Costco Expands Into Medicare Coverage? 3-State Rollout in the Works
A 15-pound bag of rice, 2 liters of olive oil, a $1.50 hot dog and a deal on Medicare?
Warehouse retail giant Costco is partnering with the SCAN Group to offer co-branded Medicare Advantage plans and other Medicare services. Federal regulatory approval is still pending, but the two companies are eyeing limited rollouts in three yet-to-be announced states, possibly before the end of 2026.
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Here's what information is available so far.
Details Remain Sparse, but Promising
How the partnership will affect the industry and seniors’ Medicare shopping habits remains to be seen.
“There are still a lot of unanswered questions about this particular partnership, including exactly where the products will be offered, how they will be marketed and what their benefits and pricing will look like,” said Jenny Chumbley Hogue, health policy analyst for medicareresources.org. “Until those details are available, it’s difficult to say how different the offering will be from other branded Medicare products.”
The deal marks Costco’s first comprehensive partnership with a Medicare plan. Costco and SCAN claim the arrangement will bring greater value to seniors.
"For the millions of older adults who rely on Medicare Advantage, the future of the program depends on strong partnerships that make healthcare more accessible, more connected and more seamlessly integrated into everyday life," said Dr. Sachin H. Jain, CEO of SCAN Group and SCAN Health Plan, in a prepared statement. "Older adults want healthcare that is easier to navigate, more responsive to their needs and rooted in organizations they trust.”
Jain told The Wall Street Journal last month that Medicare Advantage plans would integrate with Costco’s current health-related offerings. Additional insurance products would include pharmacy, vision, hearing and over-the-counter Medflex benefits, pending approval.
SCAN Group’s SCAN Health Plan is a not-for-profit Medicare Advantage plan that serves nearly 460,000 members across 33 counties in California, Arizona, Nevada, Texas, New Mexico and Washington, according to the release. Costco operates more than 900 warehouses around the globe, including 655 in the United States. California leads the way with 147 locations, followed by Texas (44) and Florida (35).
"We (Costco and SCAN) have developed a shared understanding of what matters most to the seniors we serve," said Costco CEO Ron Vachris as the deal was announced. "Deepening our partnership allows us to build on that foundation and create value for our members."
Benefits the Partnership Could Offer
Hogue said that the key for consumers will be comparison shopping, once there are actual Costco-SCAN offerings to compare. She cautioned that trust in a brand doesn’t necessarily mean its Medicare offerings will be best for you.
“Consumers still need to do the same due diligence they would with any Medicare plan,” Hogue said. “That means looking at whether their doctors and hospitals are in network, whether their prescriptions are covered, what their premiums and out-of-pocket costs would be, and what additional benefits the plan provides. If the plan is a standardized Medicare supplement (Medigap), consumers need to compare the price to other available Medigap plans and understand how the plan will adjust pricing going forward. Modern Medigap plans do not include prescription drug benefits, but enrollees can get prescription drug coverage through stand-alone Part D plans.”
If the Costco-SCAN partnership sees initial success, expansion to additional markets with high percentages of seniors could follow. A strong rollout could also pave the way for expansion into other healthcare services, and prompt Costco competitors such as Sam’s Club to enter the branded Medicare fray.
“It’s probably too early to draw conclusions about what this might mean,” Hogue said. “The Medicare rollout is starting in only a small number of states, and many of the details have not yet been released.”
“If the offering is successful, it would be reasonable to expect Costco and SCAN to consider expanding it into additional markets,” she continued. “It could also show other retailers with large customer or membership bases that Medicare is another service they can potentially offer to their customers.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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