Report: Walgreens to Expand into Health Insurance Market
Walgreen Co., the nation's largest drugstore chain, plans to start selling health insurance to consumers this fall. The Deerfield, Illinois-based chain will sell health insurance products with different price ranges and coverage levels nationwide through a private health insurance exchange, according to a CNN Money report.
Walgreens neither confirmed nor denied the move. "As always, we're looking at a number of options in light of health care reform as we continue to seek ways to help our customers better navigate today's health care system," a Walgreens spokesman told the news outlet.
Health reform mandates the creation of federal and state-funded public health insurance exchanges by 2014 that will offer subsidized insurance for uninsured and underinsured persons. A number of companies that are not usually associated with health insurance are expected to enter the emerging market for health insurance exchanges, estimated to be worth billions of dollars, ahead of 2014.
Walgreens, the top seller of pharmacy and health and beauty products, already provides health care services that treat minor illnesses and offer seasonal flu shots and vaccinations through its more than 350 in-store “take care clinics.”
By partnering with some of the nation’s largest health insurers, selling health insurance is a natural next step in Walgreens’ long-term strategy of becoming a one-stop shop for all health care needs.
According to experts, retailers, financial services providers and large payroll processers are all among firms that are actively looking into starting private health insurance exchanges that are separate from public exchanges, industry watchers said.
TripleTree, an investment banking firm focused on the health care and technology market, estimates that from 2014 through 2019, as many as 36 million consumers will buy their health insurance from exchanges.
"For retailers, (creating a private insurance exchange) is a way to generate more revenue from a new business. Those companies that get their exchanges up and running before 2014 could also succeed in stealing customers away from the public exchanges,” said Chris Hoffman, TripleTree's chief marketing officer.
Hoffman also said private exchanges will try to remain competitive with public exchanges by offering their customers other incentives to join, such as loyalty programs that tie in discounts and bundling other types of insurance like life insurance along with their health insurance products.
The Walgreens push will allow customers to shop for a mix of insurance products online, through call centers or in the stores. Some will be branded by national insurers and others will be "private label" insurance products sold through Walgreens' insurance exchange.