What launched. SCAN Costco Medicare Advantage (HMO): 12 plans across 17 California counties and 2 Nevada counties, effective January 1, 2027 (Becker's, Fierce Healthcare). A Medicare Supplement plan in a third state was also announced; that state hasn't been named (Yahoo Finance).

It's a pilot. Costco's SVP of pharmacy, Richard Stephens, called it a pilot program the company expects to learn from. The partners also plan a broader suite of senior products over the next few years (Cox Media / WSJ).

How it's sold. In Costco warehouses, and through insurance agents and websites like any other MA plan (Cox Media / WSJ).

Membership isn't part of it. Federal anti-bundling rules keep the plan from being tied to a Costco membership. Enrollees don't need one and don't get one (The Medicare Store).

The money is undisclosed. Neither company disclosed financial terms. Executives sized the target markets at about 5 million Medicare enrollees (Cox Media / WSJ).

A trusted brand and a new storefront. The product carries the Costco name and is sold inside the warehouse, in front of a member base of 84.1 million paid members with a 92.3% renewal rate in the US and Canada (Costco FY2026 10-K).

A growth lever in crowded markets. In the pilot counties, Kaiser has about twice SCAN's individual MA enrollment. SCAN's share is already high in Orange County but low in Clark County and Fresno (see the markets section below).

A first Medigap product. The partnership includes SCAN's first Medicare Supplement plan (The Modern Medicare Agency).

Pharmacy volume. Costco Pharmacy is the plan's preferred pharmacy (SCAN), and Costco Mail Order is the preferred mail pharmacy (Skyline Benefit).

A home for supplemental benefit dollars. The plan's OTC card, eyewear allowance and hearing aid allowance map to departments Costco already runs. They aren't exclusive to Costco: the vision and hearing allowances also work with SCAN's network providers.

No insurance risk. SCAN underwrites the plan, sets the network and copays, and pays the claims.

Pharmacy is already a growth engine. On its fiscal Q3 2026 call in May, Costco said ancillary businesses grew comparable sales in the mid-20% range, led by pharmacy. Management cited Medicare Part D OTC flex card acceptance among the drivers (Nasdaq / MarketBeat).

Health is a long-running push. Pharmacy, optical and hearing aids are already in the warehouse, and Costco offers $29 virtual primary care visits through Sesame (pharmaphorum).

The brand is low prices on thin margins. Markups are capped at 14% over cost on regular items and 15% on Kirkland Signature (Supermarket News). Gross margin was 11.09% in FY2026, and membership fees, $5.9 billion, are the profit engine (10-K). The hot dog and soda combo has been $1.50 since the mid-1980s (East Idaho News). Medicare Advantage minimum required loss ratios are 85%, leaving 15% of gross margin.

6,149,683 Medicare eligibles

3,466,543 MA enrollees

56.4% blended MA penetration, ranging from 37.7% in Kings to 67.2% in San Bernardino

Pharmacy. Costco Pharmacy is the preferred pharmacy and Costco Mail Order the preferred mail pharmacy. Standard-pharmacy copays are higher than on SCAN Classic, so where a member fills matters.

Optical and hearing. Costco sells eyewear and hearing aids, but the plan's allowances also work with SCAN's network providers, not only Costco (Skyline Benefit). Costco's lowest-priced hearing aid pair lists at $1,599.99 (CostcoGuides).

The card. OTC spending for every member, plus groceries for members who qualify under the chronic-condition rules.

Enrollment. The first CMS enrollment files for 2027 will show how many members the Costco plans pick up, and where. We'll provide an update once February enrollment data lands.

The rest of the rollout. The unnamed third-state Medigap plan, and whether the pilot expands beyond California and Nevada.

Costco's pharmacy results. Whether management calls out Medicare in pharmacy growth on future earnings calls.

^{Market figures (eligibles, penetration, parent enrollment) use all Medicare Advantage, including SNPs. Parent enrollment and SCAN's county shares cover individual MA plans, including SNPs, and exclude employer group plans. Source: CMS September 2026 enrollment and penetration files.}

^{Benefit comparisons use non-SNP HMO and HMO-POS plans with Part D only. County median MOOP is across all such plans, regardless of premium.}

^{Plan benefits are as filed in the CMS CY2027 Landscape and Plan Benefit Package files. The Costco plans have no enrollment yet, so comparisons are plan-level, not enrollment-weighted.}

^{Costco warehouse counts come from Costco's state warehouse directories, assigned to counties by warehouse address; Business Centers and home showrooms are excluded. Drive-time reach and trade-area income are from ScrapeHero's independent analysis as of September 20, 2026.}

^{Claude was utilized throughout to help aid in the research. Vlada Health MCP was also used.}

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