Medicare Advantage costs: why a $0 premium is not the whole story
Written by the My Plan Compass team. Last reviewed October 26, 2026, against Medicare.gov.
A $0 premium plan is not always the cheapest. What you pay in a year is the premium plus your copays, your drug costs and, in a bad year, up to the plan's yearly out-of-pocket limit. A plan with a premium and a lower limit can cost less if you end up in the hospital.
What you pay in a Medicare Advantage plan
- Monthly premium
- What the plan charges each month, from $0 up. You also keep paying your Medicare Part B premium ($202.90 a month in 2026), whichever plan you choose. A few plans pay back part of it.
- Deductible
- What you pay for some services before the plan starts paying its share. Many plans have none for medical care.
- Copays and coinsurance
- What you pay each time you see a doctor, get a test or stay in the hospital.
- Drug costs
- What you pay for your prescriptions, which depends on the plan and the pharmacy.
- Yearly out-of-pocket limit
- The most you pay in a year for covered medical care. After that, the plan pays 100% of covered services. It does not include premiums or drug costs.
Each plan sets its own amounts every year, including its limit, which can be different in and out of network. Original Medicare has no yearly limit unless you add other coverage. Source: Medicare.gov: Costs.
An example: two made-up plans
These plans are invented to show the math. They are not real plans or real prices, and drug costs are left out to keep it simple.
| Item | Plan A | Plan B |
|---|---|---|
| Monthly premium | $0 | $45 |
| Specialist copay | $50 | $20 |
| Yearly out-of-pocket limit | $6,700 | $3,900 |
| Light year: 8 specialist visits | $400 | $700 |
| Heavy year: a hospital stay | $6,700 | $4,440 |
In the light year, Plan A's $0 premium wins: $400 against $700. In the heavy year, both plans hit their limit, and Plan B costs $2,260 less even after a year of premiums. Neither year is a prediction. The question is which risk you would rather carry.
How My Plan Compass estimates yearly cost
For each plan we add the premiums, your prescriptions at your pharmacy, and medical costs for a common pattern of use, and we show each plan's yearly limit beside it. If you tell us predictable costs matter to you, the limit counts for more in the ranking. Your real costs depend on the care you use. More in how we compare plans.
This guide is general information, not advice about your situation. We are not connected with or endorsed by the U.S. government or the federal Medicare program.