What you should know
  1. Medicare Advantage, also known as Medicare Part C or MA plans, is a private Medicare plan.
  2. Medicare Advantage Plans vary by insurance company and service area, but there are some available with a premium cost of zero dollars.
  3. Even with zero-premium plans, there are typically other healthcare costs you’re responsible for, including the Medicare Part B premium, co-pays, and other out-of-pocket expenses.
  4. The closest to a no-cost health care plan you could get is if you qualify for both Medicaid and a zero-dollar Medicare Advantage plan.

Medicare Advantage Plans are Medicare benefits offered by private insurance companies. You’ll have to enroll in Original Medicare Parts A and B before you enroll in a Medicare Advantage Plan, but anyone eligible for Medicare can choose to enroll in a Medicare Advantage Plan. Plans vary in each state and carrier, but most people have access to zero-dollar premium plan options.

How can Medicare Advantage plans have a zero-dollar premium?

Insurance companies can afford to offer $0 Medicare Advantage plans because the federal government subsidizes the plans, says Grant Dodge, a broker at Health Benefits Associates, Inc., in Reno, Nevada. “When a Medicare beneficiary enrolls in a Medicare Advantage plan, the federal government is no longer the primary payer for medical expenses. Instead, the insurance company takes on this risk. In exchange, the government provides the insurance company with funding,” he explains.

Because of government funding, insurance companies can offer a variety of competitive plans to attract potential consumers. Sometimes, that means offering zero-dollar premium options. According to a Kaiser Family Foundation report, more than nine out of 10 beneficiaries (98%) had access to a Medicare Advantage plan with no monthly premium in 2022.

Are zero-dollar premium Medicare Advantage plans really zero-dollar?

Having a zero-dollar premium Medicare Advantage plan means that you don’t have to pay an extra monthly premium to the private plan provider. But having a zero-dollar premium plan doesn’t mean your health care is free.

“Even if a Medicare beneficiary enrolls in a $0 Medicare Advantage plan, they still need to pay their Part B premium to the federal government unless they are getting financial assistance,” says Dodge. For 2022, the standard Part B premium cost is $170.10 per month.

Look carefully at each Medicare Advantage Plan to determine which one is best for your health and budget. In many cases, a plan with greater coverage that costs a few dollars per month could end up being more cost-effective than a zero-premium plan depending on your health needs. To give you some perspective, in 2021, just 65% of enrollees chose a zero-dollar premium plan.

You could have health care for no cost (or close to it) if you’re eligible for both Medicare and Medicaid. Dual eligibles who qualify for both programs can sign up for Medicare Advantage Plans and get secondary coverage from Medicaid.

Your secondary Medicaid coverage can pay for some expenses you’d otherwise pay out-of-pocket with Medicare. You may qualify for a Low Income Subsidy (LIS), which lowers the cost of Medicare prescription drug coverage. With a zero-premium Medicare Advantage Plan, Medicaid, and LIS, the combined programs should cover most, if not all, of your medical expenses.

“Not only do these plans have $0 monthly premiums, but they also have $0 copays and out-of-pocket expenses for medical services,” says Dodge. “This means that Medicare beneficiaries who are dual-eligible can go to the doctor, the ER, fill prescriptions, etc., without spending a dime.”

How do zero-dollar Medicare Advantage plans work?

Medicare Advantage Plans combine your Part A and Part B coverage, and many also include drug coverage (Part D). If you choose a zero-dollar plan, you don’t have a monthly fee to pay to that plan provider.

Otherwise, zero-premium plans work the same as other Medicare Advantage Plans in that you will have to pay your Part B premium to Medicare. You may have to stay within the plan’s health care provider network to reap the full benefits. Medicare Advantage Plans also limit the amount of out-of-pocket expenses you’ll pay each year for covered services.

Who qualifies for zero-dollar Medicare Advantage plans?

If you have Original Medicare Parts A and B, you can choose to enroll in a $0 premium Medicare Advantage Plan if it’s available to you, says Dodge. But like any insurance plan, it’s essential to read the plan rules. Understand the full scope of coverage and what you’re responsible for paying in terms of co-pays and drug costs. Finally, you’ll also want to confirm that your health care providers are part of the network.

It would be foolish to choose a plan simply because it has a zero-dollar premium, only to realize afterward that it doesn’t adequately cover your prescriptions or that your doctors don’t take the plan. But if you can find a no-premium plan that has everything you need, then you might as well save a few bucks each month.

This expert was consulted for insight into understanding Medicare Advantage premiums:

Grant Dodge, broker at Health Benefits Associates, Inc., in Reno, Nevada

Medicare consultant

LeRon Moore has guided Medicare beneficiaries and their families as a Medicare professional since 2007. First as a Medicare provider enrollment specialist and now a Medicare account executive, Moore works directly with Medicare beneficiaries to ensure they understand Medicare and Medicare Advantage Plans.

Moore holds a bachelor’s degree from Southern New Hampshire University and is A+ Certified with a Medical Records Clerk Certification and Medical Terminology Certification from Midlands Technical College.

He’s passionate about educating, informing, and resolving issues concerning Medicare and Medicare Advantage Plans, and considers it imperative that he does all he can to educate and inform the senior community as much as possible about Medicare.