Medicare Cost Plans

Medicare cost plans are a hybrid between Medicare Advantage and Original Medicare. They are available in certain rural areas of the country where Part C may be limited. However, these plans are being phased out.

Rachel Christian, writer and researcher for RetireGuide
  • Written by
    Rachel Christian

    Rachel Christian

    Financial Writer and Certified Educator in Personal Finance

    Rachel Christian is a writer and researcher for RetireGuide. She covers annuities, Medicare, life insurance and other important retirement topics. Rachel is a member of the Association for Financial Counseling & Planning Education.

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    Matt Mauney
    Matt Mauney, Senior Editor for RetireGuide

    Matt Mauney

    Financial Editor

    Matt Mauney is an award-winning journalist, editor, writer and content strategist with more than 15 years of professional experience working for nationally recognized newspapers and digital brands. He has contributed content for,, The Hill and the American Cancer Society, and he was part of the Orlando Sentinel digital staff that was named a Pulitzer Prize finalist in 2017.

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    Jerrad Prouty
    Jerrad Prouty, Medicare Expert & RetireGuide Reviewer

    Jerrad Prouty

    Licensed Agent at Insuractive

    Jerrad Prouty is a licensed agent at Insuractive with a specialization in selling Medicare insurance. He is licensed to sell insurance in more than 15 states.

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  • Published: June 15, 2020
  • Updated: January 17, 2023
  • 3 min read time
  • This page features 5 Cited Research Articles
Fact Checked
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A licensed insurance professional reviewed this page for accuracy and compliance with the CMS Medicare Communications and Marketing Guidelines (MCMGs) and Medicare Advantage (MA/MAPD) and/or Medicare Prescription Drug Plans (PDP) carriers’ guidelines.

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How to Cite's Article

APA Christian, R. (2023, January 17). Medicare Cost Plans. Retrieved June 9, 2023, from

MLA Christian, Rachel. "Medicare Cost Plans.", 17 Jan 2023,

Chicago Christian, Rachel. "Medicare Cost Plans." Last modified January 17, 2023.

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What Are Medicare Cost Plans?

Medicare cost plans share characteristics of both Original Medicare (Part A and Part B) and Medicare Advantage (Pact C).

Like Medicare Advantage, cost plans offer a narrow network of providers. They may also offer additional benefits such as dental and vision.

Unlike Medicare Advantage, you get to keep Original Medicare, and this coverage kicks in when you go outside your plan’s network.

This flexibility helps reduce your out-of-pocket costs.

Medicare cost plans can be convenient for people who travel across the U.S. during retirement because enrollees can seek care outside their local service area.

Medicare Cost Plan Enrollment

A Medicare cost plan that is accepting new enrollees must maintain an annual open enrollment window of at least 30 days. You can sign up any time a plan is accepting new applications.

You can leave a cost plan anytime and return to Original Medicare.

You may be eligible for a Medicare cost plan if:
  • You are already enrolled in Medicare Part B.
  • You live inside the service area. (In rare cases, you can live outside the plan’s service area).
  • The plan is currently accepting new patients.
  • You don’t have end-stage renal disease.
Did You Know?
Some Medicare cost plans offer Medicare prescription drug coverage. Otherwise, you can get drug coverage by joining a Medicare Part D plan.

Availability of Medicare Cost Plans

Historically, cost plans offered a managed care option in rural areas of the country where few Medicare Advantage options existed.

In 2018, about 600,050 Americans in 14 states and the District of Columbia were enrolled in Medicare cost plans, according to the Kaiser Family Foundation.

While cost plans have offered a kind of “best of both worlds” hybrid option to beneficiaries, the plans are now being phased out by the federal government.

Since Medicare Advantage launched in the late 1990s, its reach has expanded significantly, nearly doubling from 10.5 million enrollees in 2009 to 22 million enrollees in 2019.

On Jan. 1, 2019, the U.S. government eliminated Medicare cost plans in counties where two or more Medicare Advantage plans competed the prior year.

By 2019, the number of Americans enrolled in cost plans had dropped to just 200,000.

The sunsetting of Medicare cost plans has significantly impacted some communities more than others.

According to a Minnesota Star Tribune report, Minnesotans accounted for more than half of all cost plan membership in 2018 — about 400,000 out of 630,587 people that year.

North Dakota and South Dakota are now the two states with the most cost plan beneficiaries in 2019, according to the Kaiser Family Foundation.

Alternatives to Medicare Cost Plans

If you live in a county where Medicare cost plans are being eliminated, you have two options.

  1. You have the right to join a Medicare Advantage plan during a special enrollment period.
  2. If you do nothing, you will receive coverage only from Original Medicare.

You will also need to join either a Medicare Advantage plan with prescription drug coverage, or a stand-alone Medicare Part D plan if you choose to stay with Original Medicare.

You will likely be eligible to purchase a Medicare Supplement plan, or Medigap, policy during a special enrollment period to help cover your costs.

If you are losing your Medicare cost plan, it’s important to find a new plan that covers your doctor visits and prescription drugs.

There are resources available to help you find new health care coverage.

Three Ways to Explore New Medicare Plans
  • Call your local State Health Insurance Program (SHIP). Counselors can help answer your questions and provide you with information about your options. All SHIP services are free.
  • Call 1-800-MEDICARE (1-800-633-4227). This toll-free help line is available 24 hours a day, seven days a week.
  • Visit Medicare’s official website features tools that can help answer your questions. Click “Find Health & Drug Plans” to explore plans in your area.
Last Modified: January 17, 2023

5 Cited Research Articles

  1. Kaiser Family Foundation. (2019, June 6). Medicare Advantage. Retrieved from
  2. Snowbeck, C. (2019, June 23). Big Medicare shift coming to Minnesota: Health plans say many will need to switch from Medicare Cost coverage. Retrieved from
  3. Centers for Medicare & Medicaid Services. (2018). Sample Letter: Your Medicare Cost Plan won’t be available in 2019. Retrieved from
  4. Centers for Medicare & Medicaid Services. (n.d.). Medicare Cost Plans. Retrieved from
  5. (n.d.). Medicare Cost Plans. Retrieved from