For plans with an out-of-pocket limit, after you meet your yearly Part B deductible and your out-of-pocket yearly limit, the plan pays for 100 percent of covered services for the rest of the year.
Out-of-pocket limits by plan
- Medicare Supplement Plan L: $2,940 out-of-pocket limit (2020)
- Medicare Supplement Plan K: $5,880 out-of-pocket limit (2020)
With original Medicare (Part A, hospital insurance and Part B, medical insurance), there is no cap on your annual health care costs. Limiting the amount of money spent on healthcare is one reason people purchase a Medicare Supplement Plan (Medigap).
Because Medicare Supplement Plan L has an out-of-pocket limit, choosing this supplement can help you better plan for your medical expenses. That’s because you’ll know the maximum you may have to spend in any given year for covered medical conditions.
An out-of-pocket limit may be especially beneficial if you:
- have high costs for ongoing medical care due to a chronic health condition
- want to feel prepared if faced with a highly expensive unexpected medical situation
Most Medigap policies cover coinsurance after you’ve paid the deductible. Some also pay the deductible. Coverage with Medicare Supplement Plan L includes:
- Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up: 100 percent
- Part A deductible: 75 percent
- Part A hospice care coinsurance or copayment: 75 percent
- blood (first 3 pints): 75 percent
- skilled nursing facility care coinsurance: 75 percent
- Part B coinsurance or copayment: 75 percent
- Part B deductible: not covered
- Part B excess charge: not covered
- foreign travel exchange: not covered
- out-of-pocket limit: $2,940 in 2020, with 100 percent of covered services for the rest of the year paid after you meet your yearly Part B deductible and your out-of-pocket yearly limit
Because original Medicare doesn’t cover all healthcare costs, private companies can sell supplemental insurance to Medicare recipients to help cover those expenditures.
These standardized policies follow federal and state laws, although standardization in Massachusetts, Minnesota, and Wisconsin are different. In most states, Medicare supplemental insurance plans are identified by the same letter, so Medicare Supplement Plan L will be the same from state to state.
Eligibility for Medigap requires that you:
- have original Medicare parts A and B
- have your own policy (your spouse requires their own separate policy)
- pay monthly premiums in addition to your Medicare premiums
You cannot have both Medicare supplemental insurance (Medigap) and a Medicare Advantage plan.
Medicare Supplement Plan L is a Medigap policy that helps cover healthcare costs that original Medicare doesn’t cover. One of its features, offered by only one other Medigap policy, is setting a yearly limit on the amount of money you will spend out-of-pocket.
The yearly out-of-pocket limit may be especially beneficial if you:
- have a chronic health condition with high costs for ongoing medical care
- want to be prepared for potentially expensive unexpected medical emergencies
Review the costs and benefits of adding a Medigap policy to your original Medicare. If Medigap is the right decision for your health care and financial needs, you have a choice of 10 Medigap plans, each offering different levels of coverage and options. If a limit on out-of-pocket spending is important to you, consider Medicare Supplement Plan L.
The information on this website may assist you in making personal decisions about insurance, but it is not intended to provide advice regarding the purchase or use of any insurance or insurance products. Healthline Media does not transact the business of insurance in any manner and is not licensed as an insurance company or producer in any U.S. jurisdiction. Healthline Media does not recommend or endorse any third parties that may transact the business of insurance.