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Leading Online Marketplace for Health Insurance 2011 Annual Report eHealth 2011 Annual Report eHealth is the leading online source of health insurance for individuals, families and small businesses. WHO WE ARE: We are the parent company of eHealthInsurance Services, Inc., the leading online source of health insurance for individuals, families and small businesses. eHealthInsurance was founded in 1997 and our technology was responsible for the nation’s first Internet-based sale of a health insurance policy. Since its inception, the company has helped to insure over 2 million Americans. We are headquartered in Mountain View, California. WHAT WE DO: Through our technology and online marketplace, eHealth turns complex health insurance information into an objective, user-friendly format and simplifies the process for consumers to find, compare and purchase the plans that best suit their needs. We are licensed to market and sell health insurance in all 50 states and the District of Columbia. We have partnerships with more than 180 health insurance companies, and offer thousands of health insurance products online. eHealth, Inc. also provides powerful online and pharmacy-based tools to help seniors navigate Medicare health insurance options, choose the right plan and enroll in select plans online through its wholly-owned subsidiary, PlanPrescriber, Inc. (http://www.planprescriber.com) and through its Medicare website http://www.eHealthMedicare.com. eHealth sells more than health insurance: in order to cater to different customer needs, we also sell related insurance products such as dental, vision, short-term, travel, accident and critical illness insurance. All of this is complemented by a full-service customer care center of licensed and trained customer service representatives. Available via a toll-free number, online chat, email or fax, the customer care team answers consumer questions throughout the process of buying and using health insurance. eHealth 2011 Annual Report GARY L. LAUER Chairman and Chief Executive Officer FELLOW SHAREHOLDERS, with many changes in the health insurance industry, 2011 was a dynamic and productive year for eHealth. In our core individual and family plan business, we con tinued to operate profitably and efficiently as we absorbed healthcare reform-related reductions in broker commission rates and made corresponding adjustments to our operating expenses. eHealth remains the nation’s leading online platform serving this important market. In 2011 we also continued to leverage eHealth’s technology and online demand generation expertise to build our presence in adjacent businesses, including the sale of Medicare and ancillary products targeting individual con- sumers. Specifically, in our new Medicare business, we achieved significant progress in 2011, deliv- ering strong growth in demand, enrollment, revenues and commission-generating membership. Most importantly, in the face of many changes, we generated strong earnings and cash flow, allowing eHealth to maintain a debt free balance sheet, invest in growth opportunities and return capital to our shareholders through a share repurchase program. Overall, eHealth is rapidly becoming a broader and more diversified company both from a revenue and product offering standpoint. OUR 2011 FINANCIAL HIGHLIGHTS INCLUDE: • 815,500 estimated members as of December 31, 2011, a 5% increase over 2010 • Annual revenues of $151.6 million • Operating income of $13.2 million reflecting a 9% operating margin • Cash flow from operations of $22.5 million • Balance sheet with $123.6 million in cash and cash equivalents as of December 31, 2011* and no debt • Implemented eHealth’s third $30 million stock repurchase program** *After cash used in connection with our stock repurchase program. **$21.6 million used to repurchase 1.6 million shares of our common stock during 2011; the remaining repurchases were completed in the first quarter 2012. 01 eHealth 2011 Annual Report “We believe that the changing industry landscape and the shift towards a consumer-centric, digital model for the health insurance industry create unique opportunities for eHealth.” eHealth Value Proposition ProductProduct ChoiceChoice Broad and DeeDeepp ArraArrayy of Products DemandDemand FulfillmentFulfillment GGenerationeneration HiHighlyghly Scalable Online Expertise IntInterneternet PlatformPlatform Consumer-Centric Decision Making INDUSTRY LANDSCAPE: The health insurance industry is rapidly changing, and, while these changes present challenges, we believe that eHealth can benefit from many of the industry trends underway. First and foremost, we believe that the market is starting to move towards a more consumer-centric model and away from the traditional employer-based model for accessing health insurance. This is partially driven by increasing costs for companies to provide quality health benefits to employees and their dependents and, more importantly, by certain provisions of the Affordable Care Act, which in our opinion, can encourage direct purchase of health insurance by individuals. In this environment, our ability to give consumers electronic online access to a wide variety of health insurance solutions and our strong customer acquisition expertise using diversified Internet-based marketing programs is critical and enhances our value proposition to carriers. Another important trend impacting our industry is fast growth in the Medicare-eligible population. Medicare is an attractive product for managed care companies with over 76 million Baby Boomers turning 65 during the 20-year period starting in 2011, or an average of 10,000 per day. People are also living longer with average life expectancy increasing from just under 70 in 1960 to over 78 estimated in 2010 according to the U.S. Census. These trends represent an excellent opportunity for our Medicare business. 02 eHealth 2011 Annual Report “In our new Medicare business we achieved significant progress in 2011, delivering strong growth in demand, enrollment, revenues and commission- generating membership.” INDIVIDUAL & FAMILY PLAN BUSINESS: 2011 was a challenging year for our individual and family plan business, and I am pleased with our ability to navigate the changing industry landscape. As I shared with you in my letter last year, the commission rates we earn on individual and family health insurance products have been reduced as a result of health care reform. These changes became effective in January 2011, and most of them were prospective, or applicable only to new members we signed on after the effective date. As a result, our commission revenue in the individual and family business declined in 2011 compared to 2010. Notwithstanding the commission rate reductions, eHealth remains the leading online distribution platform for individual and family health insurance and the largest source of individual and family enrollments for many of our carrier partners. We also continue to rank highly on relevant keywords in our category, both in paid and natural search, and represent a significant share of online resources for individual health insurance. And, based on our current lifetime member value projections, we are profitable across all member acquisition channels in the individual business. We expect to return to revenue growth in our individual and family health insurance business in 2013. In 2011, I personally dedicated a lot of my time to government affairs, working with key decision makers in Federal and state government to ensure that the Affordable Care Act is implemented in a way that will maximize the access to quality health insurance to all segments of the population in the United States. We are operating under the assumption that the Affordable Care Act will remain the law of the land and, while it has and will present challenges, we believe that its implementation represents opportunity for eHealth as a potential provider of exchange technology to states and as an operator of a private online marketplace for the individual and family market. MEDICARE: Our new and growing Medicare business is a key strategic initiative for eHealth that produced sound results in 2011. We believe that, as the Medicare eligible population grows and seniors become increasingly comfortable using the Internet, eHealth can replicate our success in the individual market by applying our demand generation expertise and our powerful technology platform to selling Medicare plans. During the year, we made a significant investment in this business and expect it to be an important contributor to our financial results in 2012. As a reminder, our Medicare plan business contributed less than $1 million to our revenue in 2009 and just under $10 million in 2010, which was the first year we invested significantly in this market. In 2011, we more than doubled our Medicare plan-related revenue to over $20 million and expect another year of strong revenue growth in 2012. During the year we also expanded our dedicated customer care center to better serve our customers. The number of Medicare-eligible individuals who came to our PlanPrescriber and eHealthMedicare websites during the Medicare Annual Enrollment Period in 2011 was substantial and represented a significant increase compared to 2010. The strong demand we generated was driven by our diversified online marketing strategy, including paid and organic search as well as innovative programs like PlanPrescriber’s pharmacy partnership with WalMart. As a result of our demand generation and customer care initiatives, Medicare

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