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Insurance retail stores proving durable, but growth slowing down

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Retail insurance: Capital BlueCross operates a retail store in the Promenade Shops at Saucon Valley in Upper Saucon Township. It is eyeing Lancaster and Reading for its next store.
Retail insurance: Capital BlueCross operates a retail store in the Promenade Shops at Saucon Valley in Upper Saucon Township. It is eyeing Lancaster and Reading for its next store. - (Photo / )

Two Pennsylvania insurance companies that have had ventures into retail storefronts say that their initiatives continue to show benefits to consumers but expansion plans are on hold at least through 2019.

Highmark Direct retail stores and Capital Blue Health and Wellness Centers continue to show positive results, especially for the consumers who use the retail outlets to understand insurance options or to develop healthy lifestyles through the counseling and services offered by the stores, company representatives said.

Neither company would offer sales figures for their stores but said that the efforts have been successful enough to continue.

“We don’t share sales figures from the stores, as that is proprietary,” Leilyn Perri, with the corporate communications office of Pittsburgh-based Highmark Health, said in an emailed response to questions.

Highmark, which has had stores since 2009, has 11 retail shops -- with two in the Lehigh Valley and three in the Harrisburg-Lancaster area -- and does not have immediate plans to add to that mix. At one point, the company had as many as 13 stores, Business Journal records show. Perri said two stores closed after Highmark took over the Northeast PA Blue Cross Blue Shield plan a few years ago because “there was not enough volume at the time to justify keeping them open.”

“We are always evaluating the stores and determining if there is a need for more,” Perri said. “Right now, this seems to be the right number.”

At Capital BlueCross, the two “Capital Blue to You” stores have shown enough promise that company officials are looking at adding a third storefront, perhaps in 2020, said Dave Skerpon, Capital BlueCross’ senior vice president, enterprise marketing, consumer experience. The Harrisburg-based company has a Lehigh Valley store on Center Valley Parkway in Center Valley and a store at Hampden Marketplace on Marketplace Way in Enola, and it is eyeing the Reading and Lancaster areas for a possible third store, Skerpon said.

Capital Blue also would not provide sales figures. But its two stores have been steadily increasing foot traffic, with an average of about 3,000 people per month coming through the stores, said Mike Crnovic, director of retail services. During the open-enrollment season, the traffic is heaviest, especially because the company expands hours to seven days per week, he added. The Enola store, which opened in 2015, employs eight and Saucon Valley, which opened three years earlier, employs nine.

Capital has worked to make the stores accessible as community centers, where health-related events and services are available for free to consumer members and businesses, Skerpon said. For a nominal fee, non-members have access to many services, such as fitness classes. The classes are popular and often have waiting lists, Crnovic said.

In addition, Healthy You Cafes offer nutritional food options and nutrition advice. The idea is to have a one-stop shop for health needs. Blood pressure checks, custom wellness plans and other services are available, and consumers and small-business owners can consult with store employees about the best health-insurance options or doctors for specific care


One motivation for retail stores that have popped up in other markets and states, as well, was the Affordable Care Act, or Obamacare. The stores were seen as a way to help consumers and businesses navigate complex insurance options, while promoting healthy lifestyles. Since the act’s passage, a reverse trend has accelerated, with large national retailers seeking ways to enter traditional healthcare markets.

“If retail is getting into healthcare, why not healthcare into retail? Amazon and Walmart aren’t eyeing disruptive innovation to healthcare as a key strategic move in isolation; the consumer (sometimes the patient, sometimes the employer) is gaining the power and demanding convenience,” Dr. Patrick Michael Plummer, a business professor at Penn State University – Mont Alto, said in an email. “This is the motivating factor, and why retailers believe they have an opening. That’s my opinion on why insurers are testing these retail waters.”

However, he doesn’t necessarily think that the insurance-owned storefronts will remain a growing trend.

The lack of “expansion plans means insufficient profitability in this area,” he said. “I can’t imagine these retail shops are too busy except during open enrollment. They’ll likely need to add retail services to truly satisfy a consumer’s ‘convenience’ need and make a profit. 

Overall in 2019, Plummer said he expects to see a continuation of the “bigger is better” mentality for insurers and hospitals/health systems, which likely will involve small steps involving more mergers with independent doctors and practices.

Harrisburg is not likely see major changes “at the same level that we saw over last 18 months,” he explained. “But size – and the perceived negotiating leverage that size potentially provides – will remain at the forefront.”

He doesn’t expect much movement on the national level with health care initiatives, even though Democrats and Republicans can agree on some of the main issues, such as rules involving pre-existing conditions.

Both sides of the aisle will posture to appeal to their bases, he added, while making no real effort to solve the problems.

“It’s a mess, and everyone is to blame,” Plummer said.

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