Many Medicare Advantage plans charge no monthly premium beyond what you already pay for Part B, but that doesn’t make them free. You’ll still owe your standard Part B premium (currently $185 per month in 2025), and you’ll face copayments, coinsurance, and deductibles when you actually use care. The $0 premium is real, but it’s only one piece of what you’ll spend.
How $0 Premium Plans Work
Private insurers can offer Medicare Advantage plans with no additional monthly premium because the federal government pays them a set amount for each person who enrolls. This payment, called a benchmark, is calculated at the county level. When an insurer believes it can cover your care for less than the benchmark amount, it keeps a portion of the difference as a “rebate.” Plans are required by law to pass that rebate back to enrollees in the form of lower cost sharing, reduced premiums, or extra benefits like dental, vision, and hearing coverage.
The size of the rebate depends on the plan’s quality star rating. Plans rated 4.5 stars or higher keep 70% of the difference between the benchmark and their bid. Plans rated 3.5 to 4.5 stars keep 65%, and those below 3.5 stars keep 50%. Higher-rated plans also get their benchmarks increased by 5 to 10 percentage points, giving them even more money to work with. This is why so many plans can bundle supplemental benefits at no extra premium: the federal payments are large enough to cover standard Medicare services and then some.
The Part B Premium You Still Owe
Every Medicare Advantage enrollee must continue paying the Part B premium, which is $185 per month in 2025 for most people. This is deducted from your Social Security check regardless of which Advantage plan you choose. A “$0 premium” plan means no additional charge on top of that, not that your total monthly cost is zero.
Some plans offer what’s called a Part B giveback benefit, where the insurer pays back a portion of your Part B premium. The reduction can range from as little as 10 cents to the full amount, though most givebacks fall well short of covering the entire premium. The money shows up as a smaller deduction from your Social Security check or a reduced invoice from Medicare. These giveback plans are only available in certain states and counties, so they’re not an option for everyone.
What You Pay When You Use Care
The costs that catch people off guard aren’t premiums. They’re the copayments and coinsurance that add up each time you see a doctor, get a test, or spend time in the hospital. These amounts vary widely by plan, but they’re a standard part of every Medicare Advantage contract. You might pay $20 for a primary care visit, $40 to $50 for a specialist, and significantly more for imaging, surgeries, or inpatient stays.
The critical protection is the annual out-of-pocket maximum. In 2025, Medicare Advantage plans cannot require you to spend more than $9,350 for in-network services, or $14,000 when combining in-network and out-of-network costs. Once you hit that ceiling, the plan covers 100% of your care for the rest of the calendar year. Traditional Medicare has no equivalent cap, which is one reason many people choose Advantage plans despite the trade-offs.
Prescription Drug Costs
Most Medicare Advantage plans include Part D drug coverage, but it comes with its own cost structure. Plans can charge an annual deductible of up to $615 in 2026, though some have no deductible at all. After the deductible, you typically pay 25% of the cost of your medications during what’s called the initial coverage stage.
Once your out-of-pocket drug spending reaches $2,100 in 2026, you enter catastrophic coverage, and you won’t owe anything more for covered prescriptions for the rest of the year. This is a significant improvement from previous years, when a coverage gap (the “donut hole”) left people paying high costs for expensive medications before catastrophic coverage kicked in.
Dental, Vision, and Hearing Limits
The extra benefits advertised on Medicare Advantage plans are real but often more limited than they appear. Preventive dental services like cleanings and X-rays are typically covered with no cost sharing, but 78% of enrollees with more comprehensive dental coverage are in plans that cap benefits at a set dollar amount. The average cap is $1,300 per year, and more than half of those enrollees have a limit of $1,000 or less. For anything beyond basic preventive care, like fillings or root canals, the most common coinsurance rate is 50%, meaning you pay half the bill. About 10% of Advantage enrollees must pay a separate premium just to access dental benefits at all.
Vision and hearing benefits follow a similar pattern. Plans may cover a routine eye exam or a hearing test at no cost, but glasses, contacts, and hearing aids usually involve significant out-of-pocket spending.
Network Restrictions Add Hidden Costs
Medicare Advantage plans use provider networks, and the type of plan you choose determines how much flexibility you have. HMO plans, which are the most common, generally don’t cover out-of-network care at all except in emergencies, urgent care situations while traveling, or for dialysis. If you see an out-of-network provider under an HMO without a qualifying exception, you could be responsible for 100% of the cost.
PPO plans give you the option of going out of network, but you’ll pay higher copayments and coinsurance for doing so. The difference can be substantial: an in-network specialist visit might cost you $40, while the same visit out of network could run two or three times that. If you have doctors you’re loyal to, checking whether they’re in a plan’s network before you enroll is one of the most important things you can do to control costs.
What “$0 Premium” Actually Means for Your Budget
A $0 premium Medicare Advantage plan eliminates the extra monthly charge that some plans carry, but your real annual spending depends on how much care you use. Someone in good health who rarely sees a doctor might spend very little beyond the Part B premium. Someone managing a chronic condition, filling multiple prescriptions, or needing dental work could spend several thousand dollars in copays, coinsurance, and drug costs before hitting the out-of-pocket cap.
The most accurate way to compare costs is to estimate your total yearly spending, not just the monthly premium. Factor in the copays for the doctors you see, the cost sharing on your medications, and any limits on the extra benefits you plan to use. A plan with a $30 monthly premium but lower copays could cost less overall than a $0 premium plan with higher cost sharing at the point of care.