Would You Buy Health Insurance at Costco?

  • Share
  • Read Later
Victor J. Blue / Bloomberg / Getty Images

Sure, warehouse clubs are great for picking up pallets of bottled water and giant tubs of ranch dressing. But would you turn to one for your health insurance? Costco just announced a partnership with insurer Aetna that will let Costco members buy health insurance through the warehouse retailer in nine states, and it plans to roll out the program to other states in the future.

No, you can’t pick up a box of health insurance off the shelf and chuck it in your oversized cart, but Costco members will be able to buy one of five Aetna plans through the Costco Personal Health program, the Hartford Courant reports. Right now, customers in Arizona, Connecticut, Georgia, Illinois, Michigan, Nevada, Pennsylvania, Texas and Virginia can buy their insurance this way.

On its website, the insurer says that deductibles range from $3,000 to $7,500 annually. For family coverage, the deductible amounts range from $6,000 to $15,000. Some of the plans only cover generic prescription drugs, and one is meant for people who also have a health savings account or HSA. The program also includes a separate dental coverage plan.

(MORE: Enough to Make You Sick: Debt Collectors Hit Up Hospital Patients)

So what’s under the hood? We put in a Virginia ZIP code (the site requires you to plug one in to see plan details) and took a look. Provided that you’re using in-network doctors, a couple of the plans will waive the requirement that you pay the deductible first before covering visits to a physician, a specialist or an urgent care clinic.

All charge $0 for preventative care and an annual mammogram and pap smear for women. None of them cover maternity care with the exception of what Aetna calls “pregnancy complications.” After the deductible has been paid, the patient pays 30% of the cost for lab work, X-rays and physical therapy under all of the plans except for the HSA-linked one, under which the patient pays 10%.

(MORE: How Medical Debt Sickens Your Credit Score)

Those same percentages (30% for four plans, 10% for the HSA one) are also in effect for outpatient surgery as well as hospital admission. This is where things can get expensive. For serious or chronic medical conditions, hospital costs can climb to five and even six figures relatively quickly. Of course, people with chronic illnesses might not qualify for these plans, since the part of the Affordable Care Act — a.k.a. Obamacare — that prohibits insurers from denying people coverage based on pre-existing conditions hasn’t kicked in yet.

The Courant points out this isn’t the first time insurers have experimented with new ways of selling coverage. UnitedHealthcare has sold Medicare plans at retail locations in parts of New York in the past, and Cigna set up a direct-to-consumer website in 2010 to sell insurance plans.

Costco Personal Health isn’t the company’s only venture outside warehouse-store staples like pet food and patio furniture. A program it recently launched with First Choice Bank and 10 additional lenders offers Costco customers home loans for purchasing or refinancing. Costco doesn’t make the loans itself, but it connects customers with lenders and provides the online platform for them to comparison shop. A company rep told CNNMoney the store has already sold around 10,000 loans, and the program is still in its infancy.

Costco members already buy everything else from the warehouse giant. Will they be willing to finance their homes and insure their families’ health with the warehouse retailer, too?

2 comments