While researching Medicare Advantage plans, you may have come across advertisements for some plans that claim to have $0 premium and wondered how, or even if, this is possible – especially as many other insurance companies charge monthly premiums for these types of policies.
The good news is that these plans are not a scam – and in fact, many of them offer good quality coverage. By contracting with health care providers that enrollees must use, some insurance companies are able to save a great deal of money on Medicare Advantage plans – and are therefore able to pass the savings along to their policy holders.
Consider the Tradeoffs
Just as with anything else, when considering the purchase of a Medicare Advantage plan, it is important to go over all of the factors involved – and, if a policy comes with a $0 premium, it is likely that there will be tradeoffs in other areas.
For example, remember the old saying, “There really is no such thing as a free lunch.” With this in mind, be sure to read all of the fine print on the policy regarding the policy’s co-payments, deductibles, and any other potential out-of-pocket expenses that may be required of you. This is because in return for the $0 premium, it is likely that the costs will be passed off to you in some other way.
A $0 premium Medicare Advantage policy may also require that policy holders use in-network health care providers and facilities. In this manner, it could work like an HMO (Health Maintenance Organization) or a PPO (Preferred Provider Organization) where premiums are kept low (or in this case, at $0), but with heavy restrictions on the coverage.
It is also important to note, however, that a $0 premium policy could actually be an ideal choice for some individuals. For instance, those who are in good health and do not require a great deal of doctor visits won’t be required to pay a lot of expenses. So, in this case, the savings could be substantial.
In addition, many Medicare Advantage plans come with additional benefits over Original Medicare (Medicare Parts A and B), such as vision care, prescription drug coverage, and even fitness center memberships. Therefore, depending on exactly what benefits you use, the savings could add up to be even more.
Factors to Consider
While the premium you pay is important, there are a number of other important factors that must also be considered prior to purchasing a Medicare Advantage plan. When determining the right plan for you, some of the other criteria to consider should include:
Will you receive your health care services from in-network or out-of-network providers?
Will the plan cover all or part of your Medicare Part B premium amount?
How much of the plan’s maximum out-of-pocket limit will be for your medical services?
How much are you required to pay in coinsurance and / or copayments?
Does the plan offer additional benefits such as vision and dental?
Does the plan have a prescription drug benefit?
Does the plan require an annual deductible to be met?
All of these factors should be considered in conjunction with how much overall medical care you typically require on an annual basis. For example, do you typically only visit the doctor once per year for an annual check-up, or does your health require more frequent visits to a variety of different providers and specialists?
All of these criteria should be considered when determining the amount of out-of-pocket expenses that you are likely to pay in addition to your policy’s premium – and this will help you in determining an overall amount of expense.