Cancel anytime.In addition to free two day shipping, a Prime membership offers other perks including thousands of movies and TV shows, over two million songs, exclusive deals, free two hour shipping with Prime Now, discounts on subscriptions, and more.
Targeting low-income customers is a key part of the war between Amazon and Walmart. The lowered monthly rate is $27 cheaper than the $99 annual Prime membership fee. A Morgan Stanley survey found 40% of Amazon Prime members spend over $1,000 a year on Amazon compared to 8% of non-Prime customers.
The online retailer opened its discounted $5.99-a-month Prime membership on Wednesday to people on Medicaid, giving it an even bigger pool of potential shoppers who may otherwise have been unable to pay the standard fee.
Industry analysts believe Amazon is maneuvering both to expand its Prime membership numbers, and to go after people whose first shopping destination may be Walmart.
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The Medicaid connection may also stir more nerves among healthcare companies anxious about tentative moves by Amazon to sell and distribute some medical supplies and drugs.
Almost 70 million people are enrolled in Medicaid, which provides health coverage to low-income people and those with disabilities. The service counts tens of millions of Americans among its customers (the program is used by nearly half of US households by to some estimates.) It has made Amazon's e-commerce site even stickier among members, who ramp up use as they look to get their money's worth. The $5.99 membership can be renewed every year for up to four years.
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. Shoppers needed a valid EBT card to qualify.