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Costco Health Insurance Review

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency...

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Reviewed byJoel Ohman
Founder, CFP®

UPDATED: Oct 29, 2020

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They sell pretty much everything else, so why not offer health insurance too, right? They have food, toiletries, household cleaning items, clothing, and more. But should you consider purchasing Costco health insurance plans?

While it’s a great place to stock up on household essentials (and try some free samples while you’re at it), you may be questioning whether buying health insurance through Costco would be a good decision. We’ll answer this question below in our Costco health insurance review.

Before continuing, be sure to enter your ZIP code above to compare insurance quotes from insurance providers in your area.

About the Costco Health Insurance Marketplace

Costco entered the insurance market several years ago to offer property and casualty (auto/home/renters) policies on behalf of Ameriprise Financial and it must have worked out pretty nicely, because not long after they went on to partner with mega health insurer Aetna when they created the so-called Costco Personal Health Insurance program.

This looks to have since been replaced as a result of the Affordable Care Act, and now Costco simply offers health insurance quotes.

Aetna was the company that underwrote the policies and paid insurance claims under the old setup. Today, the company works with an insurance broker by the name of Custom Benefit Consultants, Inc. (CBC) to provide customers with affordable Costco health insurance. And you do not need to be a member to get Costco health insurance quotes.

Once you access, you’ll be able to compare Costco health insurance rates in your state.

The Costco Health Insurance Marketplace currently offers quotes for individual plans in all states except for Washington D.C., Hawaii, Maryland, Massachusetts, New York, Rhode Island, and Vermont.

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Does Costco Offer Individual Health Insurance?

In short, yes. Costco individual health insurance can be purchased through well-known insurance providers, such as Oscar or Blue Cross Blue Shield.

Costco members may also receive additional benefits or discounts on some of these plans. However, as with all Costco health insurance plans, purchasing these plans through Costco is only available to members.

Other Costco Health Insurance Products

You can apply for the following health insurance coverage via Costco’s Health Insurance Marketplace:

  • Family Health Insurance
  • Costco Small Business Health Insurance
  • Short Term Medical
  • Medicare Insurance Programs

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What’s the Benefit to Using Costco?

The Costco insurance marketplace might be up your alley if you are one of the millions of Americans who:

– Do not qualify for health insurance through your employer
– Feel your employer’s health care plan is simply too expensive
– Are self-employed

Back when they were partnered with Aetna, there were apparently savings from selling insurance online (versus in-person we assume) that were passed on to the Costco customer. Basically, this meant that the Costco-Aetna health insurance policies cost less than Aetna policies sold via the traditional channels.

However, it didn’t mean they were guaranteed to be the most cost effective health insurance plans out there when compared to plans from other health insurance providers.

This made sense, as Aetna probably spent much less money on advertising. In fact, they expected to sell more insurance while spending less on advertising.

Also, there was a deal in place to purchase prescriptions from Costco, resulting in lower co-pays for those who opted for the Costco-Aetna health insurance plan. This may have been a lifesaver for those who purchased medication on a regular basis.

Today, you can take advantage of Costco’s partnership with Health Advocate, a company that can help you better navigate the complex and confusing health insurance industry.

The service matches you with a Personal Health Advocate, generally a registered nurse (RN), who can assist you with a variety of tasks such as finding the best doctors/hospitals, researching treatment methods, resolving billing issues, and more.

It’s kind of like a health insurance concierge. Other than that, it appears that the Costco Health Insurance Marketplace is exactly that, an online health insurance quote marketplace.

You can probably get the same exact quotes on other websites that compare health insurance providers.

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Free Samples and an Insurance Agent?

Thankfully, no. Costco will not have insurance representatives handing out free samples of Lipitor to get us to buy their health insurance in bulk.

This is going to be an online program on the Costco website for the time being. Really, it’s just an online quote marketplace and not much more than that. You will, however, be able to grab a brochure from in-store employees should you decide you want a little information before hitting the Costco website to check out Costco health insurance premiums.

This type of dual marketing is likely to be repeated with many large retailers across the United States. There is really almost no way to lose for either company.

Custom Benefit Consultants, Inc. gets access to a large group of people for which they have a lot of information – based on Costco’s raw consumer data, and Costco gets to earn a hefty commission by acting as an insurance broker, while taking no actual risk (i.e. not paying out health insurance claims).

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Is There Any Downside to Getting Health Insurance from Costco?

Costco medical insurance plans may be a little too simple for individuals with complex needs and financial situations. It may be better to seek an insurance company that offers more flexible or customizable policies.

You may also find that the brokers and agents you work with through Costco and CBC cannot offer you as much in-depth guidance or advice. They may also appear a little biased in order to convince you to purchase one of their plans.

Last, if you are not a Costco member, you will not be able to purchase a policy. Costco health insurance is for members only. Therefore, instead of paying for a Costco membership, you may be able to save some money by just purchasing your health insurance plan elsewhere.

In Conclusion

Insurance can be complicated…especially when it comes to health insurance.

It is always recommended that you speak to an insurance agent for help navigating the insurance waters. What may seem like a great deal based on the premium may not be the best option for your individual needs.

If Costco is able to find you a health insurance product that best fits your needs and also saves you some money, then this could be a great route to take. Of course, the only way to be sure is to compare multiple insurance quotes online from several health insurers while consulting with a professional to determine your needs before making your final purchase.

To compare health insurance quotes from companies in your area, enter your ZIP code below.

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