Our Take: Walmart introduces its health insurance agency, launches co-branded MA plans with Clover Health
In a blog post last Tuesday, Walmart’s chief operating officer, Lori Flees, formally introduced Walmart Insurance Services, the retailer’s licensed insurance brokerage. The new affiliate will help older adults enroll in a Medicare plan. And starting this week, it will sell Medicare plans for the 2021 plan year during open enrollment.
The agency, which is licensed in all 50 states and Washington, D.C., will begin with Medicare Advantage (MA), Medicare Supplement, and Part D plans offered by Humana, UnitedHealthcare, Anthem Blue Cross Blue Shield, Amerigroup, Simply Healthcare, WellCare (now a subsidiary of Centene), Clover Health, and Arkansas Blue Cross and Blue Shield. The list of insurers could grow, according to Flees.
Earlier this month, Clover Health said in a press release that it was partnering with Walmart on two co-branded MA plans, both called LiveHealthy, and both PPOs. One offers a $0 premium. Both include free primary care visits, lab tests, preventive dental exams, and annual physicals. The plans will be available to Medicare-eligible residents in eight Georgia counties. Plan members will have access to Walmart Health centers in certain cities, and those in the Metro Atlanta region will have in-network access to 31 hospitals and more than 8,000 providers, Clover Health noted.
When we first reported in July that Walmart was quietly making plans to set up shop in the health insurance business, it appeared that the mega retailer might start slowly, with a focus on the Dallas-Fort Worth area.
Obviously — to no one’s real surprise — Walmart had other ideas.
Analysts believe that while other insurance brokers may not have anything to worry about in the short term, Walmart’s entry into the lucrative Medicare Advantage market could pose a threat to them down the road.
Even though all brokers must sell MA plans at the same price, there is wiggle room in the commission. Clearly, it won’t be a problem for Walmart to sell plans with a lower commission than smaller brokerages might be able to afford.
Plus, not all brokers offer the breadth of MA plans that Walmart is making available right from the start. Lori Flees was being corporate and cautious when she wrote in the blog post that “more carriers may be added in the future.” Of course the retailer will be adding more insurers to its roster. Carriers will be champing at the proverbial bit to have Walmart selling their plans.
In light of these factors, and given Walmart’s reach, smaller brokers definitely have cause to be concerned. But for consumers, this latest move by Walmart is probably a very good thing. It’s an understatement to say that signing up for Medicare, choosing the most appropriate plan, and then enrolling in that plan can be daunting. If Walmart’s insurance agents can simplify even part of that process for older adults, well, there’s that.
Walmart Insurance Services is starting with MA plans this year. It’ll be interesting to see what other types of health insurance plans the brokerage will be selling during open enrollment next year.
Humana estimates that it saved $4 billion through its value-based care programs in 2019. That’s how much the insurer’s Medicare Advantage members would have incurred in additional costs if they had been enrolled in traditional Medicare plans, according to a press statement announcing Humana’s annual report on the programs. Two-thirds of Humana’s MA members (2.41 million beneficiaries) were treated by primary care physicians who had value-based arrangements with the insurer. More of those members received preventive screenings as compared with MA members in non-value-based care models. They also had fewer visits to the emergency department and fewer hospital admissions, and they spent fewer days at the hospital as inpatients.
In separate news, Humana said it agreed to expand its collaboration with Fresenius Medical Care North America (FMCNA), effective Jan. 1, to offer more coordinated care to members with chronic kidney disease (CKD) and end-stage renal disease. As part of the expanded collaboration, Humana members in 39 additional states will have access to FMCNA’s care coordination services for CKD; currently, those services are available to Humana members in just three states. Additionally, Humana and FMCNA entered into value-based payment arrangements for the CKD care coordination services, as well as for in-center and home dialysis services.
Medicare Advantage insurer Clover Health plans to go public. The San Francisco-based startup announced the signing of a definitive agreement to merge with Social Capital Hedosophia Holdings Corp. (SCH), a special purpose acquisition company based in Palo Alto, Calif., with the goal of becoming a publicly traded company. The transaction, which gives Clover Health an enterprise value of approximately $3.7 billion, is expected to close in the first quarter of 2021. It is subject to SCH shareholder approval and other closing conditions, as well as regulatory approvals. Among insurers with more than 50,000 members, Clover Health is the fastest-growing MA insurer in the U.S. As noted in our lead story, the company partnered with Walmart earlier this month on Walmart’s first insurance plans.
The Medicare Payment Advisory Commission (MedPAC) has suggested shrinking the number of advanced alternative payment models — according to MedPAC Chairman Michael Chernew, roughly 40 of them are active now — because most of the models have not produced the desired results. During MedPAC’s virtual meeting on Oct. 1, Chernew said the various models interact, making it difficult to assign results to a specific model. He said CMS needs to “come up with a set of models that will work well together.” Chernew also pointed out that even though some models do not save much money, they do give providers some flexibility. The commission also discussed changing the benchmarks for the Medicare Advantage (MA) payment system. MedPAC staff have proposed using a new benchmark based on a combination of local and national spending instead of the existing method of setting benchmarks for each county based on per capita fee-for-service spending.
Hospitals will soon have to report their seasonal flu data along with COVID-19 data or risk not being able to participate in Medicare and Medicaid, the Department of Health and Human Services (HHS) said when it released updated guidance for daily COVID-19 reporting last Tuesday. CMS Administrator Seema Verma said at a press conference on Tuesday that letters would be sent, starting Oct. 7, letting hospitals know if they are in compliance with the COVID-19 reporting requirements. If they are not, they will be advised of the changes needed and will then have 14 weeks to comply. Starting on Oct. 19, hospitals will have the option to begin reporting certain influenza data; HHS intends to make reporting that data mandatory “within the coming weeks.”
Regeneron Pharmaceuticals submitted a request for emergency use authorization of REGN-COV2, an investigational antibody combination therapy for COVID-19, the company announced Wednesday. The combination drug is among the treatments President Trump received after he tested positive for the novel coronavirus. Although REGN-COV2 is still being evaluated in clinical trials, it is available for compassion use in certain cases. The federal government agreed in July to make an unspecified number of initial doses of REGN-COV2 available to Americans at no cost if the FDA approves the drug or authorizes it for emergency use. Regeneron was awarded a $450 million contract to manufacture and supply the double antibody cocktail. The company said doses are available for approximately 50,000 patients now, and it anticipates that doses will be available “for 300,000 patients in total within the next few months.”
Bristol Myers Squibb (BMS) will acquire MyoKardia, a Brisbane, Calif.-based biopharmaceutical company that discovers and develops targeted therapies for cardiovascular diseases, for $13.1 billion in cash, or $225 per share. Among the assets BMS will gain is mavacamten, a potential first-in-class drug that MyoKardia has been developing for patients with obstructive hypertrophic cardiomyopathy. The companies said in a press release last Monday that they have signed a definitive merger agreement and both boards have approved the transaction. The deal is subject to the usual closing conditions and is expected to close before the end of the year.
HCA Healthcare plans to return or repay early about $6 billion in federal funding it received as part of the CARES Act. The Nashville, Tenn.-based, for-profit company said in a news release previewing its third-quarter financial results that the conservative approach it took during the outset of the pandemic and “other factors” have helped the company do relatively well despite the challenges of the last several months. Of the $6 billion total, approximately $1.6 billion came from the Provider Relief Fund. The balance represents Medicare accelerated payments that HCA would need to repay eventually, but the company intends to do so sooner than required. “[W]e believe returning these taxpayer dollars is appropriate and the socially responsible thing to do,” said CEO Sam Hazen.
Blue Cross Blue Shield Association (BCBSA)’s board has chosen Kim Keck as the association’s new president and CEO, according to a press release issued Tuesday. Keck, who is currently the president and CEO of Blue Cross & Blue Shield of Rhode Island (BCBSRI), will succeed Scott Serota when he retires at the end of the year. Serota has been with BCBSA for 25 years and has served in his current roles since 2000. Before Keck joined BCBSRI in 2016, she was with Aetna for 28 years.
The merger between Charlotte, N.C.-based Atrium Health and Winston-Salem, N.C.-based Wake Forest Baptist Health is officially a done deal, the organizations announced on Friday, The resulting entity takes the Atrium Health name and has 42 hospitals, more than 1,500 care locations, and over 70,000 employees who will serve patients in the Carolinas, Georgia, and Virginia.