CVS Caremark Corporation (CVS), Walgreen Company (WAG): 2 Companies Ride to the Rescue of Obamacare Exchanges

“I don’t get no respect.”

This line repeated frequently by the late comedian Rodney Dangerfield could serve as the motto for the health insurance exchanges required by the Patient Protection and Affordable Care Act, commonly known as Obamacare. Indeed, so many problems have been cited by critics and supporters alike that the exchanges have received very little respect. But that could be changing now that private sector companies are riding to the rescue.

Drugstore cowboys
Earlier this month, Walgreen Company (NYSE:WAG) announced its participation with the Blue Cross Blue Shield Association, or BCBSA, in helping promote awareness of Obamacare, including the health insurance exchanges. The two organizations teamed up to launch a website, LearnAboutReform.com, that educates consumers about the new exchanges and other ways that health reform impacts them. Walgreen Company (NYSE:WAG) is also offering informational brochures about Obamacare in most of its 8,000 drugstores in the U.S.

Last week, the nation’s second-largest pharmacy chain joined the fray. CVS Caremark Corporation (NYSE:CVS) said that it plans to launch a companywide initiative to help customers better understand the exchanges. These efforts will include “retail events and brochure displays” at the company’s 7,400-plus retail stores and 650 MinuteClinic locations. CVS will also make information online on its website.

CVS Caremark Corporation (NYSE:CVS)A survey conducted by CVS Caremark Corporation (NYSE:CVS) recently highlighted the confusion over Obamacare. While 74% of respondents reported a general awareness of the health reform legislation, only 48% of those eligible to receive a federal subsidy knew that they were. Around 36% of survey respondents who were likely to participate in a health exchange indicated that they needed more help understanding the process.

It’s about time
The Government Accountability Office, or GAO, reported in June that the federally operated Obamacare exchanges were way behind schedule. Scope for the exchanges was “still evolving,” according to the GAO, making it impossible to determine if they could be fully operational by the scheduled deadline of Oct. 1.

Chances that Americans will be able to enroll online look better now, though. The nation’s first and largest private health insurance exchange for individuals, eHealth, Inc. (NASDAQ:EHTH), announced yesterday that it has secured a contract with the federal government to support enrollment through its website eHealthInsurance.com.

For well over a year, eHealth aggressively lobbied the Obama administration to allow privately run exchanges to enroll individuals in the federally subsidized insurance plans. However, no deal happened until now. Why did it take so long? It’s about time — literally.

Those in charge of getting the exchanges up and running undoubtedly felt the pressure of the ticking clock. That Oct. 1 deadline was only 62 days away when news of the eHealth contract broke. The GAO report from June painted a picture of a fiasco in the making. Even though the Department of Health and Human Services, or HHS, “expressed its confidence” that the exchanges would be running by the deadline, few others appeared to have any confidence.

The bottom line
There’s no doubt that the Obamacare deal is great news for eHealth, Inc. (NASDAQ:EHTH). Its shares jumped 29% following the announcement. This is a company with 2012 revenue and earnings well below levels from two years ago. Riding to the rescue of Obamacare amounts to a joyride for eHealth.

CVS Caremark Corporation (NYSE:CVS) certainly didn’t get that kind of bounce from its promotional efforts for Obamacare. However, assuming that lots of previously uninsured Americans sign up for insurance through the exchanges, CVS — along with Walgreen Company (NYSE:WAG) and other pharmacies — should see higher revenue and profits as more prescriptions are filled.

The bottom line for the Obamacare exchanges, though, will depend on whether enough uninsured individuals actually use them. As Rodney Dangerfield knew from experience, respect doesn’t come easily.

The article 2 Companies Ride to the Rescue of Obamacare Exchanges originally appeared on Fool.com and is written by Keith Speights.

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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