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

Yes, it’s true – some Medicare Advantage plans can have premiums as low as $0. You might wonder how they can offer plans so cheaply. Here’s some information that might help explain.

A quick rundown on Medicare Advantage plans

Medicare Part C, the Medicare Advantage program, lets Medicare-approved private insurance companies offer plans that provide your Medicare Part A and Part B benefits. A $0 premium Medicare Advantage plan, like other Medicare Advantage plans, might include prescription drug coverage. Plans may include other benefits too – routine dental services, for example.

Medicare pays insurance companies a fixed amount of money to provide your Medicare Part A and Part B coverage. $0 premium Medicare Advantage plans have to follow Medicare rules, but have some flexibility in setting their premiums and cost sharing amounts. The same is true for all Medicare Advantage plans. Learn more about what you need to know about Zero-Premium Medicare Advantage Plans.

$0 premium Medicare Advantage plans: what are their other costs?

Just because you may have found a $0 premium Medicare Advantage plan in your area, that doesn’t automatically mean it’s the best plan for you. $0 premium Medicare Advantage plans may have other expenses, such as copayments, coinsurance, and deductibles. Also, different plans may include different extra benefits.

Copayments and coinsurance are cost-sharing amounts you may have to pay towards covered medical services. For example, a Medicare Advantage plan might cover 80% of a certain doctor visit, and you might have to pay the remaining 20% coinsurance.

A deductible is an amount of money you may have to pay for medical services before your plan begins to cover them. Generally deductibles apply on an annual basis. For example, if your plan’s deductible is $700 per year, and you spend at least that amount during one year, your spending amount resets to $0 at the beginning of the next year. So, you might have to pay $700 out-of-pocket every year before your plan starts covering certain services.

Deductibles, copayments, and coinsurance can vary among plans. Keep that in mind as you compare $0 premium Medicare Advantage plans with other Medicare Advantage plans.

$0 premium Medicare Advantage plans: what else should I know?

  • Unlike Original Medicare, Medicare Advantage has an out-of-pocket limit on your annual spending. That means that once you’ve spent a certain amount of your own money on medical services within a calendar year, the plan may pay all your approved medical costs for the rest of that year.

  • Remember, a zero-premium Medicare Advantage plan may still have out-of-pocket costs you have to pay. It may have deductibles, coinsurance, and/or copayments for medical services.

  • Some plans have provider networks, and might require you to receive care from in-network providers, or charge you more for out-of-network care. For instance, a $0 premium Medicare Advantage plan might have a provider network that suits your needs. If you get care outside the network, your out-of-pocket costs could be more expensive.

  • You can generally enroll in $0 premium Medicare Advantage plan (or any Medicare Advantage plan) only during certain times. Read about these enrollment periods.

  • When you have any kind of Medicare Advantage plan, you’re still in the Medicare program, and you still need to pay your monthly Part B premium. If you have a $0 premium Medicare Advantage plan, then of course you won’t pay a premium for this plan. However, some Medicare Advantage plans do charge premiums. You are responsible for any premium a Medicare Advantage plan may charge.

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