Are Zero-Premium Medicare Advantage Plans Free?

Updated on March 29th, 2021

Reviewed by Elaine Wong Eakin

We aim to help you make informed healthcare decisions. While this post may contain links to lead generation forms, this won’t influence our writing. We follow strict editorial standards to give you the most accurate and unbiased information.

For many Americans turning 65, Medicare signals relief from rising healthcare costs and a new, expansive set of health insurance options. 

More than one-third of people on Medicare — 24.1 million — are Medicare Advantage members in 2020. Increasingly popular, Medicare Advantage (MA) enrollment has more than doubled in the last 10 years.1

Zero-premium MA plans may be part of the appeal. You may wonder, “What’s the catch?” with no-premium insurance. The key is that Medicare is not free, not even Medicare Advantage plans with no premiums. 

Understanding how MA works — and what you get and pay for with a zero-premium plan — can help you determine if this plan might be right for you.

What is Medicare Advantage?

Medicare is not one single insurance program. It’s a combination of different components that cover different services, each with different costs. Those components are:

  • Medicare Part A for hospitalizations 
  • Medicare Part B for outpatient medical services and supplies
  • Medicare Part D for outpatient prescription drugs

Unlike Original Medicare, Medicare Advantage plans are provided by private insurers that offer comprehensive Medicare benefits in one package. 

Medicare Advantage plans — also called Medicare Part C plans — combine Parts A, B, and often D into a single health plan. Costs vary by plan and carrier. HMO and PPO options offer different levels of flexibility. For example, you might be able to save money by using a more restricted provider network.

Considering a Medicare Advantage Plan?

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Because MA members do not need to navigate each Medicare part separately, Medicare Advantage plans can feel easier to understand. MA plans offer selection, quality, and value.

How Many Medicare Advantage Plans Are Available?

In 2020, virtually everyone (99%) on Medicare has access to at least one of more than 3,000 private Medicare Advantage plans. How many options you have depends on where you live; in more than 2,000 U.S. counties, enrollees have more than 10 plan choices, but there are 77 counties with no MA plans. The average Medicare enrollee has 28 Medicare Advantage choices from an average of seven insurance carriers.2

Are Medicare Advantage Plans Rated Well? 

Medicare Advantage plans tend to score well on quality ratings. CMS, the federal agency that oversees Medicare, uses a five-star scale to measure health plan quality. Of all enrollees in Medicare Advantage plans, 78% are in a plan that gets at least four out of five stars, an increase over prior years.3

What’s Included with Medicare Advantage Plans?

The average Medicare Advantage monthly premium, covering Medicare Part A and B benefits and Part D prescription drug coverage, has declined over the past decade. For plans with premiums, the average premium is $63 per month in 2020.4 These plans help members by setting annual caps on out-of-pocket costs. Original Medicare doesn’t limit out-of-pocket spending.5 

Outpatient prescription drug coverage is not included under Original Medicare. Medicare enrollees can choose to pay for supplemental Part D prescription coverage. In contrast, most Medicare Advantage plans include outpatient prescription drug benefits. 

Most MA plans offer extra benefits like fitness programs, dental, vision, and hearing aids, which Original Medicare doesn’t cover. These benefits may be offered as part of the plan and included in the plan premium, or members can pay separately for optional packages.

Who Enrolled in Zero-Premium Medicare Advantage Plans?

Depending on where you live, no-premium Medicare Advantage plans may be an option. Most (89%) Medicare Advantage enrollees choose a plan with prescription drug coverage. Of those, 60% — or more than half of all Medicare Advantage members — don’t pay any monthly premium besides the Medicare Part B premium.6

Provided there is a zero-premium option available in your area, these plans can be especially attractive if you’re managing a tight budget or if you don’t expect to use a lot of services and want to keep your monthly costs low. 

What Are the Costs of Zero-Premium Medicare Advantage Plans?

Zero-premium plans may be appealing, but premiums are not necessarily your only expenses. Other forms of cost-sharing include copayments, coinsurance, and deductibles; though your financial exposure is capped by an “out-of-pocket” maximum, these costs can add up. 

Depending on the plan, you may actually pay more if you need more services than you expect. For example, on a zero-premium plan, the copays may be higher than copays on a plan with a premium. Additionally, the annual out-of-pocket limit in a zero-premium plan may be higher than the limit in a plan with a premium, meaning you could pay more.

Part B Premium

Most Medicare enrollees pay a Part B premium. In 2020, the standard Part B premium is $144.60 per month, though it is higher if your income is above a certain amount.7 Some Medicare Advantage plans pay all or part of this premium,8 but zero-premium plans may be less likely to pick up this cost. 


Deductibles are the healthcare costs you pay before insurance kicks in. Medicare Advantage plans can have annual deductibles and/or deductibles specifically for medications.9 The average deductible for MA plans with prescription coverage was $121 in 2019; it was $415 in Medicare Part D.10 Some plans have much higher deductibles, so research the options where you live. 


Copayments are the set fees you pay when you receive services,11 though not all services — like preventive care — require copays. Zero-premium plans may include copays from $5 to $50 or more, depending on the plan and the service. 


Coinsurance is the percent of medical costs that you pay.12 If you have Original Medicare, for Part B-covered services, you pay 20% of medical bills. MA plans set copays for most services, but also include coinsurance for some services. 

Coinsurance is one of the least understood health insurance terms in an already confusing industry.13 Unlike a copay, which is a set dollar amount, coinsurance is a percentage of the bill. Even if you know what it means, you might have trouble figuring out the amount if you don’t know what the bill will be — which is most of the time. 

You may want to get in the habit of asking your healthcare provider or pharmacist what your costs will be. They may not know the answer, but they can be allies in uncovering the costs and potentially in finding lower-cost options.

Out-of-network costs

One of the ways Medicare Advantage plans control costs is by limiting members to a network of providers — doctors, hospitals, and other clinicians or facilities. Unlike in Original Medicare, you may have a harder time using providers outside the network and you’ll probably pay more if you do. You usually have to pay all or some out-of-network charges yourself until you reach your plan’s cap on overall out-of-pocket expenses.

Out-of-pocket maximum

In Medicare Advantage plans, unlike in Original Medicare, there is a limit to how much you pay out-of-pocket each year. Though plans vary, the 2020 average out-of-pocket maximum is $4,925 in-network and $8,828 for both in- and out-of-network services.14 The out-of-pocket maximum does not apply to outpatient prescription drug benefit, which has a separate out-of-pocket limit. Zero-premium plans may have higher out-of-pocket maximums than plans with monthly premiums.

When Can You Enroll in Zero-Premium Medicare Advantage Plans?

You can sign up for an MA plan once you’re eligible for Medicare Parts A and B. You’re eligible for Medicare if you’re 65 or older.15 Some younger people with disabilities also qualify.

Considering a Medicare Advantage Plan?

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Considering a Medicare Advantage Plan?

Review options now.

You can sign up for Medicare starting three months before you turn 65 until three months after. You have to enroll in Medicare before you can sign up for a Medicare Advantage plan. 

After you enroll in a Medicare Advantage plan, you can switch for any reason between October 15 and December 7 or during the Medicare Advantage Open Enrollment Period (OEP) every year from January 1 through March 31. 

Outside those two periods, you can join or switch plans under special circumstances, for example, if you move, you lose your current coverage, or your current plan changes.16

After your initial sign-up, open enrollment or a special enrollment period is your chance to switch MA plans. If zero-premium plans are offered in your area, you might choose one during open enrollment. 


Zero-premium Medicare Advantage plans help you manage your monthly costs, but you may pay more if you’re hospitalized or have unexpected medical expenses. If you’re in good health and you feel confident that you won’t need to go beyond what the plan covers, a zero-premium MA plan can offer good value while delivering peace of mind. 

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  1. Freed, Meredith, Anthony Damico, and Tricia Neuman. “A Dozen Facts About Medicare Advantage in 2020.” Kaiser Family Foundation, April 22, 2020 (accessed May 20, 2020).

  2. Jacobson, Gretchen, Meredith Freed, Anthony Damico, and Tricia Neuman. “Medicare Advantage 2020 Spotlight: First Look.” Kaiser Family Foundation, October 24, 2019 (accessed May 20, 2020).

  3. Freed, Meredith, Anthony Damico, and Tricia Neuman. “A Dozen Facts About Medicare Advantage in 2020.”

  4. Freed, Meredith, Anthony Damico, and Tricia Neuman. “A Dozen Facts About Medicare Advantage in 2020.”

  5. U.S. Government Website for Medicare. “Consider these 7 things when choosing coverage.” (accessed May 26, 2020).

  6. Freed, Meredith, Anthony Damico, and Tricia Neuman. “A Dozen Facts About Medicare Advantage in 2020.

  7. U.S. Government Website for Medicare. “Part B costs.” (accessed May 20, 2020).

  8. U.S. Government Website for Medicare. ”Costs for Medicare Advantage Plans.” (accessed May 20, 2020).

  9. U.S. Government Website for the Federal Health Insurance Marketplace. “Deductible.” (accessed May 20, 2020).

  10. Kaiser Family Foundation. “Medicare Advantage.”, June 6, 2019 (accessed May 20, 2020).

  11. U.S. Government Website for the Federal Health Insurance Marketplace. “Copayment.” (accessed May 20, 2020).

  12. U.S. Government Website for the Federal Health Insurance Marketplace. “Coinsurance.” (accessed May 20, 2020).

  13. Accenture. “The hidden cost of healthcare system complexity.”, September 6, 2018 (accessed May 26, 2020).

  14. Freed, Meredith, Anthony Damico, and Tricia Neuman. “A Dozen Facts About Medicare Advantage in 2020.”

  15. U.S. Department of Health and Human Services. “Who Is Eligible for Medicare?” (accessed May 20, 2020).

  16. U.S. Government Website for Medicare. “Special circumstances (Special Enrollment Periods).” (accessed May 20, 2020).