What Is a Medicare Cost Plan?

Medicare is full of different parts and plans, and it can be difficult to understand all your Medicare options. One of the lesser-known types of coverage is a Medicare Cost Plan. 

In this guide, we explain a special type of Medicare coverage called a Medicare Cost Plan, including what it can cover and how you can search for plans in your area.

Because Medicare Cost Plans are similar to Medicare Advantage plans but are offered in far fewer places than Medicare Advantage plans are sold, you may want to call to speak with a licensed insurance agent who can help you find out if either type of plan are offered where you live.

What Is a Medicare Cost Plan?

A Medicare Cost Plan is like a Medicare Advantage (Medicare Part C) plan in some ways. Like Medicare Advantage plans, Medicare Cost Plans are offered by private insurance companies and offer some additional benefits that aren’t typically covered by Original Medicare (Medicare Part A and Part B).

If a Medicare Cost Plan beneficiary has Medicare Part A and Part B and visits a doctor or provider who is outside of their Cost Plan network, Original Medicare covers the services and the beneficiary pays the Part A and Part B coinsurance and deductible costs.

If you visit a doctor who is part of your Cost Plan provider network, you pay only your plan’s coinsurance, copay or deductible costs, which are likely low or $0.

If your Medicare Cost Plan offers prescription drug coverage, you can get your Medicare drug coverage through the plan. If the Cost Plan doesn’t include drug coverage, you can join a separate Medicare Part D prescription drug plan.

One way to think of the difference between the Medicare Advantage plans and Medicare Cost Plans is that a Medicare Cost Plan is used in addition to your Original Medicare coverage while a Medicare Advantage plan is used in place of your Original Medicare coverage. 

Am I a Good Candidate for a Medicare Cost Plan?

Medicare Cost Plans can be ideal for beneficiaries who spend a lot of time traveling. Because Medicare Advantage plans generally limit you to a network of participating providers, you may find yourself outside of your coverage area while traveling. 

But because Medicare Cost Plans use Medicare Part A and Part B coverage for out-of-network services, these beneficiaries may still receive covered care almost anywhere they go within the U.S. and U.S. territories. 

When Can You Enroll in a Medicare Cost Plan?

While some other types of private Medicare insurance restrict beneficiaries to enrolling during a certain time of year, Medicare Cost Plans have no such rules and you may usually enroll in a plan at any time. In some cases, however, a Medicare Cost Plan may not be currently accepting new members. 

Also, unlike some types of private Medicare plans, you may typically leave a Medicare Cost Plan at any time and return to Original Medicare.

Where Are Medicare Cost Plans Sold?

Medicare Cost Plans are not as widely available as Medicare Advantage or other types of private Medicare plans. Medicare Cost Plans are only sold in certain and limited parts of the country. 

As of 2019, there were only 68 total Medicare Cost Plans available in the U.S. and they were concentrated in only nine states:

• Minnesota (19 plans)
• Wisconsin (17)
• Iowa (13)
• North Dakota (10)
• South Dakota (10)
• Colorado (9)
• Maryland (6)
• Virginia (6)
• Illinois (3)

Medicare Cost Plans are gradually being phased out. In 2011, there were 111 Medicare Cost Plans across 16 states.

What Are the Eligibility Requirements for a Medicare Cost Plan?

The eligibility criteria for a Medicare Cost Plan are similar to that of a Medicare Advantage plan.

You must live in the plan’s service area in most cases, and the plan must be currently accepting new patients. 

Unlike a Medicare Advantage plan, you do not need to be enrolled in both Part A and Part B in order to enroll in a Medicare Cost Plan. You only need to be enrolled in Part B at a minimum. 

How Can You Enroll in a Medicare Cost Plan?

Contact a licensed Medicare insurance agent to see if there are any Medicare Cost Plans available in your area. As previously mentioned, Medicare Cost Plans are not available in most states.