Costco Is Getting Into Medicare — Here’s What Shoppers Should Know

Costco has built its reputation around making shoppers feel like they’re getting more for their money. Now, the warehouse giant wants to bring that same idea to one of the most complicated purchases many older Americans make: Medicare coverage.

Costco announced on Aug. 18 that it is expanding its partnership with nonprofit insurer SCAN Group to develop Costco-branded Medicare plans. The initial rollout is expected to include Medicare Advantage plans in two states and a Medicare Supplement, or Medigap, plan in a third.

But there’s an important catch: you can’t buy one yet.

The plans still require federal regulatory approval, and Costco and SCAN have not announced exactly where they will be available, what they will cost or when enrollment will begin.

That means Medicare beneficiaries shouldn’t assume a Costco plan will automatically be a bargain — even if they already swear by Kirkland Signature.

What Costco Is Planning

The new partnership pairs Costco with SCAN Health Plan, a nonprofit Medicare insurer that currently serves roughly 460,000 members.

The companies say they want to make health care easier for older adults to navigate by connecting insurance coverage more closely with services Costco already offers, including:

• Prescription drugs
• Vision services
• Hearing care
• Over-the-counter health products
• Food and wellness benefits

Costco already accepts many Medicare Advantage prepaid benefit cards at its registers, allowing eligible members to use plan benefits on certain over-the-counter products, vitamins, hearing products, optical items and, depending on the plan, some food.

The forthcoming Costco-SCAN plans could potentially tie some of those services together more directly.

However, the actual benefits haven't been announced yet. Neither have premiums, copays, deductibles, provider networks, drug formularies or annual out-of-pocket limits.

Those details will ultimately matter far more than the Costco name on the insurance card.

Costco Already Helps Members Shop for Medicare Plans

There’s another detail that could easily cause confusion.

Costco members can already shop for Medicare coverage through the CBC Health Insurance Marketplace for Costco Members. That service currently advertises Medicare options in Arizona, California, Florida, Georgia, Illinois, Michigan, Minnesota, Montana, Nevada, Ohio, Oregon, Texas and Washington.

Through that marketplace, shoppers can compare Medicare Advantage, Medicare Supplement and Part D plans from participating insurers and receive help from licensed representatives.

That is separate from the newly announced Costco-SCAN partnership.

The difference is that the new products are expected to be jointly branded Costco Medicare plans rather than simply other insurers' plans being sold through a Costco-related marketplace.

Costco's existing insurance marketplace also makes clear that Costco Insurance Agency receives commissions from insurers for distributing insurance products.

Will a Costco Medicare Plan Be Cheaper?

Maybe. But don't assume it will be.

Medicare Advantage plans are private insurance plans approved by Medicare. Depending on the plan, they may charge an additional monthly premium — although many have a $0 plan premium — and beneficiaries generally must continue paying their Medicare Part B premium. For 2026, the standard Part B premium is $202.90 per month.

Plans can also have very different copayments, coinsurance, deductibles and annual out-of-pocket limits.

So a $0-premium Costco plan, for example, wouldn't necessarily be less expensive overall than another $0-premium plan if hospital stays, specialists or prescription drugs cost significantly more.

And unlike a case of paper towels or a rotisserie chicken, there's no reason to assume Costco will be able to offer a special “warehouse price” on Medicare coverage simply because its name is attached to it.

What Costco potentially brings to the equation is convenience and integration, particularly for people who already use Costco Pharmacy, optical and hearing services.

Whether that translates into real savings won't be clear until the actual plans are released.

5 Things to Check Before Choosing Any Costco Medicare Advantage Plan

If Costco-SCAN plans become available in your area, compare them just as carefully as you would any other Medicare Advantage option.

1. Are your doctors and hospitals in the network?

This can be one of the biggest differences between Medicare Advantage and Original Medicare.

With Original Medicare, you can generally see any provider in the U.S. that accepts Medicare. Medicare Advantage plans may require you to use providers within their networks for non-emergency care, and some plans charge substantially more for going out of network.

2. Are your prescriptions covered?

Most Medicare Advantage plans include Part D prescription drug coverage, but every plan has its own formulary and pharmacy network.

Medicare.gov lets you enter your specific prescriptions when comparing plans so you can estimate what each option could cost over the year.

Don't assume Costco Pharmacy automatically means your medications will be cheaper under a Costco-branded plan.

3. What is the total cost — not just the premium?

Look at deductibles, specialist copays, hospital costs, coinsurance and the plan's maximum out-of-pocket limit.

Every Medicare Advantage plan has an annual limit on what you can be required to pay for covered Part A and Part B services. The amount varies by plan.

A lower premium doesn't necessarily mean lower overall costs.

4. How restrictive is the plan?

Some Medicare Advantage services may require referrals or prior authorization before the plan will pay.

Medicare notes that prior authorization requirements are generally much less common with Original Medicare.

If you receive ongoing specialty care, this can matter considerably.

5. Are the extra benefits actually useful to you?

Dental, vision, hearing, fitness, grocery or OTC allowances can look impressive on a benefits sheet.

But their value depends on whether you'll actually use them — and on the limits attached to them.

A $500 benefit you never use isn't worth more than better coverage for a medication you fill every month.

What About Costco's Medigap Plan?

Costco and SCAN also reportedly plan to introduce a Medicare Supplement ("Medigap") policy in one state.

Medigap works very differently from Medicare Advantage. Instead of replacing the way you receive your Original Medicare benefits, a Medigap policy helps cover some of the deductibles, copayments and coinsurance Original Medicare leaves behind.

That can provide greater freedom to see Medicare-participating providers, but beneficiaries may also need separate Part D prescription coverage.

Changing Medigap coverage can also be more complicated than changing Medicare Advantage plans. Medicare warns that after dropping certain Medigap policies, you may not necessarily be able to get the coverage back later.

When Could the New Costco Plans Become Available?

That's still unclear.

Costco and SCAN have said the products are pending regulatory review, and the states included in the initial rollout haven't been publicly identified.

The timing is worth watching because the annual Medicare Open Enrollment Period runs from Oct. 15 through Dec. 7. During that period, current beneficiaries can switch Medicare Advantage plans, move between Original Medicare and Medicare Advantage or change Part D coverage. Changes generally take effect Jan. 1.

Whether the new Costco plans will be approved and available in time to participate in the upcoming enrollment season has not yet been confirmed.

The Bottom Line

A Costco-branded Medicare plan could eventually be a good option — especially if SCAN and Costco manage to combine competitive insurance coverage with pharmacy, vision, hearing and other benefits people already use at Costco.

But Costco's reputation for bargains shouldn't replace comparison shopping when it comes to Medicare.

Before enrolling, check your doctors, hospitals and prescriptions; compare total annual costs; look at the plan's Medicare Star Rating; and decide whether its extra benefits are actually valuable to you.

For now, the biggest thing to know is simple: Costco Medicare is coming, but there isn't enough information yet to know whether it's a deal.

BenefitKarma will continue tracking the rollout as Costco and SCAN reveal where the plans will be offered, what they'll cover and how much they'll cost.