Aetna Establishes a Beachhead at Costco

Barbara DeMaio, who heads individual business at Aetna, says the Costco membership base has been very strong for Aetna. She notes that the typical Costco member is similar to Aetna's existing book of business. They tend to be value-based shoppers, have families, and be sole proprietors or business owners. While declining to cite sales figures, DeMaio says Costco's reputation as a first-class retailer and its loyal customer following are helping sell the insurance products.

DeMaio reports that feedback received so far indicates a "very high level" of customer satisfaction, with about 86% of members enrolled in these products reporting that they are very satisfied with their purchase. "We see this as a huge opportunity to service these customers over the long term," she says.

This is not the first time Aetna has sought to expand its brand by partnering with a major retailer. In January it announced a pilot program with Chicago-area Best Buy stores to sell online wellness programs in the retailer's health technology department. The programs from Aetna's LivingWell line focus on fitness, smoking cessation, stress management, and weight management. The line also includes products such as pedometers and blood pressure cuffs.

The Aetna-Costco health insurance products vary slightly from state to state but are based on five comprehensive offerings: a health savings account model, two traditional high-deductible plans, and two value plans. A dental option is also available. Deductibles range from $3,000 to $7,500. Costco personnel were very involved in the product development, says John Conlon, its director of insurance services. "This isn't a typical affinity relationship like some businesses might offer. Costco is involved in the [insurance] product and we're careful about what we offer."