Costco Is Launching Medicare Plans for Seniors - Here’s What to Know

Medicare, or government-administered health care for retirees, is an essential cost-saving component of any retirement plan. Choosing the right Medicare plan can have a major impact on your quality of life once you leave the workforce, but the sign-up process is notoriously confusing. However, help might be coming from an unexpected source: Costco.

A recently announced partnership between the wholesale retailer and SCAN Health Plan, a non-profit Medicare Advantage provider, intends to make senior health care easier to navigate. Keep reading to see what Costco and SCAN Health Plan have in mind and learn how it could impact your future health care plans.

What is Medicare Advantage?

To understand what Costco and SCAN have planned, you need to be clear on the difference between Medicare Advantage and Original Medicare.

Original Medicare, or Medicare Parts A and B, is run by the federal government. Part A covers inpatient hospital services while Part B covers more routine health care costs, like outpatient care. Some Medicare beneficiaries purchase Medigap plans, which help cover the costs of additional health care needs.

Medicare Advantage, or Medicare Part C, offers the same benefits as Original Medicare, but the plan is administered by a private insurance company rather than the government.

How is Costco moving into the Medicare space?

Costco isn't an insurance company, and it isn't about to offer its own Medicare Advantage plan. Until this point, its only tie to Medicare has been accepting Medicare Advantage Prepaid Benefits Cards, which can make shopping for over-the-counter prescriptions, medical supplies, and glasses a little easier.

But now, Costco and SCAN Health Plan (a non-profit Medicare Advantage plan provider) are working together to create senior-centric products and services. The two brands say they intend to make Medicare benefits easier for seniors to navigate, and their co-branded health care plans will include both Medicare Advantage and Medigap plans.

What products could Costco and SCAN co-develop?

While there aren't many product specifics in SCAN's partnership announcement, SCAN's site says some beneficiaries might be able to pay for Costco Optical services with a prepaid card, and some plans will include Costco as a preferred pharmacy.

SCAN and Costco's press release also mentioned the possibility of a "re-invented pharmacy experience" and potential "Medflex over-the-counter benefits."

Is this new plan already available?

Although Costco and SCAN announced their partnership in mid-August of 2026, their co-branded plan still hasn't been officially approved by the Centers for Medicare & Medicaid Services (CMS). Plus, while we know the companies will roll out Medicare Advantage plans in two states and a Medigap plan in one state, we don't yet know which states will be first in line.

It's worth noting that SCAN Health Plan operates in Washington, New Mexico, Texas, Nevada, California, and Arizona, and that SCAN and Costco believe their first phase rollout will reach a market of five million eligible seniors.

Do you need a Costco plan to access one of these plans?

Per federal law, Costco and SCAN won't be able to tie their co-branded Medicare Advantage plans to a Costco membership. Just like anyone can pick up prescriptions at a Costco pharmacy, even people who aren't Costco members, anyone can sign up for a SCAN and Costco Medicare Advantage plan.

Still, you'll likely benefit more from the plan if you're a Costco member. Non-members can't purchase non-pharmacy items at normal registers or get member-only discounts on products or services.

What are the potential benefits of a Costco co-branded Medicare plan?

A full 63% of Costco shoppers are Baby Boomers or Gen Xers, the two generations with members who are eligible for health care. These shoppers are already familiar with Costco and are presumably fans of its pricing model, and that familiarity could make transitioning to Medicare feel less intimidating or overwhelming.

Plus, Costco houses a pharmacy, eye clinic, and hearing clinic within the same warehouse space. A Medicare Advantage plan with Costco benefits could make it easier to access all three services, making well-rounded health care easy, affordable, and convenient (at least, for Costco shoppers).

Why is this partnership happening now?

Medicare Advantage enrollment started out small, but now, more than half of American Medicare beneficiaries opt for Medicare Advantage over Original Medicare. That trend is likely to continue, with 63% of eligible Americans opting for Medicare Advantage by 2034.

As Gen Xers start to hit retirement age, more and more people will sign up for Medicare, potentially straining the system and making privatized alternatives like Medicare Advantage more appealing. The expanding market gives more companies opportunities to offer competitive plans, even non-health care companies like Costco.

Bottom line

Wondering if a Costco-branded Medicare Advantage plan could help you save money in retirement? It's possible, but you'll have to wait for plan pricing information to come out before making a decision. Sure, Costco can be a great place to save on groceries, you can't assume you'll naturally get similar savings on health insurance.

Instead, do the research yourself. Whether you're signing up for Medicare for the first time or preparing for the next open enrollment period, do your due diligence in thoroughly comparing each plan's premiums, out-of-pocket costs, deductibles, benefits, and drug formularies. If Costco's plan saves you money, excellent — but if it doesn't, don't let brand loyalty sway you away from your retirement plan.

You May Also Like

23 Ways To Get Money Without Getting A Second Job

By FinanceBuzz Editors

How To Save Money on Car Insurance: 12 Ways to Lower Rates

By Elyssa Kirkham

10 Things Seniors Born Between 1941-1969 Could Take Advantage Of

By FinanceBuzz Editors

19 Dumbest Things Smart People Waste Money On

By Team FBZ

7 Moves If You Want to Stop Living Paycheck to Paycheck

By FinanceBuzz Editors

7 Clever Ways to Crush Your Debt

By FinanceBuzz Editors

Save Money and Get Huge Discounts on Everyday Purchases

AARP Benefits

• Huge discounts on travel, groceries, prescriptions and more
• Access to financial planning resources and health tools
• Join AARP and get 25% off with automatic renewal

Become a member now!

---

Subscribe Today

Learn how to make an extra $200

Get vetted side hustles and proven ways to earn extra cash sent to your inbox.

or

Subscribe Now →

By submitting this form you agree to receive emails from FinanceBuzz and to the privacy policy and terms