Thursday, May 26

Free Medicare Advantage Plans – The Real Story

Are there really free Medicare Advantage Plans?

Everybody like free. But what if free isn’t really free at all? We all know the meaning of free: that which has no cost. But what about Medicare Advantage Plans? Is a plan with a $0 premium free?

To get to the bottom of these questions we need to review how a Medicare Advantage Plan works. Private insurance companies offer plans as another way to receive your Medicare benefits. Plans must include all Part A and Part B benefits and often include Part D drug benefits as well.

You must also continue to pay your Medicare Part B premium no matter what the monthly premium; even if it’s $0 per month. And here lies the answer to the question.

Would you refer to Medicare as free? When the Part B premium gets deducted from your Social Security income (as a painful reminder!) you would probable not. The practice of referring to plans as free started when people realized that there was a disparity in Medicare Advantage premiums. Plans with $0 premiums were automatically considered free.

As a matter of fact, Medicare forbids insurance companies and their agents from referring to $0 premium Advantage Plans as free. Because it’s just not the case.

So what’s wrong with $0 premium plans?

The answer is absolutely nothing as long as that plan is suitable for your circumstances. But a plan with a $0 premium is not necessarily going to have the lowest cost. The deductibles, copayments and coinsurance required when you use your plan may have a bigger impact on overall costs than the monthly premium.

There is more to determining your true cost than finding a plan with the lowest premium. And if you really think about it, money shouldn’t be your first priority when comparing plans.

Tips on finding low-cost plans not free plans

When comparing Medicare Advantage Plans you should know what resources are most important to consider. These include:

  • Summary of Benefits
  • Provider Directory
  • Part D formulary (for plans with drug coverage )

The Summary of Benefits goes well beyond the highlighted literature in the enrollment kit. You can learn what your costs will be for any covered service. With this information you can assess how you use health care services while tasking your current health into consideration to estimate your annual costs.

Most Advantage Plans require that you use a provider network, such as an HMO or PPO. Choosing a plan that requires you to find new providers is not very convenient. Find a plan that includes your primary care provider, specialists, ancillary facilities and hospitals. You’ll be glad you did.

Most plans include drug coverage. The Part D formulary is the list of all covered drugs in a plan and it also has details on which tier placement.

You should review these plan documents before you even worry about the monthly premium. Finding a plan that will meet your needs is the first step. Then you can compare premiums from the short list of plans that look like your best options.