Medicare Cost Plans
Reach out to discuss your options, and learn which kinds of Medicare plans would work for you.
What is a Medicare Cost Plan?
A Medicare Cost Plan is a type of Medicare health plan offered by private insurance companies in certain areas of the country. It’s called a “Cost” plan because Medicare shares costs with the private insurer — you can get covered care from providers both in and out of the plan’s network. Cost Plans are a flexible option for people who want the security of Original Medicare combined with the benefits of a managed plan. They’re available in counties with fewer than two qualifying Medicare Advantage plans, which makes them a unique solution for those areas with limited choices.
Who is eligible for a Medicare Cost Plan?
To qualify for a Medicare Cost Plan, you must live permanently in the plan’s service area and have Medicare Part B — or both Parts A and B. Generally, you must not have End Stage Renal Disease (ESRD), although there are some exceptions if you develop ESRD while already enrolled in the plan. Because these plans are only offered in certain counties, you’ll need to check if you live in a location where they’re available. Many Cost Plans come with extra benefits such as dental, vision, hearing, fitness memberships, and even nationwide coverage if you visit Medicare-approved providers while traveling.
How does a Cost Plan Compare to a Medigap Plan?
A Medicare Cost Plan and a Medigap (Medicare Supplement) plan can seem similar because both work with Original Medicare to help manage your out-of-pocket costs. However, they differ in how they’re structured. Cost Plans are health plans offered by private insurers and include network providers; you can choose to go outside the network and use Original Medicare. Medigap plans, on the other hand, are supplemental insurance policies that help pay your share of Medicare-approved costs, like deductibles and coinsurance, but don’t include provider networks or extra perks. Another key difference: with most Cost Plans, you have guaranteed enrollment throughout the year and no medical underwriting, while Medigap plans have stricter enrollment windows and may require underwriting outside your open enrollment period.
| Original Medicare | Medicare Cost Plan | Medigap Plan | |
|---|---|---|---|
| Coverage | Part A & B only | Primary coverage for Part B Secondary coverage for Part A Covers Original Medicare deductibles and coinsurance |
Usually covers Original Medicare deductibles, coinsurance and copayments |
| Supplemental Benefits | None | Typically covers routine physicals, annual eye and hearing exams, dental services, eyewear, hearing aids and fitness club benefits | None |
| Premium Cost | Part B premium only | Monthly premium average $ No age-rating |
Monthly premium average $$$ Attained-age rated |
| Patient Cost Share | Highest | Low or no copays for services | Lowest |
| Patient Out of Pocket Limits | None | Annual out-of-pocket maximum protection | Varies |
| Medical Underwriting | None | None | Yes, after initial enrollment period (turning 65) |
| Participating Provider Network | No | Yes, including out-of-network "snowbird" coverage | No |
| Part D Prescription Drug Coverage | No | Separate Part D plan recommended | Separate Part D plan needed |
