For most people, their health tends to get pushed to the back burner. The older that we get, the more money that we spend at the doctor and on our health care needs. As a senior, the largest part of health care insurance is Medicare.
The government program has provided health care coverage to millions and millions of people across the United States. For a lot of these seniors, they wouldn’t be able to afford this protection if they applied for a policy through a private company.
The problem is that Medicare doesn’t cover everything that seniors may run into as they get older. Those coverage gaps could leave you with a mountain of hospital bills and medical fees. Those bills could quickly drain a retirement account and leave seniors with too little money in their retirement age.
Luckily, there are several ways that you can get some additional coverage against rising medical bills. It’s vital that you have the health care coverage that you need. One of the best ways to do that is to purchase a Medigap policy.
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What Is a Medicare Supplemental Plan?
These Medigap plans are sold by private insurance companies and are separate from the government Medicare program. The goal of these plans is to fill in the gaps that Medicare leaves behind. If you have one of these plans, then you’ll still be required to pay the premiums for Plans A and B, and you’ll also pay a private insurance company every month for the additional coverage. Some Medicare enrollees assume that these Medigap plans replace original Medicare, but that is not true.
There are ten different supplemental plans that you can choose from, depending on where you live. Not every state allows all the plans. These plans are denoted by a letter of the alphabet, from A to N.
The different plans are going to cover different expenses or a portion of expenses. Some of them are going to provide more comprehensive coverage, like Plan F, while others are going to be more basic, like Plan A.
What Does Medigap Plan K Cover?
Now that we’ve looked at the foundational information of supplemental plans, let’s take a deeper look at Medigap Plan K. For a lot of applicants, Plan K is a great policy, but it’s important that you compare all of your options before you decide which one is going to work best for you.
Plan K is not the most popular option, but there are several advantages of this plan that you should be aware of when you’re shopping for additional coverage.
Plan K is one of the smaller policies that is going to provide basic coverage (which means lower monthly premiums). Unlike other plans that pay 100% of categories, Plan K is only going to pay for a portion of those expenses. For most of the categories, it pays 50% of these expenses. I’ll discuss those categories later in this article.
One of the unique advantages of Plan K is the yearly out-of-pocket limit that it includes. With Plan K, the out-of-pocket limit is $7,060, but that number can change every year. Once you’ve reached this threshold, your Medigap plan is going to cover 100% of your Medicare-covered costs for the remainder of the year.
This is a nice safety net to have for your supplemental coverage, especially if you have a drastic health condition that could rack up a massive amount of healthcare costs. Plan K is only one of two plans that have an out-of-pocket limit. The other plan is Plan L, which has a much lower limit. With Plan L, the limit is $3,530.
If you purchase a Plan K, you’re going to get 50% coverage for these categories:
- Medicare Part A Deductible
- Part A Hospice Care Coinsurance or Copayment
- Skilled Nursing Facility Coinsurance
- Part B Copayment or Coinsurance
- First Three Pints of Blood for Medical Procedures
Until you reach the out-of-pocket limit, you will have to pay half of all of the categories. For most people, 50% coverage is enough to give them the financial protection that they need, but for others, they would like to have those expenses completely covered.
This is one of the most unique traits about the Plan K is that it only pays for half of the categories.
These are the main coverage categories for your Plan K. There are a few key areas that you won’t get any coverage at all. The two main ones are the Part B deductible (which no plans are allowed to pay for anymore) and the Part B excess charges.
When you go to the doctor or have any medical services done, there is a pre-determined amount that they are going to pay for those treatments. Legally, the doctor is allowed to charge 15% more than that pre-determined amount, and everything above that is considered excess charges. With a Plan K, you’ll be responsible for paying for all of those excess charges out-of-pocket.
In most cases, these are not going to be huge bills, but depending on the treatments or services that you get, it could end up draining your bank account before you know it.
Choosing the Plan That Works Best for You
Is a Plan K right for you? Plan K is a specific Medigap plan that scares a lot of applicants away. The half coverage keeps a lot of Medicare enrollees from choosing this plan, even though they could save money by picking this plan.
If you don’t think a Plan K is best for you, there are several other excellent options that you can choose from. I know that picking a plan can be difficult, but there are several key factors that you should look at when you’re shopping for supplemental coverage.
The first thing that you should look at is your finances. The goal of your Medigap plan is to protect your savings account from being hit with thousands and thousands of dollars of medical bills, but you shouldn’t have a plan that’s going to stretch your budget every month.
Before you apply for any of these plans, take a long, hard look at your finances and see which one is going to fit comfortably.
The next thing that you should consider is your health. The purpose of your Medigap plan is to ensure that you’re getting the proper health care coverage without having to foot that bill yourself. If you’re in excellent health with no serious health complications, then you can consider purchasing a smaller plan, like Plan K, which leaves more gaps in your coverage.
On the other hand, if you’re in poor health and have several red flags in your medical history, then you should consider enrolling in a more encompassing plan that fills in all of the gaps left behind by Medicare.
Medigap Open Enrollment Period
Once you’ve decided which plan you want to buy, Plan K or one of the nine others, it’s important that you take advantage of your Medigap Open Enrolment Period. This is a six-month window that starts the month that you turn 65. During this window, the insurance company can’t decline your application, regardless of your health or any pre-existing conditions that you may have.
If you have some drastic health problems, this could be your only chance to get supplemental coverage.
If you apply during your Medigap Open Enrollment period, the insurance company can’t increase your premiums before your health. If you purchase one of these plans outside of the open enrollment date, then your application will have to go through the underwriting process. That means that you could get drastically higher rates for your supplemental coverage.
If you want to save money, it’s important that you apply during this time frame.
If you’ve already missed your Medigap Open Enrollment date, don’t worry; there is still a good chance that you can get affordable supplemental coverage.
Questions or Concerns?
This is the basics of Plan K coverage. If you still have questions about Plan K or supplemental coverage in general, please feel free to contact me or an experienced Medigap insurance agent today. Your healthcare coverage is one of the most important factors, especially as you get older.
It can be difficult to keep up with all of the changes to Medicare and supplemental coverage, but that’s why I am here to help. It’s my goal to give you the information and resources that you need.
The Bottom Line – Understanding Medicare Supplement Plan K
Medicare serves as a fundamental health insurance program for many seniors, yet its coverage is not exhaustive, often leaving gaps that could become financially burdensome. Medigap policies, provided by private insurers, aim to bridge these gaps.
Medigap Plan K, specifically, offers unique advantages such as a yearly out-of-pocket limit and 50% coverage in key categories. Despite its seemingly partial coverage, for many, this can act as a substantial financial safety net.
As individuals consider their healthcare needs, assessing financial capabilities and overall health are paramount.
Furthermore, maximizing the Medigap Open Enrollment Period can ensure optimal coverage and financial savings. Remember, seeking expert advice can guide these crucial decisions.
