Costco is making its first move into the Medicare market through a partnership with SCAN Health Plan, a California-based nonprofit insurer, announced August 18. The companies will roll out Costco-branded Medicare Advantage plans in two states and a Medicare supplement plan in a third, targeting markets with approximately 5 million eligible Medicare enrollees.
The partnership marks Costco’s entry into a more than $600 billion insurance market. Plans will integrate Costco’s existing health services with SCAN’s coverage, including pharmacy, vision, audiology, and over-the-counter benefits through Medflex. Costco will sell plans through its stores, online, and via insurance agents, though federal rules prevent adding a Costco membership requirement.
SCAN CEO Sachin Jain said the expanded partnership would “give us a strong foundation to explore new ways to help people stay healthy and independent while delivering the quality, value and service both of our organizations are known for.” The two companies have collaborated since at least October 2025, when Costco became a preferred pharmacy for SCAN members and the organizations launched a rewards program tied to healthy behaviors.
The move comes as the Medicare Advantage market faces mounting pressures. More than half of eligible Medicare beneficiaries—55% or 35.2 million people—are now enrolled in Medicare Advantage plans in 2026, according to the Kaiser Family Foundation. However, insurers have been pulling back: UnitedHealth Group’s enrollment dropped by nearly 647,000 from 2025 to 2026, while many plans have exited certain markets entirely due to rising medical costs and regulatory scrutiny.
SCAN, founded in 1977 by senior activists in Long Beach, California, has grown into one of the nation’s largest nonprofit Medicare Advantage plans. The organization covers nearly 460,000 members across six states and added 127,000 members during the 2026 enrollment period, a 40.6% increase. The partnership with Costco represents a significant expansion of both companies’ reach into senior healthcare, allowing Costco to diversify beyond its traditional warehouse retail business while giving SCAN access to Costco’s retail footprint and customer base.
Sources
- Wall Street Journal — Costco’s announcement of Medicare Advantage and supplement plans with SCAN Group, targeting two states for MA and one for supplements, covering roughly 5 million enrollees
- Becker’s Payer Issues — Details on the partnership rollout, integration of Costco health services including pharmacy, vision, audiology, and OTC benefits; SCAN CEO Sachin Jain’s statement
- Kaiser Family Foundation — Medicare Advantage enrollment at 55% of eligible beneficiaries (35.2 million) in 2026; market concentration and enrollment shifts among major insurers
- SCAN Health Plan — Founded in 1977; covers nearly 460,000 members across California, Arizona, Nevada, Texas, New Mexico, and Washington; added 127,000 members in 2026 enrollment period
