Are you looking for zero-premium Medicare Advantage plans to save money? Medicare Advantage zero-premium plans are not uncommon, but availability may depend on where you live. You may also wonder if paying a $0 monthly premium truly mean no costs for Medicare coverage. In this article, HealthMarkets explains how zero-dollar premium Medicare Advantage plans work.

How Are Zero-Premium Medicare Advantage Plans Possible?

Medicare Advantage, also known as Medicare Part C, combines the coverage of Original Medicare (Part A and Part B) as well as additional benefits, such as prescription drugs, dental, and vision. Costs for Medicare Advantage programs are kept low because the government pays the insurance companies to take care of the bills instead of the Medicare program itself. Then, the private insurers can save costs by establishing their own networks and set their own premium rates approved by the Centers for Medicare & Medicaid Services (CMS). All of these savings help make the plans affordable—as low as $0.

Are There Really ‘Free’ Medicare Advantage Plans?

Keep in mind that although you may enroll in a no-premium Medicare Advantage plan, the coverage isn’t free. You are still responsible for paying your Part B premium ($135.50 in 2019). That’s because you will still have Part B medical coverage if you enroll in a Medicare Advantage plan. There are also other out-of-pocket expenses, which vary among zero-premium Medicare Advantage plans. These include:

  • Annual deductibles. This is the amount you must pay out of pocket before your plan begins to cover any costs. But not all plans have deductibles, so it’s possible to have a $0 Medicare Advantage premium with a $0 deductible.
  • Coinsurance. This is a percentage of the costs you pay for covered services and items. For example, Part B has a 20% coinsurance.
  • Copayments. This is a set dollar amount you pay. For instance, your plan might charge a $25 copay for doctor’s visits.
  • Prescription drug costs. The majority of Medicare Part C plans include prescription benefits. Many of these plans have a separate deductible for drug coverage, and there’s usually a copay or coinsurance each time you fill a prescription.

Medicare Advantage plans also have a maximum out-of-pocket limit ($6,700 in 2019), which can change every year. This is the most you would have the pay out of pocket for covered Part A and Part B expenses during a calendar year. Plans that include prescriptions benefits have a separate out-of-pocket maximum for drug costs.

‘Zero-Premium’ Doesn’t Always Mean Cheap Coverage

Though a zero-dollar premium sounds like a great deal, it’s not for everyone. For some, it may be less expensive to pay the premium for a plan. You need to determine if the savings will cover your out-of-pocket expenses or if you would end up spending more. For example:

  • A $0 premium Medicare Advantage plan can have the highest out-of-pocket maximum allowed. This means you would pay no more than $6,700 on covered medical expenses for the year.
  • A plan with a monthly cost of $29 or $348/year (average premium in 2019) can have a lower out-of-pocket maximum of $3,400. This means your total costs would be no more than $3,748 for the year. So this option offers more cost savings.

Another option is to enroll in a zero-premium Medicare Advantage plan and purchase a hospital indemnity plan, which provides flexible benefits that cover inpatient hospital copays.

Find Out If a ‘Zero Premium’ Plan Is Right for You

You can visit HealthMarkets online to find available zero premium Medicare Advantage plans, sort and compare your options, and begin your enrollment. A HealthMarkets licensed insurance agent can also help you compare plans like (HMOs) that avoid higher out-of-pocket expenses for its beneficiaries, and Preferred Provider Organizations (PPOs) that have lower costs if you visit in-network providers.

Finding a zero-premium Medicare Advantage plan doesn’t automatically mean it’s the best plan for you. That’s why it’s important to review the costs (deductibles, copays, coinsurance, etc.) of plans available in your area before choosing to enroll. In-person with an agent, by phone at (800) 488-7621, or online, HealthMarkets is ready to help you find the right Medicare Advantage plan.

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References

https://www.cms.gov/newsroom/fact-sheets/2019-medicare-parts-b-premiums-and-deductibles | https://www.ncoa.org/blog/a-guide-to-medicare-part-c-costs/ | https://www.kff.org/medicare/fact-sheet/medicare-advantage/ | https://q1medicare.com/q1group/MedicareAdvantagePartDQA/FAQ.php?faq=What-is-MOOP-or-the-Medicare-Advantage-maximum-out-of-pocket-limit-&faq_id=605&category_id=149

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