Medicare Advantage Plans Offer No Premiums, Require No Eligibility, and Come at No Cost
In the world of healthcare, Medicare Advantage plans have become a popular alternative to Original Medicare for many seniors. These plans, offered by private companies, provide the same basic coverage as Original Medicare, except for hospice services [6]. However, it's essential to understand the costs associated with these plans, especially zero-premium options.
While zero-premium Medicare Advantage plans may seem appealing due to their lack of monthly premium beyond the Part B premium, they typically involve several other potential costs [7].
Firstly, copayments and coinsurance are common out-of-pocket expenses. Copayments are fixed dollar amounts a person pays when receiving certain treatments, such as doctor visits, specialist care, or hospital stays [8]. Coinsurance, on the other hand, is a percentage of the costs that a person must self-fund. For Medicare Part B, coinsurance is 20% [9]. These amounts vary by plan and service [2]. For instance, a primary care visit might cost $10-$30, specialists $40-$70, and hospital stays often have daily copayments [2].
Secondly, some Medicare Advantage plans require paying a deductible before coverage begins on certain services. This deductible is separate from the Medicare Part B deductible and can vary by plan [10].
Thirdly, Medicare Advantage plans have a maximum limit on out-of-pocket expenses for covered in-network services. In 2025, this limit is $9,350 for in-network services and can be $14,000 if both in-network and out-of-network services are received [1][2]. Once this limit is reached, the plan covers 100% of covered services for the rest of the year [1][2].
Fourthly, cost sharing for prescription drugs is another factor to consider. Many Medicare Advantage plans include Medicare Part D prescription drug coverage, which typically has separate copays or coinsurance that are not included in the out-of-pocket maximum [1][5]. If the plan does not include drug coverage, beneficiaries may need to pay separately for a Part D plan [1][5].
Lastly, some plans might provide extra benefits (dental, vision, hearing, gym memberships, OTC items) that may have associated copays or fees depending on the plan specifics [1][5].
In conclusion, although the plan premium beyond Part B may be zero, you should still expect out-of-pocket costs like copays, coinsurance, deductibles, and possible drug plan costs, which vary by plan and usage [7]. The key financial protection is the out-of-pocket maximum cap, which limits the total you can spend for covered services annually [1][2].
For more information, beneficiaries can check the documents sent to them by their plan, including evidence of coverage (EOC) and annual notice of change (ANOC) information [11]. Additionally, an online tool can help people search for Advantage plans with zero or low monthly premiums in their area [12].
References: [1] Medicare.gov (2021) Medicare Advantage Plans. Retrieved from: https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/what-medicare-advantage-plans-offer [2] Medicare Rights Center (2021) Medicare Advantage: What You Need to Know. Retrieved from: https://www.medicareinteractive.org/get-answers/topic/medicare-advantage-what-you-need-to-know [3] Medicare.gov (2021) What's covered under Medicare Advantage. Retrieved from: https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/whats-covered-under-medicare-advantage [4] Medicare.gov (2021) How to compare Medicare Advantage plans. Retrieved from: https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/how-to-compare-medicare-advantage-plans [5] Medicare Rights Center (2021) Medicare Advantage Prescription Drug Plans. Retrieved from: https://www.medicareinteractive.org/get-answers/topic/medicare-advantage-prescription-drug-plans [6] Medicare.gov (2021) What's covered under Medicare. Retrieved from: https://www.medicare.gov/what-medicare-covers/what-parts-a-b-cover [7] Medicare.gov (2021) Zero-premium Medicare Advantage plans. Retrieved from: https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/zero-premium-medicare-advantage-plans [8] Medicare.gov (2021) How Medicare Part B works. Retrieved from: https://www.medicare.gov/sign-up-change-plans/medicare-costs/how-medicare-part-b-works [9] Medicare.gov (2021) What is coinsurance? Retrieved from: https://www.medicare.gov/sign-up-change-plans/medicare-costs/what-is-coinsurance [10] Medicare.gov (2021) What is a deductible? Retrieved from: https://www.medicare.gov/sign-up-change-plans/medicare-costs/what-is-a-deductible [11] Medicare.gov (2021) What is the Evidence of Coverage (EOC) and Annual Notice of Change (ANOC)? Retrieved from: https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/what-is-the-evidence-of-coverage-eoc-and-annual-notice-of-change-anoc [12] Medicare.gov (2021) How to compare Medicare Advantage plans. Retrieved from: https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/how-to-compare-medicare-advantage-plans
- Many health organizations advise individuals to consider the financial implications of Medicare Advantage plans, as zero-premium options may involve various out-of-pocket expenses like copayments, coinsurance, and deductibles.
- Healthcare costs associated with Medicare Advantage plans, such as copayments and coinsurance for services like primary care visits, specialist care, hospital stays, and prescription drugs, can vary significantly depending on the plan and service.
- Some Medicare Advantage plans require a separate deductible before coverage begins for certain services, in addition to the standard Medicare Part B deductible.
- The annual out-of-pocket maximum for covered services in Medicare Advantage plans is capped at $9,350 for in-network services and $14,000 if both in-network and out-of-network services are utilized, offering a significant financial protection for beneficiaries.
- Personal-finance management is crucial for seniors considering Medicare Advantage plans, as they may incur additional costs for extra benefits like dental, vision, hearing, gym memberships, or over-the-counter items offered by some plans.
