Costco Wholesale Corp. is entering the health insurance business, partnering with nonprofit provider SCAN Group to offer Medicare Advantage plans to its members starting in 2026. The move makes the warehouse club the latest consumer brand to venture into the crowded senior health-coverage market.
The plans will be marketed under the Costco name but administered by SCAN Group, a California-based organization that has specialized in Medicare Advantage coverage for older adults for more than four decades. Medicare Advantage refers to private insurance plans that bundle the benefits of traditional Medicare, often adding extras such as dental, vision and prescription drug coverage.
For Costco, the partnership extends a business model that has long relied on offering members discounted access to services beyond groceries and bulk goods, from pharmacy and optical care to travel and auto purchases. Health insurance represents a natural expansion of that value proposition for a membership base that skews toward middle-income households and includes millions of seniors.
The rollout is expected to begin during the annual Medicare enrollment period, giving eligible members a new option to compare against plans from established insurers. Specific pricing, geographic availability and benefit details are still emerging as the companies finalize regulatory filings.
The timing comes as the Medicare Advantage sector faces mounting cost pressures. Major insurers have warned that medical expenses for older enrollees are rising faster than anticipated, squeezing margins across the industry. Earlier this year, one of the largest players cut its profit forecast citing surging Medicare costs, underscoring the financial challenges new entrants must navigate.
Roughly half of all Medicare-eligible Americans are now enrolled in Advantage plans, making it one of the fastest-growing corners of the U.S. health insurance market. That growth has attracted a wave of consumer-facing brands seeking to leverage trusted retail relationships to sell coverage.
For SCAN Group, the alliance offers access to Costco’s vast membership network and brand recognition, potentially expanding its reach well beyond its traditional footprint. The nonprofit has positioned itself as a mission-driven alternative to large for-profit insurers.
Analysts suggest the partnership could pressure competitors to deepen their own retail tie-ups, as brand familiarity increasingly influences how seniors choose plans during enrollment. Costco’s model of positioning itself as a low-cost, member-first provider may resonate with cost-conscious retirees.
As the 2026 launch approaches, prospective enrollees will be able to weigh the new offering against existing options, with full plan details anticipated to be disclosed ahead of the next open enrollment window.