If you have one, you’ve probably wondered why, but at the end of the day, it doesn’t matter to you because you don’t pay a monthly premium. But is it really a free Medicare plan?
The reason why insurance carriers will always have a $0 premium monthly plan is to compete in the marketplace every Annual Enrollment Period from October 15th to December 7th. However, that plan will not be $0 a month forever, it will eventually go up through the years. Also remember you will still pay copays, deductibles, out of pocket maximums, etc.
You also pay a Part B monthly premium from your Social Security. For most people it is $135 a month. Did you know Medicare subsidizes Medicare Advantage Plan carriers with part of your Part B premium? That premium is also factored into this equation. So, I ask again, is it really free?
Let’s go back to what I said earlier about competing in the marketplace. BGA agents like myself are appointed with numerous insurance carriers who sell Medicare Advantage plans. We have sold $0 premium plans in the past that are no longer $0 premium, they are now upwards from $50 to over $150 per month depending on how old they are.
Because as the plans age so do the plan enrollees who then become unhealthy as they age and start to develop chronic conditions along the way. Others leave the plan for other plans as the years go on. Those are two reasons why the plans increase their monthly premium costs over time. The plans become more expensive because they need to cover costs for their enrollees as they use the plan more frequently and need to cover costs for a shrinking membership as other enrollees leave for other plans.
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It does not matter whether you purchase a $0 premium plan or pay for a plan that costs you $150 a month, there is no difference in benefits. The structure and outline of all Medicare Advantage plans are the same. The only difference is the cost of the monthly premium, copays, deductible etc. As an agent, when I place a new client with a $0 premium plan, I urge them to keep in touch with me on a yearly basis to review their coverage.
It is always worth a 10-minute phone conversation to find out if your plan will increase in premium or not. Being that the benefits are all the same from Advantage plan to Advantage Plan, I always assist my clients in changing plans when their monthly premiums increase over the years. Why not, I would rather keep my client ahead of the game by saving them money especially when they won’t have to forfeit the benefits they already have.
Do you qualify for ‘free’ Advantage plans? There are no qualifications for free Medicare Advantage plans. What I mean is that there are no health questions to qualify unlike what you have with Medigap plans. The only question relating to health regarding Advantage Plans is End Stage Renal Disease. So for example you could have just been released from the hospital from open heart surgery or take over 50 units of insulin daily and still qualify. Many Advantage plans offer a free monthly premium as part of their healthcare plan offerings. It just comes down to how many years will it be free monthly premium plan.
While these plans are advertised as free, you’ll still have to pay the standard out-of-pocket costs for other premiums, deductibles, and copayments. You just need to decide if it is the right plan for you. It is important to compare these plans to Original Medicare and Medigap plans to make the correct choice. Working with a BGA agent will give you comfort in knowing that you will be educated on all the options to make that correct choice.