Costco Wholesale Corporation and nonprofit insurer SCAN Group recently announced a partnership to sell Costco-branded Medicare plans. This marks Costco’s first foray into the Medicare market, with plans to offer Medicare Advantage products in two states and a Medicare supplement plan in a third pending regulatory approval from the Medicare agency.
While the target states and timing remain undisclosed due to regulatory restrictions, the potential market for these plans includes around five million Medicare enrollees. Under the partnership, Costco will market branded health insurance products for older adults, covering services such as prescription drug access, Medflex over-the-counter benefits, vision care, and audiology.
These plans will be available for purchase in Costco stores, as well as through insurance agents and other standard channels. It’s important to note that federal rules prohibit bundling a Costco membership with the health plans. SCAN Group CEO Dr. Sachin H. Jain highlighted that the new Medicare Advantage plans will integrate closely with Costco’s existing offerings across various health-related products.
Costco CEO Ron Vachris emphasized that the partnership aligns with the retailer’s commitment to delivering value to its members. He pointed out that they have a shared understanding of what matters most to the seniors they serve and aim to create value for their members through this partnership.
Richard Stephens, senior vice president for pharmacy at Costco, described the Medicare effort as a pilot program aimed at learning and refining the product to best serve Costco members. He stressed that Costco’s reputation for vetting products it sells will also apply to the new insurance offering.
SCAN Health Plan’s coverage footprint spans 33 counties across six states, reaching close to 460,000 members. When factoring in affiliated programs and entities, the broader SCAN Group network reaches roughly 500,000 members and patients. The financial terms of the partnership between Costco and SCAN Group remain undisclosed.
Overall, this partnership between Costco and SCAN Group represents a significant step into the Medicare market for the retail giant. By offering branded Medicare plans, Costco aims to provide value and convenience to its members while expanding its range of health-related products and services.
