by Russell Noga | Updated August 17th, 2023
Medicare supplement plans, or Medigap, bring additional benefits to support your Original Medicare Part A & B policies.
Many seniors don’t realize Medicare Parts A & B only cover 80% of inpatient and outpatient care services involved with hospitalization and medical treatments. The beneficiary is responsible for paying the remaining cost out-of-pocket.
So, while you might think you have coverage for medical issues and emergencies, you could receive a huge bill for services, especially for extended stays in the hospital.
A Medicare supplement plan bridges the gap, covering the remaining 20% of out-of-pocket costs.
Medigap plans come in ten variations offering different benefits.
Depending on the plan, you could get comprehensive, near-comprehensive, or limited coverage for out-of-pocket expenses.
What Is Medicare Supplement Plan K?
Medicare supplement Plan K is one of two plans implementing a cost-sharing model. Plan K covers 50% of most Original Medicare Part B services. Plan K & L also introduce out-of-pocket limits, which are $6,940 for Plan K in 2023.
When a beneficiary reaches the threshold for out-of-pocket spending, the plan pays 100% of the remaining costs for Medicare Part B services for the rest of the calendar year.
The Medicare Part B deductible also counts towards the out-of-pocket threshold for Plans K & L.
One of the highlights of Plan K’s cost-sharing model is that it covers 50% of Medicare Part B medical coinsurance.
The coinsurance responsibility is the percentage of medical bills you must pay before your insurance policy covers the rest.
For example, if you have a medical bill for $5,000, you’re coinsurance responsibility is $1,000 before Medicare Part B covers the remaining $4,000, provided you’ve reached the Medicare Part B deductible.
With a Plan K policy, you would only pay $500 instead of $1,000, assuming you haven’t met the out-of-pocket maximum. Therefore, you would pay $500 of a $5,000 medical bill.
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What Does Medicare Supplement Plan K Cover?
The Medigap Plan K cost-sharing model has the same standardized benefits across all providers. The federal agency, CMS, regulates the industry, ensuring that all insurers offer the same Plan K benefits in the policies they sell to consumers.
So, the Plan K benefits you get from an insurer like Humana will be the same as those from Blue Cross Blue Shield.
Here are the standard benefits Plan K offers for Original Medicare Part A & B expenses.
- Part A coinsurance and hospital costs for up to 365 days after using up Medicare benefits.
- 50% of Part A hospice care coinsurance or copayment.
- 50% of Part B coinsurance or copayment.
- 50% of Blood transfusion costs for the first three pints of blood. 95% after the first 3 pints and paying the Part B deductible.
- 50% of Part A deductible.
- 50% of Skilled nursing facility care coinsurance.
- Out-of-pocket limit: $6,940.
- 100% of covered services for the year after meeting the annual Part B deductible and reaching the yearly out-of-pocket limit.
What Isn’t Covered by Medicare Supplement Plan K?
Plan K doesn’t cover the costs of the following expenses involved with Original Medicare Part B.
- Part B deductible.
- Part B excess charges.
- Foreign travel emergency medical costs.
Additionally, Plan K, like all other Medigap plans, doesn’t cover the cost of preventative care services or cosmetic procedures. You don’t have coverage for any expenses unrelated to Original Medicare Parts A & B.
So, Plan K won’t cover the costs of podiatry, chiropractic, physiotherapy, and acupuncture.
You don’t get coverage for prescriptions or hearing, dental, and vision services.
Medigap plans don’t cover the costs of stays at unskilled nursing homes or private-duty nursing.
What are the Average Monthly Premiums for Medicare Supplement Plan K?
Plan K is available from private healthcare insurers. It’s not a federally-funded program like Original Medicare.
As a result, Medigap premiums in 2024 can vary from provider to provider and by state. For example, the cost of a Plan K policy in New York could be higher or lower than in Florida.
You could also pay more for Plan K with one insurer than another. For instance, Plan K premiums might be more expensive with UnitedHealthcare than with Aetna.
When insurers assess you to set your premiums, they look at factors like your location, gender, age, and smoking status.
The industry average premium for Plan K is $77 a month across all providers and states, and the policy price ranges from $47 to $112 for a 65-year-old female nonsmoker.
How Do You Enroll in Medicare Supplement Plan K?
You can enroll in Medigap Plan K during the six months after your 65th birthday. This timeframe is the Open Enrollment period for new Medigap beneficiaries.
During Open Enrollment, you can pick any plan and any provider, and the insurer must accept your application to join its Medigap scheme.
The insurer can’t charge you above-average premiums or deny you a policy if you have pre-existing health conditions.
However, unless you have guaranteed issue rights, registering for a plan outside the open enrollment period could expose you to medical underwriting.
If the insurer decides you’re a high risk to its plan because of your pre-existing conditions, they’ll charge higher-than-average rates for your premiums or deny your application.
What are the Best Alternatives to Medicare Supplement Plan K?
The best alternative to Medigap Plan K is Plan N. Plan N provides much better coverage for Medicare Part B expenses.
Plan N doesn’t cover Medicare Part B excess charges, the additional fees practitioners charge above the Medicare-approved rate.
Plan N also doesn’t cover the Part B deductible (only Plan F does), and it also requires a copayment of $20 when visiting the doctor and a $50 copayment when visiting the emergency room when not admitted to the hospital.
You get affordable premiums, making it a great choice for healthy seniors who don’t incur many medical expenses during the year but want good coverage in the event of a medical emergency.
