Medicare Plan K
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Medicare Plan K
Medicare Plan K is the Medicare supplement that covers the Part A hospital deductible while also covering about 50% of the other gaps in Medicare. Consumers are beginning to be more interested in plans that offer lower premiums if they are willing to pay more of the cost-sharing.
Fewer Benefits, but Lower Premiums
Medicare Supplement Plan K offers the same basic benefits as other supplements, but with lower premiums. For example, this plan will still cover preventive care services and give you an extra year in the hospital. However, you must split the cost-sharing with the insurance carrier on some items like the Part A deductible. You also get to pay the Part B deductible and any excess charges.
Medicare Plan K also includes a cap on the amount you spend called an out-of-pocket maximum. For example, say you have a year with a lot of medical treatments. If your out-of-pocket spending reaches the maximum limit, then your Medigap K policy will kick in to pay all of the rest for that year.
Medigap Plan K – Maximum Out of Pocket
Medigap Plan K’s MOOP cap is $5560 in 2019, so that is the maximum you would spend in any calendar year. This cap works very similar to the out-of-pocket maximums that you have had in the past on employer group health insurance plans. Your insurance carrier will track exactly how much out-of-pocket spending you’ve done for that calendar year. If for any reason you spend more than the cap, then the insurance policy must cover 100% of the rest of your expenses after that point.
Keep in mind that the yearly out-of-pocket limit for Medigap Plan K is around twice the amount as the maximum out-of-pocket limit for Medigap Plan L, the only other Medigap plan that covers this benefit. If you want a Medigap plan that includes a yearly out-of-pocket limit, but would prefer to have a lower threshold before the plan begins to cover costs, then Medigap Plan L could be another option with a much lower limit: The annual out-of-pocket for Medigap Plan L is about half the amount as the limit for Medigap Plan K.
Not every Medigap insurance carrier offers a Plan K. At Ashford Insurance, we know which carriers in Texas offer this policy.
Medigap Plan K benefits
Medicare supplement Plan K offers partial coverage for a variety of Original Medicare costs that you’d normally have to pay out of pocket. This plan covers 50% of the cost for the following benefits:
- Medicare Part A deductible
- Medicare Part A hospice care coinsurance or copayment
- Skilled nursing facility care coinsurance
- Medicare Part B copayment or coinsurance
- First three pints of blood for a covered medical procedure (yearly)
With Medigap Plan K, beneficiaries must pay the Medicare Part B deductible and Part B excess charges out of pocket. Part B excess charges are the difference between what Medicare covers for a service and what your healthcare provider may charge you. For every covered service or item, Medicare has set an “approved amount” that it will pay. However, some doctors may charge above this Medicare-approved amount, and the beneficiary is responsible for paying what Medicare doesn’t cover.
There’s a maximum limit that providers can charge above what Medicare will cover. Doctors and physicians who don’t accept assignment (meaning they don’t accept the Medicare-approved amount as full payment) are allowed to charge up to 15% over the Medicare-approved cost for their services. These “excess charges” are the responsibility of the beneficiary once Medicare pays its approved amount.
For example, you’ll usually pay 20% of the Medicare-approved cost for outpatient services, while Medicare pays the remaining portion of 80%. Let’s say the approved amount set by Medicare is $100 for a doctor’s appointment. A doctor who doesn’t accept assignment may choose to charge up to 15% over this amount, or $15 in excess charges. In such a situation, Medicare will cover 80% of the cost, or $80. However, the beneficiary would be responsible not only for paying the remaining $20, but also the additional $15, for a total out-of-pocket cost of $35. While Medigap Plan K will not cover Part B excess charges, Medigap Plan G and Plan F will if you are interested in this benefit.
Medigap Plan K offers partial coverage for most of its benefits, however, the plan completely covers the following benefit:
- Medicare Part A coinsurance hospital costs up to an additional 365 days after Medicare benefits are exhausted
Need help? Call us for an appointment at (817) 952-3153
Sarah began working in the Texas healthcare industry in 2001, where she worked for many years with elderly Alzheimer and Dementia patients. From there she worked as a Group Benefits Administrator with a local healthcare company in the Human Resource Department for a period of 10 years. Since then, she has decided to work in the Texas Medicare insurance industry full time and has joined the family business, Ashford Insurance, as a Texas Medicare Insurance Agent.
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