Medicare Update: Millions May Soon Get Medicare Plans Via Costco—Here's How

Millions of older Americans may soon be able to shop for Medicare coverage through Costco, as the retailer is preparing to enter the Medicare insurance market through a partnership with insurer SCAN Group.

Costco plans a limited rollout of jointly branded Medicare Advantage plans in two states and a Medicare supplement plan in a third, pending approval from federal Medicare regulators, the company announced this week.

The three markets together include about 5 million Medicare enrollees, though the locations have not yet been released.

Medicare coverage decisions affect tens of millions of Americans.

Medicare beneficiaries often have to decide between Original Medicare, Medicare Advantage, Part D prescription drug plans and Medicare Supplement Insurance, which is also known as Medigap.

As of April, 70.3 million people were enrolled in Medicare. CMS said 51.2 percent were enrolled in Medicare Advantage and other health plans, while 81.2 percent had Medicare Part D coverage.

Costco is working with SCAN Group on a limited pilot that would sell Costco-branded Medicare products.

SCAN Group is based in Long Beach, California, and has about 460,000 members, offering Medicare Advantage plans in Arizona, Nevada, New Mexico, Texas and Washington state.

The new products are expected to be sold through Costco stores, insurance agents and websites. The plans will not include a Costco membership because federal rules prohibit that type of arrangement.

“The decision for Costco to enter Medicare is one that looks to tap into their massive base of loyal customers who already trust the company to provide value after years of seeing the same from services like travel and gas,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. “Healthcare represents both a major business opportunity and an area where older consumers frequently struggle with confusing choices.”

The companies have not yet publicly disclosed the specific states where the new Costco-branded Medicare products will be sold, and the plans are still pending federal approval.

Source: CMS April 2026 enrollment data and KFF 2026 Medicare Advantage analysis.

The Costco-SCAN partnership would not replace federal Medicare. Instead, it would offer private Medicare coverage options to eligible beneficiaries.

Medicare Advantage plans generally bundle Part A and Part B and usually include Part D prescription drug coverage. These plans may require members to use doctors and hospitals in the plan’s network and can require approval for certain drugs or services.

Original Medicare, by contrast, allows beneficiaries to use any doctor or hospital that takes Medicare anywhere in the U.S., and beneficiaries can add a separate Part D plan and supplemental coverage such as Medigap.

Eligibility would depend on the final plan design, the approved service area and the type of plan offered.

For Medicare Advantage plans, beneficiaries typically need to be enrolled in Medicare Part A and Part B and live in the plan’s service area.

Because Costco and SCAN have not disclosed the states or counties where the new products would launch, beneficiaries cannot yet determine whether they would qualify based on location.

Specific premiums, deductibles, and provider networks have not yet been released.

However, the new Medicare Advantage plans would integrate with Costco offerings, including prescription drugs, vision, over-the-counter medications, food and hearing products.

Newsweek reached out to Costco and CMS for comment via email.

The biggest potential advantage of this choice would be trust and simplicity.

Costco has built its brand around curated products, bulk savings and member loyalty. If the retailer applies that model to Medicare, the pitch would likely be that beneficiaries can shop for coverage through a familiar brand rather than navigating dozens of insurer websites or broker options.

Costco members "know that if they buy something from Costco, it has been vetted, and we feel it’s the best thing in the category," Richard Stephens, Costco’s senior vice president for pharmacy, told the Wall Street Journal. "That’s really what we’re trying to do with this particular product."

Costco already has a Medicare-related marketplace through Custom Benefit Consultants, which says it lets Costco members shop and compare available Medicare plans, including Medicare Advantage, Medicare Supplement plans and Medicare Part D plans.

That marketplace lists availability in Arizona, California, Florida, Georgia, Illinois, Michigan, Minnesota, Montana, Nevada, Oregon, Texas, Washington and Ohio.

However, that existing marketplace will not necessarily be the same as the new Costco-branded SCAN plans.

The Costco move comes at a complicated moment for Medicare Advantage.

KFF reported that Medicare Advantage enrollment has increased steadily over the past two decades and reached more than half of eligible Medicare beneficiaries. But KFF also said the pace of enrollment growth slowed in 2026.

KFF found that just over 35 million people were enrolled in Medicare Advantage as of February 1, an increase of 1.1 million from February 2025, or 3 percent year over year.

Source: KFF Medicare Advantage enrollment analysis.

At the same time, Medicare Advantage insurers have faced pressure from rising medical costs and scrutiny over coverage denials.

CMS finalized a 2026 rule that includes changes to Medicare Advantage and Part D, including provisions related to prescription drug coverage, special needs plans and appeals. CMS said the rule includes steps to close Medicare Advantage appeals loopholes and clarify that certain adverse plan decisions are subject to appeal and notification requirements.

A Costco-branded Medicare plan could be appealing, but beneficiaries should still compare it against other available options.

Medicare Advantage plans may have different out-of-pocket costs than Original Medicare and often require members to use network providers.

The companies have not disclosed the launch date or the exact states where the jointly branded plans would be sold, and the plans are pending approval by the Medicare agency.

Medicare open enrollment generally runs from October 15 to December 7.

If Costco’s products receive approval in time for a future enrollment window, eligible beneficiaries in the approved markets may be able to compare them with other Medicare Advantage, Part D or Medigap options.

Costco and SCAN still need federal approval before the plans can be sold. Until then, beneficiaries will not know the states, premiums, benefits, or provider networks for possible plans.

“This entry into Medicare could produce effects that extend well beyond Costco if the experiment succeeds, as bringing a trusted brand into Medicare could force traditional insurers to compete more aggressively on simplicity and value,” Beene said.

Correction August 18, 2026, 2:09 p.m. ET: The SCAN Group member number has been updated to 460,000 members from the previously reported 560,000.