Amazon offers discounts on Amazon Prime fees to recipients of EBT funds and, now, Medicaid. They can renew their discounted Amazon Prime membership every year, for up to four years, and can cancel anytime. While Amazon doesn't say how many members Prime has, those customers usually spend more and buy more frequently than non-members.
By establishing a tier for medicare recipients, the government-sponsored health care scheme for low-income pregnant women, adults, seniors, and people with disabilities, Amazon adds another entry point to its services to people in lower income brackets.
To qualify for the discounted rate, customers must have a valid Medicaid card or Electronic Benefits Transfer (EBT) card.
An Amazon Prime membership includes perks such as two-day shipping on more than 100 million products, unlimited photo storage and free online streaming of thousands of movies and TV shows.More news: Teens exposed to five toxic chemicals from E-cigarettes Video
With about 74 million people receiving Medicaid, according to 2017 Medicaid enrollment data, Amazon is positioned to fold in a new market for Prime, which is one of its three pillars of business along with its marketplace and cloud computing service. Almost half of those recipients are under the age of 19. Medicare, which isn't part of this discount program, guarantees health coverage for those 65 or older.
In the end, selling discounted Prime subscriptions to low-income families and students could very well be a big win for Amazon. The online retailer also recently announced it was participating in a program led by the Department of Agriculture that will allow SNAP recipients to purchase groceries online. The company's experimental, cashier-less Amazon Go stores were knocked by critics for failing to accept SNAP.
The low-income customer segment has always been Walmart's forte, and the retailer has its own products geared toward them, like low-fee checking accounts and money services that can be done in-store. Using Prime and all its benefits as an enticement to the less affluent is not only a generous offer, but another shot at Walmart.