America’s largest retailer is expanding more aggressively into the insurance market, hoping to become the go-to place for all your health care needs. But the store is far from the only place to get your coverage questions answered.
Want help choosing a health insurance plan? Superstore Walmart bets that many consumers do—and that they are willing to visit a big-box store for guidance.
There is still a huge opportunity to educate the growing individual healthcare market about buying direct. Many do not know that unless they qualify for assistance through the ACA they do not necessarily need to buy their policies on the exchanges. Comparison websites can further add to the confusion in that they also list details for both types of plans, on and off exchange. With confusion comes opportunity. And by learning about how Walmart is selling today, you may just get an edge on how to market directly to this valuable audience.
Walmart first teamed up with the health comparison website DirectHealth.com to house insurance agents it stores last October. They now are offering health care assistance in 2,700 of its 4,300 U.S. stores. The way it works is agents sign up to have assigned time slots in the store and are available in store to help shoppers understand and compare individual insurance plans as well as private Medicare plans, including drug, supplemental, and Advantage policies. So what does this marketplace look like? Walmart’s face-to-face help can help with an individual or Medicare plan and currently offers individual plans from 300 carriers, and Medicare plans from 13 firms.
This actually isn’t new to Walmart. Since 2005, Walmart has hosted insurance agents from individual insurers in some stores to answer questions and enroll customers in health plans. This new program expands on that offering. “For years, our customers have told us that there is too much complexity when it comes to understanding their health insurance options,” said Labeed Diab, president of Walmart’s U.S. health and wellness group.
With the current enrollment period quick approaching, agents will be in stores this October through December, a timeframe that captures the kick-off of the annual enrollment periods for both individual health plans and private Medicare policies. And many agents are clamoring to do so, with several insurance information sites (like Insurance Networking News) touting the benefits and earning potential. That very website was recently promoting that for only $250 and you can sell Medicare at Walmart, with the message that you can market your business in their “high-traffic retail location while representing the carriers of your choice” (and citing that more than 2,000 Walmart stores are now available).
A bid for more health care business
This move isn’t the first time Walmart has dabbled in health care. The company has been slowly adding retail clinics to many of its locations, letting shoppers get primary care such at the store. Walmart’s total number of clinics, though, falls far short of what pharmacy chains CVS or Walgreens offer.
By adding insurance agents to its stores, the retailer appears to be aiming to get consumers to think of Walmart as a one-stop resource for health care. Walmart does not receive commissions on the sale of health plans, the Associated Press reports, but hopes the agents will attract consumers who will then rely on the stores for other health care needs, such as prescriptions. The agents will of course receive a commission from the insurers whenever a patient enrolls in a plan in the store.
Looking for help
There is a great opportunity as an insurer, and an insurance agent, to inform consumers and sell direct. This is evidenced by Walmart’s entering into the marketplace. And as Walmart directly noted many consumers have difficulty understanding their health plans.
For people buying direct, the offer of assistance brings a welcome alternative to those buying a policy through your state insurance exchange, where people have expressed frustration and confusion. Once open enrollment begins, many community centers and non-profits are also staffed with counselors, navigators, or other assistance who can offer explain a plan’s details. But these individuals aren’t supposed to tell you which plan is best for you. That is up to the consumer. Again, leaving the door open for the health care companies, and their sales channel, to seal the deal.
On- or off-exchange individual policy?
There is still a huge opportunity to educate those individuals buying direct that unless they qualify for assistance through Obamacare they do not necessarily need to buy their policies on the exchanges. Comparison websites can further add to the confusion in that they also list details for both types of plans, on and off exchange. And furthermore -there’s no guarantee every off-exchange plan available from an insurer will be listed on each site.
In lieu of this superstore giant selling health care plans, one caveat really works in insurers and agents favor. The in-store agents can explain plan details and help with comparison shopping, but they won’t be able to actually enroll you in an individual plan in the store. The same goes for many of the staffed community assistance centers. Guide they may, but the onus is on the individual. In Walmart’s case to sign up that individual needs to take the added step need to call Direct Health, Walmart’s partner, or go to the website. Will all who visit the store for help carry through and actually enroll in the recommended plan? Likely not and there will be considerable fall-off. (The agents will, however, be able to enroll you in a Medicare plan while you’re in the store).
And while Direct Health’s site DirectHealth.com is required by law to list every plan available through the exchange, it won’t necessarily include the full details for each plan. Instead, the site attempts to determine which plans may best suit you. “We want to make sure people have the right amount of choice without overwhelming them,” says Michael Mahoney, senior vice president of marketing at GoHealth, which powers the DirectHealth.com comparison site. You decide if you’d rather see all your options, or only a limited choice.
With confusion comes opportunity, and Walmart clearly sees that. But unless health care insurance companies can adequately educate, and capture, the individual health care market it’s likely they won’t come out ahead in the long game of health insurance market share. The direct to consumer model holds the key to business growth in this segment.