Gary Lauer, chief executive officer of eHealth, stated, "Our second quarter financial results illustrate the continued leverage and strength of our business model. During the second quarter, significant progress was made in many important areas of our growing business. We added several new carriers and products to our offerings, including an important addition in the state of Massachusetts, broadened the utilization of eApproval, launched our public eCommerce onDemand (eOD) business in Utah and continued to expand the presence of our commercial eOD platform."

Second Quarter Results

Revenue -- Revenue totaled $33.4 million for the second quarter of 2009, a 22% increase compared to revenue of $27.5 million for the second quarter of 2008.

Submitted Applications -- Submitted applications for individual and family products increased 17% in the second quarter of 2009 to 121,100 applications, compared to 103,800 applications in the second quarter of 2008.

Membership -- Estimated membership at June 30, 2009 totaled 707,100 members, a 22% increase over estimated membership of 579,600 at June 30, 2008.

Operating Income -- Operating income increased 7% to $6.9 million for the second quarter of 2009, compared to operating income of $6.4 million for the second quarter of 2008. Operating margins were 21% and 23% in the second quarters of 2009 and 2008, respectively. Non-GAAP operating income increased 9% to $8.1 million for the second quarter of 2009, compared to non-GAAP operating income of $7.4 million for the second quarter of 2008. Non-GAAP operating margins were 24% and 27% in the second quarters of 2009 and 2008, respectively. Non-GAAP operating income and margins in the second quarters of 2009 and 2008 exclude $1.2 million and $1.0 million of stock-based compensation expense, respectively.

Pre-tax Income -- Pre-tax income for the second quarter of 2009 was $7.1 million, a 3% decrease compared to pre-tax income of $7.3 million for the second quarter of 2008. Pre-tax income was unfavorably impacted in the second quarter of 2009 by a decrease in interest income of $0.7 million compared to the second quarter of 2008.

Net Income -- Net income for the second quarter of 2009 was $4.0 million, or $0.16 per diluted share. Net income for the second quarter of 2008 was $4.2 million, or $0.16 per diluted share. Non-GAAP net income for the second quarter of 2009 was $4.8 million, or $0.19 per diluted share, compared to non-GAAP net income for the second quarter of 2008 of $4.9 million, or $0.19 per diluted share. Non-GAAP net income and non-GAAP net income per diluted share in the second quarter of 2009 exclude $1.2 million of stock-based compensation expense, adjusted by $0.4 million for estimated net income tax benefit related to stock-based compensation expense. Non-GAAP net income and non-GAAP net income per diluted share in the second quarter of 2008 exclude $1.0 million of stock-based compensation expense, adjusted by $0.3 million for estimated income tax benefit related to stock-based compensation expense.

Cash Flow and Cash Balance -- Cash flow from operations for the second quarter of 2009 was $8.3 million, compared to $8.6 million for the second quarter of 2008, representing a decrease of 4%.

The second quarter 2008 cash flow statement includes a $3.1 million change in deferred taxes, primarily from the utilization of net operating loss carryforwards, all of which benefited operating cash flow. The second quarter 2009 cash flow statement includes a $3.0 million cash flow benefit from taxes, of which approximately $1.5 million of tax benefit, primarily from the utilization of net operating loss carryforwards, is included in cash flow from operations and $1.5 million of net operating loss carryforwards, from the utilization of excess tax benefits related to share-based payments, is included in cash flow from financing activities.

Cash, cash equivalents and short-term marketable securities as of June 30, 2009 totaled $159.8 million, compared to $150.6 million as of December 31, 2008.

During the fourth quarter of 2008, eHealth's board of directors authorized a stock repurchase program of up to $30 million, or ten percent of eHealth's outstanding common stock, whichever is less. Repurchases pursuant to the program began in December 2008. As of June 30, 2009, approximately 412,500 shares of common stock have been repurchased in connection with the stock repurchase program at an average price of $12.69 per share including commissions, for a total cost of $5.2 million, of which approximately 361,800 shares were repurchased during the six months ended June 30, 2009 for a total cost of $4.6 million.

Year-to-Date Results

Revenue -- Revenue totaled $65.4 million for the six months ended June 30, 2009, a 22% increase compared to revenue of $53.8 million for the six months ended June 30, 2008.

Operating Income -- Operating income increased 12% to $12.5 million for the six months ended June 30, 2009, compared to operating income of $11.1 million for the six months ended June 30, 2008. Operating margins were 19% and 21% in the six months ended June 30, 2009 and 2008, respectively.

Pre-tax Income -- Pre-tax income for the six months ended June 30, 2009 was $13.1 million, a 1% decrease compared to pre-tax income of $13.3 million for the six months ended June 30, 2008. Pre-tax income was unfavorably impacted in the six months ended June 30, 2009 by a decrease in interest income of $1.5 million compared to the six months ended June 30, 2008.

Net Income -- Net income for the six months ended June 30, 2009 was $7.1 million, or $0.28 per diluted share, compared to net income for the six months ended June 30, 2008 of $7.5 million, or $0.29 per diluted share.

Cash Flow -- Cash flow from operations for the six months ended June 30, 2009 was $13.0 million, compared to $14.5 million for the six months ended June 30, 2008, representing a decrease of 10%.

2009 Guidance

eHealth is reiterating the following guidance for the full year ending December 31, 2009 based on information currently available:

 --  Total revenue is expected to be in the range of $131 million to $136     million      --  Stock-based compensation expense is expected to be in the range of $5     million to $6 million      --  GAAP income tax rate expected to be in the range of 43% to 45%      --  GAAP net income per diluted share is expected to be in the range of     $0.51 to $0.61 per share      

Webcast and Conference Call Information

A Webcast and conference call will be held today, Tuesday, July 28, 2009 at 5:00 p.m. EDT / 2:00 p.m. PDT. The Webcast will be available live on the Investor Relations section on eHealth's website at http://ir.ehealthinsurance.com. Individuals interested in listening to the conference call may do so by dialing 866-730-5762 for domestic callers and 857-350-1586 for international callers. The participant passcode is #42217302. A telephone replay will be available two hours following the conclusion of the call for a period of 30 days and can be accessed by dialing 888-286-8010 for domestic callers and 617-801-6888 for international callers. The call ID for the replay is #35408865. The live and archived webcast of the call will also be available on eHealth's website at http://www.ehealthinsurance.com under the Investor Relations section.

About eHealth, Inc.

eHealth, Inc. is the parent company of eHealthInsurance, the leading online source of health insurance for individuals, families and small businesses. eHealthInsurance presents complex health insurance information in an objective, user-friendly format, enabling the research, analysis, comparison and purchase of health insurance products that best meet consumers' needs. eHealth and eHealthInsurance are registered trademarks of eHealthInsurance Services, Inc.

eHealth, Inc. was founded in 1997 and its technology was responsible for the nation's first Internet-based sale of a health insurance policy. eHealth is headquartered in Mountain View, California. Additional information can be found on eHealth's website, http://www.ehealthinsurance.com.

Forward-Looking Statements

This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. These include statements regarding eHealth's guidance for total revenue, stock-based compensation expense, GAAP income tax rate, and GAAP net income per diluted share for the year ending December 31, 2009. These forward-looking statements are inherently subject to various risks and uncertainties that could cause actual results to differ materially from the statements made, including risks associated with changes and developments in the structure of the health insurance system in the United States and healthcare system reform, eHealth's rate of growth, changes in the economy, weak economic conditions, consumer awareness of the availability and accessibility of affordable health insurance, changes in member conversion rates and factors affecting conversion, eHealth's ability to continue to increase its membership base and retain its members, eHealth's ability to maintain or expand its relationships with health insurance carriers and marketing partners, negative publicity experienced by eHealth's carrier partners, changes in products offered on eHealth's ecommerce platform, changes in commission payments or carrier underwriting practices, maintaining and enhancing eHealth's brand identity and the effectiveness of eHealth's marketing and public relations efforts, system failures, capacity constraints or data loss, continued acceptance of the Internet as a medium for the purchase and sale of health insurance, dependence upon Internet search engines, reliance on marketing partners, the pursuit of new strategies and opportunities in the health insurance market, timing of receipt and accuracy of commission reports and related impact on estimating membership, payment practices of health insurance carriers, competition, eHealth's operations in China, success in the sale of sponsorship advertising and the licensing of the use of eHealth's ecommerce platform, success of the health savings account (HSA) platform, protection of intellectual property and intellectual property rights claims, legal liability, regulatory penalties and negative publicity, ability to attract and retain qualified personnel, management of future growth, seasonality, impact of future acquisitions, implementation of internal enterprise systems and maintenance of proper and effective internal controls, impact of employee stock-based compensation expense and provisions for income taxes, changes in laws and regulations, compliance with insurance and other laws and regulations, exposure to online commerce security risks, and the performance, reliability and availability of eHealth's ecommerce platform and underlying network infrastructure. Other factors that could cause operating, financial and other results to differ are described in eHealth's most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K filed with the Securities and Exchange Commission and available on the investor relations page of eHealth's website at http://www.ehealthinsurance.com and on the Securities and Exchange Commission's website at www.sec.gov. eHealth does not undertake any obligation to update any forward-looking statement to conform the statement to actual results or changes in expectations.

Non-GAAP Financial Information

This press release includes financial measures that are not in accordance with generally accepted accounting principles in the United States ("GAAP"). To supplement eHealth's condensed consolidated financial statements presented in accordance with GAAP, eHealth presents investors with certain non-GAAP financial measures, including non-GAAP operating income, non-GAAP operating margins, non-GAAP pre-tax income, non-GAAP net income and non-GAAP net income per diluted share.

 --  Non-GAAP operating income consists of GAAP operating income excluding     the effects of expensing stock-based compensation related to stock options,     restricted stock and restricted stock units in accordance with SFAS 123(R)     beginning in 2006 and amortization of deferred stock-based compensation     expense in accordance with APB 25 for grants made prior to 2006.      --  Non-GAAP operating margins are calculated by dividing non-GAAP     operating income by GAAP total revenue.      --  Non-GAAP net income consists of GAAP net income excluding the effects     of expensing stock-based compensation adjusted for estimated income tax     benefit related to stock-based compensation expense as well as additional     tax expense recorded during the period in accordance with SFAS 123(R).      --  Non-GAAP net income per diluted share is calculated by dividing non-     GAAP net income by GAAP weighted average diluted shares outstanding.      

eHealth believes that the presentation of these non-GAAP financial measures provide important supplemental information to management and investors regarding financial and business trends relating to the company's financial condition and results of operations. Management believes that the use of these non-GAAP financial measures provides consistency and comparability with the company's past financial reports. Management also believes that the exclusion of the items described above provides an additional measure of the company's operating results and facilitates comparisons of the company's core operating performance against prior periods and business model objectives.