Have you ever seen an ad on TV or received a flyer in the mail about Medicare Advantage? You may have noticed an enticing offer for a $0 monthly premium. A $0 premium insurance plan would have anyone excited. However, it may sound too good to be true, right? If you are considering a Medicare Advantage Plan, there are some things you should know first. Not all Medicare plans are the same. Let’s explore $0 premium Medicare Advantage plans and if free really is free.
Are $0 Premium Medicare Advantage Plans Really Free?
It is true that Medicare Advantage offers plans with zero premium to help supplement your health coverage. In other words, you do not pay a dime each month to be on this Medicare plan. Keep in mind that there are some Medicare Advantage plans that do include monthly premiums. Not every single Medicare Advantage plan has a zero premium.
A Quick Overview of Medicare Advantage Plans
What is a $0 premium Medicare Advantage Plan? This is a plan called Medicare Part C and it is completely optional. This plan is offered by private health insurance companies. To be eligible for this plan, you must already be enrolled in Original Medicare. Original Medicare includes Medicare Part A and Medicare Part B. Your zero premium Medicare Advantage Plan coverage and benefits may vary depending on where you live.
$0 Premium Medicare Advantage Plans – What Do They Cover?
Most $0 premium Medicare Advantage Plans cover all Medicare-related services. This includes things like doctor visits, trips to the hospital, and appointments with specialists. Medicare Advantage Plans may also offer extra coverage, such as routine vision, dental, or prescription drug coverage.
Keep in mind, $0 premium Medicare Advantage Plans have a network. Therefore, you will be limited on choices of facilities and doctors that will accept this plan. Many doctors and practices also change their ability to accept these plans. This means your doctors or medical facilities can leave the network at any time.
Additionally, being part of a network means fewer options overall. If you are looking for a specialist or a specific type of care, you may be charged more out-of-pocket expenses to see that practitioner.
Costs Associated With $0 Premium Medicare Advantage Plans
By now you must be wondering how companies make money by offering $0 premium Medicare Advantage Plans. What you may not know is that these plans typically charge you copayments, coinsurance, and other out-of-pocket costs.
Additionally, Medicare offers reimbursements to these Advantage companies. When you combine this reimbursement with the out-of-pocket costs you pay, this makes it possible for them to charge you a zero premium Medicare Advantage plan.
Disadvantages of Medicare Advantage Plans
The biggest disadvantage of going with a $0 premium Medicare Advantage Plan is that you cannot thoroughly calculate your medical costs. Spending zero dollars a month for health insurance sounds great until you have to use your plan. Once you have to use your plan, the bills will start to add up. Annually, the maximum out-of-pocket charges you could pay can be up to $6,700 or more.
You could have a great year with your health and not pay extra at all. However, you could also end up paying $6,700 each year you use your $0 premium Medicare Advantage Plan. Is that a gamble you are willing to make?
Why Would You Not Buy a $0 Premium Medicare Advantage Plan?
Why would you not buy a $0 premium Medicare Advantage plan? The main reason is that you have options. If you want the freedom to choose how you manage your healthcare, you can opt for a Medigap plan instead.
A Medigap plan does charge a monthly premium, however, they do cover what Medicare Part A and Part B do not cover. You can stay within your budget each month without worry. Lastly, there is no network with a Medigap plan. If a doctor or hospital accepts Medicare, they will accept a Medigap plan as well.
Final Thoughts
On the surface, a zero premium Medicare Advantage Plan sounds great. You will not pay anything per month and may even have additional benefits. However, once you need to use your plan for anything major, the charges can start to rack up significantly. Additionally, you will be limited to a network that can often change. The good news is that you have the option to choose a Medigap plan that does not limit you to a network and keep your finances in check.
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