Could a Medicare Cost Plan be more cost-effective for you? Find out here. 

If you are eligible for Medicare, choosing a Medicare healthcare plan is the first step to receiving your benefits. There are different “parts,” or Medicare coverage areas, and different types of Medicare plans. The type of Medicare health plan you select will affect your co-pays, coinsurance, and access to doctors and medications.

A Medicare Cost Plan is an option that can give you greater healthcare access and help with the cost of healthcare, depending on your circumstances.

Trying to save money on Medicare? Try the Insurify Medicare comparison tool to find the best price on Medicare plans. Start with your ZIP code to compare plans and save big. Try it today!

 

 

What Is a Medicare Cost Plan?

Medicare Cost Plans are designed to work alongside Original Medicare or Medicare Part B to provide Medicare beneficiaries with additional Medicare coverage. With a Medicare Cost Plan, you can get more services covered than with just Medicare Parts A and B. By enrolling in a Medicare Cost Plan, you may even be able to avoid costly Part A premiums if you don’t qualify for premium-free enrollment.

Medicare Cost Plans are typically ideal for those who live in rural areas or regions that don’t have a large variety of healthcare provider options. Medicare Cost Plans provide you with the flexibility to allow you to get the care you need, even if you have to see an out-of-network provider.

Medicare Cost Plans are available in limited areas of the country, traditionally where medical care is hard to obtain due to a scarcity of network providers. Here, we cover everything you need to know about Medicare Cost Plans so you can decide whether it’s the right decision for you.

How does a Medicare Cost Plan work?

A Medicare Cost Plan is similar to a Medicare Advantage plan in that it usually has a network of doctors and hospitals and may cover some care and services that Original Medicare does not cover. However, if you need to go outside of that network, Original Medicare steps in to provide you with coverage. 

The Medicare Cost Plan was specifically designed to provide coverage for people living in areas with limited access to in-network Medicare providers. If you need medical care, a Medicare Cost Plan ensures you can see any provider who accepts Medicare and is available in a rural area.

A Medicare Cost Plan may or may not offer prescription drug coverage. In either case, you can purchase a stand-alone Part D prescription drug plan that fits your needs and gives you the best access to the medications you need. Part D plans cover prescription needs. When evaluating plans, be sure to note the copays associated with the plan’s formulary, any preferred retailer, and the plan’s drug deductible. 

What are the eligibility requirements for a Medicare Cost Plan?

To be eligible for a Medicare Cost Plan, you must be enrolled in Medicare Part B coverage. If you have both Medicare Part A and Part B, Part D may or may not be included in your Medicare Cost Plan. If you enroll only with a Part B plan, you’ll have to get Medicare Part D coverage separately.

To be eligible for Medicare Part A and Part B, you must:

  • Be 65 years of age or older,
  • Be diagnosed with kidney failure (end-stage renal disease),
  • Be diagnosed with Lou Gehrig’s Disease (ALS), or
  • Be disabled and drawing from SSDI for 24 consecutive months or more

Aside from being enrolled in Original Medicare or Medicare Part B coverage, another Medicare Cost Plan eligibility requirement is that you must live in a service area where Medicare Cost Plans are available. 

Many states do not offer Medicare Cost Plans because Medicare Part C, also known as Medicare Advantage plans, is readily available, providing a solid selection of Medicare network providers

States, where Medicare Cost Plans are still available and accepting new enrollees, include:

  • Colorado 
  • Iowa
  • Illinois
  • Maryland
  • Minnesota 
  • Nebraska
  • North Dakota 
  • South Dakota
  • Texas
  • Virginia 
  • Wisconsin

How does Medicare Cost Plan enrollment work?

You can enroll in a Medicare Cost Plan at any time, as long as the plan is accepting new members. If you decide to unenroll from your Medicare Cost Plan and return to Original Medicare, you can also do that at any time. 

If the insurer you plan to use offers both Medicare Cost Plans and Medicare Advantage plans in your area, they won’t be able to enroll you in a Medicare Cost Plan. (In that case, a Medicare Advantage plan may be the best alternative.) As Medicare Advantage plans become more widely available, Medicare Cost Plans will continue to be phased out, state by state.

To check if a Medicare Cost Plan is available in your area, you can always use the Insurify Medicare comparison tool. Simply enter your ZIP code to see the health plans, such as Medicare Cost Plans, available in your area.

What is the difference between a Medicare Cost Plan and a Medicare Advantage plan?

At first glance, it may seem like Medicare Cost Plans and Medicare Advantage plans are similar health plans. However, these two health plans act very differently, and it’s important for you to understand the differences before you make any enrollment decisions. There are five key differences between a Medicare Cost Plan and a Medicare Advantage plan:

Supplemental vs. Separate

Medicare Cost Plans work with Original Medicare to expand access to coverage and healthcare providers. Members can still access care, and Original Medicare seamlessly steps in to provide coverage. On the other hand, Medicare Advantage plans are offered as a complete alternative to Original Medicare. This means that you cannot have a Medicare Advantage plan and Original Medicare at the same time—so Original Medicare will not provide coverage in case of a gap in local care available through your plan.

Out-of-Network Access

Medicare Cost Plans ensure that you can visit any Medicare-accepting provider outside of the network since Original Medicare covers you in that event. 

That isn’t the case with Medicare Advantage. Most Medicare Advantage plans limit access to out-of-network providers. Most Medicare Advantage plans are organized into health maintenance organizations (HMO), with a small fraction organized as preferred provider organizations (PPO). 

You’ll have to pay significantly more out of pocket if you opt for a provider who isn’t in your plan’s network. You’ll pay 100 percent of out-of-network costs with an HMO and a significant percentage with a PPO. 

Enrollment

Patients can enroll in Medicare Cost Plans at any time, as long as the plan is accepting new members. Occasionally a plan that is “full” may open for a specific period and close once a pre-set cap on members has been reached.

Medicare Advantage plans have strict open enrollment periods. These enrollment periods are typically open on an annual basis, and you’ll have to wait to enroll until they are open. The one exception is if you have just enrolled in Medicare as a new beneficiary.

Availability

Medicare Cost Plans do not have service area coverage as big as Medicare Advantage plans. There are only 11 U.S. states with private insurance companies that still currently offer Medicare Cost Plans, so they are not as accessible as Medicare Advantage.

Plan Requirements

Medicare Cost Plans only require that you be enrolled in Medicare Part B. This can make the Medicare Cost Plans an attractive option if you don’t have premium-free Part A. Medicare Advantage plans, on the other hand, require you to be enrolled in both Medicare Part A and Part B.

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What if a Medicare Cost Plan isn’t available in my area?

If you want the additional benefits that Medicare Cost Plans can provide but do not have plans available in your service area, there are other options and supplement plans you can consider. 

If you would like a Medicare Supplement plan to help reduce your out-of-pocket spending for things like deductibles, co-payments, and coinsurance, Medigap plans can help. Medigap is a supplemental health insurance plan that helps cover your out-of-pocket costs if you are enrolled in Original Medicare. Medigap plans also offer additional benefits like helping cover the cost of emergency coverage in other countries. If you travel often, this type of Medicare Supplement plan may be a good option for you.

If you are searching for help covering the expenses of prescription medication, then a prescription drug coverage plan, like Medicare Part D, will be your best option. Medicare Part D is the Medicare prescription drug plan offered by the federal government. This is typically recommended for those who either need to take a lot of prescription drugs or have a preference for brand-name prescription drugs instead of generics. The Part D plan can help with the costs of expensive prescription drugs. 

If these supplement plans don’t sound like a right fit for you but you still want more coverage than Original Medicare offers, then a Medicare Advantage plan may be the right fit for your health and wellness requirements.

How much does Medicare cost per month in 2020?

Medicare costs in 2020 will vary depending on your work history, income, what type of plans you enroll in, and what your deductible, coinsurance, and co-payments are. Since Medicare Cost Plans and Medicare Advantage plans are offered by private insurance companies, there isn’t set standard pricing available across the board. To find out how much a Medicare Cost Plan costs for you, it is best to compare available plans in your area by using the Insurify comparison tool. All you need to do is enter your ZIP code to see all the Medicare health plans available in your area so you can compare each plan’s Medicare benefits and costs. 

For Medicare plans that are available from the federal government, here are the monthly costs you can expect to pay in 2020:

  • Medicare Part A monthly premiums can range from $0 (if you paid enough during your lifetime in taxes to subsidize your premium) to a maximum of $458.00.
  • Medicare Part B premiums can range from a minimum of $144.60 to a maximum of $491.60 per month based on your income.
  • The Medicare Part D cost is your monthly premium for your plan, plus anywhere from $0 to $76.40 per month based on your income.

You can also call Medicare at 1 (800) 633-4227 with any questions about the cost of these Medicare health plans. TTY users can call 1 (877) 486-2048.  

Can Medicare Cost Plans Be Used With Medicaid?

If you are dual-eligible for Medicare and Medicaid, you should look into Special Needs Plans (SNP). SNPs work like Medicare Advantage plans but are designed for people with certain health conditions, low income, or both. If you’re unsure if you qualify, contact your state’s Medicaid services. A representative there can counsel you as to what assistance programs are available.

 

 

FAAQ: Medicare Cost Plan

What is a Medicare Cost Plan?

A Medicare Cost Plan works in tandem with Original Medicare to give you easier access to care if you live in an area with limited healthcare provider coverage. If you need to see an out-of-network provider, Original Medicare automatically kicks in to provide coverage with the normal coinsurance and other out-of-pocket costs.

Where are Medicare Cost Plans available?

Medicare Cost Plans are only available in the following states: Colorado, Iowa, Illinois, Maryland, Minnesota, Nebraska, North Dakota, South Dakota, Texas, Virginia, and Wisconsin.

When can you enroll in a Medicare Cost Plan?

You can enroll in a Medicare Cost Plan any time, as long as the plan is accepting new members. This is in contrast to the Medicare Advantage plans, which typically only have open enrollment for a set period once a year. Once you are in a Medicare Cost Plan, you can leave and enroll in Original Medicare at any time.

Do Medicare Cost Plans have prescription drug coverage?

Some Medicare Cost Plans have prescription drug coverage. If your plan doesn’t, you can purchase a prescription drug plan (PDP). If Medicare Part D is offered as part of your Medicare Cost Plan, you may still be able to buy prescription drug coverage independently if you need a different plan.

The Pros and Cons of Medicare Cost Plans

Before you make your enrollment decision, you should understand the basic advantages and disadvantages of Medicare Cost Plans.

Advantages of Medicare Cost Plans

The primary benefit of a Medicare Cost Plan is that you can easily go out of network and receive services without restriction under Original Medicare Part A and Part B. This can be a very good thing if you live in an area without many in-network providers.

You won’t be “out of network” in the same sense as you would be if you were using Medicare Part C, or a Medicare Advantage plan, where out-of-network costs don’t default to Original Medicare and can be very expensive.

If you have residences in two different states or travel a lot, a Medicare Cost Plan can be extremely helpful in keeping your costs down in the event you have to see an out-of-network provider unexpectedly.

You may also find this option useful if you want the advantages of a plan, such as extra services, but need to see an out-of-network specialist frequently. For example, if you have pre-existing conditions and have been seeing the same doctor for years, you may have established a relationship and want to keep seeing them. 

By having a Medicare Cost Plan, you can continue seeing your preferred doctor by paying the additional coinsurance and other costs of Original Medicare for those visits and enjoy the extra benefits of being in a plan for things like vision and dental.

Disadvantages of Medicare Cost Plans

The main disadvantage of Medicare Cost Plans is that they are becoming more and more scarce. Where they are available, many plans are already at the capped number of members and aren’t accepting new enrollees. This can make it hard to find a plan to enroll in. You may also find that the PDP you prefer isn’t available if you are in a Medicare Cost Plan that offers Part D.

As Medicare Advantage plans become more accessible, the need for Medicare Cost Plans is decreasing. Eventually, they are expected to be completely discontinued nationwide. However, for now, you can still enroll in a Medicare Cost Plan plan and enjoy the additional benefits they offer. 

Conclusion: Comparing Plans Helps You Save

Whether you enroll in an Medicare Cost Plan or not, you can always benefit from comparison shopping. Using the Insurify Medicare comparison tool and just your ZIP code, you can compare plans and rates from top insurance companies in your area. Be sure you’re getting the best plan for the best price. Try it today!

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Updated May 4, 2021

Emily Vasquez is a content marketing writer based in Tampa, Florida. A graduate from the University of South Florida, Emily has worked as a copywriter, communications lead, and content strategist for high-growth start-ups and global brands and retailers. You can learn more at www.emvwrites.com