The Truth About “Free” Medicare Advantage

Nothing in life is free, right?  But have you heard the advertisements boasting “free” Medicare Advantage Plans?  What’s the catch? If you’re skeptical, you may be right to be so.  

How Does it Work?

If you have Medicare Advantage, you are no longer utilizing Original Medicare.  That’s because Medicare Advantage actually replaces Original Medicare entirely.  Medicare Advantage Plans encapsulate the benefits of Original Medicare (Medicare Part A, your hospital insurance, and Medicare Part B, your outpatient insurance) plus additional benefits such as dental, vision, hearing, wellness programs, etc... Medicare Advantage Plans (like Medicare Supplement Plans) are designed to help limit your out-of-pocket costs. However, unlike Medicare Supplement Plans, these Medicare Advantage Plans are not standardized so the benefits can vary quite widely.

Medicare Advantage (Medicare Part C) is offered by private carriers. Basically, Medicare pays these private carriers, (insurance companies) to take on your medical risk and costs. Because Medicare is paying the carriers, they are able to pass on cost-saving benefits in the form of lower monthly premiums to you. If that sounds too good to be true, it may be.

What Do I Have to Pay For?

These supposedly “free” Medicare Advantage plans can be a little misleading.  At the very least, you will still have to continue to pay for Medicare Part B.  Your Medicare Part B premium is based on your income. In 2021 the base Medicare Part B premium is $148.50. So really, your “free” Medicare Advantage plan is not going to be entirely premium free.  

Medicare Advantage Plans, like Medicare Supplement Plans are designed to cover the gaps of original Medicare.  They will also limit out-of-pocket expenses.  However, they are really just required to cover the basic benefits of original Medicare. So, you will still be responsible for some type of co-pays or coinsurance for doctor’s visit and services. This is where things can get a little tricky. Because Medicare Advantage Plans are not standardized, your coinsurance and copays can vary quite widely. So it’s very important that you carefully check the terms of your plan.


However, Medicare Advantage Plans (specifically those so called “free” Medicare Advantage Plans) are not all bad! There is a reason that so many people choose to enroll in these types of plans. First and foremost, it is possible that these plans can save you money. Again, it’s really really important that the plan not only have a low monthly premium, but also that it matches your needs. Generally speaking, you will notice Medicare Advantage Plans offer much lower monthly premiums than Medicare Supplement Plans.

Additionally because Medicare Advantage plans often offer prescription drug coverage, you won’t have to pay for Part D!

Medicare Advantage Plans will also feel very familiar. These types of plans are like One-Stop shopping. You can find a plan that offers you health coverage, prescription drug coverage, dental coverage and more. You don’t have to rely on multiple carriers. This can certainly be convenient. You won’t have to dig multiple cards out of your wallet!

Finally, Medicare Advantage Plans can offer benefits that are not offered by Medicare Supplement Plans. These are things like dental, vision, hearing, etc. Were you to enroll in a Medicare Supplement Plan you would need to find additional supplemental insurance for these benefits. 


Now let’s switch gears and talk about the negatives. Medicare Advantage Plans are either HMOs or PPOs. Because of this, you’ll need to work within a network of doctors. Your doctor or the hospital that you’re visiting must accept your specific carrier and plan. These networks are much smaller than Original Medicare. You may even have to travel a significant distance to find a doctor or hospital that accepts your plan.  

The limited network can be more than inconvenient.  If you find yourself facing a medical crisis, for example cancer, it is really important that you utilize the doctors and hospitals of your choice. If you’re enrolled in a Medicare Advantage plan, your options may be limited. And while, perhaps you can deal with the inconvenience for a regular wellness checkups, when you have significant health concerns, you don’t want to have to worry that your doctor or the hospital of your choice accepts your plan.

Additionally, here’s where the cost savings Medicare Advantage (especially “free” Medicare Advantage) may come back to haunt you. So, very often Medicare Advantage Plans that boast low monthly premiums may have coinsurance for things like chemo (up to 20% of the cost). Most Medicare Supplement Plans would cover the coinsurance for these types of procedures. Medicare Advantage Plans do have out of pocket limits, but these can be thousands of dollars.  

One more thing to mention: health insurance plans do tend to even out somewhere. So if you’re looking at a plan with very very low monthly premiums or $0 monthly premium, they’re going to make up that money somewhere. Most likely, it will be in the cost sharing.  

So What Are My Options?

The effectiveness of Medicare Advantage Plans is determined by your needs, financial concerns and your location!  For some people they are a wonderful alternative to Original Medicare.  You can view all the options available on Medicare.gov.  

Another option is, of course, Medicare Supplement Plans.  Based on your location and your financial concerns, you may want to look into this option. Although you may pay a little bit more on a monthly basis, they could end up saving you more money in the long run. You can enroll in a Medicare Supplement Plan year-round.

If after you do your research, you determine a Medicare Advantage Plan is right for you, you can enroll during the annual enrollment period. The AEP is every year from October 15th to December 7th.  Please make sure to review your plan on a yearly basis to make sure that it’s still the right plan for you!

If you’d like our assistance, you can reach us at iHealthBrokers at 888-410-0344 or schedule a call today! Our services are 100% FREE!

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Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.

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