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. But as described below, there are very few areas of the country where cost plans are still available.
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 (October 15 to December 7). 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.
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 is significantly larger than the Part B premium; some people opt only for Part B in that case.)
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (which rebranded Medicare+Choice as Medicare Advantage) created a competition clause that banned Medicare Cost plans from operating in areas where they faced substantial competition from Medicare Advantage plans. The implementation of the competition clause was delayed, but legislation enacted in 2015 (MACRA) required the competition clause to be implemented as of 2019.
How many Americans are enrolled in Medicare cost plans?
As of June 2025, there were just under 211,000 people enrolled in Medicare cost plans.
Cost plan enrollment had been quite a bit higher before the new rules began in 2019 to prevent competition with Medicare Advantage plans, but it had long been a small minority of total Medicare enrollment.
As of 2018, there were about 625,000 people enrolled in Medicare cost plans nationwide. And two-thirds of them were in Minnesota. But an estimated 320,000 people in Minnesota had to pick new coverage for 2019 (either Medicare Advantage or Original Medicare — with the option to supplement the Original Medicare with a Part D plan and/or a Medigap plan) when their cost plan ended.
CMS data showed just 249,399 people enrolled in cost plans nationwide as of late 2023. And by June 2025, that had dropped to 210,749.
What states still have Medicare cost plans?
As of 2025, CMS enrollment data showed just 11 Medicare cost plan contracts (each with multiple available plans) nationwide, and seven of them were designed for retired railroad and union workers. The other six, available to individuals, offered coverage in various parts of Minnesota, Wisconsin, Iowa, South Dakota, and North Dakota, along with one county in northwest Illinois.
People who still have Medicare cost plans available in their area can still enroll. You can use Medicare’s plan finder tool to see if there is a cost plan available in your area, although in most cases, the answer is no.
To see if a cost plan is available in your area, you can enter your zip code in the Medicare plan finder tool and select “Medicare Advantage” as the type of plan you want to see. Proceed to the available plan options, then select the button that says “View all filters.” From there, you’ll see “Types of Medicare health plans” with the available options listed under that heading.
This is where you’ll see, for example, HMOs and PPOs, both of which are Medicare Advantage plans. If cost plans are available, they will show up on that list. If not, you won’t see “cost plan” as an available option. Again, this will be the case in most of the country.
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