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Life Health > Health Insurance

Your man at Wal-Mart

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The transition team for Donald Trump, the president-elect, has just set up a President’s Strategic and Policy Forum.

The forum is supposed to be an advisory board that will give Trump ideas about how to meet his goal of ”making America great again.”

The starting forum member list looks like a great list. Trump’s advisors will include the heads of leading banks, manufacturers, technology companies and consulting firms. The incoming administration will, for example, get to pick the brains of the heads of Detroit-based General Motors Co. and Cleveland’s Cleveland Clinic.

One thing that’s striking about the starting list, however, is that no one on the list is primarily known for being involved with a small business, or with the small business community. The list does not appear to include anyone from the Nashville, Tennessee-based National Federation of Independent Business or a similar organization.

Another thing that’s striking is the lack of anyone on the list who’s primarily known for involvement in the insurance community

Many of the people on the list are heads of corporations that are huge buyers of health insurance, and just about every other group insurance and commercial liability protection product. But I think there’s a difference between being a big buyer of insurance and a supplier of insurance.

Several of the corporate executives on the list run companies that provide technology services, business support services and strategy consulting services for insurers. Ginni Rometti is one example: She’s the president of Armonk, New York-based International Business Machines Corp. Of course, IBM knows something about the insurance industry.

Jack Welch, who now runs a business education organization, was the head of Fairfield, Connecticut-based General Electric Co. from 1981 to 2001. While he was there, the company controlled big life and annuity operations.

Related: GE seeks to help a failed Japanese life insurer

Donald Trump's Strategic and Policy Forum will include the heads of leading banks, manufacturers, technology companies and consulting firms. (Photo: AP Images)Donald Trump’s Strategic and Policy Forum will include the heads of leading banks, manufacturers, technology companies and consulting firms. But how well do they know health care policy? (Photo: AP Images)

The General Electric insurance operations served as the nucleus for what eventually broke away from General Electric and became Richmond, Virginia-based Genworth Financial Inc. But it’s hard for an outsider to know how much Welch really knew about the insurance industry and how much he depended on his ability to pick good insurance unit managers.

The forum member with the most obvious current relationship with the insurance industry is probably Doug McMillon, the president of Bentonville, Arkansas-based Wal-Mart Stores Inc.

Wal-Mart has become a huge player in the health care and health insurance markets.

In the 1990s and early 2000s, labor groups dragged Wal-Mart into the insurance community by using it as the test case for determining what the minimum level of health benefits at big companies ought to be. The idea seemed to be that, if Wal-Mart offered health benefits to low-wage workers, other employers would follow its lead.

In 2006, Wal-Mart shook up the U.S. pharmaceutical distribution market by having its Wal-Mart and Sam’s Club pharmacies offer many popular generic drugs for $4 per prescription. That move turned Wal-Mart into what amounts to a pharmacy benefits manager for ordinary shopper.

Related: Drug plan navigation basics

Many agents now sell Medicare products from tables in Wal-Mart stores, and Sam’s Club offers small-employer members access to a private health insurance exchange system in 27 states. Exchange program enrollment numbers are scarce, but McMillon might run one of the biggest group health distribution operations in the country. He might, in effect, be the secret king of small-group insurance brokers.

McMillon is, however, much better known for running discount stores than for insurance distribution. It seems as if it would be good for a top federal advisory forum to include someone who’s had to try to keep an insurance company solvent.

If none of the current or former heads of insurance companies can meet the eligibility criteria, maybe a good alternative would be to add the current or former head of one of the more sober state public employees’ benefits systems.

Anyone who’s been in charge of trying to make a state public employee health and pension system somewhat sustainable knows a thing or two about the conflict between what we want to do for the suffering people in front of us and the amount of cash in the till.


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