When researching the plan that works best for them, many people are surprised to see an option in their area for what seems to be a premium free Medicare Advantage plan. Technically these plans are Medicare Advantage plans that cost $0/month in premium costs. If you see this in your area, it might cause you to wonder how companies are able to offer a $0 premium Medicare Advantage plan to you.
Carriers are able to offer a basically premium free Medicare Advantage plans because some allocate costs differently. Here are answers to a few of the most common questions about zero-dollar premium Medicare Advantage plans:
Are any Medicare Advantage Plans no cost?
Medicare Advantage plans are never at no cost, but some of them do have $0 monthly premiums. A zero-dollar premium Medicare Advantage plan is still usually going to charge you in other ways, because the companies that offer them are still run by private, for-profit insurance companies.
However, the exception may be that in some cases a zero-dollar premium Medicare Advantage will have no premium because the company has found a way to save money in some other way, usually by restricting service to a narrower group of in-network providers. This could limit your flexibility on this plan, but could be a good deal if it works for you.
Are there other costs associated with a zero-dollar premium Medicare Advantage plan?
A premium free Medicare Advantage plan will generally have higher copays, coinsurance and possibly deductible costs. This means there will be higher charges when you go in to actually use your service. However, your plan cannot charge you more than the maximum out-of-pocket limit, which is $6700 (2020) for in-network care. Some plans may have a lower out-of-pocket limit.
If you see a $0/month premium Medicare Advantage plan listed in your area, be sure to read about how much these other charges are going to cost you, what services are actually available in-network, and calculate whether it’s a good deal based on those charges and on how likely you are to use them.
How can a Medicare Advantage plan cost $0/month premium?
A Medicare Advantage plan can cost $0/month premium for the plan itself, but you will still be charged the Medicare Part B premium. This is why there are no fully premium free Medicare options. However, the money you have paid into the Medicare system throughout your working life and the Medicare Part B premium are reallocated to cover the cost of these types of plans.
Are there differences in coverage with a zero-dollar premium Medicare Advantage plan?
Not really. All Medicare Advantage plans are required by law to cover the equivalent to Medicare Parts A and B, and they generally cover some prescription drug costs as well. Like other Medicare Advantage plans, they sometimes cover dental, vision and hearing as well.
A zero-dollar premium plan is likely to either cost more in copays and coinsurance payments, or to limit the network of providers and services you are allowed to use in your area. For plans with premiums higher than $0 a month, you can generally expect to get additional benefits like lower out-of-pocket costs, greater flexibility with providers or larger networks.
Is there any way to get a Medicare plan with no premiums, copays, deductibles or coinsurance?
People who qualify for both Medicare and Medicaid are known as “dual eligible,” and are typically the only people who can in some cases obtain plans with $0 paid in premiums, deductibles, copays and coinsurance. Contact your state Medicaid office to see if your income qualifies you for Medicaid.