- Plan K is a Medicare Supplement (Medigap) plan that helps with the cost of medical care.
- Federal law ensures that no matter where you purchase your Medigap Plan K, it will include the same coverage.
- The cost for Medigap Plan K may vary based on where you live, when you enroll, and your health.
Medicare Plan K is a Medicare Supplement plan designed to help with some of the out-of-pocket costs that can occur with traditional Medicare.
A Medicare “plan” is different from a Medicare “part,” as the parts are larger divisions of coverage and the plans are supplement insurance that private insurance companies sell.
Also known as Medigap, Medicare Supplement plans range in their coverage. This article will take an in-depth look at the costs associated with Medicare Supplement Plan K.
The Centers for Medicare & Medicaid Services (CMS) requires that insurance companies offer standard plans. This means that Plan K offers the same coverage in Tennessee as it does in California. However, the plans aren’t standardized in terms of cost. Insurance companies can charge different amounts for a Medigap plan.
Insurance companies tend to price their Medigap plans using one of three pricing models:
- Attained-age rated. Enrollees pay a premium that increases based on their age. These policies are usually the least expensive at first if a person buys them at an early age entry point to Medicare, then can become very expensive as a person ages.
- Community-rated. Insurance companies don’t base these plans off a person’s age. The premium may increase over time, related to inflation, however.
- Issue-age rated. Also known as entry-age rated plans, the plan’s pricing is related to the age a person was when they bought the policy. The insurance company can increase the policy premium based on inflation, but not on a person’s increasing age.
It’s important to ask how a company prices its plan. This helps you get an idea of if your plan costs may increase as you get older. Some plans also offer discounts, such as for being a non-smoker or for having multiple policies with the company.
The costs for Medicare Supplement Plan K varies by state and by insurance company. You can enter your zip code in Medicare’s Medigap plan finder to get an estimate for the average costs for Plan K. Costs for 2020 in some states were:
Average cost of Medigap Plan K in several cities
|City||Plan N average monthly premium|
|Charlotte, NC||$47 to $97|
|Miami, FL||$87 to $176|
|New York, NY||$64 to $75|
|Seattle, WA||$87 to $264|
|Topeka, KS||$50 to $112|
As you can see, the average costs can vary significantly based on where you live.
According to an article in the New England Journal of Medicine, those with an income greater than $40,000 are more likely to have original Medicare and Medicare supplement insurance than those with an income under $40,000 a year. The journal’s authors said one potential reason for this is that original Medicare enrollees have the income to be able to purchase Medigap coverage and/or have retiree health benefits that supplement Medicare benefits. Original Medicare enrollees may have greater out-of-pocket costs they wish to save on through using Medigap policies.
Medicare requires Medigap plans to be standardized. This means they cover the same features throughout the country. Examples of what Plan K specifically covers include:
- Part A coinsurance and hospital costs for up to 365 days after a person uses up their Medicare benefits
- 50 percent of a person’s Part B coinsurance or copayment
- 50 percent of the costs of a person’s first 3 pints of blood
- 50 percent of Part A hospice care coinsurance or copayment costs
- 50 percent of the coinsurance for skilled nursing facility care
- 50 percent of the Part A deductible
Plan K does not pay for some aspects that other Medigap policies may. Examples include the Part B deductible, Part B excess charge, and foreign travel exchange.
The out-of-pocket limit for Medicare Plan K is $5,880. This means that once you pay your yearly Part B deductible (which is $198 in 2020) and meet the Plan K yearly limit, the Medigap policy will pay 100 percent of Medicare-covered Part B services for the remainder of the calendar year.
Know that three states standardize their Medigap plans a little differently. These states include Massachusetts, Minnesota, and Wisconsin.
If you have original Medicare Part A and Medicare Part B, you can enroll in a Medigap plan. In addition to the premium you pay for Part B, you will pay a monthly premium for Medigap. You can’t share a policy with your spouse — you must each have your own policy.
The ideal time to apply for Medigap Plan K is during your Medicare Supplement open enrollment window. This begins on the first day your Part B coverage is effective and lasts for a 6-month period.
During your Medicare Supplement open enrollment window, insurance companies can’t base your costs on pre-existing conditions and a company can’t refuse to offer you a policy. Otherwise, you can purchase a policy at any time, but the insurance company may require a medical examination first and they can refuse to cover you.
After this window, there may be times when you have “guaranteed issue” rights to purchase a policy. This could include if you lost coverage from your previous health plan. However, at this time, you may have to answer questions about your health history that could increase the plan’s cost.
Some states create different enrollment windows. Examples include California and Oregon. They have an annual 30-day window for additional Medicare Supplement enrollment. You can ask your State Health Insurance Assistance Program (SHIP) for information about enrollment in the specific state in which you live.
Medicare doesn’t require insurance companies to offer every plan. If an insurance company does choose to sell Medigap policies, they must offer at least Plan A.
If you wish to purchase a Medigap plan, you have several options:
- Visit Medicare.gov and search for available Medigap plans in your state. You will see a list of potential price ranges for coverage.
- Call your State Health Insurance Assistance Program. Also known as SHIP, this agency helps people with counseling for available plans in your area.
- Call or visit an insurance agent with an insurance company you’d like a quote from for a Medigap policy.
When it comes to Medigap policies, it pays to shop around. Because the coverage is the same, trying to get a lower-cost policy can be helpful. Just remember to ask how the insurance company prices the policy. If the policy is age-related, you may need to consider how your costs could change as you get older.
As of January 1, 2020, Medigap underwent some changes. Medigap plans could no longer cover the Part B deductible costs. This new rule affected Medigap Plans C and F.
Those who previously had the plan before January 1, 2020, could elect to keep it. Medicare may also allow some people who were eligible before 2020 for Medicare, yet not enrolled, to purchase Plan C or Plan F. However, those who are new to Medicare in 2020 can’t buy one of these plans.
Because these were some of the most popular plans with the most comprehensive coverage, those new to Medicare will have more to consider when deciding to purchase one of the other plan options.
Medicare Plan K is one Medicare Supplement plan option. The costs vary based on geographic location, when you enroll, and how the insurance company prices the policy. If you are interested in this policy type, it pays to shop around online, by phone, or in-person.