Medicare Cost Plans: Eligibility, Coverage, and Costs

Jory Cross by Jory Cross | Licensed since 2012
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This article was updated on: 07/05/2018

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Medicare Cost plans are private Medicare health plans that are only available in certain parts of the country. Plan members who use in-network providers will have lower costs and the most coverage, but there’s also an option to use out-of-network providers and be covered under Original Medicare, Part A and Part B. Unlike Medicare Advantage, you can sign up for a Medicare Cost plan even if you’re only enrolled in Medicare Part B.

Eligibility for Medicare Cost plans

Individuals may enroll in a Medicare Cost plan if they:

  • Have Medicare Part B.
  • Live as a permanent resident in the service area of the plan they’re considering.
  • Do not have end-stage renal disease (ESRD), in most cases. Check with your plan or with Medicare (contact information at the end of this article) to see if you qualify for an exception if you want a Medicare Cost plan.

Medicare Cost plan benefits

Because these plans are offered by private insurance companies, Medicare Cost plans may vary. There are generally two types: Medicare Cost plans that provide both Part A and Part B benefits and plans that provide Part B benefits only.

Medicare Cost plans that provide Part A and Part B benefits

If your Medicare Cost plan provides both Part A and Part B benefits, your costs will be lower if you use providers within the plan’s network. However, if you go outside of this network, you’ll be covered under Original Medicare Part A and Part B, and not the Medicare Cost plan. In this case, you’d be responsible for the Part A and Part B coinsurance and deductible for Original Medicare. However, the Medicare Cost plan will cover out-of-network costs in emergency situations.

This type of Medicare Cost plan may include optional prescription drug coverage. If a Medicare Cost plan offers a drug benefit, you can only enroll in the plan or add on drug coverage during Medicare Part D enrollment periods. This includes the Initial Enrollment Period for Part D, the Annual Election Period (AEP), the 5-Star Enrollment Period, and the Special Election Period (SEP) (if you qualify). If your Medicare Cost plan doesn’t include prescription drug coverage, you can join a stand-alone Medicare Part D Prescription Drug Plan (PDP).

Medicare Cost plans that provide Part B benefits only

Some Medicare Cost plans, often sponsored by an employer or union, only provide Part B benefits. If you’re enrolled in Part A, you’ll get this coverage through Original Medicare. This kind of plan doesn’t include Medicare Part D benefits, and if you want drug coverage, you’ll need to enroll in a stand-alone Medicare Part D Prescription Drug Plan.

Enrollment for Medicare Cost plans

Medicare Cost plans can accept new members at any time. Unlike Medicare Advantage or Medicare Prescription Drug Plans, there are no open enrollment periods. Each plan is required to have at least one 30-day enrollment period each year, which can be held throughout the year. You can disenroll from a Medicare Cost plan at any time to return to Original Medicare. If the Medicare Cost plan includes Medicare Part D Prescription Drug coverage, you may make changes to your Part D coverage only during a valid election period for Medicare Part D.

As I stated above, Medicare Cost plans may or may not available in your area. If you want to see if there are any available near you, or ask me about other types of Medicare coverage, please don’t hesitate to reach out. In order to learn more about my background as a licensed insurance agent, see my photo and profile below. You can also schedule a phone call with me or request an email containing personalized plan information. Want to see what types of plans are available in your area? Click the Compare Plans buttons on this page.

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