If you’ve been recently shopping around for a Medicare Advantage plan, you may have noticed that some of these plans are advertised as “free.”
Certain Advantage plans are called free because they offer a $0 monthly premium to be enrolled in the plan. This makes zero premium Medicare Advantage plans an attractive offer for those looking to save money on monthly Medicare costs.
This article will explore what these free Medicare Advantage plans cover, what additional costs you might encounter, and who’s eligible for a free Medicare Part C plan.
Medicare Advantage, also called Medicare Part C, is offered by private insurance companies for qualifying individuals who want more than Original Medicare coverage.
Medicare Advantage plans provide the following mandatory coverage:
- Hospital coverage (Medicare Part A). This covers hospital-related services, home healthcare, nursing home care, and hospice care.
- Medical coverage (Medicare Part B). This covers the prevention, diagnosis, and treatment of medical conditions.
Many Advantage plans also cover additional medical needs, such as:
- prescription drug coverage
- dental, vision, and hearing coverage
- fitness coverage
- other health perks
When you choose a Medicare Advantage plan from a private company, there are different plan options to choose from. Most Advantage plans are:
- Health Maintenance Organization (HMO) plans. These cover services from in-network doctors and providers only.
- Preferred Provider Organization (PPO) plans. These charge different rates for in-network and out-of-network services.
There are also three other plan structures for Medicare Part C plans:
- Private Fee-for-Service (PFFS) plans. These are special payment plans that offer flexible provider coverage.
- Special Needs plans (SNP). These are a coverage option for people with long-term medical conditions.
- Medicare Medical Savings Account (MSA) plans. These plans combine a high deductible health plan with a medical savings account.
Free Medicare Advantage plans are Medicare Part C plans that offer a $0 yearly premium.
Compared to other Medicare plans, these zero premium Medicare Advantage plans don’t charge a yearly amount to be enrolled in the plan.
There’s generally no difference in coverage between a free plan and a paid plan. Regardless of cost, most Medicare Part C plans offer parts A and B, prescription drug, and other additional coverage.
So, why do companies offer these zero premium Medicare plans? When a company contracts with Medicare, it’s given a set amount of money to cover parts A and B insurance.
If the company can save money elsewhere, such as by using in-network providers, it may be able to pass those extra savings along to members. This can result in a free monthly premium.
These free Medicare Advantage plans are also a great way for companies to advertise attractive savings to potential beneficiaries.
Even though zero premium Medicare Advantage plans are marketed as free, you’ll still have to pay some out-of-pocket costs for coverage.
Advantage plan monthly premium
If a Medicare Advantage plan is free, you won’t have to pay a monthly premium to be enrolled.
Part B monthly premium
Most free Medicare Advantage plans still charge a separate monthly Part B premium. Some plans will cover this fee, but others may not.
The Part B monthly premium starts at $135.50, or higher depending on your income.
There are two types of yearly deductibles associated with most Medicare Advantage plans:
- The plan itself may have a yearly deductible, which is the out-of-pocket amount you pay before your insurance pays out.
- The plan may also charge you a drug deductible as well.
Most Medicare Advantage plans charge copayments for visits. A copayment is the out-of-pocket fee you pay every time you receive medical services.
Some plans may also charge a coinsurance. This is the percentage of all medical costs you’re responsible for paying.
Type of plan
Medicare Advantage plans can also differ in costs based on their structures. For example, PPO plans charge different copayment amounts based on whether your provider is in-network or out-of-network.
These costs may even vary from year to year. For example, PFFS plans have experienced a small percentage increase in costs every year for the last few years.
Medicare isn’t free health insurance. There are many different costs that are associated with Medicare coverage.
Before you can enroll in a Medicare Advantage plan, you must have Medicare parts and B coverage. Below you’ll find the costs associated with those plans.
Medicare Part A
Medicare Part A charges a monthly premium, which can range from $240 to $437. However, many people are exempt from this fee.
If you paid Medicare taxes while working or receive (or are eligible for) Social Security or railroad retirement benefits, you may be exempt.
Medicare Part A also charges a $1,364 deductible for each benefits period plus a coinsurance amount, which ranges from $341 to $682-plus.
Medicare Part B
Medicare Part B charges a standard monthly premium of $135.50 or more, depending on your gross yearly income. You’ll owe this Part B premium as part of your free Medicare Advantage plan unless it’s covered by the plan.
Medicare Part B also charges a $185 deductible per year, after which point you’ll owe a 20 percent coinsurance amount for all services.
If you choose to enroll in a Medicare supplement plan like Medicare Part D or Medigap as an alternative to Medicare Advantage, you’ll owe a monthly premium and other costs associated with these plans.
Medicare Part D and Medigap costs are determined by the plan you choose.
Unlike the out-of-pocket maximum with a Medicare Advantage plan, there’s no limit to the amount of out-of-pocket costs you’ll pay for Medicare parts A, B, D, or Medigap.
You’re eligible for Medicare under the following criteria:
- You’re 65 or older. All Americans 65 or older are automatically eligible for Medicare. You can apply for Medicare up to 3 months before your 65th birthday.
- You have a disability. Even if you’re under 65, you’re eligible for Medicare if you receive Social Security disability payments. Social Security offers disability benefits for roughly 14 categories of disabilities.
- You have ALS. If you have ALS and are receiving disability benefits, you’re automatically eligible for Medicare.
- You have end stage renal disease. If you have permanent kidney failure, you’re eligible for Medicare. However, it’s important to note that people with this condition are not eligible to upgrade to a Medicare Advantage plan.
Certain criteria, such as receiving disability benefits for 24 months, will automatically enroll you into Medicare on the 25th month. If this is the case, you don’t need to sign yourself up for Medicare parts A and B.
However, if you’re eligible for Medicare but not automatically enrolled, you’ll need to apply at the Social Security’s website.
There are no qualifications for free Medicare Advantage plans. Many Advantage plans offer a free monthly premium as part of their healthcare plan offerings.
You can find Medicare Part C plans in your area with a $0 premium by using Medicare.gov’s Find a 2020 Medicare plan tool.
During your search, you can use the “Sort plans by: Lowest monthly premium” feature to see zero premium Medicare Advantage plans in your area.
resources to help cover medicare costs
One of the most important ways to manage your Medicare costs is to use the resources available to help cover or lower your costs. These resources include:
- Medicaid. This program has helped cover medical costs for more than
10 millionpeople who are low income or don’t have the resources to pay for medical expenses.
- Medicare Savings Programs. These programs can help low-income beneficiaries pay Medicare Advantage premiums, deductibles, copayments, and coinsurance.
- Supplemental Social Security. This benefit offers people who are disabled, blind, or over 65 a monthly payment, which can help cover Medicare costs.
- Additional resources. There are other programs that may offer help for people who live in certain U.S. territories or have high prescription drug costs.
Another way to keep track of your Medicare Advantage costs is to pay attention to the Evidence of Coverage and Annual Notice of Change notices your plan sends you each year. This will help you stay on top of any price changes or fee increases.
Free Medicare Advantage plans are private Medicare insurance plans that offer a $0 monthly premium.
While these plans are advertised as free, you’ll still have to pay the standard out-of-pocket costs for other premiums, deductibles, and copayments.
If you qualify for Medicare and are enrolled in parts A and B, you can use the Find a 2020 Medicare plan tool to search for zero premium Medicare Advantage plans in your area.