Costco sweetens membership package with low-cost medical visits

Partnership with Sesame health care e-marketplace brings member-only discounts on virtual and in-person services.
Costco telehealth partnership with Sesame-online screen
Among other benefits, Costco members now get access to virtual primary care visits for $29 and 10% off of all other Sesame health services, including in-person appointments. / Image courtesy of Sesame

Costco Wholesale has sweetened its already appetizing membership perks with some low-cost health care.

Health care e-marketplace Sesame said this week that it has teamed up with Costco to offer the warehouse club giant’s members exclusive discounts on telehealth and other primary care services. Under the partnership, Costco members now can book inexpensive doctor visits directly through their membership.

Provided virtually or in-person with a health care professional, the services are aimed at Costco members who prefer to pay cash for their health care, are enrolled in high-deductible insurance plans, are uninsured or seek more convenient access to care, according to New York-based Sesame.

Costco members get “Sesame’s best pricing” on a range of health services across all 50 states, the health care marketplace said. That includes virtual primary care visits for $29, health assessments (a standard lab panel and followup virtual consultation with a provider) for $72 and virtual mental health therapy visits for $79. They also receive 10% off all other Sesame services, including in-person appointments.

Sesame noted that it doesn’t accept health insurance. The private equity-backed company said it’s building a “radically new health care system” for uninsured and underinsured Americans, including those with high-deductible coverage. Sesame explained that its marketplace is designed to replace “historically inefficient, expensive health care” with a direct connection—online or in-person—between patients and physicians, enabling not just care visits but also lab tests, imaging and prescription drugs at half the price.

“Quality, great value and low price are what the Costco brand is known for,” David Goldhill, co-founder and CEO of Sesame, said in a statement. “When it comes to health care, Sesame also delivers high quality and great value—and a low price that will be appreciated by Costco members when it comes to their own care.”

Costco already is one of the largest U.S. pharmacy retailers, generating some $3 billion in prescription drug sales annually, according to the Drug Channels Institute, and providing members some of the most affordable medications around, particularly maintenance drug regimens for chronic conditions. Besides full in-store pharmacy care services, Costco Pharmacy offers online mail-order, auto-refill, club pickup, pet medications, and health and wellness clinics, the latter including screenings for heart disease, diabetes and osteoporosis.

Overall, Costco’s membership bundle gives consumers another reason to buy their groceries at the wholesale club and helps it pull food and one-stop shoppers away from other big retailers like Amazon and Walmart, which also offer compelling customer benefits via their respective Prime and Walmart+ programs.

Along with access to warehouse club shopping, a Costco membership—available in Gold Star and Executive tiers—includes access to Costco gas stations, pharmacy/health services, on-demand grocery delivery, optical care, tire centers, free tech support on electronics and appliances, Costco Travel, cash-back credit cards, and a range of third-party services for home, auto, insurance and business needs.

“Membership growth continues. We ended the fourth quarter with 71 million paid household members, up 7.9% versus a year ago, and 127.9 million cardholders, up 7.6%. And that’s on new openings over the past year of just under a 3% increase in new locations,” Costco Chief Financial Officer Richard Galanti said Tuesday in a call with analysts on fourth-quarter results. (Call transcript provided by AlphaSense.)

A membership fee increase is in the offing, but Galanti declined to give a timetable. “It’s a question of when, not if,” he said, noting that Costco’s last fee hike came six years ago. According to CFRA Research analyst Arun Sundaram, a membership fee hike could come before the end of calendar 2023, as Costco has indicated it was waiting for inflation levels to ease off.



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