Costco Is Getting Into the Medicare Business

Costco is getting ready to tuck a new item onto its shelves: its own branded Medicare plans. The retail warehouse is teaming with nonprofit insurer SCAN Group to launch Costco-labeled Medicare Advantage plans in two states and a Medicare supplement in a third, reports the Wall Street Journal. The initial markets together include roughly 5 million Medicare enrollees, though the companies aren't naming specific states yet, citing federal rules while they await government approval.

SCAN CEO Sachin Jain tells the Journal that the Advantage plans will be built to plug into services Costco members already use, from pharmacy and vision to hearing aids, food, and over-the-counter drugs. "We are trying to create something that's incredibly simple for people to use that will enable them to seamlessly access their benefits," he says. The plans won't come with a free Costco membership—that's barred by federal rules—but they'll be sold in warehouses alongside more traditional sales channels like agents and websites. Costco views the offering as a test of whether its "we vet it for you" reputation can extend into the $600 billion Medicare market. For the full details and context, read Anna Wilde Mathews' report at the Journal.