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Are Medicare Advantage Plans Free?

Page Reviewed / Updated - August 21, 2020

Medicare Advantage plans are offered through private insurers, so the costs associated with them can vary significantly. Some companies offer zero-premium plans, which do not have a monthly fee. However, these plans still come with some out-of-pocket expenses, such as co-pays and deductibles. People who have a zero-premium plan also generally have to pay their own Medicare Part B premium.

What are Medicare Advantage Plans?

Medicare Advantage plans are an optional alternative to Original Medicare. These plans are offered by private health insurance companies and often come with additional coverage not offered by Original Medicare, such as vision, dental and prescription drug coverage. The downside is that they typically only cover services provided by in-network doctors, while Original Medicare can be used at any hospital or provider in the United States that accepts Medicare. Some may also have additional restrictions, such as requiring a referral from a primary care physician for some types of services.

Are Medicare Advantage Plans Less Expensive than Traditional Medicare?

Whether Medicare Advantage plans are less expensive than Original Medicare depends on many factors. Original Medicare typically only covers about 80% of most health care and hospital services, so it can be more affordable for seniors who are generally healthy. However, basic Medicare does not offer prescription drug coverage, so seniors who need expensive medications also need to purchase Medicare Part D coverage. There is no out-of-pocket maximum for Original Medicare, which means seniors who have expensive medical needs may wind up paying significant amounts of money if they don't purchase additional Medigap insurance.

Medicare Advantage plans also come with out-of-pocket expenses, but there is a cap on how much seniors can be expected to pay in a calendar year. This can make them a more affordable choice for seniors who need regular medical care or specialized treatment. Zero-premium plans can also help cut down on overall costs to consumers, especially if the plan includes supplemental coverage not offered by Original Medicare.

Can Seniors Switch Plans?

Seniors who choose Original Medicare or a Medicare Advantage plan are not locked into that choice forever. If they decide that a different plan fits their budget and needs better, they can add or drop a Medicare Advantage plan. Seniors can also switch to different Medicare Advantage plans.

For the most part, this can only be done during the general enrollment period, which lasts from October 15 to December 7 each year. Certain qualifying life events may allow seniors to switch or change their Medicare plans at other times as well.