Costco looks to Medicare Advantage as next “bulk savings” move

Costco is looking beyond grocery and big-ticket warehouse deals for its next growth arena, with a reported push into Medicare Advantage, a government-subsidized health insurance program for people age 65 and older. The plan centers on extending the company’s reputation for cutting costs and standardizing value into healthcare coverage, a category where shoppers typically face complex pricing and multiple plan options.

According to the report, Costco is working with SCAN Health Plan, a Medicare-focused insurer, to bring a version of Costco-style savings to seniors. Medicare Advantage is sold by private insurers, which manage benefits under contracts with the federal government, typically bundling hospital and medical coverage (and often adding extras such as prescription drug coverage) into one plan.

The key idea, as framed in the coverage, is that Costco’s “bulk” model for pricing could translate into healthcare by simplifying benefits and using scale to lower costs. For seniors and caregivers, the practical appeal is the prospect of paying less for a structured set of coverage options, rather than navigating separate channels for Medicare parts and supplemental choices.

The report characterizes the effort as “quiet,” suggesting Costco has not announced the initiative in broad retail channels. It also implies the collaboration is still at an early stage, with details such as plan design, pricing, service area, and enrollment timing not laid out in the coverage.

From Costco’s perspective, healthcare is a sector with unusually high customer lifetime value, because insurance relationships can span years. It also aligns with Costco’s demographic core, which includes many older households already familiar with the company’s membership model. Medicare Advantage could allow Costco to deepen its presence with existing members rather than only pursuing new retail customers.

For SCAN Health Plan, a partnership with a major retail brand would be a form of distribution, potentially helping reach consumers who may not actively shop insurer websites or compare plan structures. Medicare Advantage enrollment and retention can hinge on perceived value, network access, and customer experience, areas where well-known brands can influence consumer trust and awareness.

What remains unclear is how much Costco would control day-to-day plan features, how the two companies would handle pricing and contracting mechanics, and whether this would be offered nationwide or first in select markets. The report does not specify those particulars in the information provided, and it is not possible to verify additional operational details from the packet accompanying this request.

Looking ahead, the items to watch are whether Costco and SCAN begin formal plan filings or enrollment announcements tied to specific service areas, and whether Costco’s healthcare offering includes distinctive features that mirror its core retail promise of predictable pricing and limited complexity. Any disclosures about timelines, benefit structure, or consumer cost-sharing would help determine whether this is a limited pilot or a broader strategy.