Costco Partners With SCAN Health Plan to Launch Medicare Advantage Insurance Venture

Costco Wholesale Corp. is expanding into health insurance through a new venture with SCAN Health Plan to offer Medicare Advantage plans directly to its members.

The warehouse giant has teamed up with SCAN Health Plan, one of the nation’s largest nonprofit Medicare Advantage plans focused on senior health care, the insurance company announced Tuesday.

Under the partnership, the companies will launch a suite of senior-focused insurance products over the coming years, selling the plans inside Costco warehouse locations as well as through licensed insurance agents and digital platforms, as reported by The Wall Street Journal.

Pending regulatory approval, the suite could include a revamped pharmacy experience, Medflex over-the-counter pharmacy benefits, vision care coverage, audiology or hearing benefits and more.

A customer approaches a pharmacy inside a Costco store in Teterboro, New Jersey, on Feb. 28, 2024. (Stephanie Keith/Bloomberg via Getty Images / Getty Images)

The insurance venture builds on Costco’s prior moves to offer direct healthcare benefits to its members. In September 2023, the retailer partnered with direct-to-consumer healthcare marketplace Sesame to offer discount virtual primary care visits for $29, later adding a specialized weight loss management subscription program for $179 across a three-month term in April 2024.

SCAN Health Plan currently serves over 300,000 Medicare Advantage members across 33 counties in California, Arizona, Nevada, Texas, New Mexico and Washington. The insurer stated that the partnership aims to address fragmented access to care by integrating health services into retail locations that seniors visit regularly.

“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, said in a statement.

“Older adults want healthcare that is easier to navigate, more responsive to their needs and rooted in organizations they trust,” Jain said. “Our expanded partnership with Costco will give us a strong foundation to explore new ways to help people stay healthy and independent while delivering the quality, value, and service both of our organizations are known for.”

Customers visit the membership and customer service counter at a Costco store in Florida. (Lindsey Nicholson/UCG/Universal Images Group via Getty Images / Getty Images)

Costco CEO Ron Vachris added that the partnership with SCAN serves as an extension of the company’s commitment to providing value to its customers.

“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,” Vachris said in a statement.

“Selecting SCAN as our partner to deliver a better healthcare experience for seniors, is an extension of that commitment. We have developed a shared understanding of what matters most to the seniors we serve. Deepening our partnership allows us to build on that foundation and create value for our Members.”

To take effect, any newly created Medicare Advantage options must clear regulatory review by the Centers for Medicare & Medicaid Services. CMS regulates all Medicare Advantage offerings, requiring plan details and rates to be finalized prior to the annual Medicare Open Enrollment Period, which runs annually from October 15 through December 7.

A customer makes a purchase from a Costco pharmacy, Tuesday, May 30, 2006, in Long Island City, New York. (Daniel Acker/Bloomberg via Getty Images)