eHealth, a private online health insurance exchange in the US, has agreed to acquire Health, Wealth and Life Advisors, more commonly known as GoMedigap, in a cash and stock deal worth $20m.
Under the terms of the deal, GoMedigap membership interest holders are entitled to earn up to additional $30m of cash and eHealth common stock, pending achieving certain milestones in 2018 and 2019.
Established in 2013, GoMedigap operates as a technology-enabled provider of medicare supplement enrolment services in the US. At present, GoMedigap serves more than 26,000 existing medicare supplement customers.
Commenting on the deal, eHealth CEO Scott Flanders said: “The transaction fits well into our strategy of rapidly expanding eHealth’s presence in the Medicare Supplement market to complement our successful and growing Medicare Advantage and Medicare Part D prescription drug plan business.
“The Medicare Supplement market is attractive from a demographic perspective with over 13 million individuals currently enrolled in Medicare Supplement plans. We believe that having a more balanced and complete focus on both Medicare Advantage and Medicare Supplement products significantly broadens our addressable market and allows us to better serve the diverse health insurance needs of our customers.
“The goal is to leverage our collective strengths and capabilities to deliver market leading decision support tools and enrolment services with a broad selection of Medicare plans and carriers to meet every consumer’s need.”
eHealth plans to integrate the GoMedigap’s core technology and processes into the combined entity. GoMedigap co-CEOs Richard Cantu and Kevin Walbrick will join the eHealth executive team. They will continue to manage GoMedigap’s Medicare Supplement business in Texas.
eHealth will fund the transaction using existing cash balances.