Here is what you’ll find in this week’s newsletter!

1. Important links 🔗 - the best articles we found this week about the Medicare Market along with links to Jared’s recent LinkedIn posts.

2. Deep Dive 📚 - Q2 2024 Medicare eBroker Financials Side-By-Side 💵

3. Compliance Chatter 📢 - New 2025 Medicare & You handbook, and more!

4. Sponsor Snapshot 🚀 - brought to you by CLUE

It’s only a 5 minute read, but it will make you 10x smarter.

DEEP DIVE 📚

Q2 2024 Medicare eBroker Financials Side-By-Side

This week, we will explore Q2 2024 financials for publicly traded Direct-to-Consumer distributors, also known as eBrokers.

The following companies’ Q2 2024 financial results will be compared below, side-by-side. (note: Q1 2024 results are here, and a section on “What are eBrokers?” can be found here.)

• GoHealth (“GOCO”)

• eHealth (“EHTH”)

• SelectQuote (“SLQT”)

• e-TeleQuote (“PRI “) - part of Primerica

These publicly traded eBrokers do have some unique characteristics worth noting.

GOCO recently announced they are acquiring e-TeleQuote, after Primerica’s announcement of plans to leave the senior health distribution market.

GOCO utilizes a model where they are not the agent of record, don’t receive agent commission, but instead get paid an up-front fee to generate warm leads to carrier partners. They refer to this model as Encompass.

SLQT has added a healthcare vertical in order to increase revenue per customer by cross selling Rx benefits. They now generate a significant amount of revenue from this vertical.

There are other large eBrokers that are part of publicly traded companies, but they do not report segment financials. Examples being:

•  Tranzact - part of Willis Towers Watson

•  AssuranceIQ - part of Prudential

•  HealthMarkets - part of UnitedHealth Group

Let’s dive into the most recent financial results…

Side-By-Side Results

To compare and contrast Q2 2024 results we are looking at the Income Statement, a few key Balance Sheet items, LTV metrics, and Sales metrics.

Some key observations:

• Each company recorded operating losses in Q2 2024.

• SLQT continues to lead the field in revenues, and acquisition/overhead ratios.

• EHTH leads Medicare Advantage LTVs at $927.

• GOCO added the most policies with over 150k.

YoY % Change

Let’s observe and discuss the year-over-year (“YoY”) % changes.

Revenues

• Revenue growth was led by SLQT (77% growth in through Select Rx vertical).

• GOCO, EHTH, e-Telequote all experienced a decline in revenue compared to Q2 2023

• GOCO Encompass revenues decreased significantly (Other Revenues)

Expenses

• GOCO significantly reduced expenses (at a similar rate that revenues dropped).

• Large increase is SLQT Cost of Revenue, directly related to growth in Healthcare Services division

• Acquisition ratio down 1% overall (driven by SLQT).

• Overhead ratio down 9% overall (driven by GOCO and SLQT).

Profitability

• Overall, 33% improvement despite all companies generating operating losses.

• SLQT profitability is driven by revenues from their Healthcare Services division.

• Others show changes in expenses that outpace revenues.

LTV Changes

• MA LTV increased slightly with the exception of GOCO.

• MS LTV is up significantly for EHTH and down significantly for SLQT.

• Overall PDP LTV is down YoY

Approved Policies

• Overall approved policies down in Q2 2024

• MA continues to be the significant majority of approved polices 

• SLQT grew SelectRx customers 68% YoY

Conclusion

Traditionally, Q2 and Q3 make up the least profitable portion of the year for these companies. The relationship between LTV and customer acquisition cost (CAC) continues to challenge eBrokers. In Q2 2024, SLQT shines as the only eBroker with revenues that outpaced expenses.

As we head into a wild AEP, eBrokers will play a pivotal role in helping a higher-than-normal number of consumers review coverage options.

It will be interesting to see if they’re able to do so more profitably than they’ve done recently.

If you’re ready, here are some ways we can help you:

• Newsletter Sponsorship opportunities: Promote your product or services to leaders in the Medicare space. Let’s discuss. (link)

• Market Research: Reports that help you wrap your arms around the Senior focused insurance markets. (link)

• Consulting: We can help you develop new insurance products for the Medicare market, appraise your books of business, and keep you compliant. Let’s discuss. (link)