Amazon announced this morning it will offer a low-cost version of its Prime membership program to qualifying recipients of Medicaid. The program will bring the cost of Prime down from the usual $10.99 per month to about half that, at $5.99 per month, while still offering the full range of Prime perks, including free, two-day shipping on millions of products, Prime Video, Prime Music, Prime Photos, Prime Reading, Prime Now, Audible Channels, and more.
The new program is an expansion on Amazon’s discounted Prime service for customers on government assistance, launched in June 2017. For the same price of $5.99 per month, Amazon offers Prime memberships to any U.S. customer with a valid EBT card – the card that’s used to disburse funds for assistance programs like Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), and Women, Infants, and Children Nutrition Program (WIC).
Now that same benefit is arriving for recipients of Medicaid, the public assistance program providing medical coverage to low-income Americans. To qualify for the discount, customers must have a valid EBT or Medicaid card, the retailer says.
While it seems like online shopping – and especially a Prime membership – should be a luxury for those who can afford the convenience, Amazon and other retailers are increasingly seeing it as something that should be broadly accessible to all.
For low-income customers, online stores can sometimes have the best prices, compared with local retailers, allowing them to save on everyday needs. In addition, driving to and from a store isn’t always easy, either – especially because some low-income shoppers don’t have regular (or any) access to a vehicle.
Plus, Prime includes a 20 percent discount on wipes and diapers, which can help low-income families with babies save.
Above: a video featuring a customer with a discounted Prime membership
In the case of Medicaid recipients, getting to the store can be a challenge. Around half of Medicaid recipients are children under the age of 19, while disabled individuals and adults over the age of 65 – people who sometimes require extra assistance when out shopping – make up a bulk of the remaining enrollees.
In its announcement of the new discount program, Amazon specifically highlighted stories that demonstrate how Prime is helping a variety of customers, from a retired military veteran and cancer survivor to a single mom in rural Missouri who has limited access to stores, and a five-year old with a genetic disorder who requires 24/7 care.
“He already has a lot to deal with and dislikes stores, so even eliminating a trip to the local store makes such a difference for him, and is easier on me. I love it,” the mom said.
Their stories about time-saving and convenience may have more resonance because of their particular situations, but really they’re speaking to the benefit to e-commerce in general. Online shopping it eliminates the hassles with going to a store, and allows you to spend time on what’s important – not buying more paper towels.
Prime discounts for government assistance recipients aren’t the only way Amazon is working to attract more low-income shoppers.
The retailer was also selected to participate in a USDA-led pilot program, along with Walmart, Thrive Market and others, which will allow SNAP members to buy groceries online. But despite these initiatives, Amazon isn’t entirely EBT-friendly – its new cashierless Amazon Go stores don’t take food stamps, for example.
Shortly after Amazon announced its low-cost Prime membership for government assistance recipients last year, Walmart followed suit by announcing that customers with EBT cards could use its Online Grocery Pickup service. It will be interesting to now how Walmart will respond to today’s news, given the rivals’ tit-for-tat war.
The expansion of Amazon’s discounted program to Medicaid is also notable, given the speculation around Amazon entering the prescription drug market, by operating as an online pharmacy. The company has already obtained pharmacy licenses, but told regulators it will use them to sell medical devices and supplies instead.
It’s unclear how many EBT shoppers are now taking advantage of Prime, as Amazon declined to share numbers.
“We are pleased with the response to the program already. We have great customer feedback,” was all a spokesperson would say on the matter.