Aetna Establishes a Beachhead at Costco

Aetna and Costco have expanded into nine states with their cobranded health plan. Two additional states will be added pending state regulatory review.

The Costco Personal Health Insurance program offers five Aetna health plans with major medical benefits and dental coverage in Arizona, Connecticut, Georgia, Illinois, Michigan, Nevada, Pennsylvania, Texas, and Virginia.

The partnership between the giant health insurer and the major warehouse merchandiser establishes a beachhead for Aetna to a "nice cross-section of individual and small business customers," says Tory Wolff, a partner at Recon Strategy, a Cambridge, MA-based consulting firm focused on healthcare strategy.

He sees the partnership as one more indication of the movement taking place in the health insurance industry. "There's a lot of experimentation taking place right now as insurers test different channels to bring their products to customers."

As health insurance sales shift from B2B to direct-to-consumer models, the Costco deal means Aetna can tap into the company's successful retail strategy. Meanwhile Costco, which has wanted to expand its health insurance business line in a big way, has gained a well-established national player for its efforts.