February 9th 2023
By Ari Parker
We’ve all heard that “nothing in life is free,” so what’s the catch with zero-premium Medicare Advantage plans? Learn how they work & what the drawbacks are.
Medicare Advantage plans (also called Part C) are growing in popularity, and about 70% of their plan holders are on zero-premium plans. The concept of “free” is appealing, especially if you’re a retiree living on a fixed income—and many of these plans also offer other exciting benefits, like dental, vision, and hearing.
Some Medicare Advantage plans have a $0 monthly premium. While free premiums sound appealing, there are other costs associated with Medicare Advantage plans that every beneficiary should be aware of.
Medicare Part C is not technically free, even when a plan has a $0 premium. You’ll still have to pay your Part B premium, which is $185 per month in 2025.
Medicare Advantage plans are a bundled alternative to Original Medicare. These policies combine Medicare Part A and Medicare Part B and also typically offer other benefits like routine dental, vision, and hearing services. Certain Medicare Advantage plans also provide transportation benefits, credits for over-the-counter (OTC) items, and free fitness memberships.
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While many Medicare Advantage (Part C) plans have $0 monthly premiums, Medicare Part C is not free. With Medicare Advantage plans, you’re responsible for the following premiums:
Monthly Part A premium (if applicable)
Monthly Part B premium
Monthly Part C premium
Every Medicare beneficiary should know what they’re getting into when signing up for a plan. Read on to find out more about how even the premium-free Medicare Part C plans are not actually free and what the restrictions of Medicare Advantage plans are.
We’ve all heard that “nothing in life is free” and “if it sounds too good to be true, it probably is.” So, what’s the catch with Medicare Advantage plans?
To start, zero-premium Medicare Advantage plans are not actually free. You will still need to pay the Part A & B premiums you are already paying. For most people, those premiums are $0 for Part A and $185 for Part B (in 2025). The money will continue to come out of your Social Security checks, and Medicare will take care of paying the insurance company providing your coverage.
Medicare Advantage plans are required to provide at least the same coverage as Original Medicare—and most provide additional benefits. So, how are insurance companies making money off these $0 premium plans? Network restrictions.
Most Medicare Advantage plans (not just the premium-free plans) rely on contracted rates with in-network providers to reduce healthcare costs. This means that you’ll need to visit doctors in your network to get full coverage from your plan. For those who aren’t picky about which doctors they see, network restrictions may not be a problem. But if you have doctors you love or need to find new doctors, these limits can make it more difficult to get the care you need from the doctors you choose.
If you don’t travel that much, are relatively healthy, and aren’t picky about which doctors you see, a $0 Medicare Advantage plan may sound pretty nice. There’s one more crucial factor you should consider: financial risk.
If you’re healthy, you may not be worried about the cost of care beyond your monthly Medicare premiums because you don’t currently need the care. But, especially as we age, health issues spring up—and you can’t change your Medicare Advantage plan mid-year just because you were diagnosed with a condition. In some cases, it makes sense to purchase a Medicare Advantage plan with a low premium and more coverage to save money over the year and reduce your financial risk. Oftentimes, spending a little bit more on premiums can also increase your dental, vision, and hearing benefits to save you money on popular preventive services.
It’s hard to say what the best $0 premium Medicare Advantage plans are because plan availability, premiums, and details vary based on where you live. There’s also no one-size-fits-all approach when it comes to Medicare. With thousands of plans out there and significant variability in Medicare enrollees’ healthcare needs and financial positions, Medicare recommendations need to be tailored to each individual.
There are a few ways you can find the best $0 premium Medicare Advantage plan for you. You can use the Medicare.gov plan finder tool, enter your zip code, choose Medicare Advantage plans, enter prescription drug details, and filter the list by Medicare star ratings. This method isn’t fool-proof—you may not get the plan that you want this way because the tool doesn’t take your personal considerations into account.
The best way to find the Medicare plan for you is to talk to a licensed Medicare Advisor, which we’ll discuss in detail below.
When comparing plans, you should always consider your 3 Ps: your health care providers, prescriptions, and priorities. When you work with Chapter, your Medicare Advisor will look at your current prescriptions and healthcare providers as well as your priorities concerning ancillary benefits and financial savings. They’ll use this information to provide a Medicare plan recommendation that will provide comprehensive coverage for your individual needs.
And unlike other Medicare agents who only recommend plans from insurance carriers who pay them, we recommend the best plan for you, regardless of whether or not the insurance carrier offering the plan pays us to represent them. Give us a call at (855) 900-2427 or schedule a free consultation to discuss your Medicare options.
