Anthem, the nation’s largest health insurance carrier, warned of higher medical costs to come in their recent earnings forecast – due in part to more rapid than expected vaccine administration and bounceback of medical expenses as non-COVID 19 expenses are in greater demand. This sentiment was also shared by UnitedHealthcare in their earning report. There is no doubt that the negative medical cost inflation seen in COVID-stricken 2020 was an aberration. Medical cost trend is reemerging and the nation’s largest retailers clearly see the potential.

Viewpoints from Craig Hasday

Amazon, the most valuable company in terms of market capitalization, made its fortunes by disrupting markets and they are at it again with Amazon Care.

When Amazon purchased PillPack with its 50-state pharmacy license, it was clear that would be a cornerstone of Amazon’s healthcare buildout. The Amazon Care app is another major move that is intended to streamline, increase transparency, lower barriers to entry and disrupt health insurance as we know it. Amazon’s Care Medical group will provide virtual care triage. Through an easy-to-use interface, members’ care will be coordinated and they will be steered to the appropriate provider or services for care such as preventive or ongoing treatment of chronic conditions. Low costs and simplified administration are intended to be funded by patients as needed, out of pocket, and eliminate the need for billing of medical insurance coverage.

But Walmart, America’s largest brick and mortar retailer, is not content to watch their nemesis walk away with the prize without challenge.

They know well that 90% of Americans live within 10 miles of one of Walmart’s 5,700 stores. In 2020 and 2019, 10% of Walmart’s revenues were derived from health and wellness products and services. Walmart Health centers, currently standalone supercenters, offer $30 medical check-ups, $25 teeth cleaning, $45 vision exams and mental health counseling for $1 per minute. There are 20 health centers in Georgia and Arkansas and 16 new centers are planned for 2021. At those costs, who needs health insurance? This strategy cures the affordability issue that impacts many Americans, especially those with high-deductible health plans. Walmart also intends to march into Medicare with its Walmart Insurance Services agency, which would avoid conflicts with existing health insurance carriers. Medicare is an inclusive platform for providers willing to following the government’s rules and accept their payment schedules.

Karen Lynch, CEO of CVS, which recently purchased health insurance giant, Aetna, says they are ready for the competition.

Having tested and vaccinated millions of Americans, CVS is already deeply embedded in healthcare for its 100 million customers. Aetna has stated its intention to return to the Affordable Care Act’s state exchanges in a big way for January 1, 2022 and CVS is targeting 65 billion healthcare interactions over the next decade. Their 650 HealthHUB locations are expected to grow to 1,500 by the end of this year.

Expect disruption, expect transparency and expect a change in the way healthcare is delivered. The United States can’t afford not to allow it.


EPIC offers these opinions for general information only. EPIC does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this article and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.


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Craig Hasday

President, National Employee Benefits Practice