Bloomberg News

Walgreen Joining Blue Cross May Recharge Health Law Push (2)

July 10, 2013

Walgreen Co. (WAG:US), the biggest U.S. drugstore chain, agreed to join with the largest federation of health insurers to promote the Affordable Care Act, lending a hand as the Obama administration strains to win over the public.

The Blue Cross Blue Shield Association, comprising 38 state and local health plans including 14 owned by WellPoint Inc. (WLP:US), said today it will set up an educational website with Walgreen and distribute information in the retailer’s 8,000 stores. The campaign is aimed at encouraging people without insurance to use the government exchanges to shop for subsidized health plans.

The announcement may provide a lift two weeks after the National Football League threw water on the idea of becoming a partner with the Obama administration, which has struggled to sell the law’s benefits amid roadblocks by Republican opponents. The Walgreen-Blue Cross effort would be the largest by private industry to promote the 2010 health-care law.

“There’s a lot of confusion, a lot of questions, and it’ll take a tremendous collaborative effort to make sure people have the information they need to make informed choices,” Brad Fluegel, chief strategy officer for Deerfield, Illinois-based Walgreen, said in a statement.

While the core parts of the law take effect next year, about 4 in 10 people polled by the nonprofit Kaiser Family Foundation in April said they weren’t even sure it was still on the books.

The companies didn’t disclose financial terms of the partnership.

Health Destination

Chicago-based Blue Cross includes plans that cover about 100 million people in the U.S. Walgreen stores see about 120 million customers a year, Fluegel said today in a phone interview. About 16 percent of Americans were uninsured in 2011, according to Kaiser, and Fluegel said Walgreen believes its customers “are fairly representative of America.”

“We are a health destination for a lot of those customers,” he said. “We wanted be able to keep them informed, educate them on the changes and what their options are. It’s a question people are going to be asking our store personnel, pharmacists, other professionals.”

The promotional materials Walgreen distributes won’t recommend any specific insurance plan and customers won’t be able to enroll in stores, Fluegel said.

Shares Rise

Walgreen gained 3 percent to $47.85 at the close in New York. The company’s shares have increased 29 percent this year. WellPoint rose less than 1 percent to $84.75 and has advanced 39 percent this year.

Blue Cross and Blue Shield plans participating in the effort include some that haven’t committed to sell policies in their states’ exchanges in 2014, said Maureen Sullivan, senior vice president of strategic services at the association.

“They’re looking to participate in the future,” she said in a phone interview. “Even if they’re not playing the first year, they want people to know this is what’s happening. It’s a commitment to the local community.”

The Obama administration has been criticized by opponents and supporters for not doing enough to promote the law. The online exchanges are supposed to be ready Oct. 1 for people to start signing up for insurance that would start Jan. 1.

Hotline Opened

U.S. officials opened a hotline for questions about the law last month and activated a website that outlines its provisions. The administration also has hired the advertising and public relations firm Weber Shandwick to design publicity campaigns for the law, which will begin closer to October, Health and Human Services Secretary Kathleen Sebelius has said.

The government has announced programs totaling about $212 million to promote the law, including grants to federally funded health clinics to hire people who will help patients sign up for insurance. Sebelius’ department said today that 1,159 clinics will be awarded grants of at least $59,000, and may enroll as many as 3.7 million people into the health law’s insurance expansions.

“We have a robust plan to get the job done,” Sebelius told reporters in a conference call today.

The administration has complained that efforts to do more have been stymied by congressional Republicans, none of whom voted for the health law. Republicans have refused to approve more funding for implementation and they opened an investigation into Sebelius’s urging of corporate support for a nonprofit, Enroll America, that has been handling some promotion.

NFL Talks

Sebelius stumbled again last month when she told reporters she had discussed a partnership with the NFL to promote the law. Senate Republican Leader Mitch McConnell of Kentucky wrote to the NFL on June 28 demanding to know more about the talks. A league spokesman, Greg Aiello, then denied there had been any “substantive” discussions and said there were no plans to help promote the law.

The exchanges will sell insurance online and over the phone from companies such as Indianapolis-based WellPoint. People who lack coverage through their jobs will be eligible for tax credits to help pay monthly premiums if they make less than four times the poverty level -- about $94,000 for a family of four.

The plans begin Jan. 1, when the law requires most Americans to carry insurance. About 7 million people are expected to enroll in exchange plans next year, rising to 25 million by 2018, according to the Congressional Budget Office.

The law also encourages states to expand their Medicaid programs for the poor to cover people earning close to poverty-level wages. About 24 states have refused so far, Sebelius said on June 24.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net


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Companies Mentioned

  • WAG
    (Walgreen Co)
    • $76.46 USD
    • -0.21
    • -0.27%
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