Costco Enters Medicare Market

Costco is set to launch its own branded Medicare Advantage and Medicare Supplement plans, partnering with insurer SCAN Group. This move, pending federal approval, will initially involve a limited rollout in two states for Medicare Advantage and one for supplement plans. These markets collectively comprise approximately 5 million Medicare enrollees, though specific locations remain undisclosed.

The new Costco-branded Medicare products will be accessible through Costco stores, insurance agents, and websites. Notably, a Costco membership will not be a prerequisite for enrollment, as federal rules prohibit such arrangements. This venture aims to capitalize on Costco's established customer trust and value proposition in the healthcare sector.

These offerings represent private Medicare coverage options that do not replace the federal Medicare program. The Medicare Advantage plans are expected to bundle Part A, Part B, and often Part D prescription drug coverage, potentially including additional benefits like vision and hearing. Medicare Supplement (Medigap) plans will assist with out-of-pocket costs for those with Original Medicare.

While specific premiums, deductibles, and provider networks are not yet public, the plans are designed to integrate with Costco's existing offerings. This includes prescription drugs, vision, and hearing products. Beneficiaries considering these plans should still compare them against other options, checking for doctor access, prescription coverage, out-of-pocket costs, and plan ratings.

Costco's entry into Medicare occurs amid increased scrutiny of Medicare Advantage plans due to rising medical costs and coverage denial concerns. The federal government has implemented new rules for 2026 to address prescription drug coverage, special needs plans, and appeals processes. The exact launch date and approved states for Costco's Medicare plans are yet to be announced, but potential availability during the Medicare open enrollment period from October 15 to December 7 is anticipated.