$0 Premium Medicare Advantage? Here’s the Catch

What Does “$0 Premium” Actually Mean?

Let’s start with what $0 premium Medicare Advantage really means.

A $0 premium plan means you don’t pay a monthly premium to the private insurance company offering the plan. However, you still have to pay your Medicare Part B premium, which is $185.00/month in 2025 for most people. If your income is higher, you may also pay IRMAA (Income Related Monthly Adjustment Amount), which raises that cost even more.

So no, these plans are not totally free.

And while the premium may be $0, you’ll still face copays, deductibles, coinsurance, and maximum out-of-pocket limits when you actually use the plan.

The Trade-Off: Pay As You Go

Most $0 Medicare Advantage plans are designed to work like “pay-as-you-go” coverage. This means:

• You’ll pay copays for primary and specialist visits
• You’ll pay daily rates for hospital stays—often $300–$400 per day
• You’ll face 20% coinsurance for things like chemotherapy, dialysis, or outpatient surgeries
• Your maximum out-of-pocket costs can be as high as $8,000–$9,000 per year for in- and out-of-network services combined

We’ve seen clients rack up $5,000 or more in out-of-pocket costs after just one hospital stay and a few specialist visits, all while thinking they were on a “free” plan.

When Zero Premium Plans Make Sense

Now, to be fair—$0 premium Medicare Advantage plans aren’t all bad. In fact, they can be a great fit for certain people.

They work well if:

• You’re generally healthy and don’t go to the doctor often
• You want built-in extras like dental, vision, hearing, fitness programs
• You don’t mind staying in-network for care
• You’re okay with getting referrals to see specialists (common with HMO plans)
• You can’t afford a Medicare Supplement (Medigap) plan

In these situations, a $0 Advantage plan can provide value—but you still need to understand what you’re signing up for.

A Smart Add-On: Hospital Indemnity Plans

If you decide to go with a Medicare Advantage plan, especially a $0 premium one, we highly recommend adding a hospital indemnity plan with a cancer rider.

These supplemental plans are typically $30–$40/month and pay cash benefits directly to you if you:

• Are hospitalized
• Are diagnosed with cancer
• Need outpatient surgery, ambulance transport, or skilled nursing care

We helped a client recently who was on a $0 Advantage plan. She added a $35/month indemnity plan. She was hospitalized for 3 days and received a $1,200 cash reimbursement to help offset her Advantage plan costs.

It’s a simple, low-cost way to protect yourself from big medical bills.

Mistakes to Avoid with $0 Medicare Advantage Plans

If you’re considering or already enrolled in a $0 premium plan, watch out for these common and costly mistakes:

1. Not Checking Your Doctors

Many people assume their current doctors are covered, but Advantage plans—especially HMO plans—have strict provider networks. If your doctor is out of network, you may pay the full bill yourself.

2. Overlooking Prescription Coverage

Just because a plan includes Part D coverage doesn’t mean your medications are covered—or affordable. Always:

• Check the plan’s formulary
• Confirm your pharmacy is in-network
• Find out your copays for each drug

3. Assuming “Free” Means “Best”

The biggest mistake? Thinking a $0 premium plan is better because it’s free.

It might cost you nothing upfront, but one hospital stay, surgery, or treatment could cost you thousands out-of-pocket. That’s why it’s critical to compare total costs, not just monthly premiums.

Medicare Advantage vs. Medicare Supplement: What’s Better?

So, which is better—Medicare Advantage or Medigap?

Choose Medicare Supplement (Plan G or N) if:

• You want predictable monthly costs
• You want zero surprise bills
• You travel or live in multiple states and need nationwide coverage
• You don’t want to deal with referrals or networks

Yes, you’ll pay a monthly premium (typically $100–$200/month), but in return, you’ll have very little to no out-of-pocket costs for covered services. Plus, you can see any provider that accepts Medicare.

Choose $0 Premium Medicare Advantage if:

• You’re healthy and don’t use much care
• You want bundled extras like dental and vision
• You’re comfortable staying in-network
• You’re okay with copays and higher out-of-pocket limits
• You add a hospital indemnity plan to protect against major costs

The key is knowing your health needs, budget, doctors, and prescriptions, and comparing total expected costs, not just the premium.

So, Is a $0 Medicare Advantage Plan Right for You?

Maybe. But don’t assume it’s the best just because it’s “free.”

Take the time to understand the plan’s details, calculate your total potential costs, and compare it to a Medicare Supplement option.

And remember—plans change every year. What worked last year might not be the best this year.

Let Us Help You Make the Right Choice

At Bluewave Insurance, we specialize in helping people compare Medicare plans based on their unique needs.

Give us a call at 800-208-4974 to book your free consultation. We’ll:

• Review your doctors and prescriptions
• Compare plans available in your zip code
• Help you understand total costs and trade-offs
• Recommend supplemental options if needed