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What To Know About Zero Premium Medicare Advantage Plans

Medical care costs have continued to soar in recent years here in Raleigh, throughout North Carolina, and across the United States. Not having health insurance coverage is not an option for most people who suffer from chronic medical conditions, aging populations, and others with pressing medical needs. 

Health insurance costs can be equally costly, especially if you’re on a fixed budget like many individuals are in their post-retirement years. The prospect of receiving health coverage at a minimal cost or free may seem intriguing. 

You might have heard about zero-dollar, or zero-premium Medicare Advantage Plans on the news, mentioned in commercials, or through some other means, but remain unclear as to what that coverage entails and how to secure it. Read on to learn about Medicare Advantage Plans, whether this coverage is really free to secure, and how to get it for yourself if you’re interested.

What Is a Medicare Advantage Plan?

The U.S. Centers for Medicare and Medicaid Services refers to Medicare Advantage Plans (MA Plans), often referred to interchangeably as Medicare Part C, as coverage offered by private, Medicare-approved entities. Having a Medicare Advantage Plan additionally provides an alternate way for insureds to tap into Medicare Part A, Part B, and often Part D benefits. 

Generally, North Carolina residents with this coverage must see health care providers credentialed or in network with their private insurer, which has previously agreed to cap patients’ annual out-of-pocket health care expenses for specified treatments and procedures. 

What Do All the Parts of a Medicare Advantage Plan Refer To?

Put quite simply, Medicare has four parts, each of which refers to a different type of coverage. Those parts include:

  • Part A: This coverage applies to inpatient hospital visits, skilled nursing facility stays, hospice care, and some at-home health care visits. 
  • Part B: This coverage is for medical care, including doctor’s visits, preventative treatment, outpatient procedures, and some home health care needs. 
  • Part C: This coverage encompasses the Medicare Advantage Plan, an alternate approach for receiving Medicare benefits through a private health insurance plan. 
  • Part D: This prescription drugs coverage applies to medications administered in an outpatient setting and covered by private plans that have entered into a contract with Medicare to offer such services.

What Are the Qualifying Criteria for Zero Premium Medicare Advantage Plans?

Individuals already eligible for Medicare with original Part A and B coverage generally qualify for a zero-dollar premium plan. North Carolina must check with their insurer or a private brokerage like our Raleigh professionals at Carolina Insurance Professionals to see if they can enroll in the zero-dollar premium plan. 

How Does It Make Financial Sense for Private Insurers To Offer Zero Premium Medicare Advantage Plans?

Until Medicare Part C coverage came about, the federal government was responsible for being the primary payer for insureds’ medical expenses. The creation of Medicare Advantage Plans put private insurers in a position where they assumed financial responsibility for plan participants’ health care costs. The federal government financially subsidizes the private insurance companies that offer MA Plans in exchange for these insurers assuming this monetary risk. 

This government subsidization of private insurers offering Medicare Advantage Plans allows them to offer prospective insureds coverage at various pricing tiers, one of which is a $0 premium plan. 

Is My Health Care Coverage Really Free if I Choose a Zero Premium Medicare Advantage Plan?

A study by the Kaiser Family Foundation (KFF) earlier this year showed that 98% of potentially eligible insureds had an option to select a MA plan without any monthly premium. However, even though an overwhelming majority of individuals qualify for this type of plan, they don’t necessarily end up selecting it for themselves. Only 65% of those eligible for a Medicare Part C Plan did so in 2021.

They don’t because while an MA Plan with a zero-dollar monthly premium may sound ideal on the surface, it doesn’t entitle you to free health care. The federal government may still expect you to pay a monthly premium for Part B, which costs $170.10 per month in 2022. 

Additionally, a $0 premium MA plan may not provide adequate coverage that an insured needs or cover the providers they see. It’s important to verify that it does before selecting a plan. 

In some cases, it may make more financial sense for you to take on a Medical Advantage Plan with a slightly higher monthly premium than zero, depending on what you anticipate your needs to be and the providers you want to ensure you have access to. However, individuals with little to no health problems may find that having a $0 premium plan is best for them due to the low potential of them needing to use the coverage or having any out-of-pocket expenses.

As a side note, individuals who qualify for both Medicare and Medicaid may qualify for low or no-cost health care. However, even if you don’t qualify for Medicaid, you may still be eligible to receive a Low Income Subsidy (LIS) to lower prescription drug costs. The combination of an MA Plan, Medicaid, and the LIS could leave you having to pay virtually nothing out-of-pocket for medical expenses.

How Carolina Insurance Professionals Can Help You Understand Medicare Advantage Plans

Another recent report published by KFF detailed how Medicaid Advantage Plans are quickly becoming the primary ways Medicare beneficiaries receive health care benefits. If you don’t have this coverage here in North Carolina, you may be missing out. 

Insurance, in general, is a type of financial safety net. It’s not something we necessarily want to pay for each month, but it’s there to protect us from assuming a big financial bill if something unexpected happens. 

A zero premium Medicare Advantage Plan can make financial sense if you want to ensure continued access to qualified medical care and keep your expenses on your fixed budget low. However, a Medicare Part C plan may not be ideal for you, depending on the above circumstances. 

Our team of licensed agents at our Raleigh office of Carolina Insurance Professionals would be more than happy to discuss your health insurance needs and how a Medicare Advantage Plan fits into that dynamic with you. Reach out to us to initiate that no-obligation conversation today.