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Are Medicare Advantage Plans Free?

Jul 9, 2021

Medicare Advantage plans are becoming increasingly popular among Medicare beneficiaries who are in search of comprehensive coverage at an affordable price. While researching your options for Medicare Advantage, you may have come across the word “FREE!” While free certainly is always enticing, what does it actually mean? Are Medicare Advantage plans really free? Keep reading to find out.

What is Medicare Advantage?

Before we get started on what “Free” means when it comes to Medicare Advantage, let’s first review what Medicare Advantage is.

Medicare Advantage, also known as “Part C” or “MA plan”, is an alternative way for Medicare beneficiaries to receive Original Medicare benefits (Part A and Part B). Medicare Advantage plans offer all the same benefits as Original Medicare like hospital coverage and medical coverage, as well as some additional benefits like prescription drug coverage, dental, vision, and other health perks.

MA plans are offered as managed care plans like an HMO or PPO through private insurance companies contracted with Medicare. You must be enrolled in Original Medicare to enroll in a MA plan.

How Do Medicare Advantage Plans Work?

Medicare Advantage plans are sort of like having private insurance. Because Medicare Advantage is offered through private insurance companies there a variety of plans to choose from that can differ in coverage and costs. Generally, MA plans are known for having low and sometimes even $0 monthly premiums. They also provide a protective annual out-of-pocket maximum, which limits how much you pay for medical services each year.

Once you enroll in a Medicare Advantage plan, Medicare is no longer responsible for your medical costs, your MA plan is. This means out-of-pocket costs like a deductible, copay, or coinsurance are paid to your Medicare Advantage plan. In return, they provide your Medicare coverage. The health coverage they provide is limited to a network of preferred doctors and hospitals that you must choose from. Out-of-network doctors, specialists, and hospitals may be covered at a higher cost or not at all.

Are Medicare Advantage Plans Really Free?

While researching Medicare Advantage plans, you may have come across a plan in your area offering $0 monthly premiums begging you to question, “can Medicare Advantage plans really be free?” The simple answer to that question is, not entirely.

While many Medicare Advantage plans offer $0 premiums you are still required to pay your monthly Part B premium. The standard cost for Part B premium in 2021 is $148.50. In addition, there are other costs associated with Medicare Advantage coverage like a plan deductible, prescription drug deductible, and copays or coinsurance. Some plans may offer a $0 deductible in addition to a $0 premium however, they may require you to pay a separate prescription drug deductible.

While free Medicare Advantage plans do sound enticing it is important to be aware of other costs associated with the plan. Generally, when a plan has a low deductible or premium they make up the costs in other ways like higher copayments or coinsurance. If cost is a concern for you, it’s best to compare multiple plans or contact a qualified independent agent in your service area to review your plan options.

How to Qualify for a Free Medicare Advantage Plan?

The only requirements to enroll in a free Medicare Advantage plan is that you must be enrolled in Medicare Part A and Medicare Part B (Original Medicare) before enrolling in a MA plan and you must live within the plan’s service area.  You can enroll in Medicare Advantage during your Initial Enrollment Period or during the Annual Enrollment Period.

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