Medicare Advantage, also known as Medicare Part C, is one way through which Medicare beneficiaries can get their Medicare Part A and Part B benefits – you get them through a private, Medicare-approved insurance company instead of directly through the government. Some Medicare Advantage plans have premiums as low as $0, but they may not be available in all areas. If there is a $0-premium plan in your service area, there are typically other costs associated with the plan including copayments, deductibles, and your Part B premium.
Medicare Advantage plans may in some cases include additional coverage such as routine vision, dental, or wellness programs. They cover all your Medicare Part A and Part B benefits besides hospice care, which Medicare Part A still covers for you even if you have a Medicare Advantage plan.
Depending on plan availability where you live, you may be able to enroll in a Medicare Advantage plan that has low to no monthly premiums. Plans with no premiums are sometimes referred to as Medicare Advantage $0-premium plans.
Medicare Advantage plans are offered by private insurance companies approved by Medicare. Hence, these insurance companies must follow regulations set by the Medicare program. Medicare pays a fixed monthly amount for each Medicare beneficiary’s health care to all insurance companies offering Medicare Advantage plans. These plans have some flexibility in setting their costs.
Many (but not all) Medicare Advantage plans include prescription drug coverage. These are known as Medicare Advantage Prescription Drug plans.
Costs associated with $0-premium Medicare Advantage plans
Although it may seem like there are no costs to a Medicare Advantage plan with no premium, there are several expense categories to keep in mind for any Medicare Advantage plan:
- Deductibles: Any Medicare Advantage plan may have a deductible that you need to pay before the plan begins covering your health-care services. The deductible amount may vary among plans.
- Copayments: These are amounts that Medicare beneficiaries pay as their share of the health-care costs while the insurance company pays for the remaining covered costs. $0-premium Medicare Advantage plans charge copayments just as Medicare Advantage plans with monthly premiums do – but copayment amounts may vary among plans.
- Prescription drug costs: Every Medicare Advantage Prescription Drug plan has a specific list of prescription drugs it will cover (called a formulary) and corresponding copayment or coinsurance amounts. The formulary may change at any time. You will receive notice from your plan when necessary.
Because prescription drug coverage and costs can vary among plans, you may want to select a plan that covers your prescriptions at a cost you can afford. Please note that some Medicare beneficiaries may qualify for the Extra Help (also known as Low-Income Subsidy) program for help with their prescription drug costs.
- Out-of-pocket maximum: Each Medicare Advantage plan must set an annual out-of-pocket maximum amount; some plans have lower out-of-pocket maximums than others. Once you pay this amount in a given year, the Medicare Advantage plan pays all your covered costs for the rest of that year. You may want to ask your plan what counts toward the out-of-pocket maximum amount. This amount may change from year to year.
As you can see, a Medicare Advantage plan that has a $0 premium may still have other costs for you to consider – and you still need to continue paying your Medicare Part B premium. In some cases, a Medicare Advantage plan may charge a monthly premium, yet offer a lower deductible, lower copayment amounts, and more comprehensive drug coverage than a $0-premium plan. You may want to keep this in mind as you compare plans. To start researching plans in your area, just enter your zip code where indicated on this page.