Amazon.com Inc. (NASDAQ: AMZN) has begun offering a low-cost version of its Prime membership program to qualifying recipients of Medicaid. Medicaid is the public assistance program providing medical coverage to low-income Americans. Roughly 20 percent of the U.S. population is signed up for Medicaid.
The program will reduce the cost of Prime from $12.99 per month, or $99 a year, to $5.99 per month. These Prime memberships will still offer all Prime perks, including free two-day shipping, Prime Music, Prime Now, Prime Photos, Prime Reading, Prime Video, and Audible Channels.
Amazon’s discounted membership is limited to four years of eligibility. To qualify for the discount, customers must have a valid Medicaid card. No annual commitment is required. Customers can also sign up for a free 30-day trial of the service.
Amazon offers Prime memberships to any U.S. customer with a valid EBT card for the same price of $5.99 per month. EBT cards are used to disburse funds for assistance programs, including Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), and Women, Infants, and Children Nutrition Program (WIC).
It remains unclear how many EBT shoppers are currently taking advantage of Prime. Amazon declined to provide specific numbers. The retailer has also been selected to participate in a USDA-led pilot program that will allow SNAP members to buy groceries online.
Amazon and other retailers are increasingly seeing online shopping as something that should be broadly accessible to all. Lower-income consumers have been the fastest-growing segment of online shoppers. Most low-income shoppers now have a mobile phone, allowing them to shop online.
Online shopping can have many benefits for low-income consumers. Online stores can sometimes have the best prices, allowing low-income shoppers to save on their everyday necessities. Some low-income customers don’t have regular access to a vehicle, making traveling to a store to shop difficult.
Online shopping also eliminates the hassles of going to a store. Many Medicaid recipients require extra assistance when out shopping due to advanced age or disability. There is speculation that Amazon may be entering the prescription drug market in the near future. The company has already obtained pharmacy licenses and says it intends to use them to sell medical devices and supplies.