Costco Wholesale Corp. will begin selling store-branded Medicare Advantage and Medicare Supplement plans through a new pilot program [1, 2, 3].
The move marks a significant expansion of the retailer's health-service ecosystem, attempting to integrate insurance coverage with existing member benefits to lower costs for seniors.
Costco announced the partnership with the nonprofit insurer SCAN Group on Tuesday, Aug. 18 [2, 4]. The retailer said the initiative aims to bring greater value to seniors by combining Medicare coverage with the company's health-service offerings [2, 5].
The pilot program will initially launch in two U.S. states [3, 6]. Additionally, a Medicare supplement plan will be offered in a third state [3, 6]. Costco has not yet named the specific states included in the initial rollout.
SCAN Group will provide the insurance infrastructure for the branded plans. The nonprofit insurer currently serves nearly 460,000 members [7]. Its operations extend across 33 counties in six states, including California, Arizona, Nevada, Texas, New Mexico, and Washington [7].
This partnership allows Costco to leverage its membership model to enter the healthcare insurance market. By offering branded plans, the company can create a more seamless experience for elderly members who already use Costco pharmacies or health services. The company is positioning the move as a way to simplify the complex process of selecting Medicare coverage while adding value to the membership fee.
“Costco will begin selling store-branded Medicare Advantage and Medicare Supplement plans”
This move signals a trend of 'retailization' in healthcare, where large membership-based corporations move into insurance to increase customer loyalty and capture more of the healthcare spend. By partnering with a nonprofit like SCAN Group, Costco can enter the highly regulated Medicare market without building an insurance carrier from scratch, potentially creating a blueprint for other big-box retailers to offer bundled health and retail services.
