Walgreens To Sell Health Insurance?

Walgreens is apparently planning to sell health insurance with different price points and coverage levels through a private insurance exchange this fall. Should existing, well-established insurers be concerned? 

The pharmacy giant Walgreens already is a leader in healthcare services–operating in-store clinics, offering immunizations and counseling for chronic conditions, and providing prescription drug and medical plans–so some experts say selling insurance is a logical next step for the ubiquitous drugstore chain. 

If the reports are true, Walgreens will allow consumers to shop for various insurance products online, through call centers, or in-store. Some will be branded by national insurers, and others will be “private-label” insurance products sold through Walgreens’ own insurance exchange.

And that’s not all. Industry watchers are predicting other companies, even those not associated with health insurance, are eager to jump into the soon-to-be lucrative health insurance exchanges. Retailers, financial services providers, and large payroll processers all might become the new kids on the insurance block, hoping to buy up some premium land in town. Come 2012, consumers purchasing individual insurance may turn to private exchanges for policies that are more affordable than what’s available directly through insurance companies. Plus, private exchanges will be competing with state-run public exchanges by, for example, bundling life insurance, along with their health insurance products.

But I wonder whether customers will be open to buying health insurance from a retail store. Will they trust the retailers’ ability to provide competitive prices and products, as well as quality customer service? Or will they be skeptical of new entrants in the insurance industry, reluctant to purchase a product from a company that isn’t operating in its principle area of business?

The one thing I know, at this juncture, is that insurers shouldn’t dismiss Walgreens as just a fringe competitor if it does enter the insurance market. Walgreens has proven itself adept at succeeding in the changing healthcare business, stepping up to challenges throughout the years. Company revenue and operating income have grown over the past four years. It has increased its share of prescriptions and developed new revenue streams. And it has become the in-house supplier of healthcare services for hundreds of large companies while also partnering with major health insurers to counsel their members. 

Although we won’t know how a company such as Walgreens will affect the core health insurance business, it seems at least that this could serve as a lesson. Big health insurers better not sit on their laurels, assuming they’re the only sheriffs in town. They should be casing the streets, watching for any upstarts to ensure they protect their town from any unwanted competition. – Dina

Read more: Walgreens: Is there a new insurer in town? – FierceHealthPayer http://www.fiercehealthpayer.com/story/walgreens-there-new-insurer-town/2011-08-11#ixzz1kIfWp8c6
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Editor’s Note: 

With 2014 rapidly approaching, the health care delivery system we know today will undergo significant changes. Imagine Walgreens selling health insurance through state insurance exchanges packaging the benefits with on-site medical clinics at each of their locations, and of course their pharmacy. Then Walgreens enters into agreements with carefully selected specialty clinics, some owned by hospitals and others not. Both Walgreens and these independent contractors enter into business with each other, directing patients to selected hospitals or hospital systems. To be competitive within the exchanges, costs must be held to a minimum while profit margins carefully placed within certain parameters. Of course, ancillary sales realized with increased store traffic, and the sale of life insurance, annuities, and other lines of insurance will enhance profit margins which are not subject to mininum loss ratio requirements. This is free enterprise adapting to government interference in health care in this country.
 
Walgreens, and others who seize opportunities that ObamaCare inadvertently brings to innovative entrepreneurs, will become the gateway to entry into the American health care system – they will become the PCP Czars of health care. Capitated PCP contracts will evade health insurance requirements such as minimum loss ratio requirements and will operate out of the long reach of bureaucrats in Washington (until the politicols wise up).
 
In a previous post on www.riskmanagers.us Walmart is seeking proposals to set up PCP clinics nationwide. Walmart, Walgreens, and other national retailers are sensing business opportunities as ObamaCare unfolds.
 
Some say ObamaCare is a good thing – it certainly has created new opportunities for free marketers.
 
Note: This is my opinion only and is subject to change on a daily basis.
 

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