele-sales Tele-sales and the organization Organization 1.0 online operations Realized $114M Q4 ‘22 telephonic conversion Solidified the foundation for in net operating cost savings rat
Slide 13: eHealth Transformed the Way Consumers Shop for Health Insurance
eHealth Transformed the Way Consumers Shop for Health Insurance Consumers Carriers Brought transparency, choice and efficiency into a complex, high-stakes decision Benefit Educational Tech-driven Advisors Content Tools Transparent, omni-channel Efficient member comparison shopping acquisition at sca
Slide 14: Positioned to Further Advance Our Sector as a Category Leader
Positioned to Further Advance Our Sector as a Category Leader Continue solving for critical challenge of selecting the optimal health coverage by building deeper consumer relationships and further enhancing platform experience Member engagement and TRUSTED, Volume-driven comparison- brand-driven mod
Slide 15: Competitive Thesis: Differentiated Value Proposition
Competitive Thesis: eHealth Has a Differentiated Value Proposition eHealth provides unique value to consumers that is not currently offered by other channels Carriers Feet on the street Telebrokers Alignment with Unbiased broad choice Single carrier Limited choice select carriers Omni-channel with L
Slide 16: Strategic Relationships with Carriers
Strategic Relationships with Carriers Aligned with our carrier partners on delivering the best possible experience to beneficiaries Large Multi-nationals | Blues | Niche | Approximately 200 Carriers Leaderships’ vast experience in carrier Efficient industry Trusted, Advantage over streamlined 25 yea
Slide 17: Vision for Driving Sustainable Profitable Growth
Vision for Driving Sustainable Profitable Growth at eHealth eHealth Distinct Increase Targeted Revenue Enhanced as Gold Consumer in Member Investment in Diversification Capital Standard Brand Retention Tech/Product Structure Profitable growth Attractive Cash Flow profile Meaningful shareholder value
Slide 18: Great People + Great Teams + Great Cultures = Great Outcomes
GREAT PEOPLE + GREAT TEAMS + GREAT CULTURES = Great Outcomes 18
Slide 19: Chief Marketing Officer
Click to edit Master title style Chief Marketing Officer
Slide 20: Michelle Barbeau, Chief Marketing Officer
Educational background Prior work experience Michelle Barbeau Chief Marketing Decades of marketing expertise Officer in healthcare and consumer packaged goods 2023 Copyright eHealth Insurance. 20
Slide 21: Year 1 Marketing Success
Year 1 Marketing Success Thorough Reduced Optimized Significantly Enhanced Tele Audit Marketing Campaigns Improved COA Conversions Of Each Channel Spend In Core Per Approved Through Higher and Campaign Channels Medicare Member Lead Quality Exited Channels in Q4 22 (down 24% YoY) with Unfavorable ROI
Slide 22: Sector Ripe for Disruption
Industry Current State Marketing budgets often Inflated COAs deployed over 10 weeks Increased churn Consumers bombarded with generic ads Lack consumer loyalty Same messages frequently used Low or no brand recognition across the same channels among brokers Sector Ripe for Disruption 22
Slide 23: Consumer Sentiment
Current advertising is not helpful New world of plans and information to navigate Feel lost and alone in choosing the right plan Don't always feel good about their final selection Every year new regulations and plans restart the cycle of confusion and anxiety Consumer “Every year I look at all the g
Slide 24: We Have a Solution!
We Have a Solution! eHealth’
Slide 25: Marketing Strategy
Marketing Strategy Build Personalize Expand Drive Our Brand Audience Insights Channel Mix Retention Disciplined spend Every campaign Higher retention Brand building approach with more optimized against strict to boost member- through in-period efficient COAs LTV/CAC guidelines level LTVs ROI initiat
Slide 26: Build Our Distinctive Brand
Build Our Distinctive Brand Our north star that guides how we show up to our consumers, partners and employees eHealth® has 8% Aided Awareness(5) Blue Cross Blue Shield Top Brands Consistently And Drive Humana Deliver Better Returns Higher Click- UnitedHealthcare than Peers(1) throughs(2) Aetna ~1.8
Slide 27: Our Brand Opportunity
eHealth’ Our Brand Opportunity 27
Slide 28: Your Remarkably Transparent Advisor
Our Brand Opportunity Your Remarkably Transparent Advisor 28
Slide 29: Lead with Personalized Audience Insights
Lead with Personalized Audience Insights Beneficiaries are not a Switchers New To Medicare Dual homogenous group Medicare Supplemental Eligible • Tailor messaging, shopping experience and post-enrollment engagement • Drives higher conversion rates, satisfaction and retention Special Local Individual
Slide 30: Expand Channel Mix
Expand Channel Mix Brand Building Test addition of upper funnel channels Driven by audience segments Play to our omni-channel strengths Conversion Strict LTV/CAC guidelines New marketing mix model Lean into high performing channels 30
Slide 31: Measuring Success
Measuring Success Higher conversion rates Expanding Lower COAs enrollment margins Stronger member retention Sustainable competitive Increased brand affinity differentiation Marketing is Critical to Achieving Positive Adjusted EBITDA by ’24 and Continued Margin Expansion Beyond 31
Slide 32: Marketing Evolution Plan
‘22 ’23+ Returning to growth on a Pulled back marketing spend disciplined basis Generic messaging Branded message featuring to our platform our unique value prop Unified audience approach Audience-tailored messaging across MA market Marketing Narrowed channel mix Test-driven channel expansion Evolut
Slide 33: Chief Operating Officer
Chief Operating Officer 2023 Copyright eHealth Insurance.
Slide 34: Roman Rariy, Chief Operating Officer
Educational background Prior work experience Roman Rariy Mission to provide Turnaround and Continuous operational Chief Operating peace of mind transformation improvement Officer 2023 Copyright 2023 Copyright eHealth Insurance. eHealth Insurance. • Confidential 34
Slide 35: Telesales Organization at eHealth
TELESALES ORGANIZATION AT EHEALTH At-a-Glance Organizational Goal 2023 Focus • Strong marketing, sales, • Build a highly-efficient, • Enhance infrastructure for the and sales ops collaboration year-round, full-time bifurcated fulfillment model: advisor model carrier-agnostic & carrier- • Organizatio
Slide 36: Fulfillment Models
FULFILLMENT MODELS Two distinct fulfillment models enable operational diversity Demand Gen Lead Advisory and Post-sale: Ongoing Carrier- through eHealth Assessment sales Enrollment and Retention agnostic lead acquisition and Benefit Remarkably verification efforts Advisor matching transparent adviso
Slide 37: Transformation 1.0 (2022)
TRANSFORMATION 1.0 (2022) Enhanced management Revamped hiring Sales Mastery Local market processes and reporting processes University focus pilot Flattening the Cross-functional Omni-channel strategy sales organization alignment 25% 50% Increase Decrease (1) Q4 ‘22 over Q4 ’21 (2) Q1 ‘23 over Q1 ‘22
Slide 38: Transformation 2.0 (2023+)
TRANSFORMATION 2.0 (2023+) Several longer-term strategic initiatives in the pipeline to build on 2022 successes At scale local Alignment with Diversified market focus audience product sales targeting Member loyalty BPO & retention 2023 Copyright eHealth Insurance. 38
Slide 39: Local Market Strategy
LOCAL MARKET STRATEGY Healthcare is local and insurance distribution should be as well IL Successful 2022 pilot in IL and NY clusters NY Expanded into six local market clusters CA this year GA Higher conversion and partnership potential TX FL Additional markets to be evaluated for 2024 2023 Copyrigh
Slide 40: Member retention drivers
The right plan match and post-sale engagement as key drivers of member retention Contact capture & Onboard Engage Retain lead nurture • Online and tele. • Targeted • Loyalty program • Focus on member enhanced contact campaigns for • Deep integrations retention (prior capture high-churn plans with cu
Slide 41: Strategic initiatives impact key performance indicators
OUR STRATEGIC INITIATIVES DIRECTLY IMPACT OUR KEY PERFORMANCE INDICATORS Member Local Market MS, IFP/SMB, Audience BPO Loyalty & Focus Ancillary Targeting Retention Year-round advisor utilization Conversion LTV/Retention 2023 Copyright eHealth Insurance. 41
Slide 42: Telesales Organization: Gold Standard goal
TELESALES ORGANIZATION AT EHEALTH Organizational Goal Establish eHealth as Gold Standard in Health Insurance Distribution Superior Consumer experience rooted in Strict adherence to Compliance principles best-in-class advisor onboarding, training with focus on unique requirements for and coaching sup
Slide 43: Chief Digital Officer
Click to edit Master title style Chief Digital Officer
Slide 44: Ketan Babaria, Chief Digital Officer
Educational background Prior work experience Ketan Babaria Background in Experience in D2C, design, engineering Marketplaces & Digital Chief Digital Officer Digital Native and product Transformation 2023 Copyright eHealth Insurance. 44
Slide 45: Tech Platform as a Key Competitive Differentiator
Customers Chat Tele Video Tech Platform as One of the Key Competitive Improved Data Tech Platform Differentiators Analytics Experience Plan Better Plan Upload Match Carriers Online Better Advisor Advisors Enrollments Retention 45
Slide 46: True Omni-Channel Experience
Customers True Omni-Channel Experience Online Assisted + Online Unassisted Tele Guided Shopping Multi-plan Multi-plan Pharmacy Phone and Chat Personalized Chat with licensed insurance advisor Tech Enabled Hey there, do you have any questions? We’re here to help. Start Chat CX-driven 46
Slide 47: Demo
DEMO eHealth’
Slide 48: Powerful Tools That Empower Advisors
Advisors Powerful Tools That Empower Advisors and Drive Beneficiary Satisfaction Advisor and Lead scoring Instant Lookup Plan Recommendation 48
Slide 49: Carriers and Strategic Partners
Carriers and Strategic Partners Close Partnership Tight Dedicated Post Sales Integrations Fulfillment Engagement 49
Slide 50: Online Adoption Continues to Improve
Online Adoption Continues to Improve 58% 462,092 45% 48% 21% 39% 298,294 16% 29% 10% 29% 9% 38% 105,271 25% 24% 28% 32% 21% 0 75+ 70-74 65-69 56-64 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 Digital adoption continues as OLU + OLA as percentage Ending total customer younger cohorts age into Medicare(1)
Slide 51: Enhancing Conversions in the Online Funnel
Enhancing Conversions at Key Points of Our Online Funnel is a Significant Operational and Financial Lever 11.3 M (2022) Medicare unique online visits(1) Financial Impact of Higher Conversion • Personalized Experiences (Illustrative example) Quoted Sessions(2) Conversion rate +50 bps online improveme
Slide 52: The Road Ahead
The Road Ahead Carriers Deeper partnerships and integrations Customers Tech Platform Be where customers Drive omni-channel experience are and build long term relationships Continues improvement and operational efficiency Advisors Build tools and services to provide best in class customer experience
Slide 53: Chief Business Officer
Click to edit Master title style Chief Business Officer
Slide 54: Gregg Ratkovic, Chief Business Officer
Educational background Prior work Joppel, experience Inc Gregg Ratkovic Chief Business Officer Industry leader Entrepreneur Diversification expert 2023 Copyright 2023 Copyright eHealtheHealth Insurance. Insurance. • Confidential 54
Slide 55: Carriers are essential for our choice model
Carriers are essential for our choice model Carrier Our channel is an important element partners of carrier growth strategy 25 years of history 2023 Copyright eHealth Insurance. • Confidential 55
Slide 56: Common Goal – Best Consumer Experience
COMMON GOAL – BEST CONSUMER EXPERIENCE Quality Platform experience • eHealth as first mover • Attract beneficiaries who value choice and comparison shopping • Significant CTM improvement • Technology and internet savvy • Excellent advisor training customers • Collaborate with carriers • Expanding be
Slide 57: Product diversification
Leveraging our platform and carrier relationships Post Product Consumer Dedicated enrollment diversification insights fulfillment engagement 2023 Copyright eHealth Insurance. • Confidential 57
Slide 58: Chief Financial Officer
Chief Financial Officer 2023 Copyright eHealth Insurance. • Confidential
Slide 59: John Stelben, Chief Financial Officer
Educational background Prior work experience John Stelben Chief Financial +25 years working Deep financial Focused on profitable Officer in health insurance leadership experience growth 2023 Copyright 2023 Copyright eHealth Insurance. eHealth Insurance. • Confidential 59
Slide 60: Significant improvement in financial performance
Significant improvement Implemented a ‘22 Annual in financial Guidance on each performance metric and $802M achieved in 2022 Commissions Receivable(1) Strategic & operational initiatives Levers in place to drive underway to in 2023 on enhanced and OCF drive sustainable cost foundation positive for T
Slide 61: Primary source of revenue is broker commissions paid by carriers
Our primary source of revenue is broker commissions paid by carriers FY 2022 revenue SMB, Ancillary, IFP PDP, & Other 5% 9% MS Non-Commission 5% Revenue Commission • Carrier advertising Commision Revenue Revenue • Dedicated carrier BPO Non-commission 89% Med Advantage Revenue • Ancillary carrier 11%
Slide 62: Med Advantage AEP example
Med Advantage AEP example Revenue recognized at product LTV on application approval Revenue Cash $1,033 LTV First commission payment received … Renewal payments begin on a monthly cadence (1/12 of annual rate) … ~40% LTV Continue while policy in effect Q4 2022 Q1 Q2-Q4 Q1 Q1 year Q1 following Q1 Div
Slide 63: Significantly improved LTV to CAC ratio in 2022 AEP
Significantly improved LTV to CAC ratio in 2022 AEP Q4 Medicare LTV to CAC ratio(1) FURTHER UPSIDE REMAINS LTV:CAC Enrollment Margin 60% ~1.7x ~40% 2.5 2.5x 51% LTV:CAC Margin 47% 47% 50% 2.0x2 Q4 target Q4 target 2.1x 40% 1.9x 1.9x ~1.5x ~35% 40% 1.5x 33% 28% 1.7x 1.5 1.5x 1.4x 1.4x 30% FY target F
Slide 64: Shift in focus toward profitable growth
Shift in focus toward profitable growth resulted in a temporary pullback in enrollment as the company worked on enhancing the effectiveness of sales and marketing organizations Revenue Net Income (Loss) Adjusted EBITDA(1) Operating Cash Flow ($, MM) ($, MM) ($, MM) (2) ($, MM) (2) $53M 76% $84M impr
Slide 65: FY 2023 guidance reflects Transformation Program
FY 2023 guidance reflects the impact of our Transformation Program Revenue Adjusted EBITDA(1) Operating Cash Flow FY ending 12/31, YoY % Change FY ending 12/31, ($, MM) TTM as of 3/31 ($, MM) $37M YoY $13M YoY improvement improvement 6% (2) ($5) (2) Break-even(3) ($42) ($13)(2) (25%) 2022 2023 2022
Slide 66: Building on 2022 accomplishments: guidance and targets
We will be building on our 2022 accomplishments in 2023 and beyond with a goal of returning to revenue growth this year and positive adjusted EBITDA in 2024 Metric 2022 (actuals) 2023 (guidance) 2024–2025 (targets) Revenue Growth (25%) 6%* 8-10% annually Adjusted EBITDA ($41.7M) ($5M)* 8-10% margin
Slide 67: Balance sheet as of March 31, 2023
As of March 31, 2023 ($, MM) Sufficient liquidity to Cash, cash equivalents & short-term marketable securities $202.7 execute on operating plan Commission receivables (current & non-current) $802.0 Stable, high-quality commissions receivable Other assets $78.3 Total assets $1,083.0 Any future financ
Slide 68: $802M commissions receivable; trading at a significant discount
$802M Trading at a significant discount commissions $334M to our commissions receivable (1) enterprise value (2) receivable balance Cumulative tail revenue recognized ($, MM) MA LTV ($, MM) Reflects appropriate conservatism of LTV models LTV trend points to stabilizing churn $146 $153 $1,013 $125 $9
Slide 69: Building on this progress in 2023
Plan in place Achieved to drive significant Building on this sustainable, operational progress in 2023 profitable progress in 2022 growth and CF generation 2023 Copyright eHealth Insurance. • Confidential 69
Slide 70: Thank You
THANK Our mission is to expertly guide consumers through their health insurance and related options, when, where and how they prefer. YOU Our vision: Through strategic relationships with insurance carriers, eHealth will become the nation’s leading and most trusted source for consumer purchasing of h
Slide 71: Appendix
Appendix 2023 Copyright eHealth Insurance.
Slide 72: Net Income (Loss) to Adjusted EBITDA Reconciliation
Net Income (Loss) Attributable to Common Stockholders to Adjusted EBITDA Reconciliation 2023 Copyright eHealth Insurance. 72
Slide 73: Reconciliation of Non-GAAP Financial Measures to Guidance
Reconciliation of Non-GAAP Financial Measures to Guidance 2023 Copyright eHealth Insurance. 73
Slide 74: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets 2023 Copyright eHealth Insurance. 74