Medicare advantage plans have a big selling point, which is a low premium for benefits which are usually better than your original Medicare Part A and B coverage. In 2015 / 2016, you will even find many insurance carriers advertising zero premium Medicare advantage plans. How is that possible? How can you avoid being scammed by a zero premium plan?
In general, zero premium Medicare advantage plans may be a good choice, as some plans come with extra benefits over original Medicare such as fitness center memberships, prescription eyeglasses, hearing aids or prescription drug coverage. Actually, they may be right for many seniors who are having health issues, but have limited financial means. Almost anybody on Medicare can enroll, even with pre-existing conditions, with the exception of persons suffering from ESRD (End Stage Renal Disease).
When you think about enrolling in a $0 premium plan however, keep in mind that there just is not such a thing as a ‘free lunch’. You must check zero premium advantage plans very carefully to make sure you will be covered, in case you are getting sick.
First, you have to realize that zero dollar Medicare advantage plans are actually not free. Truth is that they cost nothing beyond your Medicare Part B premium, which you have to keep paying. Insurance companies are able to offer this option because they are paid subsidies by the federal government. This is why they can still make a profit with $0 premium plans.
However, zero premium plans can be misleading, and consumers have to be careful when enrolling in 2015 in such a zero premium plan for 2016. Depending on how comprehensive your Medicare plan is, you will most likely still have co-pays and deductibles, and they might be much higher than if you had selected a plan that comes with a monthly premium. Avoid plans that have no out of pocket maximum! Be aware that you may have to pay co-payments every time you see a doctor, and in case you get really sick, you might very well be responsible to pay a large amount out of pocket for your share of your medical costs.
Make sure to check any co-insurance, co-payments, deductibles and – most importantly – the out-of-pocket spending limit of the plan. While it might be a great solution if you are currently in good health, it may cost you more than other Medicare advantage plans that come with a monthly premium, in case of an unforeseen illness, or if you develop a serious health condition. Good news is however, that you can switch your Medicare advantage plan each year during the Open Enrollment period in fall, and if you have 5 star advantage plans even any time during the year. So in case your current plan does not work for you any more, you may cancel and switch it at the end of the year. With a Medicare advantage plan, you also never give up your rights to switch back to original Medicare. More information on changing plans can be found here.
As long as you agree to use the plan’s network of healthcare providers and realize that you will have to pay co-payment for specific services, zero premium Medicare advantage plans may be an affordable alternative to add coverage to your original Medicare.By: Joseph Rosario