Medigap Monday: What is a Zero Premium Supplement Plan

There is no such thing as a “zero premium” Medicare Supplement plan. If you see any plans advertised as being “zero premium” those are not Medicare Supplements but Medicare Advantage plans, and they are not “zero premium”. The way a Medicare Advantage plan works is the premium you would pay to Medicare Part B, is now paid to a private insurance carrier instead of Medicare. You are still paying for those plans. It is important when choosing between these two plans that you know the differences.

Summary of a Medicare Advantage Plan:

  • A Private Company provides a health plan that you will use instead of using your traditional Medicare.
  • Low monthly premium
  • Requires you to pay some bills when you use the Plan. You will have copays, co-insurance and sometimes a deductible.
  • You have to go to certain Doctors, Hospitals and other Providers. (HMO / PPO)
  • Has a max out of pocket for your protection. Once you have paid a certain amount, the plan will pay the rest of your healthcare cost. For 2019, most HMO’s are around $4,000.00 and the PPO Plans are around $6,700.00.

Summary of a Medicare Supplement Plan:

  • Medicare (A and B) are your primary insurance and the Supplement Plan pays the bills that Medicare would normally make you pay.
  • You can go to any Doctor, Hospital, or Provider in the Country that accepts Medicare.
  • You will very rarely have a healthcare cost other than your monthly premium. (My favorite Supplement Plan is the Plan G, once you pay the first $185.00 of your medical bills, you are done for the rest of the year)
  • Does have a higher monthly premium than a Medicare Advantage Plan. A Supplement is usually between $80.00 and $120.00 per month.

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