Potential implications of Amazon’s One Medical membership offer on employer sponsored health plans

November 28, 2023

Earlier this year, Amazon acquired One Medical, a primary care provider with physical locations in about two dozen geographies which provides virtual care nationwide. This month, Amazon announced that it would offer membership in One Medical to Amazon Prime subscribers for $8 a month (or $99 a year). One Medical offers access to same day office virtual and in-person office visits and has existing employer customers which pay a fee for health plan member access.

One Medical has contracts with most major national and many regional health insurance plans, and bills carriers for virtual and in-person services delivered. One Medical’s allowable fees can be high in markets where they contract with payers through local health care delivery networks which have high negotiating leverage.

Employer-sponsored health plan members in much of the country report difficulty finding primary care physicians who are accepting new patients. One Medical’s integration of virtual and in-person care could allow the company to scale its offerings despite the nationwide shortage of primary care providers.

Implications for employers:

• Given the challenges in primary care access, a well-funded vigorous competitor can benefit plan members.

• Members should recognize that subscription fees are not eligible for reimbursement from Flexible Spending Accounts.

• The price point of One Medical membership has become low enough that many employees might choose to pay this out of pocket if they want access to these services.

Disclosure: I was the Chief Medical Officer of One Medical in 2012-13. I have no financial interest in either One Medical or Amazon.

Thanks for reading.  You can find previous posts in the Employer Coverage archive

Please “like” and suggest this newsletter to friends and colleagues. Thanks!