Costco announced Tuesday that it will begin selling store-branded Medicare plans, marking the company's entry into the health insurance market for seniors. This initiative is the first in a series of insurance products the Issaquah, Washington-based wholesaler plans to release in the coming years.
Costco is collaborating with SCAN Group, a nonprofit insurer, to offer these new Medicare plans. While the plans will not require a Costco membership, they will be available for purchase in Costco stores, through insurance agents, and online. The company stated its goal is to bring "greater value" to seniors.
Initially, Costco and SCAN will launch their jointly branded Medicare Advantage and Medicare supplement plans in a limited rollout across two states for the Advantage plans and a third for the supplement plans. Although the specific states were not disclosed, the combined market for these plans is home to approximately 5 million Medicare enrollees, according to the companies. This move is expected to help Costco increase sales and enhance the appeal of its membership by offering more value, similar to its expansion of gas stations.
Dr. Sachin Jain, CEO of SCAN Group, highlighted the importance of strong partnerships in making healthcare more accessible and integrated into daily life. He noted that the expanded partnership with Costco provides a solid foundation for developing new ways to support seniors' health and independence while upholding the quality and service standards associated with both organizations.
Future offerings from Costco and SCAN may include innovations in pharmacy services and a Medicare Flex Card for over-the-counter benefits, as well as vision and audiology products. Costco CEO Ron Vachris stated that the company has consistently earned its members' trust by delivering value on essential goods and expanding health services, and the partnership with SCAN is an extension of this commitment.
Richard Stephens, senior vice president for pharmacy at Costco, observed that many older customers at Costco pharmacies struggle with their coverage. He explained that Costco aims to apply the same vetting process to its insurance products as it does to its other offerings, ensuring members receive products that are considered the best in their category. The new Medicare plans are viewed as a pilot program, from which Costco plans to learn and refine its offerings for members. The health insurance industry has seen some insurers withdraw from Medicare Advantage plans due to reduced government reimbursement rates and increasing medical costs.