Amazon offers reduced Prime memberships to more low-income people

(CNN Money) — Amazon is slashing the price of its Prime Membership for lower-income Americans.

The online retail giant announced Wednesday morning that Medicaid recipients are eligible for Prime for $5.99 a month, a 54% discount from the normal rate of $12.99 a month. The lowered monthly rate is $27 cheaper than the $99 annual Prime membership fee.

To qualify for the discounted rate, customers must have a valid Medicaid card or Electronic Benefits Transfer (EBT) card. The $5.99 membership can be renewed every year for up to four years. There is no annual commitment and customers can cancel the membership at any time.

Medicaid provides health insurance to millions of Americans, including low-income adults, children, the elderly and people with disabilities. More than 74 million Americans — or more than 20% of the population — were enrolled in Medicaid and the Children’s Health Insurance Program (CHIP) as of the end of 2017.

Last summer, Amazon offered the discounted membership price to customers on other government assistance programs, including the Supplemental Nutrition Assistance Program (SNAP), and Women, Infants, and Children Nutrition Program (WIC). Shoppers needed a valid EBT card to qualify.

A Prime membership includes free two-day shipping and streaming access to movies, TV shows and music.

The move is another shot fired in the battle of the retail giants to attract more customers. Retailers have been stepping up their game to compete for wallet share. Walmart offers free two-day shipping for online orders of more than $35 to all customers.

Customers with Prime memberships are more lucrative for Amazon, according to a 2017 report from Consumer Intelligence Research Partners. The report found that there are 85 million Prime members in the U.S., spending an average of around $1,300 a year compared to $700 for non-Prime shoppers.

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