ISSAQUAH, Washington, August 23, 2026, 14:25 PDT
- Costco and SCAN plan Medicare products for three U.S. markets covering about 5 million eligible people.
- That potential pool equals roughly 6.0% of Costco’s 82.9 million paid members, but enrollment and financial terms remain undisclosed.
- Costco shares ended Friday at $947.74, up 1.52%, after a volatile week.
Costco Wholesale Corporation NASDAQ:COST is testing whether its membership trust can travel into Medicare. The retailer and nonprofit SCAN Group plan jointly branded Medicare Advantage and supplement products, pending regulatory approval. The first three markets contain about 5 million Medicare-eligible people.
The addressable pool equals 6.0% of Costco’s 82.9 million paid members. That is a useful scale marker, not an enrollment forecast. Neither company disclosed expected sign-ups, commissions or launch states.
The distinction matters. Federal rules prevent Costco from bundling insurance with warehouse membership. Investors should view the plan as ancillary-service optionality until conversion data appears.
| Medicare pilot measure | Verified detail | Investor read-through |
|---|---|---|
| Initial reach | Three markets; about 5 million eligible people | Large test pool, not booked customers |
| Products | Medicare Advantage and Medicare supplement | Potential commission and service revenue |
| Sales channels | Warehouses, agents and online | Tests store traffic and digital conversion |
| Status | Regulatory approval pending | Timing and economics remain uncertain |
Costco’s pharmacy site already features SCAN Medicare coverage. The proposed plans may include prescription, over-the-counter, vision and audiology benefits. These services fit Costco’s existing healthcare footprint.
Chief Executive Ron Vachris said the agreement should “create value for our members.” The phrase sets the right hurdle. A product that improves retention may matter more than near-term commission income. Yahoo Finance
Costco’s core engine is already strong. Third-quarter membership fees rose 10.7% to $1.373 billion. Paid memberships reached 82.9 million, while the U.S.-Canada renewal rate stood at 92.2%.
| Operating measure | Latest period | Change |
|---|---|---|
| July net sales | $23.12 billion | +10.7% |
| July total comparable sales | All markets | +8.9% |
| July digitally enabled comparable sales | Online-related | +17.7% |
| Q3 membership fees | $1.373 billion | +10.7% |
| Q3 diluted EPS | $4.93 | +15.2% |
July sales added another buffer. Net sales climbed 10.7% to $23.12 billion. Digitally enabled comparable sales rose 17.7%, nearly twice the companywide rate.
The stock still had a choppy week. It gained 1.52% Friday but finished 1.39% below its August 14 close. Friday volume ran about 29% above the prior four-session average.
| Session | Close | Daily move | Volume |
|---|---|---|---|
| August 17 | $953.50 | -0.79% | 1.24 million |
| August 18 | $961.35 | +0.82% | 1.85 million |
| August 19 | $956.99 | -0.45% | 1.64 million |
| August 20 | $933.51 | -2.45% | 2.50 million |
| August 21 | $947.74 | +1.52% | 2.34 million |
Wall Street remains positive, though the range is wide. The 39-analyst average target is $1,077, implying 13.7% upside. Targets span $740 to $1,315.
| Recommendation measure | Count or target | Implied move from $947.74 |
|---|---|---|
| Strong Buy | 19 analysts | — |
| Buy | 4 analysts | — |
| Hold | 14 analysts | — |
| Sell / Strong Sell | 2 analysts | — |
| Average target | $1,077 | +13.7% |
| Target range | $740–$1,315 | -21.9% to +38.8% |
Recent calls show the valuation debate. Evercore Inc. NYSE:EVR carries a $1,100 target. The Goldman Sachs Group, Inc. NYSE:GS lists $1,159. Roth MKM’s $781 target reflects the downside case.
Next week’s question is simple: can management quantify the pilot without overpromising? Any detail on commissions, states or launch timing would help investors model the opportunity.
Risks: Approval delays, weak plan uptake or added operating costs could erase the pilot’s benefit. Costco’s premium valuation also leaves little room for slower core sales.
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