Zero Dollar ($0) Medicare Advantage Plans: What Agents Should Know

Published on September 24, 2021

Your senior clients could pay $0 a month for their Medicare Advantage plan. Photo by Emilio Takas on Unsplash

For health insurance agents, the opportunity to sell a policy with a zero-dollar premium can be an attractive offer. $0 premium Medicare Advantage plans are real coverage options seniors can enroll in for zero dollars a month. 

Unsurprisingly, these plans are extremely popular: In 2020, nearly two-thirds of all Medicare Advantage enrollees were enrolled in a zero-dollar premium plan. Unlike government assistance programs where the insured must have a limited income to qualify, $0 premium Medicare Advantage plans have no income restrictions and are available to any Medicare beneficiary. 

Keep reading to learn more about how insurers can offer these plans, what the plans cover, and the agent regulations for selling them to senior clients.

How can Carriers Afford to Sell Medicare Advantage Coverage for $0?

When an insurer offers a Medicare Advantage plan, Medicare pays them the approximate cost to cover the individual’s care. The insurer can use plan design and low provider network fees to provide those benefits to enrollees at a reduced cost. This structure makes it possible for them to turn a profit on a plan without getting a premium from the senior.

What do These Plans Cover?

Coverage for $0 Medicare Advantage plans varies widely. Some plan options offer coverage for prescriptions, dental, vision, and hearing; others have far fewer features. If you have a senior client interested in zero-dollar premium plans, be sure to make them aware of the choices and variations in this category.

How to Sell $0 Premium Medicare Advantage Plans

While it might seem like a product with no cost should be easy to sell, CMS has strict guidelines about agent transparency that dictate the language used to explain the plan. Specifically, CMS prohibits the use of the word “free” to describe any Medicare-related product. 

This rule applies to descriptions of zero-dollar premium plans, premium subsidies, deductibles, and cost shares. The reason for the restriction is to protect seniors from getting an unrealistic impression of the plan they are considering. While the monthly premium may be no cost, lower premiums mean higher costs when accessing services. 

If your client decides to enroll in a zero-premium plan, make sure they understand that although they do not have to pay a monthly premium for Medicare Advantage, they will still pay a premium for their Medicare Part B coverage. Medicare Part B premiums are generally deducted monthly from social security benefits.

Senior Clients who Might Benefit From a $0 Premium Plan:

  • Seniors who are relatively healthy and do not anticipate needing frequent care
  • Seniors with the financial resources to afford higher out-of-pocket costs when services are needed
  • Seniors who do not regularly travel outside of the plan coverage area
  • Seniors who are dual-eligible for Medicare and Medicaid

Final Thoughts

Medicare Advantage plans with $0 premiums are widely available for seniors. For clients interested in these plans, agents should help carefully compare the benefits of each carrier’s offering since coverage varies substantially. 

With proper client education, zero-dollar premium Medicare Advantage plans can be an excellent option for seniors who can absorb higher out-of-pocket costs and are relatively healthy. These plans can also drive potential clients to contact you to schedule appointments, leading to sales of other coverage options.

How do I Learn More?

To learn more about the Medicare products available for your senior clients, contact the affiliated specialists at American Senior Benefits. Our licensed, seasoned insurance agents will be happy to provide information to help you grow your career and better serve your clients.

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