Medicare Advantage Plans: Are They Really Free?

Here’s what you need to know about Medicare plans with $0 premiums.

If you’re looking for Medicare insurance, you may have noticed that Medicare Advantage plans have monthly premiums as low as $0. Cautious shoppers wonder: Is there a cat in there?

It’s true that there are several Medicare Advantage plans on the market today with $0 monthly premiums. While these plans offer tremendous value compared to Original Medicare and Medicare Supplement plans, it’s important to evaluate the quality of a Medicare Advantage plan before choosing one. Here are some things to keep in mind.

Health plan quality

Always evaluate the quality of a health plan before purchasing health insurance. The Centers for Medicare and Medicaid Services (CMS) uses a five-star rating system to rate Medicare health and drug plans. One star represents poor performance, while five stars represent excellent performance.

“For example, Sharp Health Plan received a rating of four and a half out of five stars from CMS,” says Don Truong, director of sales at Sharp Health Plan. “This ranks Sharp Health Plan among the top 100 Medicare Advantage plans nationwide.” You can compare the quality of different plans with the Medicare Plan Finder tool on medicare.gov.

network quality

You’ll also want to assess the quality of your health plan’s network, including the doctors, hospitals, rehabilitation centers, and other providers that will be available through your health plan. You can also find and compare providers using the Medicare website.

“A Medicare Advantage plan can help lower your health care costs if you’re already receiving care from a doctor or medical group and if you’re ready to retire on Medicare,” explains Truong. These are some of the most frequently asked questions about Medicare Advantage plans.

What is Medicare Advantage?

Private health insurance companies provide Medicare Advantage plans, also known as Medicare Part C. The federal government offers Original Medicare plans ( Parts A and B ).

“If you want more coverage than you get with Original Medicare, a Medicare Advantage plan might be a good option for you,” Truong explains. “Medicare Advantage plans offer the same coverage as Original Medicare, plus extra benefits .”

At a minimum, all Medicare Advantage plans include full Part A and Part B coverage.

  • Medicare Part A (hospital coverage) provides hospital and emergency room care, home health care, hospice care, and nursing home care.
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  • Medicare Part B (medical coverage) provides services to diagnose, prevent, and treat conditions, including doctor visits and lab visits.

If you choose a Medicare Advantage plan, you can receive value-added benefits such as:

  • Dental and vision coverage
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  • Chiropractic and acupuncture treatment services
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  • Over-the-Counter (OTC) Drug Benefits
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  • Free resources for exercise

Medicare Advantage plans have an annual limit on out-of-pocket costs. Once you reach that limit, you pay nothing for covered services. However, each plan may have a different limit, and that limit may change each year. Using health care providers within your plan’s network is recommended to reduce costs.

Is a “free” Medicare Advantage plan really free?

Certain Medicare Advantage plans allow you to join for a $0 monthly premium. Please note that the $0 monthly premium will not eliminate all costs associated with your plan.

This is what you can expect:

  • Medicare Advantage plans often have lower copays and most have no deductible.
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  • There is no cost for Part A if you have worked 40 quarters during which you paid Medicare taxes.
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  • You will pay the standard monthly premium for Part B.

“There’s a common misconception that Original Medicare is free, but it’s not,” Truong explains. “Furthermore, not having good coverage over and above Medicare, like a $0 Medicare Advantage plan, could actually end up costing you more.”

Here’s an example of what an eligible Medicare beneficiary could save on their monthly premium with a Medicare Advantage plan:

  • With a Medicare Advantage Plan
  • Original Medicare ($144.60 for 2020) + Medicare Advantage Plan (Parts A, B and D = $0) = Total of $144.60 per month
  • Without a Medicare Advantage plan
  • Original Medicare ($144.60 for 2020) + Medicare Supplement (Medigap = Average $157) + Part D (Prescription = Average $20) = Total $321.60 per month

“As you can see, a Medicare Advantage plan can really help you save money on monthly Medicare costs,” says Truong.

What types of Medicare Advantage plans are there?

There are several types of Medicare Advantage plans, but Health maintenance organization (HMO) and Preferred provider organization (PPO) plans are two of the most common.

HMO Plans: Most Medicare Advantage Plans are HMOs. With an HMO plan, most of your care and services must come from providers within your plan’s network.

PPO Plans: With a PPO plan, you’ll have the flexibility to see most health care providers and may pay less if you visit a provider or hospital within your plan’s network.

How do you qualify for a Medicare Advantage plan?

To qualify for enrollment in a Medicare Advantage plan, you must be eligible for Medicare and enrolled in Original Medicare.

When can I join a Medicare Advantage plan?

You can only join a Medicare Advantage plan during certain times of the year. Consider these points when shopping for a plan:

  • If you don’t have a Medicare Advantage plan: You can join a Medicare Advantage plan during the initial period when you first become eligible for Medicare.
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  • If you already have a Medicare Advantage plan: You can switch to a different Medicare Advantage plan or to Original Medicare with or without a Part D (prescription drug plan) during the Medicare Advantage Open Enrollment Period. MA EPO). This particular enrollment period takes place every year from January 1 to March 31.
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  • If you want to change your health coverage and add, drop or change your drug coverage: Make your changes during the Annual Election Period (AEP) from October 15 to December 7.

Is a Medicare Advantage plan right for me?

A Medicare Advantage plan can help you save time and money. As with the purchase of any health insurance plan, it is important to consider your options.

 

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