There are many people who believe that there are free Medicare plans… but they are mistaken. Some would argue that it’s really a matter of semantics but it goes much deeper than that.
Typically the plans being referred to as free are $0 premium Medicare Advantage plans. And although there is not a separate monthly premium they are far from free.
As a matter of fact CMS and any insurance company will go out of their way to not refer to Medicare plans as free plans… with good reason.
The following is a discussion on why Medicare plans are really not free.
Why Medicare Advantage plans are not free
First, while you may be enrolled in a Medicare Advantage plan with or without a monthly premium, you are still enrolled in Medicare. While Medicare Part A does not generally require a monthly premium unless you didn’t meet the 40 quarters rule, Medicare Part B does require a monthly premium. You are reminded of this each month when that premium is deducted from your Social Security earnings.
Secondly, Medicare Advantage plans generally require that you share the costs of services rendered through co-payments, coinsurance and deductibles. Sure you may not pay a monthly premium but you will probably pay a copay for a doctor visit and coinsurance for many out-patient services.
Maybe it would be more accurate to call $0 premium Medicare Advantage plans save now but pay later plans but not free Medicare plans.
Another consideration is more about having a choice and less about the money. Most Advantage plans today are network based plans.
Even if you have a $0 premium plan you will not feel free if you require a specialist that is not in-network and are told your plan will not allow it.
So the next time you hear someone say that they have a free Medicare plan or that you are paying too much because your plan is not free just smile and think to yourself that person really has a save now but pay later plan. Which incidentally, may be a good thing if they do not use their plan frequently.