You’ve probably seen advertisements for Medicare Advantage plans with a $0 monthly plan premium.
It sounds simple. But what exactly does “$0 premium” mean?
A $0-premium Medicare Advantage plan can be a legitimate Medicare coverage option. But $0 premium does not mean $0 healthcare costs, and it does not mean that Medicare itself is free.
Understanding the difference between a plan’s premium and the other costs you may pay is important when comparing Medicare Advantage plans.
What Does “$0 Premium” Actually Mean?
A $0-premium Medicare Advantage plan charges you $0 per month for the plan’s monthly premium.
That’s what the “$0” refers to.
It does not necessarily mean you will pay nothing for your Medicare coverage or healthcare during the year.
Depending on the plan and the healthcare you use, you may still be responsible for:
- Your Medicare Part B premium
- Deductibles
- Copays
- Coinsurance
- Prescription drug costs
- Costs for services that aren’t covered
- Other costs under the plan’s rules
So when you see “$0 premium,” think:
$0 plan premium — not $0 total healthcare cost.
You Generally Still Pay Your Medicare Part B Premium
This is one of the most important points to understand.
To enroll in Medicare Advantage, you must have Medicare Part A and Part B.
You also must generally continue paying your Medicare Part B premium while enrolled in Medicare Advantage.
For 2026, the standard Medicare Part B premium is $202.90 per month. Some beneficiaries pay more because of their income.
Some Medicare Advantage plans may help pay all or part of a member’s Part B premium. This is sometimes called a Part B premium reduction or “giveback.”
That benefit is not available with every plan or in every area, and the amount varies when it is offered.
Why Can a Medicare Advantage Plan Have a $0 Premium?
Medicare Advantage plans are offered by private insurance companies that contract with Medicare.
Medicare pays Medicare Advantage plans to provide Medicare-covered Part A and Part B benefits to their members.
Depending on the plan’s costs, payments and benefit structure, an insurer may be able to offer a Medicare Advantage plan without charging members an additional monthly plan premium.
That doesn’t eliminate the cost of providing healthcare.
It simply means the plan isn’t charging the member a separate monthly plan premium.
What Could You Pay With a $0-Premium Plan?
Medicare Advantage plans establish cost-sharing for covered services within Medicare’s rules.
Depending on your particular plan, you might have costs when you:
- Visit a specialist
- Receive outpatient care
- Have diagnostic imaging
- Go to urgent care
- Visit an emergency room
- Have outpatient surgery
- Are admitted to a hospital
- Receive skilled nursing care
- Fill prescriptions
These costs may take the form of deductibles, copays or coinsurance.
That’s why two $0-premium Medicare Advantage plans can have very different overall costs.
Here’s a Simple Example
Suppose two Medicare Advantage plans are available where you live.
Plan A
- $0 monthly plan premium
- Higher specialist copays
- Higher hospital cost-sharing
- Higher maximum out-of-pocket limit
Plan B
- $40 monthly plan premium
- Lower specialist copays
- Lower hospital cost-sharing
- Lower maximum out-of-pocket limit
Which one costs less?
There isn’t enough information to know.
Someone who uses very little healthcare might spend less with Plan A.
Someone who frequently sees specialists or requires hospitalization might have a very different experience.
The example illustrates an important principle:
The lowest premium isn’t necessarily the lowest total cost.
What Is the Maximum Out-of-Pocket Limit?
Every Medicare Advantage plan has an annual limit on what you pay out of pocket for covered Medicare Part A and Part B services.
This is commonly called the maximum out-of-pocket limit, or MOOP.
The amount varies by plan.
Once you reach your plan’s applicable out-of-pocket limit, the plan pays 100% of covered Part A and Part B services for the remainder of the calendar year.
That’s an important number to examine when comparing Medicare Advantage plans.
A $0 monthly plan premium tells you what you’ll pay for the plan premium.
The MOOP helps you understand your potential exposure if you need substantial medical care.
What About Prescription Drugs?
Most Medicare Advantage plans include Medicare Part D prescription drug coverage.
But having drug coverage doesn’t mean every prescription costs $0.
Your prescription costs depend on factors such as:
- The medications you take
- Whether they’re covered by the plan
- Their formulary tiers
- The pharmacy you use
- The plan’s deductible, if applicable
- The applicable Part D coverage rules
- Whether coverage requirements such as prior authorization apply
When comparing plans, check your actual prescriptions rather than assuming drug costs will be similar simply because two plans both have $0 premiums.
What About Dental, Vision and Hearing Benefits?
Some Medicare Advantage plans offer supplemental benefits that Original Medicare doesn’t generally cover.
Depending on the plan, these may include benefits involving:
- Dental care
- Vision care
- Hearing services
- Fitness programs
- Transportation
- Over-the-counter items
- Other supplemental services
These benefits can be valuable.
But they can also have limitations, provider requirements, maximum benefit amounts or other plan rules.
Don’t let a $0 premium or an attractive supplemental benefit distract you from evaluating your core healthcare needs.
Check the Doctors and Hospitals Too
Cost is only one part of choosing Medicare coverage.
Most Medicare Advantage plans use provider networks.
Before enrolling, consider whether the plan includes:
- Your primary care doctor
- Your specialists
- Your preferred clinic
- Your preferred hospital or healthcare system
Also understand the rules for receiving care outside the network.
Those rules can differ significantly between Medicare Advantage HMOs and PPOs.
A low premium isn’t particularly helpful if the plan doesn’t work well with the providers you want to use.
$0 Premium Doesn’t Mean the Plan Is Automatically Better — or Worse
A $0-premium Medicare Advantage plan isn’t automatically a bargain.
But it isn’t automatically a poor choice either.
The premium is simply one component of the plan.
A $0-premium plan could be a good fit for one person and a poor fit for another.
Similarly, a plan with a monthly premium could be worthwhile for someone whose doctors, prescriptions, benefits and expected healthcare costs fit that plan particularly well.
That’s why Medicare decisions should be based on more than one number.
What Should You Compare?
When considering a $0-premium Medicare Advantage plan, look beyond the “$0” and ask:
What is the plan premium?
Confirm that it is actually $0 in your service area.
What will I pay for Medicare Part B?
Remember that you generally continue paying your Part B premium.
What are the copays and coinsurance?
Pay particular attention to services you’re likely to use.
Is there a deductible?
Check both medical and prescription drug deductibles when applicable.
What is the maximum out-of-pocket limit?
Consider what could happen financially if you have significant healthcare needs.
Are my doctors and hospitals in the network?
Verify the providers that matter to you.
How are my prescriptions covered?
Check your actual medications and pharmacies.
Which supplemental benefits would I actually use?
Focus on benefits that matter to your situation.
Medicare Advantage Costs Can Change Each Year
A plan that has a $0 premium this year isn’t guaranteed to have the same costs next year.
Medicare Advantage plans can change premiums, deductibles, copays, coinsurance and other plan features from year to year.
Your plan sends you an Annual Notice of Change (ANOC) each fall explaining important changes for the coming year.
Review it carefully.
Don’t assume that keeping the same plan means keeping exactly the same costs and benefits.
The Bottom Line
When a Medicare Advantage plan advertises a $0 monthly plan premium, the “$0” refers to the plan premium.
It does not mean:
$0 Medicare costs.
$0 medical bills.
$0 prescription costs.
$0 out-of-pocket exposure.
Instead of asking only:
“What’s the monthly premium?”
Ask:
“What could this coverage actually cost me based on my doctors, prescriptions and healthcare needs?”
That’s a much better way to evaluate Medicare coverage.
Medicare Guidance for Minnesotans
At YourMedicareMN, our focus is education first.
We help Minnesota Medicare beneficiaries understand premiums, deductibles, copays, coinsurance, provider networks, prescription coverage and the other details that matter when evaluating Medicare options.
Visit Contact Us to schedule a personalized Medicare review and get answers tailored to your situation.
For official Medicare information, visit the Medicare.gov website.
YourMedicareMN is not connected with or endorsed by the U.S. government or the federal Medicare program. Plan availability and benefits vary by location and plan. Contact the plan or Medicare for complete plan information.
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