Walmart turns into an insurance company, Walmart Insurance

The world’s largest retailer enters the American insurance arena, threatening the positioning of insurtech startups created in recent years to meet the demands of the healthcare system. The turnaround is part of a broader strategy to expand the business to include the healthcare industry

Published on 05 Aug 2020

One of the things Amazon teaches is that once you’ve conquered the end consumer, there are no taboos on the type of products you can sell them. It’s a strategy that other ‘retailers’ are also adopting, Walmart for example (long in open war with the Bezos company), which has decided to focus on all-round care, from healthcare to insurance. Amazon does the same: it is an industry that in the United States is worth over $4 trillion, with a model that has long been in crisis, leaving room for new players. A system based on health insurance which, for those who can’t afford it, means meeting the disproportionate costs of private healthcare. 

Walmart, dubbed by some commentators as ‘the sleeping giant of the healthcare system‘ (in US) recently told CNBC that it will now start selling health insurance plans, job offers have already appeared on its website for ‘Walmart Insurance Services LLC’. 

Until now, Walmart provided insurance information through Walmart Health centers, its new concept of independent health care. It has an education program, called Healthcare Begins Here, designed to help people find an insurance policy. 

We are always looking for ways to help our customers save money and live better, and insurance services are another way to do that” said Walmart spokesman Randy Hargrove at CNBC. “We’re extending our current insurance services to include selling policies to our clients… We need passionate health insurance professionals to help us grow this new business from the ground up and achieve our mission“. 

The company, called Walmart Insurance, was registered with the Secretary of State of Arkansas last month. 

Walmart has had outpatient clinics in its supermarkets for years, but now the retail giant has already opened 4 Walmart Health low-cost medical centers and plans to add more, making acquisitions such as the Carezone startup to improve its digital health technology. Great ambitions, as recently expressed in an open letter to stakeholders by Sean Slovenski, Senior Vice President Health & Wellness, Walmart U.S.A.. 

“Having access to quality and affordable health care has never been more important in the United States. We are experiencing a global pandemic that has exposed the vulnerabilities of our health care system and makes it difficult for many families to get the care they need when needed. We are also facing record unemployment, leaving many families without access to vital health resources in the process. 

As 90% of Americans live within 10 miles of a Walmart store, we truly feel we can help by bringing quality health care to the communities that need it most. We do not skimp on the responsibility of serving our customers in this way, including through our $4 generic prescription program launched more than a decade ago. This is more important than ever, and that’s why we are opening more Walmart Health locations to help even more customers access the healthcare they need. 

Expanding into an industry like health for Walmart has first and foremost corporate welfare reasons: after the US Department of Defense, it is the largest employer in the US with over 2.3 million employees. 

According to Business Insider, Walmart Insurance should be concerned not so much with traditional companies as with insurance startups, especially those created to take advantage of the opportunities of the Medicare Advantage market, the US public health care system, limited to specific categories (such as the over-65s) and managed through selected private companies. 

It seems that Walmart can focus on selling MA plans, as it has published job advertisements for Medicare sales supervisors and authorized insurance agents. In context, MA plans are offered by private payers contracted by Medicare. 

Walmart has over 5,000 locations in the United States alone – and nearly 265 million customers worldwide, in addition to the two million employees mentioned above. Clearly, with its consistently high discount pricing strategy and extensive retail knowledge, Walmart Insurance can easily overshadow insurance startups such as Bright Health and Devoted Health. 

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