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Medicare Glossary

Definitions for common Medicare terms

Medicare cost plan

DEFINITION: Medicare cost plan is similar to a Medicare HMO in that enrollees have access to a network of doctors and hospitals approved by Medicare. Unlike other Medicare HMO plans, however, a cost plan offers policy holders the option of receiving coverage outside of the network, in which case the Medicare-covered services are paid for through Original Medicare. Some cost plans may include prescription drug coverage. Enrollees can join a Medicare cost plan when it’s accepting new members, but may decide to return to Original Medicare at any time.