Welcome to the eHealth Inc. conference call to discuss the company’s results for the second quarter of 2008. (Operator Instructions) I would now like to turn the call over to your host for today’s call, Kate Sidorovich, the company’s Director of Investor Relations.

Thank you all for joining us today either by phone or web cast for a discussion about eHealth Inc.’s second quarter 2008 financial results. On the call this afternoon we will have Gary Lauer, eHealth’s president and Chief Executive Officer and Stuart Huizinga, eHealth’s Chief Financial Officer. After management completes its remarks we will open the line for questions. As a reminder, today’s conference call is being recorded and web cast from the investor relations section of our web site. A replay of the call will be available from the investor relations section of our website following the call. We will make forward-looking statements on this call. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements made on this call will include statements regarding the impact of the economy; of search category leadership position secondary [ph] to competition; the future strength of our business model; favorable industry trends and their drivers; eApprovals potential for driving increased conversion rates; unemployment stimulating demand in the ISP market; brand visibility driving growth and expansion; our pursuit of radio and television opportunities; the role of private health insurance in health insurance reform; the presidential elections impact on our opportunities; a data center expansion project; 2008 capital expenditures; future marketing and advertising expenses; future interest income; our effective tax rate for 2008; and our projected rate for payment of cash taxes. Guidance for total revenue stock based compensation expense, GAAP net earnings per diluted share, cash flow from operations and GAAP income tax rate for the year ending December 31, 2008. Forward-looking statements are based on assumptions and assessments made by the company’s management, based on factors they believe to be appropriate. Forward-looking statements are subject to risks and uncertainties that could cause actual results, developments, and business decisions to differ materially from those contemplated by these statements. We will describe these and other risks and uncertainties in our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission, which you may access through the SEC website or from the investor relations section of our website. Forward-looking statements made on this call represent the company’s views as of today. You should not rely on these statements as representing our views in the future. We undertake no duty to update or revise any forward-looking statements made during this call, whether the result of new information, future events, or otherwise. We will be presenting certain financial measures on this call that will be considered non-GAAP under SEC regulation G. For a consideration of each non-GAAP financial measure to the most directly comparable GAAP financial measure, please refer to the information included in our press release and in our SEC filings which can be found on our corporate web site under the heading Investor Relations. At this point I will turn the call over to Gary Lauer.

Let me first go over the highlights of our second quarter results. Our revenue $27.5 million, grew 31% year-over-year and operating income grew 53% to $6.4 million resulting in record operating margins. Additionally we generated record operating cash flow of $8.6 million, representing 21% year-over-year growth. These results continue to demonstrate eHealth’s strength and sound business fundamentals. Our individual and family plans submitted application growth was 18% year-over-year, less than the 23% growth we achieved in the second quarter of 2007. By channel, direct continued to be the largest source of submitted applications at 40% up from 38% in the first quarter of 2008 and unchanged from the second quarter a year ago. The marketing partner channel contributed 32% and online advertising 28% of total submitted applications. Although we expected to generate higher application growth during the quarter, we are pleased with our channel mix, especially our direct and marketing partner channel contributions. Based on our second quarter application growth, we believe that while our underlying business model is sound and there are favorable loan term trends in our market, we have been somewhat impacted by the US economic environment. In the first quarter we saw the potential for some economic factors that could drive demand for our services. For example, an increase in unemployment rates could cause previously ensured employees and their dependents to lose employer based coverage, face expensive COBRA options and as a result consider the individual market, increasing our total market opportunity. Another example is the attractiveness of our solution for those who currently have coverage but are looking to save money by replacing it with a more affordable policy. At the same time, in a challenging economic environment consumer spending for any new product or service may slow. To the extent that consumers have postponed…

I will now discuss our financial results for the second quarter of 2008. As Gary mentioned, we believe the economy had some impact on our application growth during Q2. At the same time, we continued to generate solid year-over-year growth in revenue, income and cash flows. Our operating model remained highly scalable, allowing us to further enhance our operating margin both sequentially and as compared to the second quarter of 2007. Starting at the top line, our revenue for the second quarter was $27.5 million, an increase of 31% over the second quarter a year ago. Commissioned revenue was $24.8 million, an increase of 25% over Q2 2007. Our year-over-year commissioned revenue growth was mainly due to continued growth in our membership base. Our sponsorship, licensing, and other revenue was $2.7 million in the second quarter of 2008, a 116% increase over $1.3 million in the second quarter of 2007. The $2.7 million of sponsorship, licensing, and other revenue this quarter included approximately $470,000.00 in revenue relating to a 1x item. In the second quarter we had 132,600 new approved members. Our total estimated membership at the end of Q2 2008 was over 579,000 members, which represents 25% growth over estimated membership we reported at the end of the second quarter of 2007. Our individual and family major medical plan estimated membership, which generates the majority of our commissioned revenue, grew 27% compared to estimated membership we reported for the second quarter of 2007. I’d like to comment on number retention, but before I do I’d like to remind you that when we look at maturing we estimate our membership based on trailing historical data and so our view of retention is based on estimates that are backward looking. So currently we are looking back at the fourth quarter of…

(Operator Instructions) Your first question comes from Steven Halper -Thomas Weisel Partners

Gary, how do you know with certainty that it’s the economy which resulted in the slower application growth as opposed to some other factor, be it competitive or health plan activity, things like that?

We have looked at a lot of things, as you might imagine. We’ve looked at what we believe to be the momentum that the carriers are having in the marketplace. We’ve investigated a search and this search channel in the category of health insurance specifically, with our other channels as well, working with partners and so on. The conclusion we come to is that there seems to be some, the best conclusion we come to today is that there seems to be some impact from the economy. We have certainly done a very thorough examination of all of our internal metrics and so on and as you have heard us say, our conversions are either equivalent to or better than they’ve been in the past, so we don’t think there’s an execution issue from that standpoint. From a competitive standpoint we have not seen nor are we aware of any new significant competitor in the marketplace.

So have you factored in just a lower growth expectation for the remainder of the year for submitted application?

Yes. When it comes to our guidance we’ve looked at what we just did in the second quarter and used that as essentially a baseline, roughly, for our expectations for the second half of the year, plus or minus from that point. But in setting the range we also looked at the possibility that there may be further deterioration in the economy from here which could impact us potentially not only on the submitted application side, but we also factored in some potential should churns pick up from where we are right now.

So you have assumed some further deterioration.

We have within our range. In setting the low end of our range we certainly have.

You are sitting there with well over $5.00 per share in cash, Gary, has the board or will the board consider a share repurchase at these levels?

Yes, Steve we have taken a look at that, as you might expect at this level. What we’ve found is that at these levels doing a share repurchase is somewhat accretive. Not significantly so. We have also taken a look at what the impact would be two, three and four years out as well. We continue to look at that. We’ve had some board discussion and we’ll have some more of it.

Your next question comes from George Sutton of Craig-Hallum Capital.

I know you manage your numbers very closely and I’m curious when you were seeing the quarter evolving and you saw that the 18% growth in applications was lower than you expected, I’m curious that you stayed at that 34% marketing rate. Can you just help us with the logic there?

Well you could argue that we spent less than we would have liked to have spent. Remember our range is 35% to 39%.

That’s my point.

Yes, we looked at a number of different of venues, we certainly could have spent more money to bring in more applications, but they’d be outside of our boundaries in terms of what’s profitable and what’s acceptable and so on and we feel really strongly, especially in what could be a very challenging economic environment that we really adhere do the discipline and the processes that we’ve had in the company for some time and that’s exactly what we did. Now having said that, it’s important to note that we are doing television advertising right now as I am speaking and radio as well and if that continues to produce some of the results that we’ve seen you should expect that we’ll continue to do that as well and that’s new. That has a different kind of return for us than some of the more established channels as you might know. It’s harder to track and so on. At least on an isolated basis has a higher cost of acquisition, but one area that we’re looking at and I actually feel very, very strongly about right now. I should also probably make the point and we’ve never commented about our application growth or anything else on a monthly basis but as we look back and really examine the second quarter both as it was developing, but also after the second quarter finished, what we saw and what we experienced was out of the three months May was the softest month, interestingly.

Second question on the HAS platform, you began to market that with NFIB. I know you had some presentations with them. Can you just give us a sense of how, what kind of a reaction you were seeing from potential customers?

Yes, NFIB is very enthused about it, from the CO of NFIB through the rest of the organization that’s involved with it. We’ve had very good response to it. We’re not ready yet to start disclosing volumes and so on. I would note that we’re still evolving it, we’re still adding software, we’re still developing it and so on, but we remain very enthused and optimistic about what this can do in the marketplace and we’re getting very good feedback from other partners that we approach with this HAS platform proposition as well.

Lastly if I could just ask you a quick question on the COBRA side, as you begin to try to pursue that type of an opportunity what sort of expectations were you factoring into your guidance with respect to that market?

Not a lot frankly. As you look at the unemployment changes so far this year, we haven’t really seen anything, you know major, shifting to date, so we really haven’t factored in a lot from that.

Your next question comes from Jim Cleveland.

Thanks, Kevin Copeland in for Jim. I had a couple of questions on conversion rate. Could you give us a little more color just on, was there anything in particular driving that improvement and then on eApproval do you have an idea how many carriers you expect to be using that by the end of the year and then looking out what kind of impact can that have on conversion rates?

Let me take the second part of that, on eApproval, first. As we have said in the past we fully expect to be implementing eApproval with other carriers in new and additional markets. We are very pleased with the growth that we saw in the first 90 some odd days of the approval with Anthem in California and we think that in man ways this is kind of an important lighthouse for many other carriers who are taking a look at this and considering it. Whether it was the technology specifically, the marketing we did around it, or the combination of those things, we certainly saw a marked increase in the application growth volume there and we’re pleased about that and we think other carriers can experience similar thing with eApproval and we also believe that it’s a very compelling reason for consumers to come online and to buy from us.

On the closed ratio side, as we mentioned we did see a little bit more continuous stringency on the part of the carriers in terms of what they were converting for us, but the positive factors that we can point to are two-fold, one is that our customer center reps have been much more aggressive out in the marketplace following up with consumers to convert and have seen some good results there. Another factor is our mix of our submitted applications that you saw. Our direct proportion was about 40% this quarter, it was about 38% previously and those converts a little bit better than the other channels.

Your next question comes from Sameet Sinha of JMP Securities.

From the mid-point of revenue guidance you took that down by about 2.5%, EPS by about 12%, can you talk to that? Are you expecting all metrics [inaudible] application conversion rate, churn customer acquisition, could you elaborate on that?

No at the midpoint, as I mentioned, we were really looking at the levels that we saw in applications in the second quarter and kind of building the midpoint around that, so clearly not to duration there and as I mentioned it is our down side case that really included potential increases in churn.

I think Stuart made a good comment earlier that in the range of guidance we have given you we made some assumptions about some deterioration that if there is some it’s included in this guidance. We’re not planning on that at all. I want to make that point really clear. If it does occur, if the economy continues to deteriorate and it has further impact on our application volumes and/or on churn, which we don’t think we’re observing yet, we built that in. But, right now with what we see and what we’ve experienced, we think our challenge at the moment is simply on consumers who may be deferring the decision once more to purchase health insurance and we’ve got to be even more aggressive and smarter about our marketing to convince people how important this is, that in an economic environment like this that they have health insurance.

I think another comment on the EPS side is, one of the things that we’ve been facing is there are several issues on the non-operating side of the business. Interest income, as I suggested has been a lot lower than when we came into the year. We were already seeing headwinds there that have continued even further here in the second quarter and the other is our tax rate as well is higher than we had originally anticipated, so something we faced. We certainly saw it in the first quarter already, but thought we were going to be able to navigate around that as we went along, but those are definitely things that have impacted us.

Second question, Gary you spoke about TV and radio being new channels that you’re excited about, but you also mentioned that these have a higher cost of acquisition, so is that high cost of acquisition offset by getting larger volumes or applications a large number of members? Is that your initial experience?

Yes, if you isolate television, for example, just stand-alone, it’s got a higher cost of acquisition than our other channels. But if you assume that there is, what we look at as really spillage from television, that is it will influence people who go to search, influence people who recognize us on partner sites, certainly influence word of mouth and so on. The real objective here is to get all boats to rise. We did some TV advertising in the second quarter, our direct increased to 40%. I can’t tell you definitively that that is the only reason, but we think it’s had some influence there and we like that. Right now the message is so relevant about affordable health insurance and that we’re the store where you can buy it and so on and we really want to start to push that message very hard and that’s exactly what we’re doing.

Your next question comes from Willis Taylor.

Are you seeing health plans change their plans to roll out new IFP products or to market existing IFP plans?

To my knowledge I don’t think we’ve seen at this point a major change of plans, swapping in and out and so on, you know we’ve got a number of new carriers that have joined us. Anthem, WellPoint has certainly gotten somewhat more aggressive in all the marketplaces and so on. I know they’ve taken some pricing steps; that’s not unusual. We see carriers ebb and flow in the market competitively, but nothing in terms of any major change, but more and more interest in the individual market by these plans, there is no question about that. In fact if you look at the comments of several of them in their most recent financial results earnings calls, many of them have pointed at the individual market and made comments about it and a year ago they didn’t talk about the individual market.

You talked about getting smarter in how you market to that consumer who is hesitating to buy insurance. Could you talk about how you’re adapting your marketing message there?

Yes we think it’s very, very important that people understand that health insurance is much more affordable than they may perceive it to be. I’ve always contended that people think that for the most part health insurance is only available by businesses that purchase it for their employees, but that you and I could never buy it for ourselves, or afford it for ourselves, or our family members; when in fact for many, many people the opposite is true. We’re looking at a lot of our messaging right now. We’re going to be focusing much more on the fact that you can buy directly from eHealth, that plans are surprisingly affordable, that many plans are much more robust than people think; we’re going to be getting that message out in our TV advertising, some of the radio messaging we’re doing and a lot of other messaging that we’re working through right now as well, in addition to a lot of our PR work.

It sounded like you had a very strong licensing quarter again. Do you think in the current environment that health plans might change their desire to buy your licensed software?

It’s a good question. The other thing I point out in addition is that we had a good sponsorship quarter in the second quarter and what we think we may be observing is that as it’s a more competitive environment or the market perhaps is a little bit smaller because of the economy, the plans are looking for more ways to be able to market and sell their products and sponsorship on our side is one of them and licensing of the technology to be able to sell their products efficiently, directly is another. I can’t tell you for certain that that is why sponsorship is up and licensing is up, but anecdotally we hear that from the plans and we believe that’s probably one of the influences. The other thing I’d point out that’s important to note is that we’ve got a growing number of these licensees now who are rolling out our technology to the desktops and the laptops of their agents and brokers to get them online as well, which really extends our reach. I also wanted to point out that as I said in the script, we now have 27 carriers who are licensing our technology and I think in the past we told everybody the number, but it’s getting to be what we think is a significant number of carriers.

Your next question comes from Peter Costa of Finn Midwest Securities Corp.

Stuart can you tell us the effect of the average lower share price in the quarter on your APS? Then Gary, can you talk about the growing conversations about health connectors or medical marketplaces or what ever you want to call them exchanges under the various versions of reform, in particular the Light Bennett [ph] bill?

Yes let me talk about the connectors. As everyone may know in Massachusetts there was legislation passed that’s commonly referred to as the common law fact that requires, that mandates that every resident in Massachusetts have health insurance. There was really no individual market to speak of there, it’s what’s called a guaranteed issue community rated sate, which is the reason why many carriers wouldn’t participate. Part of the approach here is to have something called a connector which was essentially a technology or internet way for people to be able to find plans and so on. There’s a connector in Massachusetts. In our view the view of the Boston Globe and some of the carriers, it’s moderately effective at best. There are a few other states who have taken a look at it. We’ve had some discussions with them. I think the one to note is the idea that Baroque O'bama has talked about nationally of having some kind of a national connector or umbrella. It doesn’t seem to be any further detailed or thought through then kind of what I’ve just described to you in terms of how it would work but we see that if we ever got to something like that on a national scale, we see that as a potential huge opportunity for our company, because it is exactly what we do today and maybe in some of the other states as well. At the end of all of this, whether there are mandates or whatever kind of focus there is on getting more people covered, more and more it appears that both democrats and of course republicans feel that the private sector in these individual products need to be a very important part of that solution set and we think that’s good for us. \

Peter on your first question, the impact of the lower share price on our EPS, it’s immaterial to us. We had a small step up in the number of weighted shares this quarter, a little bit smaller than last quarter but really immaterial.

Your next question comes from William Morrison of Thinkpanmure LLC.

Stuart your sales and enrollment costs were down from last quarter but kind of consistent with the fourth quarter. I was just wondering if there was something one time last quarter or this quarter that brought that number down?

Yes, the main reason it was down this quarter was our production in terms of new approved members was lower than we had as our goals and so some of the compensation at our customer care center is linked to performance incentive plans; most of that comes from lower incentive payments this quarter.

Gary I heard you talk a little bit about continuous underwriting and kind of a case study of one of the original share companies to sign up with and doing some continuous underwriting. Last quarter I believe you said you had about a half dozen or a dozen additional companies looking or in the pipeline. I am curious how many or any that you added this quarter.

Yes we indicated last quarter we had several in the pipeline; that’s the case today. Although we didn’t add any more in the second quarter, as we add them we’ll be announcing them. One of the reasons we won’t announce them before we add them is that we want to keep the carriers who are participating feeling that they’re advantaged and we don’t want to upset the marketplace until we actually get there with the products.

I don’t know if you heard it Bill, what I did say was that the way we measured the growth of applications for Anthem in California over the 95-day period that we’ve had those plans in place was in excess of 30% and we’re very pleased with that.

If I just looked at, if I kind of grow a sense the non-sales and marketing expenses a little bit consistent with your history, to get to your guidance, even the high end of your EPS guidance, it looks like I’m going to have to bring sales and marketing as a percent of revenue up towards the high end of that range that you’ve talked about in the past, the 30 products in the 39%, is that generally accurate or where else would the costs be coming to get to your guidance in the back half?

That is more towards the higher end of the range that we put out. There are a few reasons for that. One is that the second half is actually seasonally higher than the first half of the year. We have higher volumes and the marketing expenses rise with that and so that’s pretty natural. We’ve built in an assumption of the overall cost of acquisition per member being a little bit higher than the average that we saw in the first half. Then as Gary mentioned earlier, we are looking to continue to spend on TV and radio and some other offline venues at a little bit higher pace in the second half then we did in the first half.

Your next question comes from Justin Post of Merrill Lynch. Matt Schindler – Merrill Lynch: Yes hi, this is Matt Schindler for Justin Post. Actually my question was answered a few questions ago.

Your last question is a follow up question from Steven Halper.

Gary when did you say that you started to see some deterioration in the submitted ap trends?

Well the month that surprised us was May. May was the weak month for us. We have tried to find a lot of ways to connect that. It’s certainly the month when there seemed to be an awful lot of media visibility about gas prices going over $4.00 per gallon nationally. Over Memorial Day weekend there as a tremendous amount of focus about that. Did that have some impact, maybe, probably. CNN at that time did a segment on what it costs to buy gas and food and it was about a fellow who decided to drop his health insurance, but keep his family covered, coincidentally; so there were those kinds of things, but it was certainly in that May time frame.

So did June pick up?

Well the only comment I’m going to make about that is that May was the softest of the three months.

Okay and do you want to say something about July?

Yes, but I won’t. I do want to make one other comment that’s somewhat related to this. We have seen some analysis that’s been done by some of these outside research firms that look at visitors to websites and things of that nature and we’ve actually seen some data that’s been published that shows that our visitor counts have gone negative year-over-year in the first and second quarter for example and I just want to make this comment one time. The accuracy of what’s been reported there and what people have picked up is far, far from the reality. In fact the growth that we’ve experienced in visitors in the first and second quarter year-over-year is orders of magnitude larger and different than what’s been reported by some of these research groups.

So where do you think their methodology is flawed?

Steve I don’t know. I really haven’t studied their methodology or how they’re going about it, but we’ve seen this in the past, but it was really pronounced in this last quarter. I actually had some people ask me about it and it just became apparent to me that this was becoming something that was probably important enough for me to address. I should also tell you that visitors are important to us, but it’s not what we drive our business with. What we drive our business with is working to find potential consumers who need and want health insurance and they’ve got a need that we can satisfy and that’s why we are so hawkish about how we spend money and where we spend money and so on. I will add that our visitor counts have grown and they’ve grown quite nicely.

I just want to thank everyone for your time and look forward to talking with many of you over this next quarter at different major conferences and so on and thanks again.