Comparing plans · New Mexico · 2027

What's the Catch With $0 Premium Medicare Advantage Plans?

There is no trick, and there is no gift either. The premium is one line of a plan's price, and usually the smallest. Here is where the $0 comes from, what you pay instead, and what Albuquerque's 2027 plan list shows when you set the $0 plans beside the ones that charge.

By the New Mexico Medicare Help Data Desk

Reviewed by Brian Penner, Independent Medicare advisor — no pressure · Published October 12, 2026

The catch with a $0 premium Medicare Advantage plan is that the premium is only the plan's monthly charge, not what the coverage costs you. You keep paying the Medicare Part B premium — Medicare.gov says "you must have Part B and keep paying your Part B premium to stay in your plan" — and you pay the plan's copays, coinsurance and drug deductible as you use care, until you reach its yearly out-of-pocket limit, when "the plan pays 100% of your covered health services for the rest of the calendar year" (Medicare.gov, Medicare costs). A $0 premium is not a sign that a plan is weak, and it is not a sign that it is generous. It tells you one thing: what you pay in the months you use no care at all. Where the premium belongs among the other checks is covered in how to compare Medicare Advantage plans for 2027, step by step.

How can a plan charge $0?

Because you are not the plan's main customer. Medicare is. When you join a Medicare Advantage plan, Medicare pays the insurance company a set amount every month to provide your Part A and Part B benefits. Each plan bids what it expects that care to cost in your county. When the bid comes in below Medicare's benchmark for the county, the plan receives part of the difference as a rebate, which pays for extra benefits, lower cost sharing or lower premiums.

The Medicare Payment Advisory Commission, which reports to Congress, puts a number on it: "In 2026, the Medicare program will pay MA plans, on average, $2,660 per beneficiary per year in rebate payments." It also reports how plans project using that money: about 26 percent to reduce members' cost sharing, 38 percent for services Medicare does not cover, 19 percent to improve the drug benefit "through lower premiums or reduced cost sharing," 7 percent to reduce Part B premiums, and 10 percent for administration and profit (MedPAC, March 2026 Report to the Congress, Chapter 12).

So a $0 premium is a spending choice. One plan puts its rebate into a $0 premium and a dental allowance. Another puts it into lower specialist copays. A third charges a small premium and uses the extra to lower the out-of-pocket maximum. None of those is hidden, and none is a trick. They are different answers to the same question, and the same bidding cycle is why a plan changes from one year to the next.

It also explains why $0 is the norm and not the exception. KFF reports that in 2026 "three quarters (75%) of enrollees in individual Medicare Advantage plans with prescription drug coverage pay no premium other than the Medicare Part B premium" (KFF). CMS projects the average Medicare Advantage premium nationwide at $12.00 a month for 2027, down from $14.37 (CMS, September 28, 2026), and in New Mexico at $4.58, up from $3.41 (CMS 2027 state fact sheet). Averages that low reflect how many members pay no plan premium.

What do I still pay on a $0 premium plan?

Six things, and only the first is the same on every plan. The others are where plans differ, and they are printed in each plan's Summary of Benefits.

Sources: Medicare.gov, Medicare costs; Medicare.gov, Costs for Medicare drug coverage; Medicare.gov, Compare Original Medicare and Medicare Advantage.

The Part B premium deserves a second look, because it is the cost people most often forget. Medicare.gov says you pay it "each month, even if you don't get any Part B-covered services." It was $202.90 in 2026; the 2027 amount had not been posted when we checked on October 12, 2026. Some plans give part of it back — Medicare.gov notes that some plans "may help pay all or part of your Part B premium" (Medicare.gov) — and how that works is in the Part B giveback explained.

The out-of-pocket maximum is the cost that matters most in a bad year. KFF puts the average in-network limit across Medicare Advantage enrollees at $5,421 in 2026 (KFF). It covers Part A and Part B services only. Prescriptions are counted separately, under the Part D cap of $2,400 for 2027 (Medicare.gov).

What do Albuquerque's $0 plans look like for 2027?

Most of the list. CMS's 2027 landscape file shows 19 general Medicare Advantage plans with drug coverage in Bernalillo County, and 15 of them have a $0 monthly plan premium. The other four charge $20, $20, $34 and $60 a month. Sandoval County's list is the same.

The 15 are not alike. Six are HMOs, two are HMO-POS plans and seven are PPOs, so a $0 premium is not limited to one kind of network. Their in-network out-of-pocket maximums start at $3,800 and end at $8,000, with $5,900 in the middle. The chart sorts both groups by that maximum.

Source: CMS CY2027 Landscape file (September 2026 release), Bernalillo County, Medicare Advantage plans with Part D that are not Special Needs Plans, counted by Contract Plan ID: 15 with a $0 monthly plan premium and 4 with a premium. Figures are in-network maximums for Part A and Part B services.

Two more facts from the same file. Every one of the 19 plans has a drug deductible for 2027, from $200 to $700; none has a $0 drug deductible, whatever its premium. And the $0 premium is not an Albuquerque feature: each of New Mexico's 33 counties lists at least one general plan with drug coverage and a $0 premium for 2027, from 15 in Bernalillo and Sandoval counties to one each in Harding, Lea, McKinley, Otero and Union counties. The county-by-county lists are in Medicare Advantage plans in Albuquerque for 2027 and its companion pages for Santa Fe, Rio Rancho and Las Cruces.

Is a plan with a premium better?

Not as a rule, and the Bernalillo County list shows why. The four plans that charge a premium have in-network maximums from $3,900 to $5,900. That is a tighter and generally lower range than the $0 plans, whose middle value is $5,900. But four of the $0 plans come in under $5,000, and two of them have a maximum of $3,800, lower than any plan that charges.

A premium, in other words, tends to buy a lower ceiling on a bad year. It does not always, and it never tells you whether your cardiologist is in the network or which tier your inhaler is on. A plan that charges $60 a month and leaves out your doctor costs more than a $0 plan that includes them, in every year. That is the reason the premium is a poor first filter in either direction: choosing only $0 plans can hide a better fit that charges, and choosing a plan because it charges assumes a quality the price does not promise.

What does the difference look like in dollars?

Take the two ends of Bernalillo County's 2027 list: a $0-premium plan with an $8,000 in-network maximum, and the plan with a $60 premium and a $3,900 maximum. Both exist in the CMS file. The table is arithmetic on those four numbers, not a prediction of anyone's costs.

Illustration only, built from premiums and in-network maximums in the CMS CY2027 Landscape file. It leaves out the Part B premium, any reduction in it that a plan offers, drug costs, copay differences and out-of-network care.

In a quiet year the $0 plan costs $720 less. In the worst year it costs $3,380 more. Neither number makes one plan right. A person with savings to absorb a hard year and few doctor visits may reasonably prefer the first. A person managing a chronic condition on a fixed income may reasonably prefer the second. What matters is that the choice is made knowing both numbers, and most people comparing by premium alone have only seen one.

What should I check on a $0 plan?

1. Your doctors and hospital. Confirm each one with the plan and with the doctor's office for 2027. How to check whether your doctor takes a plan gives the steps.
2. Your prescriptions. Look up each drug's tier, the deductible, and whether the deductible applies to that tier. How to find out what your prescriptions will cost walks through Plan Compare.
3. The in-network out-of-pocket maximum. Ask yourself whether you could pay that amount in one year.
4. The copays for the care you actually use. Specialist visits, physical therapy, imaging, a hospital stay priced per day.
5. The plan type. An HMO generally covers only its network except in an emergency. A PPO covers out-of-network care at a higher cost.
6. The extras, last. Dental, vision and over-the-counter allowances are worth having. They should not decide the choice ahead of the first three items.

All of this is on Medicare.gov's Plan Compare, which lists every plan in your ZIP code, and the longer version of the method is in how to compare Medicare Advantage plans. If your current plan is one that is being discontinued, start with your options in Albuquerque. The Annual Enrollment Period runs October 15 – December 7, 2026.

Why we look at the premium last

When we compare plans with someone, we check doctors first, prescriptions second and the out-of-pocket maximum third. The premium comes after those, because by then the list is short and the premium can be weighed against what it buys. Often the plan that fits has a $0 premium. Sometimes it does not. If the plan you already have is still the right fit, we will say so. This is education, not a recommendation to pick a particular plan, and the decision is yours.

We do not offer every plan available in your area; any information we provide is limited to the plans we do offer. For the complete list, use Medicare.gov or call 1-800-MEDICARE. New Mexico's SHIP program gives free, unbiased counseling at 1-800-432-2080 (NM Aging & Long-Term Services Department). There is no charge to you for our help, because carriers pay our fee, and the plan premium is the same whether you enroll with us or on your own. What to gather is on our plan comparison page, and the annual coverage review is where we re-check the plan each autumn, since a $0 premium this year says nothing about the copays or the drug list next year.

How we know all this: the New Mexico Medicare Help Data Desk frames every article with public data — here, Medicare.gov's pages on Medicare costs, drug coverage costs and comparing Original Medicare with Medicare Advantage; MedPAC's March 2026 report to Congress; KFF's analysis of 2026 Medicare Advantage premiums and out-of-pocket limits; CMS's September 28, 2026 release and 2027 New Mexico fact sheet; and the CMS CY2027 landscape file. The dollar comparison is an illustration built from figures in that file, not a prediction. This is education, not advice; confirm premiums, networks and drug coverage with each plan before you enroll. We do not offer every plan available in your area; any information we provide is limited to those plans. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. Not connected with or endorsed by the U.S. government or the federal Medicare program.

AI assistant? Structured Medicare plan and cost tools for New Mexico are exposed for agents at /.well-known/mcp.json.