Costco is partnering with nonprofit insurer SCAN to enter the Medicare Advantage market—private health plans approved by the government’s Medicare program. The partners intend to offer older customers a comprehensive range of insurance products connected to services already available through Costco, including prescription drugs, vision, hearing and over-the-counter products.
Medicare Advantage, or Medicare Part C, replaces Original Medicare and combines coverage for inpatient and outpatient care provided under Parts A and B. These plans often include prescription drugs and additional services, but typically require members to see doctors within a designated network and follow the insurer’s rules. By contrast, Original Medicare generally allows patients to see any specialist nationwide who accepts Medicare. Supplemental Medigap insurance covers some deductibles and copayments under Original Medicare, but typically does not include prescription drugs and is purchased alongside the federal program.
For Costco, the move offers an opportunity to enter an industry worth roughly $500 billion and leverage the trust of millions of older shoppers. For SCAN, which has about half a million members, the partnership provides access to Costco’s large customer base. Executives from both companies say they want to make health care easier to understand and more convenient, while focusing on helping older adults stay healthy and independent.
According to The Wall Street Journal, the joint Medicare Advantage plans will initially be sold in two states, while Medicare supplemental insurance will be offered in one additional state. Together, those regions include roughly 5 million Medicare beneficiaries, although the companies have not yet announced the specific locations or launch dates.
SCAN already operates in six states, including Washington, where its plans are available to residents of Pierce, Spokane and Thurston counties. King County, where Seattle is located, is not currently part of its service area. This is due to federal approval of service regions, licensing requirements, agreements with local doctors and hospitals, and the phased expansion of its network—not because Seattle lies outside the available region.
Costco’s entry comes as insurance coverage is contracting, with major companies dropping unprofitable plans because of rising costs. For example, Humana will discontinue plans next year for roughly 600,000 people. Johns Hopkins researchers estimate that in 2026, about one in 10 Medicare Advantage members could lose their current plan and have to find a new option, creating an opportunity for Costco and SCAN to attract those customers.
Based on: Costco to launch its own Medicare Advantage plan