A gallon of milk, a birthday present and a new pair of jeans. And, oh, yeah, I need some health insurance for my family, too.For customers in 37 Walmart stores in New Jersey, such a scenario can take place as soon as Friday, as the retail giant announced it is getting into the health insurance business.
Health insurance will be sold at kiosks in the Walmart stores, staffed by licensed independent insurance agents from the insurance agency DirectHealth.com, a subsidiary of Fort Lee-based TRANZACT, a provider of direct-to-consumer insurance service.
Walmart is quick to point out that only new Medicare members (those 65 and over) will be able to sign up directly in stores.
Those under age 65 will be able to get information about the government-subsidized health insurance plans available from the Affordable Care Act exchange, but won’t actually be able to enroll in the ACA plans at the Walmart kiosks. They will have to complete their application by going online to DirectHealth.com or by calling that DirectHealth.com toll free phone number.
The concept, however, is significant, according to Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute.
“This development is another example of the retail-ization of health insurance,” she said. “More focus is being placed on the individual consumer over the employer. I think this is a trend that will accelerate over the next few years.”
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With so many people getting so many of their needs at Walmart already, the idea makes sense.
Or does it?
John Sarno, president of the Employers Association of New Jersey, said health insurance could be “a difficult sell for Walmart.”
“(It’s) too far outside their brand,” he said.
Sarno thinks it would make more sense for Wal-Mart to open medical and dental clinics in its stores, and then sell health insurance to the consumers who use the clinics.
“Then you can sell the insurance policy and provide the medical service in one transaction,” he said.
Walmart, which is rolling out the option in 2,700 of its 4,300 stores nationwide, obviously feels differently.
Spokeswoman Molly Blakeman said the Medicare customers will be able to choose from over 1,700 plans with 12 insurance carriers. But because of the large number of ACA plans, which differ from one state to another, Blakeman said the agents at Walmart won’t enroll customers in those plans at the store.
“There are tens of thousands of plans on the exchange from more than 300 leading carriers, and there is just no way to have an agent in store be licensed to enroll customers in all of those plans,” she said.
Blakeman said that, for the past nine years, Walmart has hosted representatives from various insurance companies who have come to the stores to sing up Medicare plans. The new initiative, by working with independent agents, will provide customers with access to the full menu of Medicare insurance companies and Medicare plans.
“Our customers told us they wanted more options; they wanted a number of ways they can enroll and options as to what carriers they can enroll with,” she said. “We are taking this to the next level by working with HealthDirect.com.”
Blakeman said the new program plays to the retailer’s core strengths: “When you think about our grocery aisle or our laundry detergent aisle, we don’t just have one option; we have multiple options for an everyday low price. And that is what is we are doing here.”
David Oscar, an insurance broker with Altigro in Fairfield, said Walmart’s entry into the insurance business will create more competition for New Jersey’s independent insurance brokers.
“This will be serious competition for independent brokers,” he said.
But Oscar said consumers who shop for insurance at Walmart will discover that buying a heath policy is a complex transaction that can’t be done quickly.
Schwimmer, however, feels it can be done — following a trend that started with pensions and auto insurance.
“Now health insurance is having its retail moment,” she said.
Walmart announced its desire to have a greater role in selling health insurance during the same week that it announced it will eliminate health insurance coverage for part-time employees who work fewer than 30 hours a week.
The change will go into effect Jan. 1.
Spokesman Randy Hargrove said Walmart will work with these employees to help them find affordable health coverage. Perhaps even in their own stores.
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