Forbes -Bruce Japsen- Contributor – Aug 21, 2018, 08:09 am
Walmart is establishing closer ties with seniors covered by Medicare Advantage plans, an increasingly popular health plan choice for millions of U.S. seniors and where Amazon isn’t yet a player.
The latest example of Walmart’s interest in the MA market came this week with the announcement of a program with Anthem, operator of Blue Cross and Blue Shield plans in 14 states. Effective in January 2019, Anthem’s Medicare Advantage plan enrollees can use the insurer’s “over-the-counter plan allowances” to buy OTC medications and personal healthcare items like “first aid supplies, support braces and pain relievers.”
Medicare Advantage plans tend to offer cheaper medical care and related healthcare products than someone would pay a retailer or out-of-pocket. Seniors will also be inundated with information from the health plan about products and services from Walmart, which operates more than 4,700 stores and the walmart.com website.
“For Walmart, the partnership extends its move upstream to influence where drugs and medical supplies are purchased,” L.E.K Consulting’s Andrew Kadar said of the retailer’s program with Anthem. “Roughly 40% of OTC drugs are used by people older than 65 years of age (and) 35% of those seniors are currently enrolled in a Medicare Advantage plan and another 42% have a stand-alone Medicare Part D plan.”
The MA market is growing rapidly with more than 10,000 U.S. baby boomers turning 65 every day to become eligible for Medicare. And increasingly, at least one in three are picking an MA plan, analysts say.Currently, just under 35% of Medicare beneficiaries, or about 20 million Americans, are enrolled in MA plans . But MA enrollment is projected to rise to 38 million or 50% market penetration by the end of 2025, L.E.K. Consulting projected in a report last year.
These MA plans contract with the federal government to provide extra benefits and services to seniors than traditional Medicare, such as disease management and nurse help hotlines, with some also providing vision and dental care and wellness programs.
MA plans may soon offer even more benefits. The Centers for Medicare & Medicaid Services (CMS) earlier this year finalized new policies, “reinterpreting the standards for health-related supplemental benefits” in the MA program to include additional services “that increase health and improve quality of life, including coverage of non-skilled in-home supports and other assistive devices.”
The expanded Medicare Advantage benefits almost certainly mean retailers like Walmart and Amazon will get a piece of the action. Amazon earlier this year bought the online pharmacy PillPack, which says it has relationships with several health insurers. Amazon also launched Basic Care brand of over-the-counter medicines.
There’s also been talk that Walmart wants to expand a relationship with Humana, another insurer with millions of MA health plan enrollees. Walmart already has a long-standing partnership with Humana to sell Medicare Part D prescription drug plans dating back to 2005 when the insurer began putting Humana sales agents in its stores to sell Medicare Part D drug plans. Anthem’s partnership has no impact on Humana’s relationship with Walmart, the companies confirm.
“Seniors with Medicare Advantage choose their pharmacy based on in-network coverage as well as Medicare Advantage plan guidance,” L.E.K. Consulting’s Kadar said. “As the likes of Amazon enter the prescription business, forging new upstream relationships in addition to its existing relationship with Humana for Part D will help solidify Walmart’s positioning as a major provider of healthcare services and health-related products for seniors.”
There’s been some speculation that Walmart wants to buy Humana outright or at the very least collaborate on ways to bring more healthcare services inside of its stores.
But Walmart’s deal with Anthem is a sign the giant retailer is going to be working with multiple health insurance companies. “The (Anthem-Walmart) relationship may also set the stage for ongoing collaboration regarding additional allowable purchases, which could be further bundled and differentiated in the future,” Kadar said.
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