Costco and SCAN Group Partner to Launch Costco-Branded Medicare Advantage Plan
核心洞察
Costco and not-for-profit insurer SCAN Group (搜索) announced a partnership to launch a Costco-branded Medicare Advantage plan, initially in two states.
SCAN Group (搜索) CEO Dr. Sachin Jain said the companies are also developing a Medigap supplemental plan for a third state, pending regulatory approval.
The collaboration builds on Costco's existing role as a preferred pharmacy for SCAN's nearly 460,000 Medicare Advantage members across five states.
Costco is embarking on another venture that takes the retail giant deeper into healthcare, announcing a partnership with SCAN Group (搜索), a not-for-profit health insurer on the West Coast, to launch a Costco-branded Medicare Advantage plan. The forthcoming product, which is still working its way through the regulatory process, is planned to initially launch in two states, according to Dr. Sachin Jain, CEO of SCAN Group.
SCAN Group (搜索) is also working on a Medigap plan — supplemental insurance to help cover out-of-pocket Medicare expenses, such as copays and coinsurance — that will be available in a third state. SCAN Group currently offers its own Medicare Advantage plan in counties across five states — California, Arizona, Nevada, Texas, New Mexico, and Washington — serving nearly 460,000 members.
The announcement builds on an existing relationship between the two organizations. Costco became a preferred pharmacy for SCAN's Medicare Advantage members last year, laying the groundwork for Tuesday's expanded collaboration.
"Being a not-for-profit provider of insurance services, our goal is to provide as much value as we can to the Medicare beneficiaries that we serve. You can understand the clear alignment between Costco and us in that regard," said Jain, who added that he is a longtime Costco shopper himself.
Jain said SCAN Group (搜索) believes health insurance is a "broken industry" in need of fixing, and that working with Costco can help accomplish that. "Part of the work that we're trying to do is really redesign the Medicare Advantage experience, and do it in the same way that Costco knows how to do it, which is an exquisite focus on member value."
Medicare Advantage is the privately run version of the U.S. government's senior health insurance program, typically bundling together hospital, medical and prescription drug insurance, as well as extra benefits not available under so-called original Medicare.
For many years, insurers such as Humana and UnitedHealth (搜索) aggressively pursued growth in the Medicare Advantage market. It had been a boon until recent years, when insurers saw their profits squeezed by rising medical costs, members using more of their services, and the government tightening its purse strings on reimbursement. In response, some insurers have scaled back their Medicare Advantage ambitions, leaving certain markets; Cigna sold its Medicare business last year.
Against this backdrop, Costco is leaning into Medicare. Costco is no stranger to healthcare, offering hearing aids and pharmacy and vision care services to members in its warehouses. But this represents a whole new way to help members get medical care. Costco's reputation for offering high-quality products at fair prices should carry weight with potential enrollees.
"Do you really want to go up against Costco if they decide to have Medicare Advantage?" Jim Cramer said Tuesday.
It is difficult to predict the long-term financial impact on Costco because much remains unknown, including details about the partnership's structure. Considering its limited scope to start, this is unlikely to be an immediate needle-mover. Nevertheless, the move reflects Costco's willingness to try new things to better serve its members and keep them renewing at high rates — membership fees make up the majority of Costco's profits. It echoes Costco's decision to experiment with building standalone gas stations, detached from its warehouses; the first one opened this summer in Mission Viejo, California, and at least one more is currently planned in Honolulu, Hawaii.