Costco built its reputation on a handful of untouchable deals: the $4.99 rotisserie chicken, free samples on every aisle, and above all, the $1.50 hot dog and soda combo that hasn’t budged in price since 1985. Now the warehouse giant is stepping into something no discount or gold bar display ever prepared shoppers for. Costco is getting into the Medicare business, and the reason behind it says a lot about who actually shops there.
SCAN Health Plan Is the Nonprofit Behind Costco’s New Venture
Costco is partnering with SCAN Group, a nonprofit insurer that has spent decades focused entirely on older adults. Together, the two companies announced plans to sell jointly branded Medicare Advantage plans in two states, plus a separate Medicare supplemental plan in a third. It marks the first time in Costco’s history that the retailer has partnered directly with a health plan.
Why a Warehouse Chain Wants In on Senior Health Insurance
SCAN Group CEO Sachin H. Jain told USA Today he pursued the deal in part because of Costco’s standing with older shoppers. “We’re trying to create a win-win, something that was going to be good for seniors, good for SCAN and good for Costco,” Jain said. The arrangement wasn’t announced by either company first. The Wall Street Journal broke the story before Costco or SCAN confirmed it publicly.
The Benefits Package Sounds a Lot Like a Costco Membership
Pending regulatory approval, the plans are expected to include pharmacy coverage, vision, hearing, and Medflex over-the-counter benefits, the same categories Costco already stocks inside many of its warehouses. Jain couldn’t share exact benefit details, locations, or a launch timeline. Medicare Advantage plans have to clear review from the Centers for Medicare & Medicaid Services and from each state where they’re sold before any of that information becomes public.
SCAN’s Reach Is Small Compared to What Costco Could Unlock
On its own, SCAN currently serves about 460,000 Medicare enrollees across Arizona, California, Nevada, New Mexico, Texas, and Washington state. That’s a modest footprint next to the $500 billion Medicare Advantage industry it’s stepping into. Combined, the three markets targeted in this partnership give SCAN and Costco access to roughly 5 million Medicare enrollees, according to reporting from The Wall Street Journal.
Millions of Americans Are Already Shopping for Plans Like This One
Medicare covers adults 65 and older along with some people with disabilities, and open enrollment runs from October 15 through December 7 each year. As of 2026, slightly more than half of the program’s 64.2 million beneficiaries had already chosen a privately administered Medicare Advantage plan over traditional Medicare. That existing shift toward private plans is exactly the market Costco and SCAN are now trying to enter.
The Trade-Off Buried Inside Every Medicare Advantage Plan
Traditional Medicare lets beneficiaries see any participating doctor or hospital nationwide. Medicare Advantage plans work differently, often restricting members to a defined network of providers in exchange for extra perks. Large Medicare Advantage insurers have also drawn scrutiny over prior authorization, the industry practice of requiring approval before doctors and hospitals can bill for certain services, a process critics say can delay care.
Jain Says He Wants to Fix What’s Broken About Existing Plans
“Many (Medicare Advantage) plans have rich supplemental benefits, but also have mechanisms in place that make it hard for older adults to actually use those benefits,” Jain said. “They create non-transparent pricing (and) non-transparent hurdles.” His stated goal for the Costco partnership is a plan simple enough that members can actually access what they’re paying for, without hidden steps standing between them and care.
Costco’s Pharmacies and Hearing Aid Counters Could Become Part of the Pitch
Once the plans clear regulatory approval, Jain expects SCAN sales representatives to reach potential customers directly inside Costco warehouses, on top of the company’s existing sales team and broker network. That plan leans on infrastructure Costco already has in place. Many locations already run pharmacies and sell eyeglasses and hearing aids, giving Medicare Advantage members a built-in reason to combine their healthcare errands with their regular shopping trip.
A $1.50 Hot Dog Built the Trust This Deal Is Betting On
Costco’s hot dog and soda combo has held its price since 1985 for one reason: leadership decided decades ago that certain deals exist purely to earn loyalty, not profit. Costco reportedly sells nearly 200 million of them a year. That same loyalty is now the asset SCAN is banking on, betting that a brand seniors already trust for cheap groceries and rotisserie chickens can make Medicare feel just as straightforward.
