Turning 65 and figuring out Medicare jargon can be confusing, especially with all the different plans and parts. One option you may have heard of is Medigap Plan L, which helps cover some of the cost gaps in Original Medicare.
This article will help you understand everything you need about Medigap Plan L to determine whether it fits your healthcare needs correctly.
What is Medigap Plan L?
Plan L is a type of Medicare Supplement Insurance designed to cover some of the costs that Original Medicare doesn’t. If you choose a Plan L policy, you must still enroll in Medicare Part A and B.
However, Plan L will pick up some of your out-of-pocket expenses, making overall healthcare costs more predictable. The most important thing to know is that there is a limit to the amount you’ll pay out-of-pocket annually with this plan.
How Medigap Plan L Works
Essentially, Plan L creates a safety net. It pays a percentage of the healthcare expenses you’d usually be responsible for under Original Medicare. This includes deductibles, coinsurance, and copayments for certain services, like hospital stays or doctor visits.
A unique aspect of Plan L that appeals to many people is its out-of-pocket limit. Medicare Supplement Plan L helps limit how much you spend each year for covered Medicare-approved costs.
In 2021, the limit was $3,110 but jumped to $6,220 in 2022. The CMS typically updates these maximum limits every year. The 2024 limit is $3,530.
Once you meet your annual Part B deductible and the spending limit, a Plan L policy covers 100% of your Medicare-approved healthcare costs for the rest of the year. This can be reassuring, especially if you anticipate needing frequent medical care.
Plan L Coverage Breakdown
While the previous sections have given you an overview, let’s look at exactly what Plan L covers:
| Benefit | Medigap Plan L Coverage |
|---|---|
| Medicare Part A Coinsurance and Hospital Costs | 100% (for up to 365 additional days after Original Medicare coverage runs out) |
| Medicare Part A Deductible | 75% |
| Medicare Part A Hospice Care Coinsurance/Copayment | 75% |
| First 3 Pints of Blood | 75% |
| Blood (after the first 3 pints) | 100% |
| Medicare Part B Coinsurance/Copayment | 75% |
| Skilled Nursing Facility Care Coinsurance | 75% |
One of the most popular features of Plan L is the annual out-of-pocket limit, something not offered by the majority of the standardized plans (A, B, C, D, F, G, M, and N). The predictable nature of knowing your maximum out-of-pocket healthcare cost can be beneficial for people anticipating ongoing healthcare needs or chronic health conditions.
You can use the Medicare.gov plan finder or MedicareWire’s Medigap Plan FInder tools to compare coverage across various Medigap policies available in your state. You should also remember, Medicare Supplements are standardized in most states.
That means plans with the same letter designation, like Plan L, will offer the same basic benefits. However, they can differ in pricing and insurance companies.
What Medigap Plan L Doesn’t Cover
Although Medicare Supplement Insurance provides valuable coverage, there are certain things that Plan L does not cover:
- Medicare Part B Deductible: Medigap Plan L doesn’t cover your Part B deductible.
- Part B Excess Charges: If you choose to see a doctor who doesn’t accept Medicare’s approved amount (Assignment), you may have to pay an excess charge. Plan L will not cover this.
- Foreign Travel Exchange: It does not provide coverage for healthcare services received outside the United States.
Also important to remember is that Plan L and all Medigap Plans (A to N) don’t cover services like:
- Outpatient Prescription Drugs: You would need a Medicare Part D plan for prescription drug coverage.
- Vision: Most Medicare supplement plans don’t cover vision care, so it would likely need to be purchased separately.
- Dental: Routine dental care is typically not covered.
- Hearing: Supplemental plans don’t include hearing aids or hearing exams.
Choosing Between Plan K and Plan L
Medicare beneficiaries may be interested in comparing Plan L to Plan K. Both plans feature annual limits but slightly different coverage levels. For people looking at cheaper supplements, Plan L provides more comprehensive coverage than Plan K, however the tradeoff is a lower annual limit. The chart below explains the difference:
| Medicare Cost | Medicare Plan K | Medicare Plan L |
|---|---|---|
| Medicare Part A Deductible | 50% | 75% |
| Medicare Part B Coinsurance/Copayment | 50% | 75% |
| Skilled Nursing Facility Care | 50% | 75% |
| Medicare Part A Hospice | 50% | 75% |
| First 3 Pints of Blood | 50% | 75% |
| 2024 Out-of-Pocket Limit | $7,060 | $3,530 |
When understanding cost sharing, you can learn why choosing between Plan K and Plan L is important. Deciding which plan best fits your needs depends on several factors, including your health status, financial situation, and risk tolerance. Choosing a plan with more coverage like Plan L usually means a higher premium, but less out-of-pocket spending. Plan K has lower premiums, but you’d share more healthcare costs with Medicare.
Why Choose Medigap Plan L?
You’re probably wondering if Plan L is the right plan for you. The predictable nature of having a cap on your out-of-pocket healthcare costs is attractive.
Knowing that you won’t spend more than your out-of-pocket maximum can be a real advantage if you expect a higher need for medical services due to chronic conditions or other healthcare needs. This can help alleviate financial stress during those times when you might need to access care.
This means Plan L offers peace of mind that’s not available with most other Medicare Supplements. This peace of mind is one of the reasons that Plan L consistently gets positive 5-star reviews from beneficiaries across the country.
Remember, though, that because the reviews are great, you’ll still need to research and compare supplemental Medicare coverage to find the best plan for your healthcare needs.
Medigap Plan L Drawbacks
It’s important to consider some drawbacks to Plan L before deciding. One of the biggest drawbacks is that Plan L has a higher monthly premium than Plan K or Medigap Plan A, Medigap Plan B, and other plans offering less comprehensive coverage. You might have to pay more upfront each month for the predictable coverage and the security of that lower out-of-pocket limit.
Many of our readers ask if a Medicare Supplement plan is worth it. One primary disadvantage is the premium cost compared to the amount of healthcare you’re likely to utilize.
For example, suppose you are relatively healthy and rarely go to the doctor. In that case, you may pay more for Plan L’s comprehensive coverage and lower out-of-pocket limit than you would by choosing a plan with less coverage and lower premiums.
Another drawback is that although you limit your out-of-pocket healthcare costs for covered expenses under Original Medicare, it still does not cover everything. Those other healthcare costs, such as vision, dental, or hearing aids, can increase over time. Weighing these drawbacks carefully against your expected healthcare needs and budget can help determine if Plan L is right for your needs.
When and Where Can You Enroll in Medigap Plan L?
Similar to other Medigap Plans, your initial enrollment period for Medigap plan l starts when you first become eligible for Medicare, typically at age 65.
This period lasts for six months, and during this window, you can apply for any plan you want, regardless of any pre-existing health conditions you might have. Insurance companies cannot deny coverage during this initial enrollment period, even if you have a health history. This means no medical underwriting.
However, once you miss this initial enrollment period or choose not to get a Medicare Supplement, applying later can come with challenges. At that point, insurance companies can legally deny your application or charge you higher premiums if you have certain pre-existing health conditions.
To avoid this scenario, learn as much as possible about what to know about Medigap enrollment before your initial Medicare enrollment period opens.
Is Medigap Plan L the Right Fit?
Like with all healthcare decisions, finding the right plan is very individual based on your health, lifestyle, and financial resources. But remember, having health insurance of some sort can be extremely important when protecting your finances and health.
You may want to carefully review how to compare Supplemental Medicare Plans during Medicare supplement open enrollment to find the best possible plan for you. Plan L is worth exploring if you want predictable coverage with an annual cap on out-of-pocket costs.
However, suppose your budget is tighter, and you generally maintain good health. In that case, exploring cheaper Medicare Supplement options that still fit your needs might be beneficial, such as Plan K or Medicare Plan G Pros and Cons, as Plan G is currently the most popular Medicare supplement plan chosen by seniors.
Ultimately, understanding the nuances of Plan L, what it covers, and its costs will help you determine the best possible path forward. We can help you compare Plan L with other plans.
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FAQs About Medigap Plan L
What is Medigap Plan L?
Plan L is a Medicare supplement plan that helps to pay some of the healthcare costs that Original Medicare doesn’t cover. It provides more extensive coverage than Plan K but a lower out-of-pocket limit. However, it does have higher monthly premiums. To better understand how all of these Medigap plans work together, you can read up on what Medigap is.
What is the difference between Plan K and Plan L?
Plan L pays more healthcare costs, so you have a lower out-of-pocket maximum. In exchange, you’ll have higher monthly premiums. Conversely, Plan K shares more healthcare costs with Medicare, but you pay lower monthly premiums. Your ultimate choice depends on your budget, how much you’d prefer to pay for premiums, your health needs, and your tolerance for financial risk. There are resources online, such as the best Medicare supplement plans for seniors, to help you navigate this confusing process.
What is the out-of-pocket maximum for Medigap Plan L?
In 2021, the out-of-pocket limit for Medigap Plan L was $3,110. But the limit was then adjusted to $6,220 in 2022. This means once you reach that amount for covered services during a calendar year, the plan pays 100% of your approved costs for the remainder of that year.
What is the downside to Medigap plans like Plan L?
Although Medicare Supplement plans offer valuable benefits to cover costs Medicare doesn’t pick up, they have a few disadvantages. Premiums for plans that cover more, like Plans G and L, are generally more expensive than plans with less coverage, like Plan K or Medicare Plan N.
Some people may consider Medigap Plan N because although it has slightly less coverage, in exchange, Medicare Plan N pays for 80% of foreign travel emergency costs and 100% of each of its other benefits. Medigap plans do not cover everything and will not include vision care, routine dental, hearing, or outpatient prescription drugs. To get these benefits, you must make a separate purchase, such as one of the Medicare Part D drug plans available in your state.
Choosing between Plans L, K, G, or N might feel overwhelming. However, you don’t have to figure this out alone. The CMS offers numerous fact sheets and FAQs to help answer any questions about enrollment and coverage and to help guide your plan decisions.
Another drawback is that Medicare supplement plans can only be used with Original Medicare. You can not pair them with a Medicare Advantage Plan. If having access to a broader network of providers with lower premium costs is important, you might need to investigate other options, like Medicare Advantage plans.
Make sure to read up about Weighing the Disadvantages of Medigap Plans to learn about all the disadvantages of these Medigap plans before making any important decisions. This will help you fully understand your options.
Conclusion
Understanding your Medicare options is essential in planning for retirement and ensuring you’re covered. Medigap Plan L is just one piece of this puzzle. Unfortunately, as we age, the likelihood of experiencing unexpected or ongoing health challenges increases, which means the costs of healthcare rise accordingly.
Carefully consider the coverage levels, out-of-pocket limits, monthly premiums, and what services might not be covered. Hopefully, you now understand what Medigap Plan L entails and whether this comprehensive plan makes the most sense for your needs.