If you’re shopping for a Medicare Supplement, and you’re wondering how you can save some money on your monthly A premium is an amount that an insurance policyholder must pay for coverage. Premiums are typically paid on a monthly basis. In the federal Medicare program, there are four different types of premiums. , your insurance agent might show you Plan K as an option.
But, is the Plan K Medicare Supplement right for you and your situation?
In this article, we’ll explore Plan K and contrast it with another cost-saving plan to see which ones can really save you money.
- Medicare Supplements are additional insurance policies that Medicare beneficiaries can purchase to cover the gaps in their Original Medicare (Medicare Part A and Medicare Part B) health insurance coverage. helps fill some of the cost gaps in Original Medicare is private fee-for-service health insurance for people on Medicare. It has two parts. Part A is hospital coverage. Part B is medical coverage..
- Some people can afford full coverage, and the premiums do not matter.
- Some people need full coverage, and their premiums save them money.
- Some people can’t afford and/or don’t need full coverage. These people can save money with a plan that lets them share Out-of-Pocket Costs for Medicare are the remaining costs that are not covered by the beneficiary's health insurance plan. These costs can come from the beneficiary's monthly premiums, deductibles, coinsurance, and copayments..
- Medicare Supplement Plan K is one of two unique Medicare supplements with shared-cost coverage and an annual out-of-pocket limit. This is a plan that works for people looking for help with certain Original Medicare costs... is a cost-sharing Medigap plan with an annual limit.
What is Medicare Supplement Plan K?
Medicare Supplement Plan K is one of 10 standardized Medigap policies. Each of the 10 standardized Medicare Supplement plans covers some of the A deductible is an amount a beneficiary must pay for their health care expenses before the health insurance policy begins to pay its share., Coinsurance is a percentage of the total you are required to pay for a medical service. , and A copayment, also known as a copay, is a set dollar amount you are required to pay for a medical service. built into Medicare Part A is hospital coverage for Medicare beneficiaries. It covers inpatient care in hospitals and skilled nursing facilities. It also covers limited home healthcare services and hospice care. (hospital coverage) and Medicare Part B is medical coverage for people with Original Medicare benefits. It covers doctor visits, preventative care, tests, durable medical equipment, and supplies. Medicare Part B pays 80 percent of most medically necessary healthcare services. (medical coverage).
Plan K is one of two shared-cost plans. The other is Plan L.
These Medigap plans cover a percentage of all basic benefits until the annual plan maximum is reached. Plan K covers 50%, whereas Plan L covers 75%.
The out-of-pocket maximum with the two plans is also different. With Plan K the annual maximum is $6,940. The Plan L limit is $6,940 per year. The out-of-pocket limits adjust annually.
The best way to compare Medigap policies is to look at a chart:
As you can see, Plan K pays 50% of most costs, but not all. And it pays 100% of the Part A coinsurance.
TIP: If you’re wondering, how much do medicare supplements cost, and the rates shock you, Plan K is generally the lowest-cost plan in most areas. If cost is a concern, and you’re asking yourself, do I really need a Medicare Supplement, be sure to discuss this plan option with your insurance agent. The high deductible version of Medicare Supplement Plan G has the same coverage benefits as the regular Medigap Plan G, but you pay all costs until your Medicare-approved costs reach the annual deductible. High Deductible... is another option to consider.
Does Medicare Supplement Plan K Cover the Part B Deductible?
One of the costs that Plan K does not cover is the Part B deductible. Only Plan C and Plan F cover this cost. However, these two plans are no longer available to new Medicare beneficiaries.
Another cost Plan K does not cover is Part B A Medicare Part B excess charge is the difference between a health care provider’s actual charge and Medicare’s approved amount for payment.. Exactly what are Medicare excess charges? They are additional medical costs doctors and other healthcare providers can add to your bill if they do not accept Medicare’s standard rates.
Plan G covers excess charges, but it is the most expensive plan available to new Medicare beneficiaries. It covers 100% of all out-of-pocket costs, except the Part B deductible.
Is Medicare Plan K Worth It?
Plan K and High Deductible Plan G (HDG) are the two lowest-cost Medicare Supplements. The reason they are the cheapest plans is that they shift more risk to the policyholder.
Generally speaking, the healthier you are and the more money you have saved, the more risk you can take with your Medigap coverage.
Why is that?
Healthy people require fewer healthcare services and are less likely to need hospitalization than individuals with chronic health conditions. These people have less risk of high healthcare costs.
People with strong retirement savings are not impacted as greatly by out-of-pocket healthcare costs. These people can afford the risk of higher healthcare costs.
What is your level of risk? Have that discussion with your insurance agent.
Hi there. I offer a 100% FREE Medigap Rate Comparison Service. It will arm you with all of the information you need to make an informed decision.
I am a retired senior and a 21-year U.S. Navy veteran. I do this to help folks just like you and me. My goal is to make sure you have access to rates from all carriers without a sales pitch. No Calls. No Email Spam. No Kidding!
How Does Plan K Compare to Medicare Advantage Plans?
If you believe the commercials on TV, it’s easy to think that private Medicare plans cost less and save money.
For some people, they do. For most people, they don’t.
Healthy people who join a Medicare Advantage plan that offers additional benefits may save money. They save money because they rarely use healthcare services and they can take advantage of the additional benefits, such as routine dental, vision, and hearing care.
However, people with chronic health conditions rarely save money with a Medicare Advantage plan. Private health insurance companies charge copays, coinsurance, and deductibles, just like Original Medicare.
In 2016, the average cost of visiting a doctor in the U.S. was $265. Medicare’s rates are a bit lower, so take this with a grain of salt. Under Medicare Part B, the A person who has health care insurance through the Medicare or Medicaid programs. pays 20%. On average, that’s $53. However, with Plan K coverage, you only pay 50% of that, or $26.50.
Looking at it this way, what you pay out-of-pocket for doctor visits isn’t so bad. A typical Medicare Advantage plan has a $25 to $40 copay to see a specialist. Some plans charge a 20% coinsurance to see a specialist. Which means you’d be paying $53 or more out of pocket.
In our research, Medigap Plan K out-of-pocket costs are generally more affordable than Advantage plans. This includes coinsurance and hospital costs.
Oftentimes, what you pay for hospitalization with a Medicare Advantage plan is more than standard Medicare benefits. There is a growing trend in Medicare Advantage (MA), also known as Medicare Part C, are health plans from private insurance companies that are available to people eligible for Original Medicare (Medicare Part A and Medicare Part B). to charge a 20% to 40% coinsurance on inpatient hospital costs.
How Does Plan K Compare to a High Deductible Plan G?
In most areas, Plan K and high-deductible Medicare Supplement Insurance plans have similar monthly premiums. In most areas, you can get into a Plan K or HDG policy at age 65 for around $50 per month.
That’s about where the similarity ends.
With a Plan K policy, you and your insurance company share 50% of the big costs until your spending reaches the annual limit of $6,940.
With a High Deductible Plan G, you pay all of your Part A and Part B deductibles, coinsurance, and copay costs until you’ve spent $2,490 in the current calendar year. That makes an HDG policy a bigger risk.
Find Plans in your area with your ZIP Code
How Do You Save Money with a Plan K Policy?
Can you afford to pay 50% of the Medicare Part A deductible if you are hospitalized? This year, the Part A deductible is per A benefit period is a method used in Original Medicare to measure a beneficiaries use of hospital and skilled nursing facility (SNF) services. With each new benefit period, the beneficiary is charged a new benefit....
Can you afford 50% of the Part B coinsurance if you become seriously ill or injured? Medicare beneficiaries pay a 20% coinsurance. So your costs with Plan K would be 10% of all doctor, specialist, testing, medical supplies, and Durable medical equipment (DME) is equipment that is designed to last and can be used repeatedly. It is suitable for home use and includes wheelchairs, oxygen equipment, and hospital beds. until you’re spent $6,940.
Here’s how smart people handle these costs with Plan K. They self-insure the out-of-pocket limit.
Let’s say a Plan G policy at age 65 would cost you $125 per month, but you could get a Plan K for $50. That’s a savings of $75 per month.
What if you put the $75 savings into a savings account each month and used it for your share of the costs? Each year you would put away $900. How likely are you to spend that amount on regular doctor visits? How likely are you to dip into savings for a hospital stay?
Answer those questions and you’ll know if Plan K will save you money over the long run.