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🇹🇼 Taiwan /Economy & Trade

Costco Launches New Strategy: Selling 'Medical Insurance' to Capture Market

From Liberty Times · () Chinese

Translated from Chinese, summarized and contextualized by DistantNews.

At a glance

News Named sources New plan
  • Costco is partnering with SCAN Group to offer Medicare insurance plans in the United States.
  • The collaboration will initially launch Medicare Advantage and Medicare Supplement plans in two states, with a third state to follow.
  • This move aims to expand Costco's member services and provide a new revenue stream by leveraging its brand trust in the healthcare market.

American retail giant Costco is expanding its service offerings by venturing into the lucrative U.S. federal health insurance market, Medicare. The company plans to partner with the non-profit insurer SCAN Group to offer a new line of Costco-branded Medicare insurance products.

The collaboration will initially introduce co-branded Medicare Advantage plans in two states and Medicare Supplement insurance in one additional state. While specific locations and launch dates remain undisclosed pending regulatory approval from Medicare authorities, the target markets collectively encompass approximately 5 million Medicare beneficiaries. SCAN Group, headquartered in Long Beach, California, currently serves around 560,000 members across Arizona, Nevada, New Mexico, Texas, and Washington.

Costco members generally believe that the products sold by Costco have been screened and audited. We believe these are the best products in their category, and that's the philosophy Costco wants to apply to this Medicare product.

— Richard StephensExplaining Costco's approach to offering Medicare insurance.

Costco's entry into the Medicare market is a strategic move to enhance member value and discover new revenue streams. Richard Stephens, Costco's senior vice president for pharmacy operations, noted that many seniors express confusion about their insurance coverage at pharmacy counters. Costco aims to apply its brand philosophy of offering carefully selected, high-quality products to these new Medicare offerings, building on the trust its members place in the company.

Federal regulations prohibit the inclusion of Costco membership with the purchase of these insurance plans. The Medicare products will be available through traditional channels, including insurance agents and websites, as well as within Costco stores. Both Costco and SCAN Group have refrained from disclosing the financial details of their partnership, emphasizing that this initiative is a pilot program designed to gather experience and ensure the delivery of suitable products to members.

We plan to gain experience from this and also want to ensure that we can provide the right products for our members.

— Richard StephensDescribing Costco's intention for the new Medicare program.
DistantNews Editorial

Originally published by Liberty Times in Chinese. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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