Walmart will begin offering health insurance to consumers

A spokesperson from Walmart confirmed plans that the company is launching a health insurance arm — dubbed Walmart Insurance Services LLC — to sell plans to consumers, per MedCity News.

The number of medicare advantage plans that beneficiaries can choose from is rising



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Given Walmart’s apparent dedication to providing low-cost health services, we think its health insurance offerings will also be a more affordable option for consumers. 

Walmart has made a litany of healthcare-focused moves this year: Last month, it acquired startup CareZone’s medication management platform to help customers keep track of their prescriptions; and in February, it debuted a second Walmart Health center in Georgia — with plans to expand to more locations — featuring services like primary care, mental health counseling, diagnostic services, and dental care.

And each of Walmart’s healthcare services boasts low prices compared with traditional doctors’ offices: The retail giant stated that Walmart Health Center prices would be up to 50% lower than traditional care —  a difficult bargain for doctors’ offices to match, considering many primary care practices are undergoing financial strain amid the pandemic.

It’s not just its cheaper primary care services that attract patients: Walmart’s $4 generic drug program offers members a list of generic prescriptions for significantly discounted prices — often providing Medicare Advantage (MA) patients a more low-cost price than their own insurance would offer. We don’t think Walmart will drop its claim to affordable care any time soon, as its brand is well-known among consumers for its low prices — so, we expect that it will offer discounted insurance plans, too. 

Walmart’s low prices and wide footprint could pose a threat to insurance startups — especially those firms breaking into the MA market. It appears Walmart may focus on selling MA plans, as it’s posted job listings for Medicare sales supervisors and licensed insurance agents. For context, MA plans are offered by private payers in contract with Medicare.

Walmart boasts over 5,000 locations in the US alone — and nearly 265 million customers worldwide. With discounted prices and large mindshare in tow, we think a Walmart MA plan could overshadow smaller insurance startups’ MA plans — like insurtechs Bright Health and Devoted Health. The number of MA patients are covered by insurance startups is growing — and if Walmart convinces even a small portion of its consumer base to enroll in its insurance, we think that insurtechs will face stiff competition from the retail behemoth.

While insurtechs flaunt their ability to offer more efficient and affordable care, we think that Walmart’s ability to consolidate all types of care into one visit — and its hard-to-beat rates may eventually have insurtechs floundering to hold on to their MA patients. We expect that insurtechs with a smaller footprint will have to leverage their digital tools to attract cohorts other than MA patients to retain business — like Millennials and Gen X — who are more likely to adopt tech than seniors.

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