Are $0 Premium Medicare Advantage Plans Really Free?
You’ve probably seen the TV commercials, postcards, or online ads promoting $0 premium Medicare Advantage plans. For many people exploring Medicare Advantage plans, that message sounds almost too good to be true and it usually raises some important questions:
How can I have Medicare coverage if I’m not paying a monthly plan premium?
Does a $0 premium mean the coverage isn’t good?
What’s the catch?
Are these plans different from Original Medicare?
These are smart questions and once you understand how Medicare Advantage plans are structured and funded by Medicare, you’ll see exactly what a $0 premium includes, what it doesn’t, and how to evaluate whether it’s a good option for you.
How Medicare Advantage Plans Are Funded
Medicare Advantage plans are not “free plans” created by insurance companies. They are federally funded Medicare plans offered through private insurance companies that contract with Medicare.
Here’s how it works:
When you enroll in a Medicare Advantage plan, Medicare pays the insurance company a fixed monthly amount to manage your healthcare. Insurance companies then use that federal funding to:
Provide your Medicare Part A and Part B benefits
Set copays and coinsurance amounts (that you pay as the enrollee)
Create provider networks
Offer extra benefits like dental, vision, hearing, and fitness programs
Decide whether they can charge a monthly plan premium or reduce it to $0
Because the insurance company is receiving money from Medicare to administer your care, some plans are able to offer Medicare Advantage plans with a $0 monthly cost. Instead of charging you a monthly premium, costs are often shifted to copays, coinsurance, and sometimes, deductibles.
That’s why a $0 premium doesn’t mean the plan has no cost; it simply means the costs are structured differently than you might expect.
Further Insight: While a $0 premium Medicare Advantage plan may sound free, Medicare coverage still comes with costs - whether you choose Original Medicare or Medicare Advantage. If you want a deeper breakdown of what beneficiaries actually pay in Blair County, PA, this article explains it in plain English: How Much Does Medicare Really Cost in Blair County, PA?
What a $0 Premium Medicare Advantage Plan Means for Beneficiaries
A $0 premium Medicare Advantage plan means:
The plan is offered through a private insurance company approved by, and contracted with, Medicare
You do not pay an additional monthly premium to the insurance company for that plan, but you will pay as you utilize services
You still must pay your Medicare Part B premium
So while the plan itself may have a $0 premium, Medicare is not free overall. Even without a monthly plan premium, most people still pay in other ways:
1. Medicare Part B Premium
This is required for nearly all Medicare beneficiaries and is usually deducted from Social Security. This cost exists whether or not you choose a $0 premium plan. In 2026, the standard Part B premium is $202.90, although it can be higher if you are considered a high income earner.
2. Copays and Coinsurance
With Medicare Advantage plans, you typically pay:
Copays for specialists and other outpatient services
Hospital and skilled nursing copays
Coinsurance for certain services
💡 If you don’t use much healthcare, these costs may be low.
💡 If you use care frequently, they can add up.
3. Prescription Drug Costs
Most Medicare Advantage plans include drug coverage, but:
Copays vary by medication and tier level
Some medications may be subject to a deductible
Formularies can change
Not all drugs are covered the same way
A plan with a $0 premium doesn’t mean $0 prescriptions.
4. Network Restrictions
Most Medicare Advantage plans use provider networks:
HMO or PPO structures
Doctors and hospitals must be in-network for the lowest cost
Going out-of-network may cost more, or may not be covered at all
This isn’t a cost you see on a bill, but it can impact your options.
Are $0 Premium Medicare Advantage Plans Bad?
Not at all! For many people, they can be a great fit, especially if:
You’re generally healthy and don’t use healthcare heavily
You don’t see specialists often
You’re comfortable with copays
Your doctors are in-network
You want lower monthly costs
The key is understanding the trade-offs. A $0 premium plan may not be ideal if:
You want predictable healthcare costs
You see doctors frequently
You travel often
You want more provider flexibility
You prefer fewer surprise bills
In these cases, paying a higher monthly premium for a different type of plan (like Original Medicare coupled with a Medigap plan) may actually cost less over time.
Summary
$0 premium Medicare Advantage plans can be very affordable, but they are not “free”. While you may not pay a monthly premium to the insurance company, costs can still show up through Part B premiums, copays, coinsurance, prescription drugs, and network restrictions.
The real question to consider is: “How much will this plan cost me overall based on how I actually use healthcare?”
Choosing a Medicare plan based only on the premium can lead to unexpected expenses later. The best plan is the one that aligns with your health needs, doctors, medications, travel habits, and budget - not just the lowest monthly cost.
If you’d like help reviewing a $0 premium Medicare Advantage plan - or comparing it with other Medicare options -I’m happy to walk you through it! A quick, personalized review can help you avoid surprises and feel confident you’re making the right choice for your coverage.
Care Compass is an independent insurance agency that helps seniors navigate the complexities of Medicare and other Senior Products. Our services are offered at NO COST! Care Compass is proudly owned and operated in Blair County, Pennsylvania. We provide Medicare insurance assistance to the residents of Altoona, Hollidaysburg, Duncansville and the surrounding region. If you need assistance with Medicare, contact Care Compass today!
