Can a Medicare Advantage Plan really be free? The answer depends on the plan. There are Medicare Advantage Plans that come with a $0 premium fee. This means that there is no additional cost for enrollment in that specific policy. But this doesn’t mean that all Medicare Advantage Plans are the same. Additionally, there might be other things you have to pay for as a part of your plan.

Key Takeaways

  • Medicare Advantage (MA or Part C) Plans are an all-inclusive alternative to Original Medicare plans.
  • The different types of Medicare Advantage plans are HMO, PPO, PFFS, and MSA plans.
  • Special Needs Plans (SNP) are also available to those who need regular specialized medical care.
  • Some Medicare Advantage plans will have $0 or low-cost premiums – but will require extremely high out-of-pocket costs.
  • Be wary of high coinsurance, copayments, and deductibles hidden in some Medicare Advantage policies.

Medicare Advantage

You may be asking yourself what exactly Medicare Advantage is – but no need to fret! With so many insurance options everywhere it can be confusing to try to navigate through them all. A Medicare Advantage Plan is not the same as Original Medicare. Medicare Advantage (MA or Part C) Plans are an all-inclusive alternative to Original Medicare. Private Medicare-approved companies offer these bundled policies. They include Medicare Part A, Part B, and Part D benefits. MA Plans cover all Medicare services and many offer extra coverage. Medicare pays a fixed amount each month to the MA Plan companies, as long as they follow a set of rules placed by Medicare.

Types of Medicare Advantage Plans

When considering a Medicare Advantage plan, look into every single plan type. Choosing a plan that aligns best with your needs will help you the most in the long run.

HMO Plan

Health Maintenance Organization (HMO) Plans require you to get healthcare services from providers within the plan’s network. A few exceptions apply to this rule, like out-of-network emergency care or out-of-network dialysis. Some plans might allow you to go out of network for certain services, but at the risk of higher fees. HMOs do require policyholders to choose a primary care doctor who will in turn provide referrals for future specialist visits. If your concern lies in the realm of drug coverage, find comfort in knowing that most plans do offer this option.

PPO Plan

Under Medicare Advantage Plans there is the Medicare Preferred Provider Organization (PPO) option. This option provides a large network of doctors, hospitals, and specialized healthcare providers. Due to this setup, those enrolled usually have to pay less with these in-network options. Subsequently, visits to those outside of the network will be more pricey. PPOs are usually pretty flexible because they don’t require a primary doctor, resulting in no need for referrals and flexibility to go to any doctor, specialist, health care provider, or hospital within the network. Prescription drug coverage depends on the plan chosen.

PFFS Plan

Private Fee-for-Service (PFFS) Plans determine how much it will pay doctors, health care providers, and hospitals, and likewise, how much you will pay for care. Some PPFS Plans function with a network but others will work with any doctor, provider, or hospital. So no need to worry about choosing a primary care doctor or getting referrals. Always check with your plan for coverage details, and check with your provider ahead of time to see if they take your insurance plan. Usually at the time of the services a copayment or coinsurance amount will have to be paid. Drug coverage depends on the plan chosen, but if it’s not, you can enroll in the Medicare Prescription Drug Plan (Part D).

SNP Plan

Special Needs Plans are Medicare Advantage Plans specifically for those with specific diseases or characteristics. These plans provide tailored benefits, provider choices, and drug formularies that best meet the needs of those they serve. SNPs are available to those with a severe or disabling chronic condition, those living in an institution, or people who require home care. Each plan is tailored for the condition it is meant to benefit. This plan works with in-network providers and hospitals (except for emergency rooms, urgent care, and out-of-area dialysis). Drug coverage is mandatory. Most SNPs will require a primary care doctor or a care coordinator to assist you, and both will be necessary for handling referrals to specialists.

MSA Plan

A Medicare Medical Savings Account (MSA) Plan works with private insurance companies to focus on offering a consumer-directed plan. This means the consumer is more in control of the plan and what they get, like choosing health care services and providers. A MSA is a combination of a high deductible insurance plan with a medical savings account for paying and covering health care costs. These plans cover the mandatory Medicare services required of all MAPs and could additionally cover things like dental, vision, and long term care. As these plans are highly customizable they are best suited for those who want a special tailored approach.

Medicare Advantage Plans with Low or No-Premiums

While searching for a Medicare Advantage Plan best tailored to your needs, you might stumble across some free plans that come with a premium, or cost of enrollment, at $0. This might be surprising and maybe even suspicious – but these types of plans exist and are legitimate. Essentially, these plans do not have an additional cost to be enrolled under such a plan. You might be asking yourself how they do this, and there are various ways how. One way these private insurance companies cut down on overall costs, to provide their users with more savings, is by using in-network providers. Another way is by charging high copayments and deductibles, which sometimes can be higher than other programs with higher premiums. So, although a Medicare Advantage Plan with a low or nonexistent premium may seem enticing, it’s important to measure whether it is your best option.

Is Medicare Advantage Truly Free?

Now that we know that some MA Plans come with a low premium cost, it’s time to discuss what other possible fees you might have to pay. Although your MA Plan may have a low premium, you might still have to pay your Medicare Plan B premium. Depending on your plan, you might have to pay copayments or coinsurance. Additionally, deductibles and extra benefits can appear as additional charges you are responsible for. In the end, when it comes to picking the right insurance plan for you, there are more factors to consider than just your plan’s premium.

Medicare Plan B Premium

Some Medicare Advantage Plans will offer to pay a part, or all, of your existing Medicare Plan B premium, but others may not. In the case that this cost is not incorporated into your plan already, you will have to pay your premium yourself. The cost varies from plan to plan but usually it starts around $135.50.

Copayments or Coinsurance

Copayments, or coinsurance, is the fee you are responsible for paying whenever you receive a service like a doctor or emergency room visit, or when picking up a prescribed drug. Your insurance provider predetermines this amount, and it can vary widely across companies. Sometimes insurance plans with lower premiums may lead to higher copayments or coinsurance out of your own pocket when you receive a service.

Deductibles

A deductible is another out-of-pocket expense that may come with an MA Plan. This is a predetermined amount that you have to pay prior to your plan paying for your medical bills. So this means there is a certain threshold that you have to account for before your insurance kicks in. Usually plans have a deductible for medical bills and then a separate one for prescription drugs.

Extra Benefits

In the end, on top of everything else, there is always the possibility of requiring or wanting a service that is not included within your network or covered by your plan. This kind of “extra benefit” will cost you out-of-pocket, and prices will vary. To avoid an unprecedented expense, always check with your plan first to see if the desired service is included or not.

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