Blue Cross and Blue Shield of Minnesota will open a retail store in Edina, the first insurer in the state to make a direct play to consumers as health care becomes ever more competitive.
The store is scheduled to open this fall at Yorkdale Shoppes, a busy retail node near Southdale Center and Cub Foods, in space once occupied by specialty retailer Christopher & Banks. It will serve consumers shopping for individual plans and seniors eligible for Medicare.
Eagan-based Blue Cross is the state's largest, nonprofit organization and the largest insurance company. The $9.3 billion organization is a dominant player outside of the Twin Cities area, and traditionally has relied on an active network of brokers to reach individual consumers.
But changes in health care are putting more choice in the hands of the consumers, and insurers are marketing directly to them to try to win their business.
"Everybody in health care wants to reach the masses, and retail is one way to do that," said Tom Charland, CEO of Merchant Medicine, which tracks retailing trends in health care, particularly walk-in medical clinics.
No date has been set to open the doors, but Blue Cross officials said the store will be ready for the upcoming open enrollment period, which begins Nov. 15. More stores could follow in the coming years.
The 3,500 square-foot space will be also used for informational sessions and wellness activities, such as yoga, light fitness and healthy cooking classes.
Retail storefronts aren't new to insurers. Nationwide, Blue Cross and Blue Shield operates about 50 retail stores in nine states. Michael Guyette, CEO of Blue Cross and Blue Shield of Minnesota since January 2013, was instrumental in opening the first of those stores, for Florida Blue, in 2006.
Minnetonka-based UnitedHealthcare, the nation's largest insurance company, has long had a storefront presence and in recent years has opened temporary stores and kiosks in shopping malls around the country during the busy holiday season to sign up seniors for its Medicare plans.
HealthPartners also has tested a pop-up store concept at Ridgedale Center in Minnetonka.
The timing of the new venture is strategic, with the store opening just as tens of thousands of Minnesotans will be renewing policies bought under the first year of the fully implemented federal health law.
Blue Cross saw modest enrollment growth through MNsure, the state's online insurance exchange established by the Affordable Care Act. About 23 percent of those who purchased coverage through MNsure bought a Blue Cross plan, compared with the market-leading 59 percent who went with PreferredOne.
Monica Engel, a vice president of sales at Blue Cross, said the insurer will take a "somewhat aggressive … but thoughtful" approach to opening additional retail outlets in the coming years. The stores are meant to complement, not replace, insurance agents, she said.
"Brokers are a key member of our distribution," Engel said. "We see the store as being an extension of the services that the brokers provide to consumers today."
But Charland said that brokers' traditional business model is under siege, and the move is one more sign of massive changes underway in the health insurance industry.
"We see health care providers entering the insurance business, we see insurance companies entering the health care business," he said. "And everybody's starting to talk about 'customers.' The whole vocabulary is changing."