Wondering how a Medicare Advantage plan can have a $0 premium? (Part II)

When people hear about Medicare plans with $0 premiums, they usually want to know more. Learn the answers to some of the most common questions.

When my parents were about to turn 65, I helped them enroll in a Medicare plan.

We talked a lot about their health care needs, and the different types of plans they could choose. They were really interested in learning more about Medicare Advantage plans with $0 premiums. But they wanted to understand how health care companies are able to offer $0 premium plans in the first place (READ PART I).

Once they understood that, they had a few more questions:

“Is it a lower quality plan?”

Definitely not! Medicare Advantage plans are offered through private health care companies that contract with the government. At a minimum, Medicare Advantage plans are required to cover everything that Original Medicare does. And they usually include extra perks like routine hearing and eye exams, travel benefits and health club memberships. So you’re not getting fewer benefits – in many cases, you’re actually getting more. And who doesn’t want that?

“My premium is $0 this year. But what about next year?”

Zero dollar premium plans are really common – they’ve been going strong for a decade. If a health insurance company does decide to raise its premium, the government limits how much the rate can increase in a single year.

“How can a health care company stay in business if it offers a $0 premium plan? How do I know it will stick around?”

Not every health plan can offer a $0 Medicare Advantage plan. Medicare, along with the state and federal government, has lots of rules in place to protect members. For example, before a health plan company can offer a Medicare Advantage plan, state officials audit their finances to make sure the company is financially stable and able to pay claims.

“My premium is $0, but how much will I pay for care?”

The answer depends on your health care needs. If you’d like an estimate of how much you might spend, visit the Medicare Plan Finder on the medicare.gov website.

Zero dollar premium Medicare Advantage plans are a good fit if you like the idea of lower monthly premiums, extra perks and a pay-as-you-go approach to your health care.

Want to learn more about Medicare Advantage plans? Read our post “What is a Medicare Advantage plan?”