What You Should Know About Free Medicare Advantage Plans

Interested in free Medicare Advantage plans? Read this article to learn everything you need to know about free Medicare Advantage plans.
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Medicare Advantage (MA) plans, also known as Part C plans, are known for providing bundled benefits. Aside from giving standard Medicare coverage – Part A (hospitalization) and Part B (medical), most MA plans offer benefits like dental, hearing, vision, and Part D prescription drug coverage.

In 2021, around 54 percent of Part C plans with prescription drug coverage are ‘$0 premium’ plans. The existence of free Medicare Advantage plans is one reason that makes MA plans attractive to so many Medicare beneficiaries. 

But have you wondered how private insurers can offer these MA plans for free

Here’s the truth – for most people when you enroll in a Medicare Advantage plan you still have to pay the default Medicare Part B premiums as well as out-of-pocket expenses when you use healthcare services.

This means that free Medicare Advantage plans are not entirely ‘free’.  However, they are still worth considering. Let’s take a closer look before you decide to enroll.


How can some Medicare Advantage plans offer zero-premium?

Plans receive federal funding to deliver you Medicare coverage from CMS, which runs Medicare.  Here is how it works:


  • Private insurers estimate the cost of providing Part A and Part B services per person. Then, they submit their plan’s bid to Medicare.
  • Medicare will compare the bid against the benchmark amount, a value based on Medicare’s average spending per person. Each county has its own benchmark.
  • If the plan’s bid exceeds the benchmark, the enrollee pays for the difference. This amount adds to their standard Part B premium ($148.50 in 2021).


But here’s the good news – if the bid is lower than the benchmark, the plan gets a rebate from Medicare. 

This rebate is passed as savings to its members. That is why they can offer free Medicare Advantage plans. Plus, they provide extra benefits like dental, vision, hearing, and prescription drug coverage.

Private insurers manage their costs by getting contracts with a network of health providers. They also focus on preventive care and disease management to lower health care costs.

However, it’s important to remember that, enrolling in these free Medicare Advantage plans does not mean zero costs. You are still responsible for paying Part B premiums and out-of-pocket costs. 


What should you know before getting a free Medicare Advantage plan?

First, examine the plan’s evidence of coverage (EOC). It will explain its benefits, how much you need to pay, any maximum limit to your out-of-pocket costs, and how the plan works (e.g., authorization, network coverage, approval process, limitations). 

Second, determine the total cost of getting these $0 premium plans. Always add your Part B premium and out-of-pocket expenses to the total cost. 

Here are some examples of out-of-pocket expenses:


  • Deductible: This is an annual amount you must pay before your MA plan starts paying your medical bills. There may be deductible amounts for Part B (medical) and Part D (prescription drugs) coverage.
  • Copayments: Depending on the plan, you may need to contribute a fixed fee per visit to the doctor.
  • Coinsurance: After meeting your deductible, this is your percentage of cost-sharing.
  • Out-of-network care: Most Medicare Advantage plans require members to consult within its network of health providers, except for emergencies. Getting services outside this network will cost extra.The only exception is if you enroll in a plan that covers out-of-network services but at a higher cost.  Also known as a PPO plan.
  • Maximum out-of–pocket: There is a cap on out-of-pocket costs for all Medicare Advantage plans, including free Medicare Advantage. Once you exceed the limit, your plan pays for the remaining expenses before the end of your coverage. 


This cap only applies to medical services and does not apply to dental, hearing, vision, and prescription drug coverage.

Compare your total cash-out against the costs of joining Original Medicare or other non-free Medicare Advantage plans. According to the CMS, the average Medicare Advantage premium is $21 (in 2021).

Low-income individuals may qualify for Medicare Savings Program (MSP). These programs help in paying premiums, deductibles, copayments, and coinsurance. Plus, Medicaid may offer benefits like routine dental and vision services.


How to enroll in a Medicare Advantage plan?

Whichever plan you choose, whether free Medicare Advantage or not, here are some steps you need to follow:


  • Step 1: Find out if you are eligible. You should be qualified for Original Medicare before you can enroll in any Medicare Advantage plan.
  • Step 2: Determine your current and anticipated health status.Regardless of if you take any prescription drugs, you should enroll in a plan with drug coverage to avoid late enrollment penalties (unless you have other qualifying drug coverage that is as good as Medicare’s)
  • Step 3: Check if your doctor accepts payment through Part C plans.
  • Step 4: Check the plan’s evidence of coverage (EOC) for a description of benefits and a breakdown of costs.


How to enroll in a Medicare Advantage plan?

Enrolling in a free Medicare Advantage plan could be your best option, considering your health condition and financial status. 

But remember that the costs and benefits change annually. Private insurers compete for business by improving their MA plans. So, review the offers of various plans before your next enrollment period.



Enrolling in a free Medicare Advantage plan could be your best option, considering your health condition and financial status. 

But remember that the costs and benefits change annually. Private insurers compete for business by improving their MA plans. So, review the offers of various plans before your next enrollment period.

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