• Many Medicare Advantage plans have a zero dollar monthly premium.
  • Zero monthly premium Advantage plans may not be “free,” however.
  • You may still have to pay out of pocket for things like copays, deductibles, and coinsurance.

If you’re shopping around for a Medicare plan, chances are you’ve seen the words “zero dollar premium” attached to Medicare Advantage plans. A Medicare Advantage plan (Medicare Part C) is an insurance plan that is offered by a private insurance company. But does anything ever cost zero dollars? What exactly does this mean for your Medicare plan search?

Although Medicare Advantage plans can have a zero premium, there are other things you may have to pay for out of pocket. These include:

  • Copays: A copayment (copay) is an amount that you pay for a service after you have met your deductible. These may be higher with plans that have a lower monthly premium, while plans with a higher monthly premium may have lower copays.
  • Coinsurance. Coinsurance is the amount that you are responsible for paying for a covered service, even after you’ve paid your deductible. For example, if your coinsurance is 20 percent, you will pay the first 20 percent of the amount due, and your health plan will cover the rest.
  • Deductible. A deductible is the amount that you are responsible for paying before your insurance plan begins to pay. Often, deductibles are higher with cheaper plans, meaning you’ll pay less each month in premiums, but you may pay more out-of-pocket for healthcare services. After you pay your full deductible, your health plan will pay the full cost of the service, but you will still have to pay any copay or coinsurance.
  • Other Medicare premiums. Even with a Medicare Advantage plan, you are still responsible for paying the premiums for all other parts of Medicare (parts A, B, and D) that you may have. Most people do not pay a premium for Part A. The Part B monthly premium for 2020 is $144.60.

Most health plans have a maximum amount that a person has to pay out of pocket. Once that amount is met, the health plan will cover 100 percent of the cost of the healthcare service.

What are Medicare Advantage plans? Also known as Medicare Part C, these plans are offered to you through a private insurance company.

Medicare Advantage plans replace what traditional Medicare plans cover: Part A hospital insurance, Part B medical insurance, and Part D prescription drug insurance. Depending on the Advantage plan you choose, your Advantage plan may also cover extras like hearing, vision, dental, and other wellness programs that traditional Medicare does not.

Here’s how a zero premium plan is created. In order to keep costs low, the federal government contracts with private insurance companies to provide your plan. Through this contract, the government pays a flat fee to the insurance company. The insurance company then creates agreements with a network of hospitals or providers, which keeps your costs lower as long as you stay in-network.

Many Advantage plans are offered to you at a cost of $0 monthly premium for a few reasons:

  • Costs are lower because Medicare agrees upon rates with a network of healthcare providers.
  • Medicare Advantage plans cover a range of preventive care and wellness programs, which keep participants healthier. The healthier the participant, the lower the cost of their healthcare.
  • If you don’t use all of the flat fee that Medicare pays the private insurance company, that money can be passed on as savings to you, making your premium $0 per month.

You qualify for a zero premium Medicare Advantage plan if you meet the general Medicare program eligibility requirements. You must:

  • be age 65 or over
  • be enrolled in Medicare parts A and B
  • live in the area of coverage for whatever plan you choose

To sign up for a Medicare Advantage plan, head over to the Medicare.gov website and use their Plan Finder. Part C plans vary by state, and you will be able to search for Advantage plans using your zip code.

tips for enrolling in Medicare

There are certain enrollment periods for different Medicare Plans, called general or open enrollment. Remember:

  • Initial enrollment period. You can initially enroll in Medicare parts A and B 3 months before you turn 65 and up to 3 months after you turn 65.
  • Open enrollment. If you are looking to make changes to an existing Medicare part A or B, or are over the age of 65 but still looking to enroll, the open enrollment period is January 1 — March 31 every year.

If you are helping your loved one enroll in Medicare, remember:

  • Make sure to gather important documents, such as their social security card and any other insurance plans that they may have.
  • Medicare Advantage plans can be found through a variety of private websites, as well as the Medicare.gov Plan Finder.

A zero premium Medicare Advantage plan can cover a variety of things, depending on the plan you choose. Many plans come as a “bundle,” which means that they cover parts A and B, as well as the “extras.” Other plans do not cover parts A and B, instead covering things like:

  • vision
  • hearing
  • prescription drugs
  • gym memberships
  • other health and wellness programs

Zero premium Medicare Advantage plans are a great option for people who are looking to either bundle or supplement their existing Medicare coverage. Be sure to research plans thoroughly before choosing one to make sure it covers everything you need.

The information on this website may assist you in making personal decisions about insurance, but it is not intended to provide advice regarding the purchase or use of any insurance or insurance products. Healthcare Website Media does not transact the business of insurance in any manner and is not licensed as an insurance company or producer in any U.S. jurisdiction. Healthcare Website Media does not recommend or endorse any third parties that may transact the business of insurance.