Ensuring that you have adequate insurance for your health is a major priority. Healthcare insurance can be complicated; however, with so many options and offers, benefits, exemptions, and conditions covered and ignored.
Medicare supplements, also known as Medigap plans, can be an ideal solution to help you establish what it is you need and what is surplus, and can help you to build the best package.
As the name suggests, Medigap plugs the holes which exist within the Medicare system. There are ten plans available, all of which offer different levels of coverage and support, as well as changing premiums from affordable to expensive.
One of the lesser known plans is Plan K, and this can offer a range of benefits which might make it the perfect fit for you.
Benefits of Medigap Plan K
Plan K is a smaller and less well-known policy, and this has one immediate advantage: the premiums tend to be far lower and more affordable.
This is because Plan K only pays for a portion of your expenses –usually around 50 percent—compared to other plans which offer to pay 100 percent.
This difference means you may have higher upfront costs but will be able to afford the premiums more easily.
More importantly, the lack of coverage doesn’t mean you will be out of pocket. Plan K offers an annual out-of-pocket limit, which kicks in at around $5,000.
Once this threshold has been breached, you can rest assured that your Medigap plan will kick in, covering all of your Medicare costs for the rest of the annual period.
This can be a lifesaver—sometimes literally—if you suffer from chronic or recurring health conditions which require repeat treatment and have the potential to build up substantial medical bills and costs.
Put simply, Plan K will offer you around 50 percent coverage for:
- Part B copayment or coinsurance
- Part A hospice care coinsurance or copayment
- Medicare Part A deductible
- Skilled nursing facility coinsurance
- The first three pints of blood required for medical procedures
Up until you reach the threshold, you will be required to pay half of these costs. Once that limit kicks in, however, you will no longer have the financial responsibility for your care, and this offers essential peace of mind for some customers.
There are two significant exemptions if you take out a Plan K option. First, you will not receive any coverage for Part B deductibles; this is something which is being phased out across all plans and is not restricted to Plan K.
Part B excess charges will also not be covered. Upon visiting a doctor or undergoing any medical services, you will be charged a predetermined cost to pay for the treatments.
The doctor is entitled to charge you 15 percent more than these pre-set charges, and anything above this is considered excess—something you will be required to pay for under Plan K.
Plan K is a popular choice primarily due to the lower premiums. The price point makes it attractive and affordable even if you are running to a strict budget.
Your exact cost will vary depending on your service area, but as a general rule, Plan K offers some of the lowest premium costs of any Medigap plans. In return, other alternatives will cover more benefits or a higher percentage of the costs.
It is important to remember, however, that it may end up costing you a higher amount in out-of-pocket costs. The 50-percent limit may seem generous, but medical expenses can quickly mount up and spiral out of control.
You will still be responsible for paying half the cost of the first three pints of blood received, any Part A deductible charge, and the cost-sharing for any Part B covered services, as well as half the cost of skilled nursing care and Part A hospice care.
The basic benefits of Medigap are standardized. You will not receive a lower quality of care options simply because you live in a particular state.
This is also the case regardless of which insurance company you choose to purchase your policy with. What may change is the cost of your premiums.
These are subject to variations across providers and locations, and depend mainly on the method Medigap uses to set the prices of premiums— make sure you check this out before you commit to a payment.
Plan K Alternatives
Plan L – Like Plan K, Medigap Plan L uses an out of pocket maximum to keep the monthly premiums low.
Plan G – The only part of Medicare not covered by Plan G is the Part B deductible. This will be the most comprehensive plan when they retire Plan F in 2020.
Plan F – The most comprehensive plan currently available, Medigap plan F covers all gaps left by Medicare.
Deciding which plan to choose depends mostly on your situation, including your health, how frequently you need to seek medical assistance or use a healthcare facility, and an estimate of the out-of-pocket costs you are likely to face.
If you are generally fit and healthy with no long-term health conditions, it may be that you only require the bare minimum in terms of assistance with healthcare costs. If this is the case, Plan K is the ideal choice.
If, however, you are anticipating high medical expenses and frequent use of healthcare services, it may be a good idea to look more closely at plans which offer to pay a higher proportion of costs, such as Plan F.
These may have higher premiums but are likely to save you money in the long run. It is essential to look at all angles, and work out how much you will save on monthly premiums.
It could that the thought of facing considerable bills in the event of a claim is a deterrent, and you are willing to go with a slightly costlier plan to offset this.
Choosing the right medicare supplemental insurance is imperative for ensuring the long-term health and safety of your family. Make sure that you are not saving money in the short term with smaller premiums by sacrificing larger bills in the future.
If you have a lot of high-demand medical needs, you may want to consider an option which offers more comprehensive coverage and can take on a higher percentage of any costs incurred.