Costco is entering the Medicare market through a partnership with nonprofit insurer SCAN Group, launching store-branded Medicare Advantage plans in a limited rollout. The initiative aims to simplify senior healthcare access by combining retail trust with insurance benefits across select states, pending federal approval.
Costco and SCAN Health Plan Launch Senior Insurance Venture
Costco Wholesale is branching out from bulk groceries and gasoline into senior healthcare. The Issaquah, Washington-based warehouse retailer announced store-branded Medicare plans in a partnership with Foxbusiness, a Long Beach, California-based nonprofit insurer.
The collaboration marks the first time Costco has collaborated with a Medicare plan. While the insurance products will not be bundled into standard warehouse memberships, they will be sold directly in Costco stores, online, and through independent insurance agents and websites, according to industry reporting.
Phased Rollout Targets Five Million Potential Enrollees
The initial launch will be small in scale. The companies plan to introduce jointly named Medicare Advantage plans in two states and a Medicare supplement in a third state. Though precise state locations have not been publicly named, executives indicated to media that the combined initial market reaches roughly 5 million Medicare enrollees.
Pending regulatory approval from federal and state authorities, future offerings from the partnership may encompass a revamped pharmacy experience, Medflex over-the-counter pharmacy benefits, vision care coverage, and audiology services. Richard Stephens, senior vice president for pharmacy at Costco, noted that retail pharmacists frequently observe older adults struggling to navigate their healthcare coverage.
Costco members know that if they buy something from Costco, it has been vetted, and we feel it’s the best thing in the category,
Stephens explained to reporters, describing the initiative as a pilot project from which the company intends to learn.
Executive Perspectives on the Healthcare Venture
Both corporate leadership teams emphasized that the joint venture is built on addressing consumer frustration with fragmented medical systems. SCAN Health Plan currently serves nearly 500,000 members across 33 counties in California, Arizona, Nevada, Texas, New Mexico, and Washington.
“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.”
Dr. Sachin Jain, CEO of SCAN Group and SCAN Health Plan
Dr. Jain added that older adults are actively seeking healthcare systems that are easier to navigate and rooted in trusted organizations. On the retail side, Costco leadership framed the healthcare venture as a natural continuation of a four-decade retail model.
“For more than 40 years, Costco has consistently listened to our Members and earned their trust delivering consistent value on essential goods and expanding our health service offerings. Selecting SCAN as our partner to deliver a better healthcare experience for seniors, is an extension of that commitment.”
Ron Vachris, Costco CEO
Retail Expansion Into a $600 Billion Industry
The move eases Costco deeper into the broader domestic healthcare and service economy. The retailer already operates gas stations, sells gold bars, caskets, and vacation packages alongside bulk grocery items. Entering the senior insurance market helps the big-box retailer reinforce membership value as it navigates a retail landscape exceeding a $600 billion nationwide business.
The expansion arrives at a complex time for Medicare Advantage providers nationwide. Insurers across the sector have increasingly dropped or scaled back plans due to tight government reimbursement rates paired with rising medical costs. By partnering with an established nonprofit insurer like SCAN, Costco attempts to bridge retail loyalty with specialized medical administration.
Regulatory review remains ongoing, and the companies have not yet announced exact dates for when the new healthcare products will hit store counters or registration portals.
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