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  "docSlug": "b4cdf04ed0fb",
  "documentTitle": "eHealth Inc. (EHTH)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson Block",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2020-04-08 00:00:00",
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  "notes": "The slide uses direct quotes from earnings calls to highlight management's alleged dishonesty regarding operational costs.",
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      "kind": "callout",
      "text": "We view these statements as disingenuous because customers are not obligated to renew their policies.",
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      "text": "EHTH wants to have its cake and eat it too. On the commission side, it recognizes commissions that it says are probable. It fails to take service and retention into account because they are not legal obligations. Management actively misleads investors about the need for further service:",
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      "text": "Former EHTH executives also dispute management's notion, stating or agreeing that ongoing retention and service takes resources and costs average $50 to $100 per MA member per year.",
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      "text": "We view these statements as disingenuous because customers are not obligated to renew their policies. EHTH has to fight to retain business because the industry is highly competitive, and plans change regularly.",
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      "kind": "quote",
      "text": "And the opportunities for us to significantly improve retention rates in that 90-day period post-sale are both substantial and reflect a lot of near-term opportunity that we are very much focused on at the moment. No incremental costs associated with that kind of opportunity...",
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      "kind": "quote",
      "text": "The costs attached to each of the receivable balances have essentially been absorbed as we generate the revenue in any particular quarter. So as the cash comes in, there is no additional cost attached to that.",
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      "kind": "quote",
      "text": "And, especially with Medicare enrollments season and sign up period... there is a very high chance that that person could get signed up by another broker or even by the carrier. And, switch them off of your broker record.",
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      "kind": "quote",
      "text": "\"The costs attached to each of the receivable balances have essentially been absorbed as we generate the revenue in any particular quarter. So as the cash comes in, there is no additional cost attached to that. And the reason that those receivables are there is because there is no meaningful service component attached to them either.\" — Scott Flanders Q1 2018 Earnings Call",
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      "text": "15 EHTH Q2 2018 Earnings Call.",
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