Costco Medicare Advantage Pilot Targets Seniors
Costco Medicare Advantage pilot with SCAN will offer co-branded Medicare Advantage and Medigap plans and could alter insurer competitive narratives.
KEY TAKEAWAYS
- Costco and SCAN disclosed a pilot to market Costco-branded Medicare Advantage and Medicare Supplement plans.
- The initial rollout covers two Medicare Advantage states and one Medigap state, encompassing roughly 5 million beneficiaries.
- SCAN will underwrite and administer plans while Costco supplies brand, stores and pharmacy in an asset-light pilot.
HIGH POTENTIAL TRADES SENT DIRECTLY TO YOUR INBOX
Add your email to receive our free daily newsletter. No spam, unsubscribe anytime.
Costco Wholesale Corp. is entering the Medicare market with a pilot of Costco-branded Medicare Advantage and Medicare Supplement plans developed with nonprofit SCAN Group, the companies disclosed on Aug. 18, 2026. The move expands Costco’s retail distribution into senior health benefits.
Pilot Scope and Market Reach
Costco and SCAN are jointly developing and marketing Costco-branded Medicare Advantage plans in two states and a Medicare Supplement (Medigap) plan in a third state. The initial markets cover roughly 5 million Medicare beneficiaries. SCAN’s existing Medicare Advantage footprint spans 33 counties across six states—California, Arizona, Nevada, Texas, New Mexico, and Washington—and serves about 460,000 Medicare Advantage members. Including affiliated programs, SCAN Group’s broader network reaches roughly 500,000 members and patients.
Under the partnership, SCAN will underwrite and administer the plans while Costco provides its brand, store footprint, and in-store pharmacy, optical, and hearing operations. Costco operates a licensed insurance agency that distributes third-party products but does not underwrite policies or pay claims. This structure follows a growing model of consumer brands entering health insurance through partnerships rather than owning a plan license.
Product Integration and Distribution
The Costco-branded plans are expected to integrate Costco pharmacy services, Medflex over-the-counter (OTC) benefits, vision coverage, and audiology services aligned with Costco’s optical and hearing centers. The companies plan to sell policies inside Costco warehouses, through insurance agents, online, and other standard Medicare distribution channels. Federal rules prohibit bundling a Costco membership with plan enrollment or pricing.
Costco and SCAN have not disclosed financial terms or provided formal guidance on revenue, membership targets, or margin impact. No Costco SEC Form 8-K or company press release detailing the partnership’s economics has been identified. Commentators describe the initiative as an asset-light pilot with limited near-term financial impact on Costco’s overall business, given its limited geography and reliance on SCAN as the insurer.
The U.S. Medicare market, including Medicare Advantage, exceeds $600 billion annually for insurers. Costco’s roughly 92% membership renewal rate is cited as a potential adoption lever among senior customers. The rollout is described as a multiyear effort, with any expansion beyond the initial markets depending on pilot results and regulatory approvals.
The plans remain subject to approval by the federal Medicare agency, the Centers for Medicare & Medicaid Services (CMS). SCAN’s chief executive, Dr. Sachin Jain, noted regulatory limits prevent sharing details about benefits, locations, or timing while the plans undergo review.
