Kenneth Glad
Retailers are increasingly extending familiar services into areas once handled mainly by specialist providers. One forthcoming program remains limited in scope and dependent on regulatory approval.
Costco is preparing to co-brand Medicare insurance products with nonprofit health insurer SCAN Group, expanding its involvement in healthcare beyond the services already available inside its warehouses and through its established health-related operations.
The planned products go further than Costco’s existing role as a SCAN Health Plan provider and preferred pharmacy. The retailer already operates pharmacies, optical departments and hearing centers, giving it an established presence in several areas connected to everyday healthcare.
According to The Wall Street Journal, federal regulations prevent the insurance plans from being included with Costco memberships. That means the products would stand apart from the retailer’s usual membership benefits. The plans are also still awaiting federal regulatory approval before they can move ahead.
Pilot will cover three states
The initial rollout is expected to span three states whose identities have not been disclosed, The Wall Street Journal writes. Coverage will differ between those markets rather than following a single format across all three locations.
Two states are due to receive co-branded Medicare Advantage plans, while Medicare supplement coverage is planned for the third. The limited geographic scope gives the companies an opportunity to evaluate how the products perform before considering a broader expansion.
Richard Stephens, Costco’s senior vice president for pharmacy, has described the rollout as a pilot. He said Costco intends to use the initial program to assess whether the products suit its members and meet their needs before making decisions about what could follow in additional markets.
Benefits connect with existing services
SCAN chief executive Sachin Jain said the plans are intended to work alongside benefits involving prescriptions, vision, hearing products, food and over-the-counter items, bringing several commonly used services into a more connected system.
“We are trying to create something that’s incredibly simple for people to use that will enable them to seamlessly access their benefits,” Jain told The Wall Street Journal.
Costco’s existing health services could give customers several places to make use of those benefits. According to Costco, eligible Medicare Advantage over-the-counter and prepaid benefits cards are already accepted at every register, providing an existing connection between certain health-plan benefits and its retail operations.
The proposed insurance plans therefore represent an extension of Costco’s existing healthcare presence rather than its first involvement in the sector. Whether the pilot grows beyond its initial markets will depend first on regulatory approval, followed by what Costco and SCAN learn from the limited launch and how customers respond to the new products.
Sources: The Wall Street Journal; Scan Group
