We have all seen the ads on TV or gotten something in the mail advertising Medicare plans with $0 monthly premium or $0 co-pay for prescriptions or for a doctors visit or a routine eye exam. And I am often asked how these Medicare Advantage plans can be “free”.
$0 Premium Medicare Advantage Plans do actually cost you nothing per month for the insurance plan and they also often times offer other services or generic prescriptions for $0 but these plans are not actually free.
This is because you have to pay for Medicare to be eligible to enroll in these plans and Medicare has a monthly premium.
Some parts of Medicare and some covered services are indeed free, but there are definitely some costs involved. Medicare Part A, which covers hospital services, has no premium if you worked (and paid Medicare taxes) for at least 40 calendar quarters by the time you enroll. Medicare Part B, which covers doctor visits and similar expenses, has a premium of $134 per month in 2017, although high-income enrollees may pay higher premiums.
Other Medicare parts and plans have a wider range of premiums, often based on the type of plan and the provider or service you use. Medicare parts and plans offer different levels of coverage for various medical expenses. Some expenses with these plans may indeed have a $0 co-pay, while others require you to pay a higher co-pay or meet an annual deductible.
Under Medicare law, these private insurance companies that offer these plan are contracted with Medicare to provide Medicare Advantage (also called Medicare Part C) plans must offer the same benefits as Original Medicare (Parts A and B.)
All beneficiaries with Medicare Part B need to pay the Part B premium, even if they obtain their benefits through a Medicare Advantage plan, regardless of the plan premium. Because the federal government pays insurance companies a certain amount for each beneficiary that the plans cover, this is how the insurance company can offer plans with $0 premiums. Because they are getting money from Medicare to offset the costs.
However, $0-premium Medicare Advantage plans might not always be the most affordable option.
Even if you enroll in a plan with a $0 premium, you could have other out-of-pocket expenses that might add up over the year. So, it’s a good idea to compare a the Medicare plan’s deductible, out-of-pocket maximum and co-payments, as well as the monthly plan premium.
As you can see, the cost of a plan’s monthly premium isn’t all there is to choosing which plan is right for you.
If you would like help comparing Medicare plan options that fit your budget and health needs, you can contact me using the CONTACT page on this site or by calling me directly at 207-370-0143.
Get to know me by clicking the “About” link on the menu above. There are also links below so you can schedule a phone appointment or have me email you details on Medicare Advantage plans that could be right for you.
Would like my help?
If you would like to talk to me, ask a question or schedule a meeting at your home or a nearby meeting place, you can call me directly at 207-370-0143 or use my simple form on the CONTACT page of this site to send an email message.
The best part about working with me is that it will not cost you anything to talk with me to discuss your options and review the plans that are available. I am paid by the insurance companies in the form of a commission when you enroll in a plan.
You will not pay any more than anyone else and you are under no obligation whatsoever to enroll in any plans if you talk with me.
“My goal is to help people and I have found great joy in being able to offer my services to people who need my help.”