How do you explain to clients that "zero-premium" doesn't mean "zero-cost" with Medicare Advantage?
Answered by 19 licensed agents
Benefits vary from plan to plan. Often times you may have a $0 copay with an in-network primary care physician, for example. There is usually cost sharing for out-patient surgeries, hospitalization, major diagnostic tests as well as other services. Cost sharing can be a set dollar amount or a percentage of the cost.
So the word premium refers to how much the plan will cost you every month. Generally they are zero or no premium plans but there are some that will cost anywhere from $33-100. This is the cost to subscribe in the plan.
Zero cost can refer to the plan premium but some people get that confused with the plan copays when you use the plan for doctor visits. If someone uses the term zero cost I would clarify if they are talking about the cost to be on the plan or the copays when you use the plan.
My Daddy use to say, "Son, there ain't no such thing as a free lunch." This is the case with the zero dollar premium Medicare Advantage(MAPD.) In order to enroll in a MAPD, you have to be enrolled in Medicare A AND B, so you still have to pay your Part B premium.
The Zero Premium does not mean "zero cost." MAPD plans are a "Pay as you go" plan. Depending on what plan you enroll in you may have co pays for Doctor visits, Specialist, and Hospital stays.
Zero Premium is the cost you pay for the plan unless you have a penalty related for not carrying a prescription drug plan. I do not define a plan as zero cost since that could not be the case.
This is a great question and one that I carefully walk through to explain to my current and prospective clients. Medicare Advantage plans MAY or MAY not have a premium and I always start with that foundation after I explain how the Medicare Part B premium works.
If the plan has a premium of any amount ranging from $0 premium to anything beyond $0, it is almost certain that many costs will have copayments or sometimes other coinsurance. The most common examples might be a specialist copay or a hospital admission copay.
There are some common "zero cost" items and those most commonly include (1) seeing your primary care physician for services, and (2) preventive care services.
I always take a very consultative approach so that the consumer has a really good understanding of how the plan works and this avoids any surprises.
This question has more to do with your educational background than a full comprehension of Medicare. There can be a variety of premiums that are an integral part of a healthcare system. In effect, a premium is usually a monthly payment for a service provided. It can be a payment for a Medicare Supplement, or one for the Part D(rug) plan or one for a Hospital Indemnity plan. But “costs” are another entity. A cost could be a true “copay” at the pharmacy for an Rx prescribed by your doctor or a fee for a laboratory who will draw your blood based on an upcoming appointment with the doctor. So, costs are “indeterminate”, depending on any health checks/issues while premiums are definite costs that are common in the Medicare system.
Quite simply, premiums and costs are two different things. A premium is something you pay, usually on a monthly basis, in order to have a Medicare Advantage plan. A cost is something you pay once you have established yourself as a member in a Medicare Advantage plan and obtain some type of service. If you need any more help on your specific situation don't hesitate to call me directly at 239-848-8893.
It's simple most people will pay the Part B Premium right out of their Social Security or receive a quarterly bill for $185.00. When reviewing a plan there are many copayments, deductibles, and coinsurances within the plan. IT must be reviewed in it's entirety!!
Most Medicare Advantage plans do not have a monthly premium, but DO have copays for Medicare services. I tell people that Original Medicare is more of a "pre-pay" system, where Advantage plans are a "pay as you go" model.
Medicare Advantage plans different by carrier. "zero-premium" simply means that the carrier does not charge a premium for the coverage. There may be some benefits that also have zero cost share while other benefits can have co-pays and co-insurance until the maximum out of pocket limit has been reached.
Federal government funds private companies to assist their members and, depending on the plan, it may have a $0 monthly premium. However it doesn't mean $0 cost, for there are co-pays and deductibles, though limited by an annual Maximum out-of-pocket.
Advantage plans are "managing" your care for their profit. I only sell Supplement plans that allow you to go to any Dr. in the USA USA USA that accepts Original Medicare Part A & B.
Zero Premium needs to say Zero MONTHLY Premium. Zero cost with a Medicare Advantage Plan is misleading and many clients are concerned about their finances and any word Zero needs to be explained further.
A zero-premium Medicare Advantage plan means you do not have to pay a monthly premium for the plan itself.
However, this does not mean you won’t have to pay any other costs.
What You Still May Have to Pay
Copayments or coinsurance for doctor visits, specialist visits, hospital stays, and other services.
Deductibles before coverage starts for some services or drugs.
Costs for services not covered by the plan.
Premium for Medicare Part B, which you must keep paying even if your Medicare Advantage plan has no premium.
Important to Remember
Think of zero-premium as just one piece of the total cost puzzle. While it can help reduce your monthly out-of-pocket spending, you’ll likely still pay when using healthcare services.
I explain to all our clients that a Medicare advantage plan typically has no extra monthly premium beyond their part b premium. However there are some exceptions to that as well. Rather than an extra monthly premium, they will typically have copays with a Medicare Advantage plan. Those copays vary depending on the specific plan they would choose. Whereas with a Medicare supplement plan, they would typically have an extra monthly premium beyond their part b premium. However, with a Medicare supplement plan, they MAY have less out of pocket expenses for copays and doctor visits depending on their use. This is why we always recommend a personalized consultation with a trusted local/agent broker to discuss your specific needs.