WellPoint becomes latest to open retail insurance store
■ The number of health plan outlets is small but is expected to grow as more consumers look to buy individual policies.
By Emily Berry — Posted Sept. 6, 2010
Hoping to open up a new channel for individual policy sales, Anthem Blue Cross and Blue Shield of Colorado is going where people already shop -- the mall.
The Colorado plan is the first among subsidiaries of Indianapolis-based WellPoint to open a retail store. The Anthem store is in the Denver suburb of Littleton, Colo., in the Southwest Plaza mall.
Other plans have opened retail outlets, but experts said more might consider stores as a way to reach potential customers -- especially to build a customer base for 2014, when most U.S. residents will be required to have health coverage or pay a tax penalty.
Such stores also could give insurers a friendlier face in the community, said Jeffrey Bauer, a partner and futures leader with ACS Healthcare Solutions, a consulting group.
"If you're one of the Blues plans, WellPoint or someone else, and you've just taken a pretty strong hit in public relations, then going to where people are, the shopping malls, would be a smart move," he said.
Bauer was referring to how WellPoint was admonished by the Obama administration and others over its rescission and rate-setting practices.
Rather than working out of an imposing downtown skyscraper, plans need to show up in suburban malls, Bauer said. Denver is one of many cities where a health insurance company's headquarters looms over the landscape in a less-than-friendly way, and having smaller storefronts helps counter that negative image, he said.
Anthem's store in Littleton won't be just for buying insurance. The store will feature a juice bar, and the company plans to host yoga classes and other wellness activities to make the space inviting and friendly.
Spurred by health reform
The Patient Protection and Affordable Care Act became law in March. Although U.S. residents won't be required to have health insurance until 2014, states are working to meet that mandate by establishing health insurance exchanges, which also are required by 2014.
Companies say it's unclear what these mandates would mean for the individual market, but some are betting on retail stores to spur sales.
"The fact of the matter is no one really knows what's going to happen before, during or after reform," said Mike King, manager of retail marketing for Pittsburgh-based Highmark Inc. "We're all doing our best to figure it out just like everybody else is."
Well before the mandate takes effect, health plans say employers laying off workers and dropping health insurance coverage have pushed more people into the individual market, although that does not mean people are buying individual policies. For example, WellPoint noted in its July earnings report that its individual business had fallen by 11% during the last year.
In August, Highmark announced the opening of its fourth and fifth Highmark Direct stores in Pittsburgh. A sixth is set to open in another area of the city later in the year. Other locations are in Mechanicsburg and Harrisburg, Pa.
The first store opened in March 2009. In Highmark's first year operating retail stores, they attracted 20,000 visitors, according to the company. The insurer did not reveal how many people bought insurance, and how much revenue the stores collected.
"Retail is something we feel is the future of the business -- it's definitely a health insurance market trend," King said. "Frankly, it's a confusing product. ... What we're doing is demystifying the entire process, giving consumers a place to come in, sit down with a licensed, knowledgeable professional and talk about a big decision in their life they have to make."
Anthem had planned to open its Colorado store before health reform passed, because even before the prospect of an individual mandate took shape, the market was growing, and the retail idea made sense, said Robert Ruiz-Moss, an executive in charge of the store. "This really is a test for us to see the receptivity for people buying health insurance in a location they might buy other consumer goods."
In the first few weeks the store got about 100 visits a day and averaged about four applications for coverage, he said.
Health screenings and more
BlueCross BlueShield of South Carolina opened its SC BlueStore in Mount Pleasant, S.C., in January 2009, and has had a few thousand visitors since then, said company spokeswoman Elizabeth Hammond. Unlike at the Highmark and Anthem stores, the SC BlueStore is staffed by independent insurance brokers, along with a BlueCross BlueShield employee who helps current customers.
As at the Highmark stores, visitors to the SC BlueStore can get health screenings, but the South Carolina store also offers refreshments and massage chairs. All three companies' stores have children's play areas.
"We view the store as the next generation of outreach to our current and potential customers," Hammond said. "It's face-to-face contact in a comfortable setting that is convenient."
The company is "always assessing" whether it might expand the idea, but there are no immediate plans for another store, she said.
Bauer predicts that health plans will expand offerings at stores to include health screenings and health education, and even partner with pharmacies or retail clinics to offer a one-stop health shop for consumers.
Bauer said even tech-savvy people who buy health insurance online may need face-to-face help sometimes, and health plan stores can offer aid the way Apple stores schedule appointments at the "Genius Bar," where customers can get technical assistance.
"You want to go in and have somebody walk you through it," he said.