Walmart quietly launched a new health insurance business. The company, called Walmart Insurance, was filed with the Arkansas Secretary of State last month.
Walmart is making clear what an executive declared in a virtual conference: that it is firmly in the healthcare business, not just in retail healthcare.
News emerged today that the company is planning to throw its weight around in another healthcare segment in need of an overhaul: insurance. A spokeswoman from the Bentonville, Arkansas retail behemoth confirmed that the company has created “Walmart Insurance Services LLC” to sell insurance policies. The business entity’s name was first filed with the Arkansas Secretary of State in late June.
“We currently offer access to insurance information in our Walmart Health locations, and we have a long-standing education program called Healthcare Begins Here to help people find the right insurance plan for them,” spokeswoman Marilee McInnis wrote in an email. “We’re expanding our current insurance services to now include the sale of insurance policies to our customers.”
A handful of job postings at a call center in the Dallas metro also match up with Walmart Insurance Services, as first pointed out by Talk Business & Politics. Walmart has listings for licensed insurance agents and Medicare sales supervisors.
“Yes, you read that right, Walmart now has an insurance agency,” the listings read.
It looks like the new subsidiary will be focused on selling Medicare Advantage plans, though the company was mum when asked for additional details. The spokeswoman’s statement about the “sale of insurance policies to our customers” also leaves open the possibility of Walmart expanding its services beyond senior shoppers in the future.
Medicare Advantage plans have been experiencing rapid growth in the past decade, with more than a third of all beneficiaries enrolled in a plan managed by a private insurer. That figure is expected to increase in the future.
Deeper into the pharmacy space
Separately, on Tuesday, Walmart announced that it had struck a partnership with PBM startup Capital Rx, which provides health plans real-time information on prescription drug prices.
Walmart has been a big player in the pharmacy space for several years, and the company appears to be deepening that through this partnership.
“‘Everyday low price’ has been a guiding principle at Walmart. We take pride in providing affordable prices to more than 160 million customers who shop Walmart each week,” Walmart Health and Wellness Vice President Luke Kleyn said in a news release. “Working with Capital Rx will allow us to do the same for prescription drugs,”
Capital Rx was founded just over two years ago by AJ Loiacono, a former insurance auditor, with the idea of providing drug prices as part of pharmacy benefit plans.
Loiacono started his career in the pharmaceutical manufacturing industry, where “everything that comes out of that plant has a price.”
When he moved over to the auditing and procurement side, working with payers and self-insured companies, he was shocked to find out that none of their contracts included drug prices. To solve this, the company uses Medicaid’s National Average Drug Acquisition Cost, rather than the average wholesale price, to calculate costs.
As a standalone company, Capital Rx was able to provide price information for retail drugs, but they weren’t able to do the same for mail and specialty drugs. The partnership with Walmart will “complete the model,” with Walmart providing mail and specialty drug fulfillment.
With the partnership, Capital Rx was able to quickly sign on some payers, though it hasn’t yet disclosed which ones.
“Walmart is a diversified company. We liked the fact that they were independent. They’re not part of a PBM or a health system today,” Loiacono said. “The other part of it is, they have scale.”
Loiacono also pointed to similar goals in price transparency — something Walmart emphasized when it shared the cash pay prices for its new health clinics.
“This is what we’re seeing a little bit more of as the future in the roadmap,” Loiacono said. “They’re making a serious investment in healthcare.”