Wal-Mart Selling Health Insurance? Really?

If you’re selling health insurance to small businesses, you could be facing a huge competitor—Walmart.

 

Marcus Osborne, vice president of health and wellness payer relations for Walmart, noted that the mega-retailer wants to give small companies more low cost health insurance choices. Walmart expects to offer its new discount products via a health insurance exchange or “marketplace.” Its exchange would take full advantage of Walmart’s purchasing power to expand the accessibility of exchanges. “It would allow small employers to piggyback Walmart,” Osborne said. “We haven’t got it all figured out, but it’s one of the things we’re looking at.”

 

Walmart has for some time foreshadowed its desire to sell healthcare. In October 2012, Sam’s Club Chief Executive Officer Rosalind Brewer noted how immunizations and health screenings offered at Sam’s Club drew customers. 

 

“We are probably in an opportunity to provide even more programs inside the club around health and wellness,” said Brewer. “Our business member is the one that we’re most concerned about because we know that small businesses are not able to really provide healthcare to their workforce. And so our discussion has been what could we do more to meet our business member halfway. These health screenings and the immunizations and the consultative work that we do from our pharmacists have really paid off. And that’s why we won that J.D. Power and Associates award [for pharmacy customer satisfaction], so more to come from Sam’s in that area.”

 

If Walmart does enter the health insurance business, it will drive prices down by doing what it always does—cutting out any unnecessary costs and inefficiencies. But some doubt that Walmart’s foray into health insurance will work. Selling clothes, vacuum cleaners and TV’s is a far cry from selling health insurance to businesses.

 

Making money selling a product that competes with state-run health insurance exchanges next year won’t be easy. Larry Levitt, senior vice president at the Kaiser Family Foundation, a nonprofit health policy group, points out that insurers won’t be allowed to charge small groups different premiums. Walmart might consider selling healthcare instead of insurance. “All the pharmacy chains, including Walmart, are looking for ways to provide primary care in a way that’s more accessible and more affordable,” says Levitt. Walmart’s reputation for low prices may prove to be a challenge in the healthcare market. “It’s one thing to feel like you’re buying cheap toilet paper,” says Levitt. “It’s another thing to feel like you’re buying cheap healthcare.”

 

If Walmart does go full bore into the health insurance field, be prepared for some stiff competition—competition that will, no doubt, force you to cut costs and reduce inefficiencies. 

 

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net