While the company has neither confirmed nor denied it, the nation’s largest drugstore chain is said to be gearing up to launch a private health insurance exchange in the fall, reports CNNMoney (read here). CNN says that Walgreen Co. will sell a variety of plans with different price ranges and levels of coverage through a private health insurance exchange.
I wouldn’t be surprised if it’s true. Walgreen has rushed to fill gaps in our nation’s fractured health care system, opening hundreds of in-store Take Care Clinics, worksite health care centers (see previous post), and by offering a slew of health care services, including immunizations and counseling for chronic conditions, such as diabetes. It also provides products and services to pharmacy patients and prescription drug and medical plans through its Walgreens Health Services unit. Already a leader in health care services, offering health insurance is a logical next step for Walgreen.
With the ranks of the uninsured and underinsured swelling, consumers are being steered to health insurance exchanges under the Affordable Care Act (aka the health care reform bill) passed into law in March 2010. In addition to the creation of federal and state-sponsored health insurance exchanges, the private sector, including retailers such as Walgreen, is expected to enter the market. While only consumers enrolled in government-sponsored exchanges are eligible for subsidies, privately-sponsored exchanges could still be competitive by offering subscribers other incentives to join their network.
Some retailers, Sam’s Club comes to mind, already offer select customer groups services, including group health insurance. So the idea of buying coverage from a retailer, rather than through an employer or broker, isn’t unprecedented. Walgreen has moved quickly to capitalize on the transformation of our health care system and is looking for growth opportunities beyond its vast network of retail stores.
The Affordable Care Act mandates the creation of exchanges by 2014. If CNN is correct and Walgreen launches its insurance exchange in the fall, it will get a jump on both government-sponsored plans and any private plans to come along. With the market for health insurance exchanges estimated to be worth billions of dollars, many companies outside the insurance industry are expected to enter this brand new market.