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How Can Medicare Advantage Plans Be Free?

Medicare Advantage plans get more popular every year. It’s easy to see why so many people are attracted to them. They offer a variety of benefits you won’t find in Original Medicare, and you can usually find several zero-premium Medicare Advantage plans to choose from. 

But how can Medicare Advantage plans be free? What’s the catch? Let’s find out.

Woman on beach celebrating a "free" Medicare Advantage plan

An Agreement with the Medicare Program

We’ve all heard the saying, “There is no such thing as a free lunch.” That’s true of Medicare Advantage plans, too. Before you can enroll in Medicare Advantage, you must enroll in Original Medicare (Parts A and B). Most people are eligible for premium-free Part A, but everyone pays a premium for Part B. You must continue to pay that premium even if you move to Medicare Advantage.

Since Original Medicare is no longer paying your benefits once you enroll in Medicare Advantage, it floats some of your Part B premium to the Medicare Advantage plan carrier you enroll with. So, while you may find a $0 Medicare Advantage plan, it’s certainly not free.

Costs Under Medicare Advantage

As with any insurance plan, you get what you pay for. A $0 premium sounds great, but you should look at other factors before enrolling in Medicare Advantage.

Medicare Advantage plans require you to use a specific network of providers and facilities. Going outside of the network will cause you to pay more or even lose your coverage altogether. Networks will limit which doctors you can see, especially if you live in a more rural area. 

Medicare Advantage plans also have out-of-pocket costs. So, you may get a $0 monthly premium, but you’ll pay anytime you need medical services. Sometimes, those copays are more than you’d expect.

Other Medicare Advantage Plan Concerns

Medicare Advantage plans also have more red tape than Original Medicare. While they may be required to offer the same benefits, they’re usually more strict on when and how they approve coverage. Most Medicare Advantage plans require prior authorizations for costly treatment. This means more paperwork for you and your provider and longer wait times for treatment.

The Bottom Line

Don’t let anyone tell you Medicare Advantage plans are free. Even if they have no monthly premium, they can still be quite costly when you need to use them. 

For those looking for a more predictable alternative, a Medigap plan is a great option. These plans have higher monthly premiums, usually $100 or more, but you’ll have very few out-of-pocket costs. Plus, you won’t have any network restrictions and fewer prior authorizations.

None of that is to say that Medicare Advantage plans are bad. They can be a great option for many people as long as you know exactly what you’re getting into. Before enrolling in any Medicare plan, be sure to talk to a trusted advisor at Local Medicare Specialists. We’ll take time to understand your needs and then make customized recommendations that’ll fit your budget.

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