Costco is preparing to enter the Medicare insurance market through a partnership with nonprofit insurer SCAN Group. The initial rollout is limited, and many details—including the states and launch dates—have not yet been announced.

Costco is known for warehouse-sized shopping carts, bulk groceries, gasoline and low prices.

Now the company is preparing to enter a very different market: Medicare insurance.

On August 18, 2026, Costco Wholesale and SCAN Group announced a partnership to develop and offer jointly branded Medicare insurance products. The companies plan to offer Medicare Advantage products in two states and a Medicare Supplement product in a third state, subject to regulatory approval. The specific states and launch dates have not been publicly disclosed.

The initial markets collectively represent approximately 5 million Medicare enrollees, according to reporting on the partnership. That does not mean 5 million people will receive Costco plans. It refers to the size of the Medicare population in the targeted markets.

For older Americans, the more important question isn't simply why Costco wants into Medicare.

It's what this could mean for the way seniors shop for and use Medicare coverage.

Costco Is Not Becoming a Medicare Insurer

One of the easiest ways to misunderstand the announcement is to think Costco is creating its own insurance company.

It isn't.

Costco is partnering with SCAN Group, a nonprofit health insurer that operates SCAN Health Plan.

The insurance products will be jointly branded, while SCAN brings the health-plan and Medicare insurance infrastructure to the partnership.

That distinction matters.

Costco's role is tied to its consumer brand, retail footprint and existing healthcare-related services.

SCAN's role is tied to operating Medicare insurance products.

The partnership is therefore better described as Costco entering the Medicare insurance market with an established Medicare insurer, rather than Costco becoming an insurer itself.

The Initial Launch Will Be Small

Despite the attention surrounding the announcement, this is not a nationwide Costco Medicare launch.

The companies currently plan to introduce:

• Medicare Advantage products in two states
• A Medicare Supplement product in one additional state

The states have not yet been disclosed publicly, and launch timing has not been announced. The rollout remains subject to regulatory approval.

That means most Medicare beneficiaries in the United States will not suddenly be able to buy a Costco-branded Medicare plan.

The initial program is being treated as a pilot.

The companies intend to learn from the initial markets before determining how the relationship could develop further.

Why Medicare Advantage Matters

Costco is entering a Medicare market that has already undergone a major transformation.

In 2026, approximately 35.2 million people, representing 55% of Medicare beneficiaries with both Part A and Part B who are eligible for Medicare Advantage, are enrolled in Medicare Advantage plans, according to KFF.

That represents a dramatic change from the early years of the program.

KFF reports that Medicare Advantage enrollment represented just 19% of the eligible Medicare population in 2007. By 2026, that share had reached 55%.

In other words, Costco isn't entering a small corner of Medicare.

It is entering the part of the program that now covers more than half of eligible beneficiaries.

Medicare Advantage and Medicare Supplement Are Not the Same Thing

The Costco announcement involves two different types of insurance products, and understanding the distinction is important.

Medicare Advantage

Medicare Advantage, also known as Medicare Part C, is a way to receive Medicare-covered Part A and Part B benefits through a private Medicare-approved health plan.

Medicare Advantage plans can have their own provider networks, cost-sharing structures and additional benefits.

Medicare Supplement

Medicare Supplement Insurance, commonly called Medigap, works differently.

Medigap is private supplemental insurance designed to help pay certain out-of-pocket costs associated with Original Medicare.

It does not replace Original Medicare in the same way Medicare Advantage does.

And Medicare.gov makes an important point: you cannot have a Medigap policy and a Medicare Advantage plan at the same time.

So the Costco Medicare Advantage product and the Costco Medicare Supplement product are not two versions of the same thing.

They represent two different Medicare coverage paths.

A Costco Membership Will Not Include Medicare

Another important distinction:

Buying a Costco membership will not automatically give someone Costco Medicare coverage.

The planned insurance products are separate insurance products.

Reporting indicates the plans are expected to be available through Costco locations as well as traditional insurance channels, including agents and online channels. Federal Medicare rules also prevent the Medicare insurance from simply being bundled into a Costco membership.

So the announcement should not be interpreted as:

“Costco members are getting Medicare.”

That is not what has been announced.

Costco Already Has a Healthcare Presence

The partnership also isn't coming completely out of nowhere.

Costco already operates a substantial healthcare-related business inside its warehouses.

Its existing services include:

• Pharmacy
• Optical
• Hearing-aid services
• Vaccinations and other pharmacy services
• Acceptance of certain Medicare Advantage prepaid benefit cards

Costco currently describes its pharmacy, optical and hearing services as part of its healthcare offerings.

Costco also currently accepts Medicare Advantage prepaid benefit cards at its registers, although the availability and eligible purchases depend on the specific Medicare Advantage plan and benefit-card program.

And Costco's pharmacy website already identifies Costco as a SCAN Health Plan preferred pharmacy.

That existing relationship provides some of the infrastructure behind the new partnership.

The Companies Want to Connect Medicare With Costco's Existing Services

The partnership is intended to go beyond simply putting Costco's name on an insurance card.

The companies have discussed integrating the Medicare products with Costco's existing healthcare-related offerings, including pharmacy, vision, hearing and over-the-counter services.

However, there is an important distinction between what the companies envision and what a final Medicare plan will actually cover.

The specific benefits of the eventual Costco-branded plans have not been finalized publicly.

They will be subject to regulatory approval and the actual plan designs.

So it would be inaccurate to tell seniors today that a future Costco Medicare plan definitely includes a particular vision benefit, hearing allowance, OTC amount or pharmacy benefit.

Those details have not been finalized.

Why Costco Says It Is Doing This

The companies have positioned the partnership around value, convenience and making healthcare easier for older adults to navigate.

Costco executives have pointed to the company's existing interactions with older customers through its pharmacies and other healthcare services.

SCAN has similarly described the partnership as an effort to connect healthcare benefits with services older adults already use.

The broader idea is relatively straightforward:

A senior may already visit Costco for prescriptions, hearing services, optical care or everyday necessities.

The companies want to explore whether Medicare coverage can be integrated more closely with that existing relationship.

Whether the model actually improves the Medicare experience remains to be seen.

The Medicare Market Is Already Highly Competitive

Costco is also entering a market dominated by established insurance companies.

KFF's 2026 data show that UnitedHealthcare accounted for approximately 26% of Medicare Advantage enrollment, while Humana accounted for about 20%.

Together, those two companies represented nearly half of Medicare Advantage enrollment.

CVS Health accounted for approximately 12%, Kaiser approximately 6%, and Elevance approximately 5%.

That concentration makes Costco's entry notable.

The company isn't simply competing with other retailers.

It is entering a market where some of the largest health insurers in America already have enormous Medicare populations.

Medicare Advantage Is Still Growing

The market is also continuing to expand.

KFF reported that just over 35 million people were enrolled in Medicare Advantage in February 2026, approximately 1.1 million more than a year earlier.

Its June 2026 analysis subsequently put enrollment at 35.2 million.

That growth has not been evenly distributed across every type of plan.

KFF reported that much of the enrollment increase during the prior year came from Special Needs Plans, which serve specific populations including people who are eligible for both Medicare and Medicaid.

The market therefore continues to evolve even as overall enrollment grows.

The Number of Available Plans Has Also Changed

More Medicare Advantage enrollment does not necessarily mean more choices everywhere.

KFF's 2026 research found that the average beneficiary had access to fewer Medicare Advantage plans than in previous years.

That is important context for Costco's entry.

The Medicare Advantage market is simultaneously:

growing in enrollment

while

changing in the number and structure of plans available.

That makes the arrival of a new branded competitor particularly interesting.

Cost Isn't the Only Thing Seniors Need to Compare

Costco's reputation for value will inevitably attract attention.

But Medicare coverage cannot safely be evaluated the same way someone might compare two packages of paper towels.

A Medicare Advantage plan needs to be evaluated based on the individual's actual healthcare needs.

Medicare.gov recommends comparing coverage, costs and plan details rather than simply choosing based on a brand name.

For Medicare Advantage, important considerations can include:

• Monthly premiums
• Provider networks
• Prescription-drug coverage
• Copayments and coinsurance
• Maximum out-of-pocket costs
• Prior authorization requirements
• Covered services
• Supplemental benefits
• Whether a person's doctors participate in the plan
• Whether the pharmacies they use are in the plan's network

A familiar brand does not eliminate those questions.

The Out-of-Pocket Maximum Still Matters

Medicare Advantage plans have annual limits on what enrollees pay out of pocket for covered Medicare services.

KFF's 2026 analysis found that the average enrollment-weighted maximum for in-network services was $5,421, while the average maximum for combined in-network and out-of-network services was $9,825.

Those are averages across plans, not amounts a Costco enrollee would necessarily pay.

The point is that “low premium” does not tell a senior the full cost of a Medicare Advantage plan.

A plan with a low or zero additional premium can still involve significant cost-sharing when healthcare services are used.

A Zero-Premium Plan Isn't the Same as Free Medicare

KFF reports that in 2026, 75% of Medicare Advantage enrollees in individual MA-PD plans pay no premium beyond the Medicare Part B premium. The standard Part B premium for 2026 is $202.90 per month.

That doesn't mean Medicare Advantage is free.

Beneficiaries can still have cost-sharing and other expenses.

And the Medicare Part B premium generally remains part of the picture.

This is one reason the eventual Costco plan should be evaluated on its total cost structure, rather than its advertised premium alone.

What Seniors Should Not Assume Yet

Because this announcement is brand new, there are still major unanswered questions.

As of August 19, 2026, the companies have not publicly announced:

• The two states where the Costco Medicare Advantage products will launch
• The state where the Medicare Supplement product will launch
• Exact launch dates
• Exact premiums
• Exact deductibles
• Exact copayments
• Exact provider networks
• Exact prescription formularies
• Exact supplemental benefits
• Exact out-of-pocket limits
• Whether particular Costco locations will participate
• The financial terms of the Costco-SCAN partnership

Those details should not be guessed.

The companies have indicated that regulatory approval is required before the products can launch.

What This Means for Someone on Medicare Today

For seniors who already have Medicare, the Costco announcement does not mean they need to change their coverage.

There is no nationwide Costco Medicare plan available simply because of the announcement.

Anyone who is satisfied with their current coverage should not make a change based solely on the news.

When Costco's plans eventually become available, eligible consumers can compare them with other Medicare options available in their area.

Medicare.gov provides the government's Medicare Plan Finder, where beneficiaries can compare Medicare Advantage and prescription-drug plans available in their ZIP code.

The same basic principle will apply to a Costco-branded plan:

Compare the coverage, not just the name on the card.

Why This Could Become a Bigger Story

The most interesting part of the Costco announcement may ultimately have little to do with Costco itself.

It could signal something broader.

Medicare is increasingly becoming a consumer marketplace in which beneficiaries compare private plans, networks, costs and additional benefits.

A company whose brand is built around value, convenience and consumer trust is now testing whether those same principles can translate into Medicare insurance.

If the pilot succeeds, Costco could potentially expand.

If it doesn't, the initial program could remain limited.

At this point, neither outcome can be predicted responsibly.

What we do know is that one of America's best-known consumer brands is preparing to enter a healthcare market serving tens of millions of older Americans.

And that makes the experiment worth watching.

What Comes Next

The immediate next step is regulatory review.

The companies will need the necessary approvals before the new Medicare products can launch.

Until then, consumers should be cautious about treating preliminary descriptions as final plan benefits.

The eventual details—particularly the states, networks, premiums, cost-sharing and covered benefits—will matter much more than the Costco logo.

For older Americans, that may ultimately be the most important lesson from the announcement.

**A familiar brand can make a Medicare plan easier to notice.

It cannot make the plan automatically right for you.**

Editorial Disclosure

This article is provided for informational and educational purposes only. It is not Medicare, health insurance, financial, legal or medical advice. The Costco-SCAN products discussed in this article are planned offerings and remain subject to applicable regulatory approval. Specific states, launch dates, premiums, provider networks, formularies, cost-sharing and benefits may change or may not yet have been announced. Information reflects publicly available information reviewed as of August 19, 2026. Readers should use official Medicare resources and review the actual plan documents available in their area before making Medicare coverage decisions.

Sources & Editorial References

• Costco Pharmacy, SCAN Medicare / Costco-SCAN partnership information.
• Costco Pharmacy, Health Partnerships.
• Costco, Health Services.
• KFF, Medicare Advantage in 2026: Enrollment Update and Key Trends, June 5, 2026.
• KFF, Medicare Advantage Enrollment Grew by About 1 Million People, February 23, 2026.
• KFF, Medicare Advantage 2026: Premiums, Out-of-Pocket Limits, Supplemental Benefits and Prior Authorization.
• Medicare.gov, Compare Original Medicare & Medicare Advantage.
• Medicare.gov, Medigap / Medicare Supplement Insurance.
• Medicare.gov, Medicare Plan Finder.
• Healthcare Finance News, Costco enters the Medicare Advantage market through SCAN partnership, August 19, 2026.
• The Wall Street Journal, Costco Sells Vacations, Gas and, Soon, Medicare Plans, August 18, 2026.