Walmart and health insurer Humana reportedly are in early discussions regarding a possible merger, the Wall Street Journal is reporting. A potential merger, if it went through, would bring the Bentonville, Ark.-based retailer even further into the healthcare space that it has pushed into with its pharmacies, Care Clinics, optical centers, lab testing services and Wellness Day events.
WSJnotes that while it’s unclear what terms the companies are discussing — or that a deal with even materialize — its sources said that talks include an acquisition, as well as a range of other options.
The discussions come in the wake of several high-profile moves by retailers to enter the healthcare space in more robust ways. December 2017 saw CVS Health and Aetna announce plans to merge — which has potential to bring together CVS Health’s store footprint and pharmacy benefits manager CVS Caremark with Aetna’s connected health tools and patient base. A Walmart-Humana merger also would combine a retail footprint with insurer tools and Humana’s in-house PBM at a time when payers are increasingly using PBMs as a way to control ballooning healthcare costs. Also fresh in the retail world’s mind is Amazon’s partnership with Berkshire Hathaway and JPMorgan Chase to create a healthcare company to provide coverage to the three companies’ employees — which came amid continued speculation that Amazon will soon get into the healthcare game.
Humana currently has 2.4 million Medicare Advantage members, according to its website, making it one of the nation’s largest provider of the plans. WSJ’s report notes that in addition to the roughly 17% market share of the Medicare Advantage market would offer Walmart a customer boon, alongside potential savings on the retailer’s health plan — it currently is the largest private employer in the country, with roughly 1.5 million U.S. employees.