No HealthCare.gov? No problem, private sites say

For some consumers, these privately run sites for buying health insurance are a helpful alternative to the government's HealthCare.gov site.

Almost two months into the troubled launch of the government's new online health insurance store, Jerry Zweiger wants you to know - he beat the line.

The 35-year-old collection-agency owner bought his coverage that met the Affordable Care Act's requirements in half an hour. It took him five minutes to enter his information and about 20 to compare plans, he said.

The trick: He bought it at eHealthInsurance.com, one of the privately run sites the government has approved to sell coverage under the Affordable Care Act, including granting permission to connect to HealthCare.gov itself - once it works right.

eHealthInsurance.com.(Photo: ehealthinsurance.com)

'I don't have anything against the government, but my preference was to deal with a business,'' said Zweiger, who said he paid about $380 a month for a plan with a much lower deductible than his old coverage. 'It's a little more than I pay now but less than I was quoted a few months ago. I was actually pleasantly surprised.''

Call it alternative medicine for sickly servers. Sites like eHeathInsurance.com, GetInsured.com and GoHealth.com - all owned by for-profit companies - can sell policies that comply with the ACA's individual mandate in the 36 states served by HealthCare.gov.

'This is an important separate channel, and the government always intended it to be,'' said Larry Levitt, senior vice president of the Kaiser Family Foundation, a non-partisan health care policy center. 'Their plan was always to push insurance through every channel.''

The differences?

Not all the technology is yet in place to let the sites process the ACA's tax subsidies for moderate-income insurance buyers, so people who want to claim the subsidies should probably wait before using private sites. Like Zweiger, most individuals who don't need subsidies can buy now. On the plus side, all of the top three private sites employ professional insurance agents to guide buyers, which they say gives them an edge over the 'navigators'' helping people use HealthCare.gov. The navigators get 20 to 30 hours of training, the Department of Health and Human Services says.

And the private sites work.

Far from the early fears that government-run health insurance exchanges would wipe out private competition, shares of eHealth Inc., the Silicon Valley company that owns eHealthInsurance.com, have quadrupled since since 2010. The stock is up 64% since the company announced its partnership with HealthCare.gov in August.

'The market for individual insurance that we serve effectively doubled overnight,'' eHealth CEO Gary Lauer said in an interview. That has analysts projecting that eHealth, which made $7.1 million in 2012 on sales of $155.5 million, could push profit to more than $12 million next year.

Lauer appealed to President Obama in an Oct. 29 letter, saying eHealth served 20 million visitors last year with no problems. 'While your staff is working hard to repair HealthCare.gov, with your support, we can be the stopgap that is needed,'' he wrote.

The selection of insurance is broader at some private sites than at HealthCare.gov, since the government-run site focuses on policies eligible for the law's subsidies, said Shane Cruz, senior vice president of Chicago-based GoHealth. Private sites also have plans, usually with higher deductibles and lower prices, that let buyers comply with the individual mandate but which aren't subsidized, he added.

'The point of the new law is to give consumers choice and give them a shopping experience,'' said Adam Klauber, an analyst at William Blair & Co. 'There's a pretty good two- to three-year ramp in their business, because everyone won't sign up in year one.''

Most people can figure out their options with little help, Lauer said. He said 80% of clients at eHealth never call the company's agents with questions.

Still, GetInsured CEO Chini Krishnan says consumers who want financial help are best off waiting to buy their coverage, even at the private sites, until the data connections that let private sites process subsidy applications are completed. They have until March 31 to comply with the mandate, and families of four earning up to $94,200 a year may qualify for subsidies, Levitt said.

About 28 million people are eligible for subsidies, according to Families USA, nearly half of them uninsured.

'With the government having all these performance issues, the question is whether private entities can play a bigger role, and I believe the answer is yes,'' Krishnan said.