Costco is preparing to enter the Medicare insurance market through a partnership with SCAN Group, adding one of America's most recognizable consumer brands to an increasingly competitive Medicare landscape.
According to Benzinga, Costco and SCAN plan to introduce jointly branded Medicare Advantage plans in two states and a Medicare Supplement plan in a third. The initial markets have not yet been announced, pending regulatory approval.
For independent Medicare agents, the bigger story is not simply that Costco is getting into Medicare.
It is what this move says about the continued evolution of Medicare distribution, consumer expectations, and the importance of building a business that can adapt.
Costco has spent decades building a reputation around value, simplicity, and consumer trust.
Its Medicare initiative appears designed to bring those same principles into health insurance.
SCAN CEO Sachin Jain told The Wall Street Journal that the plans are intended to make benefits easier for consumers to access, with potential connections to Costco services including prescription drugs, vision, hearing, food, and over-the-counter products.
That approach is significant because Medicare beneficiaries are increasingly encountering insurance through brands and environments outside the traditional insurance agency model.
Retailers, healthcare organizations, technology companies, pharmacies, and other consumer brands are all becoming more involved in the healthcare experience.
For agents, that does not necessarily mean fewer opportunities.
It means the competitive environment is changing.
One detail in the announcement is particularly important for insurance professionals.
According to Benzinga, the new products are expected to be distributed through Costco stores and through traditional channels including insurance agents and websites.
That distinction matters.
Even when a recognizable consumer brand is attached to a Medicare product, beneficiaries still need help understanding:
Brand familiarity can get someone's attention.
It does not replace individualized plan analysis.
That is where knowledgeable independent agents continue to provide significant value.
Costco's involvement also underscores how important trust has become in Medicare.
Consumers may increasingly encounter health coverage alongside brands they already use for prescriptions, groceries, hearing aids, vision care, financial services, and other everyday needs.
Independent agents should think about the same principle.
Your biggest competitive advantage may not be simply having access to a particular plan.
It is becoming the person clients trust to help them make sense of all their options.
That means building visibility before enrollment season, staying in contact throughout the year, educating clients consistently, and becoming a resource rather than simply an enrollment transaction.
PSM recently explored this concept in The Trust Stack: How Insurance Agents Can Build Credibility Before the First Call.
The Costco announcement is also notable because of the carrier involved.
SCAN Health Plan is an established nonprofit Medicare Advantage organization with a long history of serving Medicare beneficiaries. SCAN currently operates Medicare Advantage plans across several states.
PSM Brokerage already works with SCAN and provides agents with information and support around its Medicare Advantage opportunities.
Agents interested in learning more can explore our SCAN Health Medicare Advantage resources.
As carriers develop new partnerships, enter new markets, or experiment with different distribution models, having access to a broad carrier portfolio becomes increasingly valuable.
There is another possible upside for agents.
When major consumer brands talk about Medicare, Medicare receives more consumer attention.
That can increase awareness, questions, and ultimately conversations.
An independent agent does not need to compete with Costco on brand recognition.
Instead, the opportunity is to help consumers understand where a particular branded product fits within the larger Medicare marketplace.
A beneficiary might initially ask:
"What is the Costco Medicare plan?"
A knowledgeable agent can help turn that into the more important question:
"Which Medicare option actually fits my needs?"
That is a much broader conversation.
And independent agents who represent multiple carriers are well positioned to have it.
The Medicare market is changing quickly.
Alongside Costco's entrance, established Medicare Advantage carriers are adjusting footprints and product strategies as they respond to rising medical utilization, regulatory changes, and profitability pressures. Benzinga notes that Humana has announced additional Medicare Advantage exits for 2027 affecting approximately 600,000 members.
That reinforces an important lesson for independent agents:
Do not build your entire business around one carrier.
Access to multiple carriers allows agents to adapt when:
PSM's Medicare product portfolio is designed around that approach, giving independent agents access to Medicare Advantage, Medicare Supplement, Part D, and related solutions rather than requiring them to rely on a single carrier.
Costco's Medicare move should also encourage agents to think beyond individual enrollments.
Large companies enter markets with a strategy.
Independent agents should do the same.
That includes developing systems around:
A strong book of Medicare clients can become the foundation for a much larger insurance business when those relationships are managed intentionally.
PSM provides Medicare agent resources along with marketing, technology, training, and business development support designed to help agents build that infrastructure.
The Costco-SCAN partnership is unlikely to be the last new distribution model Medicare agents see.
The market will continue evolving.
Consumer brands will experiment with healthcare.
Carriers will enter and exit markets.
Technology will change how beneficiaries research plans.
Plan designs will change.
Regulations will change.
For independent agents, the goal should not be trying to prevent those changes.
It should be building a business capable of benefiting from them.
That is also how PSM Brokerage views the role of an FMO.
A strong FMO should provide more than contracts.
It should help agents understand market changes, identify new opportunities, access competitive carriers, adopt better technology, improve their marketing, and build a more resilient book of business.
PSM supports independent agents with broad carrier access, integrated enrollment and CRM technology, compliance resources, marketing support, and business development guidance.
As Medicare continues evolving, that support becomes increasingly valuable.
Costco entering Medicare is another sign that the Medicare marketplace remains attractive, competitive, and full of innovation.
For independent agents, the takeaway is not to worry about another competitor.
It is to strengthen the things large organizations have difficulty replicating:
Personal relationships. Local knowledge. Individualized guidance. Carrier choice. Ongoing service.
Pair those advantages with the right technology, carrier portfolio, marketing strategy, and FMO support, and independent agents can continue to grow even as the marketplace changes around them.
If you're looking for a partner built to help independent agents navigate those changes, learn more about working with PSM Brokerage as your Medicare FMO.