Anthem and Walmart are launching a program aimed at increasing access to over-the-counter medications and other related health products for consumers enrolled in Anthem's Medicare Advantage plans, according to a joint press release issued Monday.
The Anthem-Walmart initiative will allow the beneficiaries to use over-the-counter plan allowances to buy their medications and health items (first aid kits, support braces, pain relievers, etc.) at any of Walmart's almost 5,000 locations and online at Walmart.com.
The health insurance giant and the global retailer said their aim is to cut out-of-pocket costs for an aging population. The program will launch in January.
The partnership between Anthem and Walmart for the former's MA beneficiaries shows how Medicare managed care continues to grab the attention of payers and other organizations across the healthcare industry.
Insurers are inching away from employer-sponsored plans to government-sponsored ones, according to a recent A.M. Best report. MA and Medicaid managed care now make up more than half of all health plans' premiums combined.
MA alone has grown from $69.9 billion in 2007 to $202.7 billion just a decade later. It represented almost one-fourth of overall industry premiums in 2017 — and payers are flocking to capitalize on the growing sector's potential for profits, remaining bullish into Q2 of this year.
Though UnitedHealthcare and Humana remain the two largest MA payers, Anthem — along with competitors Aetna, WellCare and Centene — has expanded its MA membership this year. In its earnings from this past quarter, Anthem reported a 14% operating revenue increase in its government business due to its acquisition of Health Sun and America's 1st Choice, along with organic growth of membership.
The Blues payer closed out Q2 with 933,000 MA Part D members, an impressive growth of 37% year over year and especially in the face of sagging commercial plan membership for many payers. Anthem's CEO said the company has a "strong pipeline of commercial customers who want to stay Blue" and transition to its MA plans once they reach retirement and become eligible.
As such, the Anthem-Walmart initiative is the latest in industry's efforts to capitalize on the aging population.
The collaboration is expected to be "important to older adults who seek more value for their money and a convenient shopping experience," according to the press release, which noted that 90% of Americans live within 1o miles of a physical Walmart location.
"We believe that programs like this can make a tremendous difference for healthcare consumers who often live on a fixed income or are managing chronic medical conditions," said Felicia Norwood, Anthem's executive VP and president of its government business division.
The release similarly touted the delivery options of the new program, which will extend Walmart's free two-day shipping with online orders of $35 or more for Anthem's MA beneficiaries without the traditional Walmart membership fee.
Although the overall financial details are hazy, it seems Walmart and Anthem may be eschewing entirely the delivery charge levied by companies such as Amazon and CVS for delivery of OTC medications to the home.
Improving access to health products remains a driver in the industry. In late June, CVS announced it will become the first national drugstore chain to offer pharmacy and front store delivery from its stores — for an additional fee.
Walmart's focus on value-based care and bid to innovate may be a lesson well learned from a big missed opportunity earlier this year that e-commerce competitor Amazon was quick to capitalize on.
In April, CNBC reported that Walmart was in talks to acquire PillPack, an online pharmacy focused on delivering pre-sorted pills to customers who take multiple daily medications. But the deal fell through and, a few scant months later, Amazon swooped in and announced it had entered into a definitive merger agreement with the startup.
Still, the Bentonville, Arkansas-based retailer is reportedly in early talks to acquire Humana as it fights to hold its ground and retain its presence in the healthcare sector against the looming threat of the e-commerce giant.