If you have ever wished your Medicare plan felt a little more practical, Costco is stepping into the Medicare Advantage space with a co-branded option built around low out-of-pocket costs and Costco-style value.
The big headline: Costco is partnering with the nonprofit insurer SCAN Health Plan to offer SCAN Costco Medicare Advantage (HMO) plans for the 2027 plan year, with coverage starting January 1, 2027.
What Costco is launching
SCAN Health Plan holds the Medicare contract and underwrites the plan. Costco provides the co-branding and the retail value component, including pharmacy and certain allowances that can be used at Costco.
The plan name is SCAN Costco Medicare Advantage (HMO). A formal rollout announcement is scheduled for October 1, 2026, ahead of the 2027 enrollment season.
Where it will be available
At launch, these co-branded plans are limited to specific counties in California and Nevada. Coverage begins January 1, 2027 in:
California (17 counties)
- Alameda
- Fresno
- Kings
- Los Angeles
- Orange
- Placer
- Riverside
- Sacramento
- San Bernardino
- San Diego
- San Francisco
- San Joaquin
- San Mateo
- Santa Clara
- Stanislaus
- Ventura
- Yolo
Nevada (2 counties)
- Clark
- Nye
Costco membership is not required
This is a common point of confusion.
Because federal Medicare regulations prohibit bundling Medicare plans with commercial products, the plan has clear boundaries:
- No membership required: You can enroll without being a Costco member.
- No free membership included: Enrolling in the plan does not include a Costco membership.
- If you are not a member: You can still use plan benefits through other designated in-network providers. This can include benefits such as vision allowances, over-the-counter benefits, and hearing aids, plus access via Costco's pharmacy.
Benefits and allowances
These plans combine SCAN Health Plan's Medicare management with Costco value. Here are the key benefits and features shared for launch:
Premiums and copays
- $0 monthly premium in many covered counties
- $0 copays for primary care physician (PCP) visits
- $0 copays for Tier 1 and Tier 2 drugs
Annual allowances (where offered)
- Up to $2,500 for dental on select plans (some Northern California counties like Placer, Sacramento, San Joaquin, and Yolo offer $0 preventive dental only)
- Up to $500 per year for eligible over-the-counter health items and healthy grocery foods (FlexEssentials), which can be spent at Costco
- $300 eyewear allowance at Costco
- $400 hearing aid allowance
Transportation
The plan includes free transportation to Costco pharmacies and medical clinics.
The pharmacy piece
Pharmacy access and prescription costs are a major focus of how this plan is designed.
Costco pharmacies are positioned as the plan's primary preferred pharmacy network, with a reimagined pharmacy experience and low-cost prescription copays, including the $0 copay structure for Tier 1 and Tier 2 drugs.
When you can enroll
Enrollment follows the standard Medicare Annual Enrollment Period (AEP):
- October 15 through December 7
- Coverage begins January 1, 2027
People will be able to enroll online, through insurance brokers, or via specialized kiosks inside select Costco warehouses.
3 things to check first
Even if the perks sound great, Medicare Advantage plans are all about the details. Here is what I would personally verify before switching:
- Is it available in your county? This rollout is county-specific, not statewide.
- Are your doctors and hospitals in-network? This is an HMO, so networks matter.
- Are your prescriptions Tier 1 or Tier 2? The $0 copay structure is tied to those tiers.
Quick FAQ
Is this Costco's first move into health insurance?
Yes. This plan represents Costco's first move into the comprehensive health insurance market through a co-branded Medicare Advantage offering.
Who underwrites the plan?
SCAN Health Plan holds the Medicare contract and underwrites the plan.
Do I have to be a Costco member?
No. You can enroll without a Costco membership, and enrolling does not include a free membership.
Want help narrowing it down?
If you are trying to figure out whether this plan is worth watching for your situation, the fastest way to sanity-check fit is to look at a few basics:
- Your ZIP code or county (to confirm local availability)
- Whether you are transitioning from Original Medicare or switching from another Medicare Advantage plan
- The prescriptions you take regularly (to see whether they fall under the $0 Tier 1 and Tier 2 copay structure)
- Whether your preferred doctors or hospitals are in the SCAN network
Medicare choices can feel overwhelming, but when you break it down into availability, network, and drug coverage, it gets a lot more manageable.