Good morning everyone and welcome to eHealth Inc.'s Conference Call to discuss the Company's Second Quarter Financial -- excuse me, Second Quarter 2024 Financial Results. At this time, all participants have been placed in a listen-only mode. The floor will be opened for your questions following the prepared remarks. I will now turn the floor over to Eli Newbrun-Mintz, Senior Investor Relations Manager. Please go ahead.

Good morning and thank you all for joining us today. On the call today, Fran Soistman, eHealth's Chief Executive Officer and John Stelben, Chief Financial Officer, will discuss our second quarter 2024 financial results. Following these prepared remarks, we will open up the line for a Q&A session with industry analysts. As a reminder, this call is being recorded and webcast from the Investor Relations section of our website. A replay of the call will be available on our website later today. Today's press release, our historical financial news releases and our filings with the SEC are also available on our Investor Relations site. We will be making forward-looking statements on this call about certain matters that are based upon management's current beliefs and expectations relating to future events impacting the company and our future financial or operating performance. Forward-looking statements on this call represent eHealth's views as of today and actual results could differ materially. We undertake no obligation to publicly address or update any forward-looking statements except as required by law. The forward-looking statements we will be making during this call are subject to a number of uncertainties and risks, including but not limited to, those described in today's press release and in our most recent annual report on Form 10-K and our subsequent filings with the SEC. We will also be discussing certain non-GAAP financial measures on this call. Management's definitions of these non-GAAP measures and reconciliations to the most directly comparable GAAP financial measures are included in today's press release. With that, I'll turn the call over to Fran Zisman.

Thank you, Eli. Good morning and thank you to everyone joining us today. Before we dive deeper into the discussion of the second quarter, I wanted to address the news we announced last night. I will be retiring from my role as CEO by or before the second quarter of 2025 once a successor is on board. As you may recall, I came out of retirement three years ago to take on the CEO role in November of 2021. It has been a privilege to lead this company during this time. Since then, I am proud of the leadership team we've assembled during my tenure and the progress we have made transforming eHealth by creating a healthy and vibrant culture, evolving carrier relationships, enhancing focus on member retention and deploying new technologies to name a few. Over the past two years, we've achieved tremendous progress across key profitability metrics, including GAAP net income, adjusted EBITDA and operating cash flow. With the business on solid footing and advancing steadily towards our three-year growth and profitability goals, now is the right time to announce my intention to retire as CEO in 2025. There are a few reasons that I made the decision to inform the Board of my plans to retire. First, it was important for me to disclose this ahead of the start of the annual enrollment period on October 15. I will continue to oversee the AEP and OEP as I have always done in the past and intend to stay close to our consumers and carrier partners during this time. Importantly, I'm focused on continuing our work to position the business to achieve our long-term financial and operating goals, including enhancing eHealth's capital structure. Further, making this decision now provides the Board the time it needs to cast a…

Thank you, Fran. Second quarter results were driven by strong execution in our Medicare segment and continued operating cost discipline across our organization. Based on our financial performance year-to-date, we are increasing our 2024 annual guidance ranges. Across our agency choice and carrier dedicated platforms, eHealth drove a 16% increase in Medicare submissions year-over-year. Some of that volume is reflected in our approved membership metrics, while enrollments transacted under fee-based arrangements within Amplify, our carrier dedicated platform, flow through our non-commission or other revenue which grew 37% year-over-year. I will elaborate on this in just a moment. Total second quarter revenue was $65.9 million, a decline of 1% year-over-year. Tail revenue across all products was $11.5 million which compares to $18.7 million in Q2 of last year. Excluding tail, total revenue for the quarter increased 13% year-over-year. Our Medicare segment generated $59.2 million in revenue, an increase of 7% compared to the second quarter of 2023. During the quarter, we recognized $10.7 million in positive net adjustment or tail revenue from our Medicare segment compared to $13.4 million a year ago. Excluding tail, Medicare revenue grew 16% year-over-year. Second quarter Medicare segment profit of $1.3 million improved from segment loss of $2.1 million last year as we scale Medicare revenue and improve member economics. Excluding the impact of tail revenue, Medicare segment loss improved by $6.1 million year-over-year. Tuning to Medicare enrollment. Last year, we launched our carrier dedicated fulfillment platform Amplify. During the second quarter, we started to shift some of the Amplify arrangements that were structured as broker of record, LTV-based enrollments, to fee-based BPO arrangements. With BPO arrangements, eHealth does not become a broker of record and instead gets paid a combination of base compensation to cover call center costs and conversion success fees upfront which improved…

Gentlemen, thank you for your remarks. [Operator Instructions] We'll hear first from George Sutton at Craig-Hallum.

Fran and John, congrats on your moves. They say AEP seasons are like dog years. So I think we've all proven that. So, I wanted to talk, Fran, if we could, about the political spend within the context of how you're going to go to market this AEP. Obviously, there typically will be a bit of a crowding out of marketing dollars. How do you shift your budgets to try to deal with that? And have you gotten any feedback from your letters to CMS to really encourage a longer shopping season?

Thank you. Let me start with the first question regarding the national election. We've experienced this before, even went back and looked at how this played out four years ago. And because of our omnichannel capabilities, we use multiple channels for each beneficiary. EV is problematic in those first three weeks of AEP because of the national election and then it opens up. So, we'll shift more of our dollars to direct mail and SEO and SEM and paid search and other channels that generally aren't as affected by the national election as TV is. And I'm -- as far as CMS's reaction; I've had two communications with CMS on this topic. They've not -- they've acknowledged what I outlined as sort of the proverbial perfect storm with more shopping likely to occur this year and the national election and Thanksgiving coming late in November and AEP ending on a Saturday. I mean it's all those factors, I think, are going to make it a little more challenging for beneficiaries to get through. So, adding five or six days on the back end, just sort of makes sense. We know we can't go too much beyond that because carriers need to get ID cards out in advance of January 1. So, there's a natural cut-off in order to avoid unintended consequences. They've listened, they've acknowledged, unclear whether they're going to act. So, I will continue to encourage that and there'll be a byline coming out in the next few weeks from me encouraging action sooner rather than later.

Good luck with that. And I'm just curious, John, you had mentioned you reserve the right to reinvest some upside that you could see from this AEP. Is that a -- are you effectively saying that we see a lot of shopping that will occur and we want to be prepared with potentially more marketing dollars to take advantage of that. Is that effectively what you're saying?

George, yes, I would say that plus depending on how this AEP unfolds, you could potentially see acquisition costs rise due to some of the factors that you mentioned in your first question of Fran. So we're going to be -- as a company, we're going to be nimble as we see opportunities where we can lean into channels, we will. And we look at this and Michelle can expand on this but we really look at how we spend the money in the channels based on LTV to tax or POAs [ph]. And so it's possible we could see profitable growth coming up in channels with potentially a slightly lower but still very positive LTV to cash. So it's -- fourth quarter is -- the earnings in fourth quarter are multiples of what our annual earnings are. And so we're just going to be nimble and be prepared and -- we're trying to give guidance out there that provides for a range of opportunity, profitable growth opportunity.

Understand. Okay. John, it's been good to work with you.

[Operator Instructions] Next, we'll hear from George Hill with Deutsche Bank.

Fran, I just wanted to wish you well. I appreciate you guys taking the question and I'll confess during a blistering earnings morning, I missed a good portion of the prepared commentary. I just was wondering if you guys would be willing to comment on kind of the expected churn that you guys think you're going to see for the 2025 AEP, like all the Medicare plans are clearly talking about a lot of disruption in the market with a lot of the plans talking about high single digit, maybe even low double-digit member attrition. And just kind of like thinking about how do you -- and then my follow-up on that would be like how do you guys think about gaining share and looks to be a volatile market coming up in October?

Thanks for the good wishes and thanks for the question. We have made retention one of our key strategic priorities and work was underway 18 months ago to start that journey. We're making good progress. The introduction of a loyalty program. We've got special initiatives around the annual notice of change in being proactive and helping beneficiaries navigate that. We have new tools that I think are going to be very helpful to address what will likely be a large demand for shopping this year. So protecting the book is critically important. No one is confused about that here at eHealth. So proactivity is the key. We do think there's an opportunity to grow share. A combination of capacity lowering in our industry and we think we're going to see significantly more shopping this year. There will be market exits which are typically disruptive but opportunistic for us to make sure that beneficiaries have a soft landing with an alternative plan. So we're all over it. I don't want to understate the importance, you're absolutely right, retention is critical. But I also feel confident in the strategies and the tools that we develop to prepare for this event.

[Operator Instructions] It appears we have no signals from our phone audience. I am pleased to turn the floor back to Mr. Soistman for any additional or closing remarks.

Thank you, operator. Thank you, again, everyone. I know it's a busy morning for you all. Appreciate your participation. I appreciate the continued interest in eHealth. You've heard today, evidence of strong momentum that started multiple quarters ago and continues to this day. The energy level and the intensity of our focus for a successful AEP is great; and I remain confident that we'll be prepared for the opportunities that lie ahead. So, thank you once again.

Ladies and gentlemen, this does conclude today's teleconference and we thank you all for your participation. You may now disconnect your lines.