Walmart ventures into mainstream health insurance: Medicare

Walmart’s evasive attempts to inch into the health insurance market created a buzz once the retailer confirmed on its plans to broker and sell Medicare Advantage plans.

In October 2020, Walmart announced its insurance brokerage, Walmart Insurance Services, will begin to sell Medicare Advantage, Medicare Supplemental and Part D plans in 2021. Walmart plans to market its Medicare health plans, called LiveHealthy, with Clover Health, in eight Georgia counties. The two plans offered by Walmart have no copay for Part D deductible, include $100 every quarter to spend on over-the-counter items at Walmart, and offer savings on dental benefits and hearing aids. Although the plan has broad network, members will not have to pay extra to go out-of-network.

Entering Medicare is a safe bet for Walmart with baby boomers turning 65 by 2030 and enrollment peaking by then. As most established insurers gear up for the enrollment peak, Walmart is stepping into a lucrative segment. Medicare also remains a sector with the few enrollment shifts during the COVID-19 pandemic. Walmart has chosen Georgia to pilot its Medicare plans, because it has six Walmart Health centers and plans to expand retail care. Additionally, Walmart has connected with a long list of providers to create a broad network for its PPO plan.

Walmart’s association with Clover Health, a startup that showed immense enrollment increase, matches the retailer’s vision of expanding its footprint. Clover Health’s rather successful presence in eight states should offer Walmart enough foothold. The partnership will utilize Clover Health’s technology to monitor patients using Walmart’s health clinics. Also, Clover Health’s PPO provider networks are broad, with much lower out-of-pocket cost.

Walmart partnership with Oak Street health (a network of 60 value-based primary care centers), expansion of Walmart Health centers in 2021, and its establishment of primary care clinics all point to the retailer’s masterplan to expand further into the healthcare business.

When Walmart starts to market its Medicare plans in 2021, Georgia seniors will have access to Walmart’s Health centers much like Aetna’s Connected plan in Kansas City that allows free access to CVS MinuteClinics and HealthHUBs. Also, Walmart has worked with Anthem’s Medicare plan in the past and the retailer has decided to use similar benefits for its LiveHealthy plan.

While healthcare stakeholders like payers and PBMs are pushing boundaries through consolidation and integration, Walmart seems to be paving its own path through diversification. Although it might seem like a road less taken, bear in mind that CVS is a retail pharmacy giant that now owns a large health insurer. Though delayed, Walmart is building on its retail pharmacy foundation to grow retail care services and venture into private health insurance.

Clover Health and Walmart are  moving into a space which has established payers and will require offerings to be unique for seniors to change plan. As Walmart pilots its Medicare plan in Georgia, the future and scale of success will depend on how Walmart derives benefit from its retail pharmacy and care service web to guide its growth. Dallas, Jacksonville and Chicago could develop as fertile markets that help the retailer gain foothold in the business.