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🎧 Part I Podcast free on Apple Podcasts and Spotify.
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Table of Contents
What actually happened in August
The cash pay machine already humming in the warehouse
How PBM leverage actually works, a refresher nobody asked for
The Rand Paul bill, read closely instead of tweeted about
What the February law changed and what it very much did not
Membership purchasing versus formulary leverage, the actual matchup
The regulatory to-do list if any of this is going to scale
Placing bets
Abstract
Costco and SCAN Health Plan announced co-branded Medicare Advantage products in two states plus a Medigap product in a third, pending CMS approval, targeting markets with roughly 5 million Medicare enrollees.
Rand Paul’s Health Marketplace and Savings Accounts for All Act would let any membership organization sponsor an ERISA health plan across state lines and would significantly expand and liberalize HSAs, including broader eligibility and allowable expenses.
The February 2026 spending bill delivered the biggest federal PBM reform in two decades: Medicare Part D delinking, bona fide service fees, full rebate pass-through, and sweeping transparency mandates that reach into the ERISA commercial market.
Core thesis: membership models are excellent at cash pay and terrible at formulary leverage, because leverage comes from the ability to move covered lives, not from warehouse loyalty. The interesting play is Costco becoming a plan sponsor, which converts loyalty into lives.
For the association plan vision to scale, expect fights over ERISA preemption, MEWA state regulation, adverse selection math, and a 2018 rulemaking ghost that already got vacated once.
