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Minnesotans Losing Medicare Cost Plans at End of 2018
Medicare Advantage companies win out
Minnesota has been the mecca for Medicare Cost Plans for years. More than half of the people who have Medicare Cost insurance in the U.S. live in the Land of 10,000 Lakes. But many will be out of luck in 2019.
Federal legislation has decreed that any Medicare Cost plan that is in an area served by two or more Medicare Advantage plans will not be doing business next year. The Center for Medicare and Medicaid Services (CMS) will not accept any new contracts or renew old ones under those circumstances.
In 2017, close to 700,000 people had Medicare Cost plans in 14 states and the District of Columbia. By comparison, 20 million are signed up for Medicare Advantage coverage. While CMS has not given a reason for discontinuing Cost plans, it may be because of the small amount of people enrolled.
What is a Medicare Cost plan?
Similar to an HMO (health maintenance organization), Medicare Cost has access to a network of doctors and hospitals that are Medicare-approved. Expenses incurred are paid by Medicare.
Medicare Cost plans offer more flexibility than Medicare Advantage plans. Eligible people can enroll any time of the year vs. a specific enrollment period. They can also drop out at any time. They can also use doctors out of a network area as long as they accept Medicare assignment.
The ability to use doctors out of network with no penalty is particularly attractive to ‘snow birds,’ those people who travel to the south to get away from Minnesotan winters.
Medicare Cost beneficiaries can also use medical benefits from one insurance company and pharmacy benefits from another.
What should Medicare Cost beneficiaries do now?
People whose Cost plan will be ended this year have several options. Some of the plans are switching over to Medicare Advantage. Individuals can also sign up for coverage under a Medicare Advantage plan. If you have a Cost plan, you can also enroll in one of the Medicare supplement plans, also called Medigap.
All of these alternatives mean there will be different types of coverage opportunities and different rules and regulations. It will be advisable to research the opportunities available to identify the best plan for your needs.
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