Dive Brief:

• Walmart is officially elbowing into the insurance brokerage industry with the launch of Walmart Insurance Services, which will start selling Medicare plans during this year's annual enrollment period.
• The news first surfaced in early July that Walmart was recruiting sales managers and Medicare insurance agents in Texas, leading analysts to forecast the massive retailer was piloting a broker business to sell Medicare products in the Dallas region. But the effort is much broader, per Tuesday's release, and could disrupt existing players like eHealth, SelectQuote and Goco, analysts say. Shares in all three brokers fell Tuesday following the news.
• Walmart will sell Medicare Advantage, Medicare Supplement and Part D prescription drug plans offered by a slew of major insurers, including Humana, UnitedHealthcare and Centene-owned Wellcare, in all 50 states and Washington, D.C. Walmart said it could add more carriers in the future.

Dive Insight:

Though Walmart's entry is unlikely to slow immediate growth of other insurance brokers, it is a legitimate long-term threat, especially in Medicare Advantage, according to analysts.

"Walmart's brokers will be able to sell from the leading MA players, including UNH and HUM which alone account for over 40% of the MA market," Jefferies analysts David Styblo and David Windley wrote in a Tuesday note on the move. "That's important since it gives seniors choice among plans they would expect to see. Not all brokers have relationships with all MA plans."

Walmart won't be able to undercut other brokers on pricing, as MA plans have to be sold at the same price by law. That's a bright spot for competitors, Styblo and Windley said, as the success of Walmart's new venture will depend mostly on its ability to reach consumers. However, it is possible Walmart could accept a lower commission than other brokers from MA plans, which could contribute to broader pricing pressure on existing brokers.

For their part, payers are likely to welcome Walmart with open arms to diversify their broker base and not let one vendor have too much control, according to the analysts. Along with Humana, UnitedHealthcare and Wellcare, Walmart will sell plans from Anthem Blue Cross Blue Shield, Amerigroup, Simply Health, Clover Health and Arkansas Blue Cross and Blue Shield. 

Medicare's enrollment period is Oct. 15 through Dec. 7.

The Bentonville, Arkansas-based retailer has been doubling down on its healthcare efforts this year, even as the pandemic wreaks havoc on the industry. It's currently undergoing a nationwide expansion of its health superstores, a year after launching the first pilot in Georgia.

Walmart has also partnered with medical network Oak Street Health to staff clinics in three Walmart Supercenters in the Dallas-Fort Worth area. And in June, Walmart bought VC-backed technology platform CareZone, which develops apps to manage medications and chronic illnesses, in a deal pegged at $200 million