By Joanne Giardini-Russell
Years ago, I remember speaking with a client on the phone who said, “I KNOW that we’ve gone over this in the past, but my friend Tom keeps telling me about his Medicare plan and he gets free dental and pays nothing for anything! I know it can’t be true, but he swears that he pays nothing. Can you explain how plans like this work again?”
Conversations like these happen fairly often with our clients, especially during the annual election period in the fall when Joe Namath pitches Medicare insurance products in TV commercials.
But, can it truly be zero?
It sure can. In fact, just today I was working with another client and I’d estimate that there were about 25 “zero premium” plans in this person’s zip code.
How is that possible?
Always remember that Medicare itself has a premium. The base premium in 2021 is $148.50. There are six levels of premiums and it’s adjusted by income level. Higher earning folks will pay higher rates for Medicare. The only people that are not paying their premium to the government are those that are eligible for both Medicare AND Medicaid.
In our client’s case above, remember that Tom kept telling her that he pays absolutely zero for anything, which means we need to add $148.50 to his cost column.
If you enroll into a zero premium Medicare Advantage plan, you will still pay your premium to the government for Part B. You have to be enrolled in both Part A and Part B of Medicare in order to then enroll into a Medicare Advantage plan.
Ok but the premium is still zero, that's better than my plan
We need to point out here that Tom isn’t paying zero for everything. If he just finished a round of physical therapy, he paid approximately $40 per session. And if he had to see a cardiologist? That would cost about $40 for a specialist visit. Hospitalized for 3 nights? He’s going to get a bill for around $1,000.
Medicare Advantage plans can be viewed as “pay as you go” insurance. He’s paying something BUT he truly is NOT paying a monthly premium.
So, is that what he meant? After advising our clients for many years, we can tell you that friends, family and colleagues often try and “one up” one another to get the “best” plan with the most stuff and they always seem to pay zero for it! Pretty amazing, right?
But he gets free dental insurance
But, Tom also touted the free dental insurance he received with his free plan. He gets two free cleanings and an x-ray each year. He is not getting crowns repaired, free implants and root canals done. Ask your dentist to price out the value of two cleanings plus an x-ray. If you want to get coverage for crowns and root canals, you can certainly do that but there will be a monthly cost to upgrade the dental coverage. So, if Tom had upgraded his dental plan to get “all this coverage” then, guess what…he’s paying something!
How could it possibly be zero each month?
Well, there are no tricks. The government pays a set rate each month to a private insurance carrier and when you enroll into their Medicare Advantage plan, that monthly rate goes to the carrier on your behalf.
Flip to page six of the “Medicare and You Handbook” and you’ll see how they describe Medicare Advantage:
● Medicare Advantage is an “all in one” alternative to Original Medicare. These “bundled” plans include Part A, Part B, and usually Part D
● Plans may have lower out-of-pocket costs than Original Medicare
● In many cases, you’ll need to use doctors who are in the plan’s network
● Most plans offer extra benefits that Original Medicare doesn’t cover—like vision, hearing, dental, and more. Each plan has their own version of what “more” will mean but that’s what the handbook notes.
Note the key word of “alternative” to Original Medicare. Tom pays his $148.50 each month to Uncle Sam and he may very well believe that he’s enrolled in Original Medicare. Sometimes people believe that if they have a problem with their Medicare Advantage plan that they can call up Medicare and complain and solve the issue.
Unfortunately, you can’t. You’ll need to call the carrier that you enrolled into the Medicare Advantage plan with. Remember that they are the “alternatives” to having Original Medicare and a Medigap plan.
So, the plans are “free” to the consumer because Uncle Sam is funding a base rate each month and the consumer that enrolled in the plan as co-pays, co-insurance, has to follow network rules for best pricing and so on.
So just remember that “free” means a zero premium fixed monthly cost.
No Tricks
At the end of the day, guess what: There are no tricks with this stuff. We like to tell people that you are going to sacrifice something when you have to choose your Medicare insurance.
If you choose Medigap and a Part D drug plan, you have excellent coverage, but you are sacrificing the dollars that you have to spend to get that great coverage. It’s not free and some don’t like to sacrifice the monthly dollars.
If you choose Medicare Advantage, you now are in a managed plan and you very likely could sacrifice some freedom. Remember you’ll have networks to work within and maybe you want to see a doctor down the road that isn’t in your network. That means that you sacrificed the freedom to see that doctor for the zero premium that you received in return.
So, there will always be a sacrifice on either side of the coin.
Who offers zero premium plans?
Gobs of carriers offer these Medicare Advantage plans. Here in Michigan, we work with a number of carriers that offer them, including:
● Blue Cross Blue Shield of Michigan (BCBSM)
● Blue Care Network (BCN)
● Aetna
● Priority Health
● Health Alliance Plan (HAP)
● Wellcare
● PHP
And that’s just the tip of the iceburg. There are dozens and dozens of plans to choose from, depending on your zip code.
Who enrolls people into these plans?
We do! If you talk with our team at at Giardini Medicare, we can review how your world would look with a Medigap and a Part D drug plan versus a Medicare Advantage plan. Then, you can choose whichever works best for your needs and budget and we can get you enrolled with a proper effective date. We’ll work with you to be sure that your doctors, dentists and medications fit with the plan that makes the most sense. And perhaps, you may find that “the best things in life are free.”
Joanne Giardini-Russell is the owner of Giardini Medicare, which she founded to help those approaching Medicare eligibility or those currently enrolled in Medicare to better understand what they are purchasing and how their choices may affect their long-term outcomes regarding care and finances.