Medicare/Medicare Cost Plans


Medicare is a national health insurance program created and administered by the federal government in the United States to address the medical needs of older American citizens. Medicare is available to U.S. citizens 65 years of age and older and some people with disabilities under age 65.


Medicare is an entitlement program similar to Social Security and is not based on financial need. Medicare benefits are available to all American citizens over the age of 65 because they or their spouses have paid Social Security taxes through their working years. Since Medicare is a federal program, the rules for eligibility remain constant throughout the nation and coverage remains constant regardless of where an individual receives treatment in the United States.



Medicare Cost Plans are a type of HMO that are available in certain areas of the country. Cost plans are special types of Medicare HMOs that are paid based on the reasonable costs of delivering covered services. They enroll a small number of beneficiaries compared with Medicare Advantage plans, which accept financial risk if their costs exceed fixed payments. Another key difference between cost plans and Medicare Advantage is that cost plans allow beneficiaries to see out-of-network physicians through the fee-for-service portion of the program.

   In a Medicare Cost Plan

  • you can join even if you only have Part B.
  • if you go to a non-network provider, the services are covered under the Original Medicare Plan. You would pay the Medicare Part A and Part B Coinsurance and Deductibles.
  • you can join a Medicare Cost Plan anytime it's accepting new members.
  • you can leave a Medicare Cost Plan anytime and return to the Original Medicare Plan.
  • you can either get your Medicare prescription drug coverage from the plan (if offered), or you can buy a stand-alone Medicare Prescription Drug Plan (Part D) to add prescription drug coverage.