Costco is preparing to enter the Medicare insurance market for the first time through an expanded partnership with nonprofit insurer SCAN Group, a move that could connect senior health coverage with services already familiar to warehouse shoppers.
The companies plan to begin with Costco-branded Medicare Advantage products in two states and a Medicare Supplement plan in a third, pending regulatory approval. They have not identified the states or announced a launch date while the products remain under review. The three planned markets together include about five million Medicare enrollees.
The rollout is being treated as a pilot rather than a nationwide launch. That distinction matters because Medicare products are regulated, market-specific and shaped by local provider networks, pricing and benefit structures.
What Costco’s Medicare plans could offer
The proposed offerings could bring together prescription drug access, Medflex over-the-counter benefits, vision care and audiology. SCAN has also described opportunities to connect benefits with food and hearing products, building on areas where Costco already has a presence.
Costco operates pharmacies, optical departments and hearing-aid centers at many warehouses, giving the partnership a ready-made consumer touchpoint. Its health-service footprint is expanding alongside its broader store network, including new Costco warehouses opened in Utah and Florida in 2026.
The plans are expected to be marketed in Costco stores and through insurance agents and other standard sales channels. However, federal rules prevent the companies from bundling a Costco membership with a Medicare health plan, so joining a plan would not automatically include warehouse membership.
Richard Stephens, Costco’s senior vice president for pharmacy, has described the Medicare effort as a pilot designed to help the retailer learn what works for members before considering a broader rollout. The companies have not disclosed the financial terms of their agreement.
Why the SCAN partnership matters
Costco brings a nationally recognized retail brand and a large membership base, while SCAN contributes experience serving older adults. SCAN Health Plan operates in 33 counties across California, Arizona, Nevada, Texas, New Mexico and Washington and serves nearly 460,000 members. Including affiliated programs and entities, the wider SCAN organization reaches roughly 500,000 members and patients.
The strategy also fits Costco’s long-running effort to give members reasons to return beyond bulk shopping. Pharmacy, optical, hearing services and fuel already extend the relationship outside the main warehouse aisles. Earlier this year, record Costco gasoline volumes showed how service-based offerings can increase customer traffic.
For Medicare beneficiaries, however, brand familiarity should not replace plan comparison. Medicare Advantage plans are offered by Medicare-approved private companies and provide Part A and Part B benefits, while many also include prescription drug coverage and additional benefits. Medicare Supplement insurance, or Medigap, works differently by helping cover certain out-of-pocket costs under Original Medicare.
Medicare’s official coverage guide explains that Medicare Advantage plans can have network rules and different costs, while Medigap is supplemental coverage used with Original Medicare. Those differences will be important once Costco and SCAN release approved plan details.
What seniors should check before enrolling
The most important consumer details are still unknown. Costco and SCAN have not published premiums, deductibles, provider networks, prescription formularies, out-of-pocket limits or exact benefit allowances. They also have not said which two states will receive the Medicare Advantage products or which state will get the Medicare Supplement plan.
That means benefits mentioned during the announcement should be viewed as potential features, not a guarantee that every future Costco-branded plan will include the same package. Coverage can vary by plan and location.
Once approved products are available, seniors should compare the monthly premium, annual out-of-pocket exposure, participating doctors and hospitals, prescription coverage and any prior-authorization rules. A familiar retailer may make a plan easier to discover, but those practical details will determine whether it is a good fit for an individual beneficiary.
For now, Costco’s Medicare move is a measured three-state entry with an experienced nonprofit partner, not a national insurance launch. The next meaningful information will come when regulators approve the products and the companies can disclose the markets, pricing and final benefits.
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