Aetna Establishes a Beachhead at Costco

Margaret Dick Tocknell, for HealthLeaders Media , May 29, 2012

From Costco's perspective, he says, the goal of the partnership is to enhance the value of the Costco membership. DeMaio refers to "integrated points of value" available at Costco, such as pharmacies, that make it easy for people access their health insurance services.

The average Costco-Aetna policy has two members and is priced at about $350 per month. Typical benefits include a discount when members fill their prescriptions at a Costco pharmacy, unlimited lifetime coverage, and online interactive wellness programs. The nationwide provider network includes more than 921,000 healthcare professionals, more than 528,000 primary care physicians and specialists, and more than 5,100 hospitals.

The insurance policies aren't sold through on-site kiosks. Instead in-store signage refers customers to the Costco-Aetna website. Other marketing includes e-mails, ads in Costco's Connection magazine, direct mail, and advertising inserts. Conlon says it expensive to sell health insurance on-site. "It's hard to demo a health insurance policy," he laughs, referring to the common practice of food vendors of providing free samples to warehouse customers. Furthermore, selling insurance requires a license.

Conlon says "several thousand" policies have been sold and sales are "meeting expectations." He says many of the policies are for what he calls "micro groups" of two to three employees.

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