Costco is embarking on a new initiative that takes the retail giant deeper into healthcare and could make membership even more appealing. On Tuesday, the company and SCAN Group, a not-for-profit health insurer, announced a partnership to launch a Costco-branded Medicare Advantage plan.
The forthcoming product is still working its way through the regulatory process and is planned to initially launch in two states. SCAN Group currently offers its own Medicare Advantage plan in five states — California, Arizona, Nevada, Texas, New Mexico, and Washington — serving nearly 460,000 members.
Costco became a preferred pharmacy for SCAN's Medicare Advantage members last year, establishing a foundation for this collaboration. Dr. Sachin Jain, CEO of SCAN Group, stated that health insurance is a "broken industry" in need of fixing, and working with Costco can help address that.
Medicare Advantage is the privately run version of the U.S. government's senior health insurance program, typically bundling together hospital, medical, and prescription drug insurance.
Costco's reputation for offering high-quality products should help attract new enrollees.
