Costco announced Tuesday that it will start selling store-branded Medicare plans, the first in a slew of insurance products it will release over the coming years to bring “greater value” to seniors.
The Issaquah, Wash.-based wholesaler – which already sells gasoline, gold bars, caskets, luxury resort packages and jumbo snack and cereal boxes – is working with SCAN Group, a nonprofit insurer, to enter the Medicare market.
The new Costco-branded Medicare plans won’t come in a package deal with Costco memberships, but they will be sold in Costco stores, as well as through insurance agents and online.
Costco and SCAN said they would start selling their jointly named Medicare Advantage plans in two states and a Medicare supplement in a third as part of a limited rollout.
Though the companies did not specify which states would see the plans or when, they told the Wall Street Journal that the combined market is home to around 5 million Medicare enrollees.
“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, said in a statement.
“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.”
Some future offerings from Costco and SCAN may include a re-invented pharmacy experience, a Medicare Flex Card with over-the-counter benefits, vision and audiology products, according to a press release.
The new plans will ease Costco into a more than $600 billion business nationwide as the big-box retailer tries to find ways to boost sales and make its membership more attractive to shoppers seeking value, alongside its effort to roll out more gas stations.
“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,” Costco CEO Ron Vachris said in a statement. “Selecting SCAN as our partner to deliver a better healthcare experience for seniors is an extension of that commitment.”
Richard Stephens, senior vice president for pharmacy at Costco, told the Journal that the retail chain has noticed older people struggling with their coverage at its pharmacy counters.
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,” he said. “That’s really what we’re trying to do with this particular product.
He added that the new Medicare plans are like a pilot, saying Costco plans “to learn a lot from it, and we plan to make sure that we have the right product for our members.”
Healthcare insurers have been dropping Medicare Advantage plans – a private version of the federal program offered to seniors and some people under 65 with qualifying disabilities – as they are squeezed by lower government reimbursement rates and rising medical costs.
SCAN, Costco’s insurance partner, is based in Long Beach, Calif. Southern California is its core market, but it also offers plans in Arizona, Nevada, New Mexico, Texas and Washington.
SCAN declined to share the financial details of the deal. Costco did not immediately respond to The Post’s request for comment.