Walmart is making a bigger move into healthcare, and this time it is targeting one of the largest and most valuable groups of consumers in America: Medicare beneficiaries.
The retail giant is partnering with nonprofit insurer SCAN Health Plan to launch co-branded Medicare Advantage plans in two states. The plans are expected to be available to more than 2 million Medicare enrollees, pending regulatory approval.
Walmart is also following a familiar name into the business. SCAN recently announced a similar Medicare partnership with Costco.
That makes the trend more interesting than either deal on its own.
Walmart Wants to Connect Healthcare With the Shopping Cart
The Walmart-SCAN plans could include pharmacy and vision services along with benefits for food and over-the-counter products.
But Walmart brings something else to the partnership: an enormous amount of interaction with consumers in their everyday lives.
The company plans to incorporate its Everyday Health Signals platform, which allows participating customers to receive personalized nutrition and wellness recommendations based partly on their wellness goals and shopping preferences.
For example, instead of health insurance existing almost entirely around doctor visits, prescriptions and claims, Walmart sees an opportunity to connect health benefits with decisions people make every week at the grocery store.
That is potentially a powerful combination.
Walmart already has pharmacies, vision centers, groceries, health products and millions of customers walking through its stores. Medicare Advantage gives it another way to connect those businesses.
Costco Is Trying Something Similar
SCAN’s Walmart deal comes shortly after the insurer announced a partnership with Costco involving jointly branded Medicare Advantage and Medicare supplement plans.
There is an obvious logic behind both deals.
Medicare can be confusing. Consumers have to compare premiums, provider networks, prescription coverage, out-of-pocket limits and an increasingly long list of additional benefits.
Walmart and Costco already have something health insurers spend enormous amounts of money trying to build: frequent contact with consumers and recognizable brands.
For SCAN, partnering with those retailers could provide a very different way to reach seniors.
The Timing Is Especially Interesting
The expansion comes at an unusual moment for Medicare Advantage.
Traditional insurers have been struggling with rising medical costs, and some have reduced their Medicare Advantage footprints or exited certain markets. Higher utilization and medical expenses have made the economics more difficult for insurers.
Yet Medicare Advantage remains enormous.
More than half of eligible Medicare beneficiaries are now enrolled in Medicare Advantage rather than traditional Medicare, making it one of the most important parts of the U.S. health insurance market.
That creates an interesting split.
Some established insurers are becoming more selective about where they offer plans, while companies with enormous consumer ecosystems are looking for ways to move further into the business.
Walmart Has Tried Healthcare Before
Investors should also remember that Walmart’s healthcare ambitions have had mixed results.
The company previously operated Walmart Health clinics and had a Medicare-related partnership with UnitedHealth. Walmart shut down its health centers and virtual-care operations in 2024, citing an unsustainable business model caused by reimbursement challenges and rising operating costs.
Its latest strategy requires far less infrastructure.
Instead of building and operating a nationwide network of medical clinics, Walmart can contribute its brand, stores, pharmacies, consumer relationships, technology and shopping ecosystem while SCAN handles the insurance side.
That could prove to be a much more natural role for the retailer.
The Bigger Opportunity for Walmart
This is unlikely to become a major earnings driver for Walmart overnight. The initial offering is limited to two states, and important details including the specific markets have yet to be announced.
The more interesting question is what happens if the model works.
Walmart serves roughly 280 million customers and members globally each week and operates more than 10,900 stores worldwide. It also has a large U.S. pharmacy operation and a grocery business that gives customers reasons to visit far more frequently than they interact with a typical health insurer.
Medicare Advantage could allow Walmart to connect more of those pieces.
Insurance benefits can lead to pharmacy spending. Food benefits can lead to grocery purchases. Vision coverage can connect customers with Walmart Vision Centers. Personalized nutrition programs can potentially increase engagement with Walmart’s digital ecosystem.
That is where this becomes more than an insurance story.
What Investors Should Watch
The first thing to watch is where Walmart and SCAN launch the plans. The companies have said two states but have not publicly identified them.
The second is enrollment. Access to more than 2 million Medicare beneficiaries sounds impressive, but the important number will be how many actually choose the plans.
Finally, watch whether Walmart eventually expands the program beyond the initial markets.
If the company can demonstrate that Medicare members use more Walmart pharmacy, grocery, vision and wellness services, there would be a clear incentive to expand.
The Bottom Line
Walmart selling Medicare Advantage plans is another sign that the lines between retail, healthcare and insurance continue to blur.
Costco is moving in the same direction, while some traditional insurers are pulling back from parts of Medicare Advantage.
The opportunity for Walmart is straightforward: millions of older Americans already shop at its stores, fill prescriptions at its pharmacies and buy their groceries there.
If Walmart can successfully connect those everyday relationships with health insurance, Medicare could become another way to keep customers inside the Walmart ecosystem.
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