Key Takeaways:
Medicare Supplement Plan K and Plan L are low cost alternatives to full coverage Medicare supplement plans. However, people interested in Plan K or Plan L should seriously consider the Plan G High Deductible because it is more insurance at a lower cost.
What Is A Medicare Supplement?
Medicare Supplement Plans (aka Medigap Plans) are private health insurance plans that can be bought by someone enrolled in Original Medicare. Medigap policies were created to cover some of the gaps in Medicare coverage, such as deductibles, coinsurance, and co-payments.
The cost and availability of Medigap policies may vary by state and by private health insurance companies.
Do Medicare Supplement Companies Offer All Medigap Plans?
No, insurance companies are not required to offer all Medicare supplements. However, they need to offer at least Medicare Plan A if they wish to participate in the supplement market.
There are 10 Medigap plans (Plan A, B, C, D, F*, G*, K, L, M, and N), and each plan provides a different combination of benefits as they pay for the deductibles and copays left as your responsibility if you have just Medicare Part A and Part B. You can view the table of Medigap benefits showing all the plans on our Resources page.
On average across the country 97% of Medicare supplement insurance companies offer Plan G and Plan F. 94% offer Plan N. 45% offer Plan G-High Deductible. 16% offer Plan L. 13% offer Plan K. *Both Plan G and Plan F have a high deductible option.
Let’s have a look at two plans, K and L.
Medicare Supplement Plan K and L Pros
1) Lower monthly premiums
Medigap Plans K and L typically have lower premiums than some of the other more popular Medigap plans, like Plans G and N.
2) Full inpatient hospital coverage
Both Medicare Supplement Plan K and Medicare supplement Plan L covers 100% of the Medicare Part A coinsurance and hospital costs. They also pay a portion of the Part A deductible. This means a very low out of pocket cost for inpatient hospital costs.
3) All the benefits of Original Medicare.
When coupled with the advantages of Original Medicare, your Plan K and L Medigap options offer more freedom and a lower financial risk than most Medicare Advantage Plans. You don’t have to worry about being denied coverage by an insurance company.
Medicare Supplement Plan K and L Cons
Medicare Supplement Plan K and L Cons1) Higher out-of-pocket costs
Medicare Supplement Plan K & Medicare Plan L have lower monthly premiums compared to some other Medigap plans, but it they comes with higher out-of-pocket cost sharing. In addition to being responsible for Part B Excess charges and the Part B deductible, the consumer has a maximum annual out-of-pocket risk that is higher than any other Medicare supplement plans. The maximum out of pocket limit resets and often increases every calendar year.
2) Limited coverage
Medicare Supplement Plan K & L only covers 50% and 75% respectively of some of the Medicare-covered costs such as the Part B coinsurance, Part A hospice care coinsurance and skilled nursing care, the Medicare Part A deductible for inpatient admission and more. This means more out of pocket expenses than found in other plans as well as a higher maximum out of pocket limit.
3) No coverage for Part B excess charges
Neither Medigap Plan L or Plan K cover Medicare Part B outpatient excess charges, which are charges from healthcare providers that exceed the Medicare-approved amount. This means that if you go to a doctor or hospital that charges more than the Medicare-approved amount, you will be responsible for paying the difference out of pocket. Your Medigap policy will not cover those expenses.
4) No Foreign Travel Emergency Coverage
Unlike many of the other supplement plans, covered services for Plans K & L do not include coverage for foreign travel emergencies. While not the most important feature, if you have the need for a Medicare plan that helps while traveling, these plans are of no use.
It’s important to also note that the out of pocket limit shown in the Medigap Table of benefits for these two plans is not all inclusive. What is not covered (i.e. Excess Charges and Part B Deductible) does NOT count toward maximum out of pocket limit.
Compare Medigap Plan G-HD to Plans K & L
Plan G-HD is the most popular low premium Medigap plan. It’s the more popular Medicare supplement plan because it has greater insurance coverage at a lower cost. While Plan G-HD has a high deductible, it covers 100% of the same benefits as Plan G once the deductible is met. Plans K and L provide less coverage and have a higher out-of-pocket limit compared to Plan G-HD.
Because the G-HD is in higher demand and offered by more insurance companies, the price is more in line with its benefits and often provides a better value.
However, both the high deductible Medigap plan and the Plans K & L are still sensitive to inflation. The reason for this is that the maximum out of pocket of Medigap plan K and Medigap plan L will generally increase each year. This means your potential out of pocket costs increase as well.
Medigap Plan G-high deductible and Plan F-high deductible respond in a similar fashion. The deductible for these plans, which serves as your Medicare supplement plan maximum out of pocket costs, increases each year with the percent change in the Consumer Price Index.
The Full Coverage Medicare Supplement Plan
As I stress in my “Best Medicare Supplement Plan” video, which plan is best for you
is a personal decision. It should be based on both immediate and lifetime costs as well as how much effort you wish to put into your Medicare.
A Medigap policies allow you to keep the most important Medicare benefits; you can see any doctor that accepts Medicare in the US and territories, plus no insurance company can deny or delay your care. Your healthcare is between you and your doctor.
As you shop for a Medigap policy , consider that a Plan N may be a better value over your lifetime. In most states the premium is nearly the same as a Plan K or L, but it offers more coverage and historically more stable premiums.
At Medigap Seminars we offer all Medicare supplement plans from all the major insurance carriers. We help our clients choose the right plan and right insurance company for your benefits and your needs. Contact Us today to see how we can help.
Matthew Claassen
Matthew Claassen, CMT and CEO of Medigap Seminars Insurance Agency. Medigap Seminars is an award winning premier national Medicare Insurance Brokerage, ranked among the top in the U.S.A. Matthew is considered a leading national expert on Medicare and Social Security. Mr. Claassen is a distinguished member of the Forbes Business council, an invitation only organization of business leaders and entrepreneurs. He and his team have received awards from many of the countries largest insurance companies including Mutual of Omaha, Aetna, Humana, Cigna, United American, United Healthcare and others. His videos have become the most popular Medicare educational videos on YouTube with millions of views. As a financial analyst Matthew lead a team of researchers to win the 2009 Best Equity Research & Strategy Award from The Technical analysis magazine.
