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What is Medicare Supplement Plan K?

Plan K is one of the 10 standardized Medicare Supplement (Medigap) plan options available for purchase in most states.

Plan K is one of the 10 standardized Medicare Supplement (Medigap) plan options available for purchase in most states. (For reference, ‘Medigap’ is another term often used for Medicare Supplement. We will use them interchangeably.)

The goal of Medicare Supplement insurance is to fill in some of the out-of-pocket costs left over after Original Medicare (Parts A & B) coverage.

The 10 standardized plans cover varying degrees of your Original Medicare deductibles, copays, and coinsurance. Medicare Supplement plans are labeled: A, B, C, D, F, high deductible F, G, K, L, M, N.

(Be careful not to confuse Medigap plans A, B, C and D with Medicare Parts A, B, C and D. They are different.)

Medigap plans are not endorsed the U.S. government or the federal Medicare program. Like all Medigap plans, a Plan K will have the same benefits no matter which insurance carrier you buy your policy from. The only difference between a Plan K from Humana, a Plan K from Aetna, a Plan K from UnitedHealthcare AARP, or a Plan K from any other insurance carrier is the price.

What is Different about Plan K

Plan K is known for two features: cost-sharing and an out-of-pocket limit. The only other Medigap plan with both of these features is Plan L, though Plan L has a different cost structure.

Cost-sharing: If you choose to go with a Plan K, your insurance carrier will only pay 50% of the costs for certain plan benefits and you will be responsible for the other 50%. We will cover these benefits in detail below.

Out-of-pocket Limit: Plan K also has an out-of-pocket limit of $5,880. This would be the maximum amount you would spend on healthcare-related costs in a year.

Whereas Original Medicare and most other Medicare Supplement plans do not have an out-of-pocket limit, Plan K limits your exposure.

Coverage Example for Medicare Plan K

Original Medicare (Parts A & B) is the federal Medicare program. However–as many newbies to Medicare are surprised to discover–Original Medicare does not cover all of your healthcare costs.

Medicare generally will only cover 80% of the Medicare-approved amount of a service. You are then responsible for the remaining 20% – with no out-of-pocket limit.

For example, if you have a covered service that costs $100,000, you could be on the hook for 20% of this amount.

With Medigap Plan K, you would typically only be responsible for 10% of the cost of the service. Additionally, once your out-of-pocket expense reaches $5,880, your Medicare Supplement Plan would cover the remaining expenses.

Medicare Supplement Plan K Popularity

Medicare Supplement Plan K is not particularly popular, but it is a great fit for certain individuals. If you’re looking for a relatively cheap Medigap plan that has an out-of-pocket-limit and some cost sharing along the way, Plan K is worth a look if it’s available in your state.

Medicare Supplement Plan K out of pocket limit

Medicare Supplement Plan K has an out of pocket limit of $5,880. Your out of pocket limit is the max that you’ll have to pay for covered services during your plan year. This only applies to covered services and doesn’t include your monthly premiums.

If you are looking for a similar plan with a lower out of pocket limit, you should consider Medigap Plan L which has an out of pocket limit of $2,940 for 2020 and covers 75% of out of pocket costs. 

Plan F, which is currently the most popular Medicare Supplement plan does not have an out of pocket limit. However, Plan F covers all cost sharing expenses, so it doesn’t matter that there is no out of pocket limit. You out of pocket limit is essentially $0.

In case you are not aware, Plan F will no longer be available for people who enroll in Medicare Supplement plans after January 1, 2020.

Medicare Supplement Plan G, which we anticipate will soon become the most popular Medicare Supplement plan does not have an out of pocket limit either. Plan G covers all out of pocket expenses besides the Part B deductible of $198 in 2020. Plan G essentially has a $198 out of pocket limit.

Medicare Supplement Plan K Coverage 

As we previously mentioned, the goal of Medicare Supplement insurance is to fill in some of the out-of-pocket costs left over after Original Medicare coverage.

Medicare Supplement Plan K covers 100%

  • Medicare Part A coinsurance and hospital costs up to 365 days after Original Medicare benefits are exhausted

Medicare Supplement Plan K covers 50%

  • Medicare Part A deductible ($1,408 for each benefit period you use in the year)
  • First three pints of blood for a medical procedure
  • Medicare Part B coinsurance
  • Medicare Part A hospice care coinsurance
  • Skilled Nursing Facility care coinsurance

Coinsurance is the amount left over after the 80% covered by Original Medicare

Medicare Supplement Plan K does not cover

  • Medicare Part B deductible ($198 per year in 2020)
  • Medicare Part B excess charges
  • Foreign travel emergency coverage

Why else you might want a Medicare Supplement policy

Medicare Supplement Plan K is just one of the Medigap plans available. It’s important to compare Medigap plans and choose the option that’s best for your healthcare needs (now and down the road) and your budget.

Anyone who has Original Medicare (Parts A & B) is eligible to buy a Medigap plan. You cannot however buy a Medigap plan if you opted in for a Medicare Advantage plan.

Beneficiaries who went without a Medicare Supplement plan spent an average of $5,374 on out-of-pocket costs in 2016, according to a study by the Commonwealth Fund, more than twice what those with a Supplement plan spent.

The best time to purchase a Medicare Supplement plan is during your personal initial enrollment period. Initial enrollment period is the first six months after you’re both 65 years old and enrolled in Medicare Part B. The typical enrollee will coordinate their Medigap policy to begin on the month they turn 65.

You can still buy a plan later, but you may have to go through medical underwriting. Underwriting could mean higher premiums or having a pre-existing condition not covered.

Medicare Advantage

You cannot have a Medicare Supplement Plan K with Medicare Advantage.

Medicare Advantage (Part C) is a private alternative to replace Original Medicare (Parts A & B) and typically offers additional benefits. Medicare Advantage plans often limit your coverage to a particular network of healthcare providers. Plans that allow you to see out-of-network providers typically charge you more.

You must be enrolled in Medicare Parts A & B to be eligible to apply for a Medicare Advantage plan.

You may pay a premium for your Medicare Advantage plan, in addition to your Part B premium. To be clear, you will still need to pay your Part B premium.

Medicare Part K

Medicare Part K does not exist.

  • Medicare Part A is the hospital insurance portion of Original Medicare
  • Medicare Part B is the medical insurance portion of Original Medicare
  • Medicare Part C is Medicare Advantage. Medicare Advantage is an alternative to Original Medicare (Parts A & B) that is offered by private insurers
  • Medicare Part D is Prescription Drug Plans (PDP)
  • Medigap Plan K is one of the 10 standardized Medicare Supplement insurance plans

Shop for Medicare Supplement Plan K

Look at Medicare Supplement Plan K prices with no obligation. Enter your zip code, birthdate, gender and tobacco status to get the most accurate prices. Or, shoot us an email at [email protected], or speak with a licensed insurance agent by calling 917-408-3690.

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