I can see great benefit from any organization negotiating rates for services. If you notice the next service confirmation you receive from almost any insurer, you will note that the insurance company does not pay the bill in full. Insurance companies negotiate rates for services that are far below “billed” rates. For instance, my daughter had some elective surgery and the doctor billed $3000 for his services as a surgeon. Insurance paid $600 and the surgeon wrote off $2400. Service discounting is standard operating procedure (no pun intended) if a physician, hospital or any service provider does business with Blue Cross/Blue Shield or any of the major insurers. Is it a benefit to a consumer if an organization is able to piggy back on “accepted negotiated rates” and is able to deliver these rates to members for an administrative fee? You’re mighty right this is beneficial! Can you get these rates as an individual? Sometimes you can, by simply asking the doctor if he will accept the negotiated rate for an uninsured service and offer… Read more »

Although there obviously has to be some profit motive for Costco, if the policy being offered is genuinely less expensive than an individual policy AND offers equivalent coverage then it sounds like one of those win win situations that we all so desperately seek.

This sounds good on the surface but I doubt they will actually save anyone money. My guess is they will only be able to sell insurance to healthy people without pre-existing conditions. I’ve investigated several plans offered by groups and associations. None of them offer a plan that excludes pre-existing conditions like what you can get through employer sponsored plans or with government programs.

Insurance is like buying a car. It’s always going to cost more going through a warehouse club because they need some room to make a profit. Smart buyers will always find a lower cost method rather than using a middleman organization. I think this will be end up like the caskets Costco wanted to sell. It might be just as hard to find a doctor that accepts the insurance sold by Costco as it is to find a funeral director willing to work with someone who bought a casket at Costco.

It is a natural fit for Costco. In particular, there’s a benefit in gaining business customers who have been traditionally a focus of Sam’s Club. That is, of course, assuming that Costco can offer a real benefit in cost savings. My assumption is that they can and this could be a great benefit, not only for Costco, but also for small to medium sized businesses that can ‘co-op’ with Costco for mutual benefit. This is innovative thinking at its best. Costco has also taken a lead as a champion of this issue in other areas. They are also a champion at providing excellent benefits to their workers at little to no cost. They are a real leader on this issue. If it doesn’t work, I am confident that they will continue to find innovative ways to address this issue, both inclusive and non-inclusive of their business customers.

We’ll take any relief we can get. I don’t have exact numbers, but it seems like years ago I paid about $125/month for my family of seven. Today, with 50 employees, it’s pushing $1200/month per family. We do have a “Cadillac” plan for our “Cadillac” employees, but this is ridiculous.