Costco Seeks Regulatory Approval for Multiyear Medicare Plan Rollout

Costco plans to start offering a Medicare plan and other senior-focused insurance products over the coming years.

The retailer partnered with SCAN Health Plan, a nonprofit organization focused on healthcare for older adults, to launch offerings that may include a pharmacy experience, Medflex over-the-counter benefits, vision, audiology and more. The launch of these offerings is subject to regulatory review and approval, SCAN Health Plan said in a Tuesday (Aug. 18) press release.

The Wall Street Journal reported Tuesday that Costco and SCAN Group plan to start by selling Medicare Advantage products in two states, and a Medicare supplement in a third. The companies declined to disclose the locations or timing due to the pending approval by the Medicare agency, according to the report.

Costco CEO Ron Vachris said in the press release that partnering with SCAN to deliver a better healthcare experience for seniors is an extension of Costco’s commitment to delivering value on essential goods and expanding its health service offerings.

“We have developed a shared understanding of what matters most to the seniors we serve,” Vachris said in the release. “Deepening our partnership allows us to build on that foundation and create value for our members.”

Costco reported in May that during the quarter ended May 10, its paid memberships grew 4.1% to reach 82.9 million.

SCAN Group’s SCAN Health Plan serves nearly 460,000 members across 33 counties in six states, including Arizona, California, Nevada, New Mexico, Texas and Washington. Together with its other services and entities, including Independence at Home, Healthcare in Action, Welcome Health and myPlace Health, SCAN serves about 500,000 members and patients, according to the release.

“Older adults want healthcare that is easier to navigate, more responsive to their needs and rooted in organizations they trust,” Dr. Sachin H. Jain, CEO of SCAN Group and SCAN Health Plan, said in the release. “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.”

The PYMNTS Intelligence report “Generations Under Pressure: How Younger Consumers Are Coping With Higher Living Costs” found that healthcare pressures are compounding for both old and young consumers. Among baby boomers and seniors, 14% of consumers said healthcare and wellness expenses cause financial stress, according to the report.

“For older consumers living on fixed or semi-fixed incomes, routine healthcare costs reduce monthly cash flow flexibility and heighten sensitivity to billing timing, payment structure and predictability,” the report said.