24 Sep Why Two Zero Premium Medicare Advantage Plans Can Differ by Thousands: A County Level Look at Out-of-Pocket Exposure
By Lara Goulson, licensed independent insurance agent, Goulson Insurance Services, Los Angeles
Medicare Advantage enrollment has crossed half of all Medicare beneficiaries nationally, and the marketing that accompanies it has converged on a single number: the monthly premium. In a large competitive county that number is usually zero, which means it carries almost no information. The figure that actually determines financial exposure in a bad year is a different one. It is published, and almost nobody looks at it. According to CMS (Centers for Medicare and Medicaid Services), every Medicare Advantage plan is required to publish an annual in-network out-of-pocket maximum — the figure that defines a member’s worst-case financial exposure in a given year — yet this number is rarely the focus of plan marketing or consumer decision-making.
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The Plan Landscape in One Large County
Los Angeles County is a useful case, because its market is about as wide as American Medicare gets. Working from the federal Landscape file for the 2026 plan year, the county has 74 Medicare Advantage plans open to general enrollment, plus 47 Special Needs Plans for people who qualify on grounds such as a chronic condition or dual eligibility with Medicaid. Of those 74 general enrollment plans, 65 carry a zero dollar monthly plan premium. Roughly 57 percent of the county’s approximately 1.7 million Medicare beneficiaries are enrolled in Medicare Advantage or a similar Medicare health plan, somewhat above the national share. A beneficiary in this county choosing on premium alone is choosing among 65 plans that all cost the same thing per month, which is nothing. The premium has stopped discriminating between them.
The Number That Does Discriminate
Every Medicare Advantage plan carries an annual limit on in-network out-of-pocket spending. Once a member reaches it, the plan covers the remainder of in-network cost for that year. It is the most consequential figure in the contract, because it defines the worst realistic year rather than the average one. Across those general enrollment plans, an analysis of the same federal file puts the average in-network maximum at $2,428, with a median of $1,700. The range runs from $199 at the low end to $9,250 at the high end.
That spread is the whole argument. Two plans both advertising a zero dollar premium can differ by roughly $9,000 in what they expose a member to during a year involving a hospitalization, a cancer diagnosis, or a complex surgery. Nothing in the marketing makes that visible. The gap between the mean and the median also tells you the distribution is skewed, with a tail of high-exposure plans pulling the average upward — so the typical plan is better than the average plan.
Why This Is a Research Question and Not Only a Consumer One
Two observations follow that matter to anyone studying access or outcomes rather than shopping for coverage. The first is selection. If plans with low out-of-pocket maximums attract members who anticipate high utilization, and plans with high maximums attract members who do not, then comparing outcomes across plans without adjusting for that risks attributing to plan quality what actually belongs to enrollee expectation. The maximum is a plausible sorting variable, it is published, and that makes the hypothesis testable rather than rhetorical.
The second is the decision environment itself. The choice is nominally among 65 equivalently priced options, differentiated by a figure that is available but seldom surfaced at the moment of decision. That is a well-described condition for poor choices, and the consequence is concrete: for someone on a fixed income it is the difference between a manageable year and a financially serious one.
The Comparison the Premium Obscures
There is a further structural comparison the zero premium framing hides. The alternative to a Medicare Advantage plan is Original Medicare, usually paired with a Medicare Supplement policy and a separate drug plan. That route carries a real monthly premium for the supplement, which makes it look more expensive at the point of comparison, and in exchange it removes networks and, depending on the supplement selected, most of the cost-sharing. Neither route is superior in the abstract. Which one fits depends on the specific physicians a person uses, the specific medications they take, their budget, and whether they travel. What is clear is that comparing a zero dollar premium against a supplement premium, and stopping there, compares the two least informative numbers available.
What a Better Comparison Looks Like
For a beneficiary the exercise is short. Find the in-network out-of-pocket maximum for each plan under consideration — which is published and which any agent or the plan itself must provide. Check whether current physicians are in network by calling the physician’s office rather than trusting a directory. Check each prescription against each plan’s formulary by name and dose. Then compare the worst year rather than the average month.
The underlying county data, including plan counts, premium distribution, and the out-of-pocket maximum analysis, is published at Los Angeles County Medicare Advantage data. A structural comparison of the two coverage routes, with the trade-offs set out rather than argued, is at Medicare Advantage compared with a Medicare Supplement.
A Note on the Data
Plan counts and premium figures come from the federal Landscape file for the 2026 plan year. Enrollment share figures come from federal enrollment data and a national survey of plan enrollment. The out-of-pocket maximum average, median, and range are computed from the same Landscape file rather than quoted from a secondary source, and they describe general enrollment plans in one county for one plan year. They are not national figures. Plan years change annually, which is itself the point: a comparison made once does not stay accurate.
About the Author: Lara Goulson is a licensed independent insurance agent with Goulson Insurance Services in Los Angeles, licensed in California and ten other states, working with families in English, Spanish, and Hebrew.
Disclosure: Not connected with or endorsed by the United States Government or the federal Medicare program. We do not offer every plan available in your area. Currently we represent 18 organizations which offer 233 products in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. Goulson Insurance Services Inc., CA Business Entity License #6020069. Lara Goulson, CA License #0E69969, NPN 8407942.
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Last Updated on September 24, 2026 by Marie Benz MD FAAD