Medicare pays insurers a flat fee for each Medicare Advantage plan enrollee. If a plan ends up spending less than the flat fee, it can pass along the savings to consumers resulting in $0 premium Advantage plans.[1]

In some cases, even Advantage plans with drug coverage and extra benefits like dental and vision can be totally premium-free.

However, $0 premium Advantage plans are not “free” in terms of all costs, as there are still out-of-pocket costs to consider like copays and coinsurance.

With that in mind, due to the way cost-sharing like deductibles and out-of-pocket maximums work and other aspects of plans like drug tiers and limits on benefits work, some people will find that plans with higher premiums actually offer them more value due to their typically more robust cost-sharing.

TIP: In general, there are more times each year in which you can switch Part C plans than in which you can enroll in a new plan (see enrollment periods). Further, Part D has late enrollment penalties if you forgo drug coverage when you are first eligible. By holding a $0 premium Advantage plan with drug coverage starting when you are first eligible you can avoid late enrollment fees down the road and give yourself more options for switching coverage compared to only starting with Original Medicare only.

FACT: Standalone Part D drug coverage can be premium-free if your income is low enough to qualify for Extra Help due to the way cost assistance works with Medicare. Also, some people may qualify for premium-free Part A based on income.


  1. Why are some Medicare Advantage plans $0? Humana.Com.

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