Aetna and Costco – the broker is ‘us’

aetna_medical_cardCostco and Aetna announced that the Big Box retailer would expand its marketing of Aetna health insurance policies to card-carrying members in California. Costco has already been selling health insurance through stores in Arizona, Connecticut, Georgia, Illinois, Michigan, Nevada, Pennsylvania, Texas and Virginia. Later in 2013, Aetna plans will be available in Costco stores in other state markets.

BTW, Costco operates stores in 42 U.S. states (as well as Canada, the UK, Taiwan, Korea, Japan, Australia, and Mexico).

All together, the company serves 37 million households.

The Costco Personal Health Insurance Program offers five plans, a network of health providers, and tools for members to use to manage administrative and other tasks. For Costco “Executive” Members (those who pay $110 a year for their card), the health plans also include the services of Health Advocate, the personal health advocate service that helps consumers navigate the health system, obtain second opinions, and resolve billing issues: not a trivial benefit.

In addition to paying lower monthly insurance premiums, when a member fills a prescription at Costco, they pay a lower copay in the store pharmacy.

Health Populi’s Hot Points:  Health, as Surgeon General Regina Benjamin has said, is where we live, work, play and pray. Add “shop” to that list of verbs, and you start to get a sense of what Aetna’s doing. Rolling out health insurance plans for individuals through trusted, beloved retail channels, like Costco — known for its low mark-ups on products and the fact that this retailer covers health insurance for (most of) its own employees, a highly unique practice in the retail segment — gets Aetna closer to consumers, and begins to brand the health plans accessed there as a high-value consumer good. For Costco, driving more pharmacy business to the counter generates revenue in the Health & Beauty aisle, along with traffic through the store: if you’ve driven to the Big Box and parked in the lot, you’re bound to pick up some other large-sized products in the proverbial “front” of the store. How about that new DVD of last year’s favorite TV show? Or a gallon of milk or 36 eggs? Not to mention the latest huge-screen TV or set of tires?

Aetna continues to position itself as more consumer-facing, more accessible, and more user-friendly than many other health plans. As we approach 2014 and the new era of Health Insurance Marketplaces, the Consumer Playbook of Aetna looks like required reading.

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