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How Can a Medicare Advantage Plan Have a Zero Dollar ($0) Premium?

Victoria Burke by Victoria Burke | Licensed since 2011
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This article was updated on: 10/02/2017

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If you’re doing some research about Medicare Advantage plans, you might have discovered some $0-premium Medicare Advantage plans. But just because a Medicare Advantage plan has a zero premium doesn’t mean the plan covers all your health-care costs.

What are $0-premium Medicare Advantage plans?

No matter whether they have a $0 premium or not, Medicare Advantage plans give you an opportunity to receive your Medicare benefits through a private insurance company contracted with Medicare. Under the Medicare Advantage (also called Medicare Part C) program, plans must offer the same benefits as Original Medicare, Part A and Part B  but if you need hospice benefits, they’d come directly through Medicare Part A instead of through the plan.

What out-of-pocket costs might $0-premium Medicare Advantage plans have?

Medicare Advantage plans (whether $0-premium or not) typically come with certain out-of-pocket costs, just as most health insurance does. These expenses may include copayments, coinsurance, and deductibles.

  • A deductible is the amount you have to pay before your Medicare Advantage plan pays its share of covered services. Not every plan might have a deductible amount, and they may vary among plans.
  • A copayment is generally a set dollar amount you may have to pay for a covered service (for example, $15).
  • A coinsurance amount is a percentage of the total cost that you may have to pay for a covered service (for example, 20%).

Insurance companies offering Medicare Advantage plans have some flexibility in setting their rates. Plan premiums, deductibles, coinsurance amounts, and copayments may vary among plans.

Another cost-related item to consider is the plan’s maximum out-of-pocket amount. Every Medicare Advantage plan, including $0-premium plans, has an out-of-pocket maximum that can vary among plans and might change year to year. This amount is about the total cost you have to pay for Medicare-covered services. Once you have spent a certain amount on these services in one calendar year, you won’t have to pay any more for covered services that year.

So, before you decide to enroll in a $0-premium Medicare Advantage plan, you might want to look at these other costs. It may be a good idea to compare all costs among plans when you’re looking at Medicare Advantage plans.

What else do I need to know about $0-premium Medicare Advantage plans?

Whether or not it’s a zero-premium Medicare Advantage plan that you sign up for, you still need to continue paying your Medicare Part B premium, in addition to any premium your plan may charge. You’re still in the Medicare program even when you receive your benefits through a Medicare Advantage plan.

As you can see, the cost of a Medicare Advantage plan’s premium isn’t all there is to choosing which Medicare Advantage plan may be right for you. It could be a $0- premium Medicare Advantage plan, or a different plan that might suit your needs. Would you like help comparing $0-premium Medicare Advantage plans and other Medicare health plans? Use the links below to schedule a phone appointment or have me email you details on Medicare Advantage plans that serve the area where you live. If you’re ready to see some plans right now, use the Compare Plans buttons on this page. Or just call Medicare.com’s licensed insurance agents at 1-844-847-2660 (TTY users 711) Monday through Friday, 8:00 AM to 8:00 PM ET.

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Victoria Burke |
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Licensed Insurance Agent since 2011
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