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Healthcare costs can add up, and when it comes to Medicare options, one common concern is how much we’ll have to pay for a plan. Unfortunately, our lawyers won’t let us say “free Medicare Advantage plans,” but if you’re looking for a Medicare plan that will save you money while you still get the health coverage you need, you may want to consider a no-premium Medicare Advantage plan. But does a zero-dollar premium truly mean no cost for Medicare? Here’s a breakdown on what Medicare Advantage is and how much these types of plans cost.

What Is Medicare Advantage?

Medicare Advantage, also known as Medicare Part C, combines the coverage of Original Medicare (Part A and Part B) as well as additional coverage—depending on the plan—including:

  • Dental
  • Health and wellness programs
  • Hearing
  • Prescription drugs
  • Vision

Offered by private insurance companies that are approved by Medicare, Medicare Advantage plans can be seen as an all-in-one deal. “Almost one in three people on Medicare (31 percent or 17.6 million beneficiaries) is enrolled in a Medicare Advantage plan in 2016,” according to the Kaiser Family Foundation. You are eligible for Medicare Advantage if you are enrolled in Medicare Parts A and B, reside in a service area, and do not have end-stage renal disease.

How Are Zero-Premium Medicare Advantage Plans Possible?

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. This helps save government money and resources. The private insurers can then save costs by establishing their own networks and set their own premium rates approved by the Centers for Medicare and Medicaid Services (CMS). All of these savings help make the plans affordable—as low as $0.

Usually, premium rates stay low and can range from zero to a hundred dollars. Keep in mind that although you may enroll in a no-premium Medicare Advantage plan, you are still responsible for paying your Part B premium. That’s because you will still have Original Medicare if you enroll in a Medicare Advantage plan.

Saving money on a Medicare Advantage plan that does not have a premium cost could enable you to save those extra funds you’d otherwise spend toward monthly premiums. Other out-of-pocket expenses may include:

  • Annual deductibles
  • Coinsurance
  • Copayments
  • Prescription drug costs

There is a maximum out-of-pocket cost of $6,700 with the average limit being $5,223 in 20161. This means that even if you exceed your out-of-pocket limit, your plan will cover any further out-of-pocket costs until the following year. Additionally, there are plans like Health Maintenance Organizations (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.

‘Zero-Premium’ Doesn’t Always Add Up to ‘Best’

Though a zero-dollar premium sounds like a great deal, it’s not for everyone. You need to determine if the savings will cover your out-of-pocket expenses. For some, it may be cheaper to pay the premium for a plan that covers a particular cost. Do you want to keep your current doctor? If your physician or hospital choice is not in the insurer’s network, you may be willing to pay a small monthly premium to prevent having to switch providers.

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

Call a HealthMarkets Agent for Help

It’s important to check all Medicare Advantage plans and review the costs that are associated with the coverage before choosing to enroll. With hundreds of plans available nationwide, a HealthMarkets agent can help with the process of finding zero-premium Medicare Advantage plans. Best of all, our services are free of charge. Find a licensed agent near you or call us today at (800) 488-7621.


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