We have had several calls from current Baylor Scott & White members concerned about their Medicare Cost Plans going away.
What is a Medicare Cost Plan?
Medicare Cost Plans were started back in the 1970’s to help beneficiaries in rural areas that didn’t have competing Medicare Advantage plan options. With the growth of Medicare Advantage plans, there isn’t really a need for Cost Plans anymore.
Private insurance companies offer Medicare Cost Plans in the same way that Medicare Advantage plans are offered. Cost Plans are often thought of as a cross between a Medicare Advantage plan and a Medicare Supplement plan.
Medicare Cost plans are like Medicare Advantage plans in that they both have a network of providers, out-of-pocket maximum and additional benefits. In contrast, they are similar to Medicare Supplement plans in the way they work with Original Medicare.
For many years, the government has been trying to withdraw Medicare Cost Plans as an option for Medicare beneficiaries. The Government Accountability Office (GAO) has conducted audits to ensure the best decision is being made for beneficiaries.
As of January 1, 2019, Baylor Scott & White Medicare Cost Plans will be eliminated because there are more than two Medicare Advantage plans competing in the area. This is known as the two-plan test.
Options for Current Medicare Cost Plan holders
Option 1: Medicare Advantage Plan
If you want to switch plans prior to losing your Cost Plan (to ensure you have no lapse in coverage), you will want to change plans during the Annual Election Period (AEP). Normally Annual enrollment begins October 15th and ends December 7th, but because of the special circumstances this year, this window of time will be extended until February 28th, 2019 for people who are losing their Cost Plan.
Option 2: Medicare Supplement Plan
One of the other options you have is switching back to Original Medicare and applying for a Medicare Supplement plan. Normally when applying for a Medigap plan outside of your Open Enrollment Period, you would have to answer health questions. In this case, because Cost Plan enrollees are being forced to switch plans, you will have a dedicated period where you will be able to enroll in a Medicare Supplement plan without having to answer any health questions. This Period begins November 2, 2018 and ends March 4, 2019.
To avoid penalties, beneficiaries should enroll in a stand-alone Part D drug plan if going with anything other than a Medicare Advantage plan.
Keep in mind, if you don’t make a transition from your Cost Plan to a different plan, you will be switched automatically to the Medicare Advantage Plan that is replacing your particular Medicare Cost Plan.
If you still find this confusing, you are not alone! Give us a call at (512) 900-3008 or fill out a form on our Contact Us page and we can help you through this transition.