Software to cut costs
obamacare ceos dan maynard
Connecture President Dan Maynard

Connecture
Headquarters: Brookfield, Wisc.
Founders: Dan Maynard and Eric Grossman
Launched: August 1997 (as Riverwood)

Right after Obama's election in 2008, health insurance sales software maker Connecture's business stalled because its clients -- insurance companies -- stopped buying new products.

"Suddenly the whole model was in flux, and insurers didn't know what was going to happen," says president Dan Maynard. "We went flat in terms of growth and new sales."

The congressional vote in 2010 to pass health care reform was so close, the company didn't really know how to prepare. "We had to wait until the vote. When it passed, that first part of 2010 was like a hurricane hit," Maynard said. "Health insurance companies had a lot of questions about it, and realized there was a lot that had to be implemented by January 2011."

The Affordable Care Act limits the percentage of premium dollars that insurers can spend on salaries, overhead and marketing, and it sets tighter limits on rate increases. Insurers reacted by scrambling to cut expenses, Maynard says.

"The first thing you think of when cutting expenses is to automate," he says. "Our sales pipeline skyrocketed in 2010."

Connecture is also profiting from the complex technology states will need to run their new insurance exchanges, which are scheduled to be operational in all 50 states by the start of 2014. No one vendor can supply everything needed for an exchange; Connecture's software handles the consumer shopping process. States often have relationships with a particular systems integrator with whom they want to work, so Connecture teamed up with Maximus to get state exchange work in Minnesota and with Noridian to get Maryland's business.

"An exchange can cost anywhere from $50 million to $100 million to set up," Maynard says. "For each unique segment of the exchange, there are fewer vendors competing than you might think. There are very few companies like us providing the shopping technology."


  @CNNMoney - Last updated March 27 2013 10:53 AM ET
Join the Conversation
More on health care reform
How Obama plans to save Medicare

President Obama is proposing $400 billion in health savings, mainly by cutting payments to drug companies and providers.

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.