One curious thing about certain Medicare Advantage policies is that they do not require premiums. This, to say the least, is unusual.
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The answer to this mystery is that he insurance company does receive payment for insuring you on their health insurance plan, even though it is not from the insured. The payments for enrollment in a zero premium Medigap Advantage policies comes from the Federal Government.
The various Medicare Advantage plans require that you no longer receive reimbursement for healthcare services and benefits from Medicare Part A or Part B. This means that the Federal Government is no longer responsible for any medical expenses you might incur once you sign up for a plan through a MA company. The insurer will cover your covered health-related expenses. When you enroll in a Medicare Advantage policy, the insurer you chose will receive some of the money the government saves by no longer having to pay for your care.
Medicare Advantage policies are considered Medicare Part C. Unlike Part A (which primarily covers care received in hospitals) and Part B (which primarily covers services received in doctors’ offices), the benefits come from private insurance companies. Another difference is that the coverage can include prescription drug benefits.
(Prescription drug benefits can also be received from Medicare Part D. Medicare Part D benefits are also provided by insurance companies like Blue Cross Blue Shield and Aetna and not Medicare.)
With most of these types of policies, you will still need to pay a premium after enrollment; you will need to subsidize the money the insurance company receives from the Fed. However, with certain policies this is not the case.
These policies tend to have high deductibles. You pay more toward any hospital services and other benefits you might receive. They provide less in the way of benefits and therefore do not require that you subsidize the payments they receive from the Fed.
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