2 Companies Ride to the Rescue of Obamacare Exchanges

"I don't get no respect."

This line repeated frequently by the late comedian Rodney Dangerfield could serve as the motto for the health insurance exchanges required by the Patient Protection and Affordable Care Act, commonly known as Obamacare. Indeed, so many problems have been cited by critics and supporters alike that the exchanges have received very little respect. But that could be changing now that private sector companies are riding to the rescue.

Drugstore cowboys
Earlier this month, Walgreen (NYSE: WAG  ) announced its participation with the Blue Cross Blue Shield Association, or BCBSA, in helping promote awareness of Obamacare, including the health insurance exchanges. The two organizations teamed up to launch a website, LearnAboutReform.com, that educates consumers about the new exchanges and other ways that health reform impacts them. Walgreen is also offering informational brochures about Obamacare in most of its 8,000 drugstores in the U.S.

Last week, the nation's second-largest pharmacy chain joined the fray. CVS Caremark (NYSE: CVS  ) said that it plans to launch a companywide initiative to help customers better understand the exchanges. These efforts will include "retail events and brochure displays" at the company's 7,400-plus retail stores and 650 MinuteClinic locations. CVS will also make information online on its website.

A survey conducted by CVS Caremark recently highlighted the confusion over Obamacare. While 74% of respondents reported a general awareness of the health reform legislation, only 48% of those eligible to receive a federal subsidy knew that they were. Around 36% of survey respondents who were likely to participate in a health exchange indicated that they needed more help understanding the process.

It's about time
The Government Accountability Office, or GAO, reported in June that the federally operated Obamacare exchanges were way behind schedule. Scope for the exchanges was "still evolving," according to the GAO, making it impossible to determine if they could be fully operational by the scheduled deadline of Oct. 1.

Chances that Americans will be able to enroll online look better now, though. The nation's first and largest private health insurance exchange for individuals, eHealth (NASDAQ: EHTH  ) , announced yesterday that it has secured a contract with the federal government to support enrollment through its website eHealthInsurance.com.

For well over a year, eHealth aggressively lobbied the Obama administration to allow privately run exchanges to enroll individuals in the federally subsidized insurance plans. However, no deal happened until now. Why did it take so long? It's about time -- literally.

Those in charge of getting the exchanges up and running undoubtedly felt the pressure of the ticking clock. That Oct. 1 deadline was only 62 days away when news of the eHealth contract broke. The GAO report from June painted a picture of a fiasco in the making. Even though the Department of Health and Human Services, or HHS, "expressed its confidence" that the exchanges would be running by the deadline, few others appeared to have any confidence.

The bottom line
There's no doubt that the Obamacare deal is great news for eHealth. Its shares jumped 29% following the announcement. This is a company with 2012 revenue and earnings well below levels from two years ago. Riding to the rescue of Obamacare amounts to a joyride for eHealth.

CVS Caremark certainly didn't get that kind of bounce from its promotional efforts for Obamacare. However, assuming that lots of previously uninsured Americans sign up for insurance through the exchanges, CVS -- along with Walgreen and other pharmacies -- should see higher revenue and profits as more prescriptions are filled.

The bottom line for the Obamacare exchanges, though, will depend on whether enough uninsured individuals actually use them. As Rodney Dangerfield knew from experience, respect doesn't come easily.

While eHealth and CVS should profit from Obamacare, how will the health reform law affect your bottom line? The Motley Fool's new free report, "Everything You Need to Know About Obamacare," lets you know how your health insurance, your taxes, and your portfolio could be affected. Click here to read more. 


Read/Post Comments (21) | Recommend This Article (4)

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  • Report this Comment On August 01, 2013, at 2:41 PM, slanciano wrote:

    Any entity associated with Obozocare implementation should be shutdown !!

  • Report this Comment On August 01, 2013, at 2:45 PM, joeddins wrote:

    The people that need coverage are those with chronic conditions. They will not "get well". They make up 20% of the population, and use 80% of the money spent on healthcare.

    I wonder how much care the healthy people who do not want to enroll, will purchase?

  • Report this Comment On August 01, 2013, at 3:20 PM, doco177 wrote:

    Google.... "Obamacare Flowchart" at Intellectual Takeout .... to see a visual representation of the corrupt mess this really is

    1. Millions are losing the insurance Obama promised they could keep. Because ObamaCare forces employers to offer expensive Cadillac plans but also offers the option of paying a fine for not providing health insurance that can be cheaper than providing it, between seven and twenty million Americans are likely to lose their health insurance coverage according to the Congressional Budget Office. The original estimate was closer to four million.

    2. The cost of healthcare premiums is about to further skyrocket. Premium costs have already exploded, but that is a slow-motion explosion. In the near future, we could see costs double or worse. Naturally, these costs will hit an already burdened middle class hardest.

    3. Lost jobs. Lost jobs.

    The Federal Reserve's March beige book on economic activity noted that businesses "cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff."

    Consulting firm Adecco found that half of the small businesses it surveyed in January either plan to cut their workforce, not hire new workers, or shift to part-time or temporary help because of ObamaCare.

    4. Doctor shortages that will mean rationing: The healthcare industry is already a bureaucratic quagmire. ObamaCare is about to add steroids. As the profession becomes tyrannized by government, the talented people currently practicing medicine plan to get out sooner than expected. Who knows how many will choose not to get in. Doctor shortages are what lead to the nightmare known as rationed care.

    5. Somewhere around $800 billion in tax increases will hit America's middle class. This added burden will not only further oppress a middle class already reeling from a drop in wages over the last few years, but could damage the overall economy.

    6. Inflation, the cruelest tax on the poor. When businesses get socked with added costs brought about by higher taxes and burdensome government mandates, they pass those cost along to the consumer in the form of higher prices.

    7. Added bureaucracy. Even those Obama lapdogs over at the Washington Post's Wonk Blog are admitting that applying for health care is about to get more burdensome than the byzantine paperwork involved in buying a home.

    8. To cut costs or to avoid having to provide insurance, workers on the economic margins are already losing hours, which means a lower paycheck. There are a million sad stories in ObamaVille; here are just a few of them.

    9. ObamaCare is projected to add $6.2 TRILLION to a deficit the GAO has already declared "unsustainable." That's "trillion" with a "t".

    10. More taxes than currently estimated are likely to hit because of situations like this one.

    11.Muslims, Amish, Native Americans, Congress are exempt from mandate and penalties under Obamacare that the rest of us have to pay.

    The govt becoming more involved in health care is the reason the costs have increased. So Govt creates a crisis, then provides a solution that comes at the expense of liberty and freedom, costs trillions, and by most accounts won't solve the problem but in fact make it far worse.Corruption, incompetence, disregard of the Constitution, and lying are integral to the way that this country is being run.

    Three years ago, Obama, Democrats, and his media lied to us about cutting the cost of health care, being able to keep our insurance, and not taxing the middle class. Today, those lies and what ObamaCare is and will do to the working and middle class are the biggest untold story in America.

    Boycott and Repeal Obamacare...If only a mere 20% of the over 300 million population of the USA boycott Obamacare the government would be overwhelmed to even think they could penalize or mandate every citizen that refused to participate in the most corrupt and unlawful ways which it was passed that circumvented the constitution of the United States.

  • Report this Comment On August 01, 2013, at 3:24 PM, Teapartysucks wrote:

    The United States of America is the ONLY industrialized nation in the world to use a "FOR PROFIT" system for Health care - AND THE COSTS VS OUTCOMES SHOW HOW STUPID THAT IS!

  • Report this Comment On August 01, 2013, at 3:41 PM, frankv826 wrote:

    One of the big arguments is the old and the sick are the reasons for the high cost of healthcare . Which is vary true . You may be healthy today , but down the road you may be the same person your complaining about . The insurance program works best when everyone is on board , It doesn't matter if it's car insurance or health insurance ! United we all pay less divided we all pay much more .

  • Report this Comment On August 01, 2013, at 3:46 PM, Saintmark01 wrote:

    Strongly suggest the doubters take a hard look at the realities of healthcare. Costs are slowing dramatically - and will continue to do so for the next several years. Companies like ehth, wag, and cvs are positioning theselves as key players in this healthcare sea change.

    You can complain - or you can profit. The choice is yours, but it's hypocritical to do both.

  • Report this Comment On August 01, 2013, at 3:47 PM, dogjudge wrote:

    Yep, it's too bad that Obama used the Republican idea that they now hate.

    Of course it was another Republican who started the health care program we have in this country now. Nixon.

    One of my first jobs was for a division of Phillip Morris. They paid 100% of medical care. 100% of drugs. 100% of eye care, including contacts. And 100% of dental care. Of course, they could afford it.

    There is not ONE company in the US that offers that type of coverage any more.

    So please tell me again how great the current plans are better than ACA. Your current plan isn't even as good as it was 10 years ago.

    "Please sir, may I have another?" Motto of the Republicans following their leaders.

  • Report this Comment On August 01, 2013, at 4:01 PM, Hjin wrote:

    I can tell you right now, the vast majority of Walgreens store managers hate Obamacare.

  • Report this Comment On August 01, 2013, at 4:10 PM, thecarnivore123 wrote:

    These companies didn't ride to the rescue ... they were hired by the government ... using YOUR tax dollars. I wouldn't even consider Walgreens, CVS, or eHealth to be in the health care industry at all, in fact. Is the Motley Fool also getting paid by the government to try to prop up this sinking ship?

  • Report this Comment On August 01, 2013, at 4:33 PM, heartbreaker101 wrote:

    This is all so crazy. You might as well tell everyone that they should see a dentist twice a year. Aint gonna happen. And the government is spending soo much money to educate people on ACA. Should put the money to better use.

  • Report this Comment On August 01, 2013, at 6:40 PM, EdHamox wrote:

    In 1887

    Alexander Tyler, a Scottish history professor at

    the University of Edinburgh, had this to say about

    the fall of the Athenian Republic some 2,000 years

    prior: "A democracy is always temporary in nature; it simply cannot exist as a permanent form of

    government. A democracy will continue to exist up

    until the time that voters discover that they can

    vote themselves generous gifts from the public

    treasury. From that moment on, the majority always

    votes for the candidates who promise the most benefits

    from the public treasury, with the result that every

    democracy will finally collapse over loose fiscal

    policy, (which is) always followed by

    a dictatorship."

    Is this where we are headed???

  • Report this Comment On August 01, 2013, at 7:09 PM, j1rose wrote:

    The exchange rates seem to be a secret still as in NY website - there is no libnk to the rates even though thy have been approved ... Same with California .

    Seems to me a $ 95 penalty is not going to encourage anyone to sign up under 30 - 35 years old if its going to cost $3 -5, 000 a year with large deductibles.

  • Report this Comment On August 01, 2013, at 7:27 PM, cosmos66 wrote:

    walgreens, cvs, and bcbs, I hope that the govt compensated you well with our tax dollars. I will make it a point to never do business with you again and I hope many others will do the same.

  • Report this Comment On August 01, 2013, at 9:25 PM, Orlandca wrote:

    This is the very same paper that Hillary was caught doing "Behind Closed Doors" trying to do, If Harvard taught the R.I.C.O. Act Obama payed hooky,

    This is a fraud !

  • Report this Comment On August 01, 2013, at 9:43 PM, justryn wrote:

    Here's a Health Care Plan, Make Health care available to everyone, MAKE EVERYONE pay for THEIR HEALTH CARE with everyone paying for their own everyone will demand lower prices. Oh and here's the catch if you don't have health care and get sick or are in an accident you pay cash or the Medical Care facility can refuse service. Now how many are willing to gamble with the stakes that high. Keep Medicaid in place for the truly impoverished. The rest should consider loosing the cell phone and stop smoking and eating at Burger King.

  • Report this Comment On August 01, 2013, at 9:46 PM, Jarhead44 wrote:

    Boycott CVS and Wallgreens and let's throw Obamacare back into the waste basket where it belongs.

  • Report this Comment On August 02, 2013, at 7:38 AM, yardomd wrote:

    Costco has the best prices for medicines. CVS the highest. Mobile device marketing will find value and quality in healthcare. Facebook may monetize healthcare marketing and become bigger than Microsoft.

  • Report this Comment On August 02, 2013, at 7:54 AM, yardomd wrote:

    Demand and supply rule the stock market. Nobody can tell stock market what to do. Control your own health. Eat less, live longer. Cut your spending, buy quality stocks, watch them grow, sit back and relax.

  • Report this Comment On August 02, 2013, at 8:07 AM, yardomd wrote:

    Do not sell a stock "To take money off the table" just because it has tripled. That is idiotic. It would be like selling a prime farm land or killing a goose that lays the golden eggs. If you need money, take the dividends, not the principal capital. Stock market is not a crap shoot. It is the best business in America, if you are not crazy or stupid.

  • Report this Comment On August 03, 2013, at 1:15 PM, HealthSystemTyro wrote:

    I enjoyed everyone's comments on here more than I enjoyed the article. Thanks for your input!

  • Report this Comment On August 21, 2013, at 1:57 AM, CVSdementia wrote:

    As a former employee of the Fortune 13 company, 214,000 employees and their dependents will be dumped into the Obamacare-less exchanges for 2014. CVS has really stepped up to the plate, haven't they? No AETNA, no United Health Care, no Blue Cross Blue Shield...nothing. The CEO of CVS has decided, just as the conservative pundits predicted large companies would do (not just the mom and pop pizza joints), it is less much less expense for CVS to pay the $2,000 fine than to sponsor an employee's medical plan to the tune of $15,000/employee. And what does one of these Obama exchanges look like? Not even a sneak preview, and we are less than 45 days to D Day. Hey, @ teapartysucks, go roll and blow another fat one...

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