When comparing Medicare Advantage (MA) plans, one of the first things most people look at is the monthly premium. And that makes sense. It's always disappointing to find a fantastic plan – one that includes all of your doctors and medications and offers great extra benefits – only to find that it's priced way outside your budget.

At the opposite end of the spectrum is the $0 Medicare Advantage plan. It sounds like a unicorn but in reality, around 90% of people have access to a zero-premium Medicare Advantage plan.

So, are zero-premium Medicare Advantage plans really free?

No, zero-premium Medicare Advantage plans are not totally free, they just don't have a monthly premium. Other out-of-pocket costs you'll likely have:

• Deductibles: This is the amount you must pay out of pocket before your plan begins paying its share. Depending on the plan, you may have separate deductibles for medical care and prescriptions.
• Co-payments: This is a set amount you pay at the time of service. Depending on the plan, you may have higher co-pays for different types of care, especially if you have a PPO, which covers out-of-network care for a higher cost.
• Co-insurance: Some Advantage plans charge co-insurance instead of a co-pay. The difference is that co-insurance is a percentage of the total cost. So, instead of a flat $20 co-pay for a doctor appointment, you might pay 20% of the cost of the service. (This is part of Medicare's cost-sharing model.)
• Maximum out-of-pocket: Also known as MOOP, the yearly max out-of-pocket varies by plan, but cannot exceed $8,300. (The 2022 average was around $5,000.) There is no MOOP with Original Medicare.

And always remember: You still owe the Medicare Part B premium ($164.90 in 2023), even if your Advantage plan also has a monthly premium. This is how the insurance company gets reimbursed for providing your Medicare benefits, even if your MA plan is premium-free.

What do you get with Medicare Advantage?

A quick refresher: Every Medicare Advantage plan must cover what you'd have if you stayed with Original Medicare. That includes:

• Medicare Part A, which pays for inpatient services. Typically, this means care received in a hospital or skilled nursing facility.
• Medicare Part B, which covers outpatient services like doctor appointments, durable medical equipment, mental health care, lab work, and more.

Medicare Part C (Medicare Advantage) combines your Parts A and B benefits into a single plan, similar to the health insurance most of us had through an employer at one time or another. Again, at a minimum, they have to cover everything that Original Medicare covers. But! They aren't limited to those benefits and nearly every Advantage plan offers extra covered services, like:

• Prescription drug coverage (offered by 89% of MA plans)
• Eye exams and/or prescription lenses (99%)
• Hearing exam and/or hearing aids (97%)
• Routine dental care (94%)
• Fitness benefits (93%)
• Telehealth services (94%)
• Over-the-counter drug benefits (79%)

When reviewing your Advantage plan options, you need to make sure you're comparing apples to apples. For example, a zero-premium plan that doesn't include prescriptions probably won't save you much money since you'll have to sign up for a standalone Part D prescription drug plan if you don't have creditable coverage elsewhere.

How much do Medicare Advantage plans cost?

The good news is that there are a LOT of premium-free Medicare Advantage plans – even ones that offer extra benefits. Costs vary widely depending on the plan and the provider, but here some averages to help you budget:

• Around 65% percent of people enrolled in a Medicare Advantage Prescription Drug (MA-PD) have no monthly premium.
• Including $0 plans, the average monthly premium for Medicare Advantage is $18 in 2023.
• Excluding premium-free Advantage plans, the average cost of an MA-PD is around $40 in 2023.
• Around 20% of Medicare Advantage enrollees pay less than $50 a month for their Part C plan.

Monthly premiums for Medicare Part C plans have dropped slowly but steadily since 2015, from an average of $38 per month to $18 today.

Can everyone join a $0 premium Medicare Advantage plan?

Yes, if you meet the plan's guidelines. In addition to being enrolled in Parts A and B, one of the main criteria for joining a Medicare Advantage plan is living in the plan's service area. So, as long as one of these plans is available in your area, you should be able to join.

The good news is that 90% of people enrolled in an MA-PD have access to a plan with a $0 premium. Interestingly, though, only around 56% who had the option chose a premium-free MA-PD plan. The remainder opted for plans with a monthly premium. Which isn't that surprising: We always recommend people look beyond the monthly premium to determine the true out-of-pocket cost of a plan – as well as to make sure it offers the kinds of benefits you want and need.

Why do some people prefer Medicare Advantage plans that have a monthly premium?

We can't speak for everyone (over 22 million people have an MA plan) but there are a lot of reasons someone might choose an Advantage plan that includes a monthly premium. Here are a few of the more common ones:

• That $0 premium could be hiding higher out-of-pocket costs elsewhere
• The plan's drug formulary doesn't include their prescriptions
• The premium-free option doesn't include benefits they need, like routine vision and dental services
• Their doctors aren't included in the plan's provider network

There's also the simple fact that a lot of people don't explore their Medicare options during the Annual Enrollment Period (October 15 through December 7). Either they like their current plan or they just don't want to take the time to explore their options. So, they keep going with what they know and feel comfortable with. If that describes you, that's fine, just know that the price of remaining in your comfort zone could be missing out on new benefits or financial savings.

Are you interested in learning more about $0 Medicare Advantage plans? Our licensed agents can explain your options in language that's easy to understand. You can also use our Find a Plan tool to explore plans available in your area. Just enter your zip code to get started.