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Is there a free Medicare Advantage plan?

Many Medicare Advantage plans have $0 premiums. But are these plans really free? We examine the true costs.

2 mins read
Our goal is to give you the tools and confidence you need to improve your health and finances. Although we may receive compensation from our partner insurance companies, whom we will always identify, all opinions are our own. CoverRight Inc. and CoverRight Insurance Services Inc. (NPN: 19724057) are collectively referred to here as "CoverRight".

You may have heard about free Medicare Advantage plans. While it’s true that there are many Medicare Advantage plans with $0 monthly premiums, it’s important to remember that you still need to pay deductibles, copayments, and coinsurance.

Let’s look more closely at these free (or $0 premium) Medicare Advantage plans.

What does a ‘free’ Medicare Advantage plan really mean?

Medicare Advantage plans, or Part C plans, must provide at a minimum the same coverage as Original Medicare. So how can these plans be premium-free?

Here’s how it works.

Private insurers that operate Medicare Advantage plans receive funding from the Federal Government to help offset the costs of providing healthcare to beneficiaries. These private insurers also find ways to lower the cost of their plans. If their plan costs less than the regional benchmark, the savings are passed on to the plan’s members in the form of zero-premium plans.

Not only that —  many plans can also afford to offer additional benefits like vision,  dental, hearing, fitness, and wellness benefits. Many Medicare Advantage plans also provide prescription drugs (Part D) coverage for no additional premium.

These advantages attract many seniors to enroll in a $0 premium Medicare Advantage plan. However, it’s essential to know that these plans are not entirely free-of-charge.

The cost of Medicare Advantage plans will typically include the following:

  • Part A premiums (if you were haven’t paid taxes for at least ten years)
  • Part B premiums (which can be reduced if the Part C plan offers the Medicare Part B premium reduction)
  • Deductibles
  • Copayments
  • Coinsurance

How do you compare various free Medicare Advantage plans?

Around 59 percent of Medicare advantage plans bundled with Part D (MA-PD) are zero-premium plans in 2022.

To help choose a suitable plan, consider these factors:

  • Drug coverage: If you need regular medications, look for MA-PD plans. Make sure their drug formulary includes your prescription drugs.
  • Doctor network: Find out if your current doctor belongs to a Part C plan’s network. If you frequently travel, consider Preferred Provider Organization plans, and plans that offer telehealth.
  • Out of Pocket Costs: What services will you use and what is the associated copay.
  • Maximum Out of Pocket: The maximum health expense exposure you may be subject to in a given calendar year.
  • Star Rating: The Centers for Medicare and Medicaid Services (CMS) has a five-star rating system that applies to many Medicare Advantage plans. Check your Medicare Advantage plan’s ranking – five stars mean excellent performance.

Remember, there are pros and cons to Medicare Advantage plans. Another option is to get Original Medicare with a Medigap plan and a standalone prescription drug plan (PDP).

How do you manage costs if there are really no free Medicare advantage plans?

Since free Medicare advantage plans still have costs, you want to be proactive about your coverage and you may want to consider switching plans during the Annual Enrollment Period each year if your current plan doesn’t serve your needs. You should consider these factors before switching Medicare Advantage plans:

Final Words

Free Medicare advantage plans, or $0 premium plans, can save you time and money. However, always review updates before the next enrollment period. The CoverRight team is here to help you navigate the right type of plan for your particular needs and preferences.

Josef Katz

Josef is a digital marketing expert, is a podcast host of PrimeLife and formerly a licensed insurance agent. Josef has had an extensive career across the education, healthcare, insurance and financial services sectors and is passionate about educating consumers.

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