What is a Medicare cost plan?

A Medicare cost plan is similar to a Medicare Advantage plan in that enrollees have access to a network of doctors and hospitals, and may have additional benefits beyond what’s provided by Original Medicare. But unlike Medicare Advantage plans, a cost plan offers policyholders the option of receiving coverage outside of the network, in which case the Medicare-covered services are paid for through Original Medicare.

Who can join a Medicare cost plan?

Eligible enrollees who live within a Medicare cost plan’s service area can join the plan when it’s accepting new members. A cost plan that is accepting new enrollees must have an annual open enrollment window of at least 30 days, although they can set an enrollment cap and close enrollment once it’s reached. Insurers that offer both cost plans and Advantage plans in the same area cannot enroll new members in the cost plan.

If the cost plan offers optional supplemental Part D prescription coverage, enrollment in (or disenrollment from) the Part D coverage is limited to the normal annual open enrollment period for Part D plans. If the cost plan does not have a supplemental Part D plan available — or if it does and the enrollee would prefer a different Part D plan — enrollees can select from among any stand-alone Part D plan available in their area, with enrollment and plan changes limited to the normal Part D enrollment window (October 15 to December 7).

Cost plan enrollees may decide to return to Original Medicare at any time, since a cost plan works in tandem with (as opposed to a replacement for) Original Medicare. And enrollees can join a cost plan even if they only have coverage under Medicare Part B. (Most people get Part A without having to pay a monthly premium, but if you don’t have enough work history — or a spouse’s work history — to qualify for that, Part A has a premium that can be significantly larger than the Part B premium; some people opt only for Part B in that case.)