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Why Are Some Medicare Advantage Plans “Free”?

Why Are Some Medicare Advantage Plans “Free”?

Why are some Medicare Advantage Plans Free? Or really, why do some plans claim to free?

Is Medicare Advantage Free

First let’s dispel this notion. Medicare Advantage is absolutely not free. No matter what a commercial or advertisement or even a salesman may claim, it is not free. At the very least, you will have to continue to pay for Medicare Part B. However, some advantage plans may offer you a rebate towards you Part B premium. Combine this cost savings with the extra benefits often offered by Advantage plans and it’s easy to see why they may be desirable. 

But remember, nothing is free. Everything comes with some sort of price and there are some hidden costs that you should be aware of. Even still, how do Part C plans offer these cost savings?

Buying Your Medicare

When you enroll Original Medicare, Medicare assumes significant risk. They will pay 80% of your outpatient costs in addition to potentially thousands and thousands of dollars in possible hospital bills. To Medicare, you are a costly liability.

Medicare Advantage plans take that liability off of Original Medicare’s plate. Part C plans will take on that liability should you so choose. If you enroll in a Medicare Advantage plan, you give up Original Medicare in favor of your Part C plan.

Cost Savings

There are potential cost savings. Medicare Advantage plans will impose an out of pocket max not offered by Original Medicare. You will likely have access to additional benefits not offered by Original Medicare. Copays and coinsurance may even be reduced.

Pitfalls 

However, there are major pitfalls. You will give up access to the Medicare network. Depending upon where you live and what your needs are it may be extremely difficult to find a doctor or hospital. But possibly not. So, if you decide to enroll in a Medicare Advantage plan, please work with a broker to ensure that not only do you pick a plan that meets your needs, but that Part C in general is right for you. 

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