Cost-sharing is the way you contribute to your health insurance plan. This includes copayments, coinsurance, premiums, and deductibles. Premiums are a set monthly rate that you must pay consistently in order to remain active on your plan. A deductible is an annual fee you pay before you receive your first benefit of that year. Medigap Plans K and L are great lower-cost Medigap options that are considered cost-sharing plans.
Copayments and coinsurance fees are your contribution toward the total cost of the service. Say, for example, you receive a service that costs $2,000. A coinsurance fee would be a flat amount you must cover—say, for instance, $300. Copayments (which are the way you will be making most of your cost-sharing payments for K and L) are a percentage contribution. Say your copayment rate is 20%—for a $2,000 benefit, you’ll pay $400 out-of-pocket.
This is the primary focus when it comes to cost-sharing, especially for Plans K and L.
Benefits of Plans K and L
Every supplement plan has its own list of covered benefits. Plans K and L, however, are some of the only ones that offer them at a lower coverage rate, i.e., they only cover a certain percentage of the benefit, while the rest comes out-of-pocket.
Plan K covers:
- 100% of Part A Coinsurance and Hospital Costs
- 50% of Part B Coinsurance/Copayment
- 50% of the First 3 Pints of Blood for Transfusions
- 50% of Part A Hospice Care Coinsurance or Copayment
- 50% of Skilled Nursing Care Facility Coinsurance
- 50% of the Part A Deductible
Plan L covers:
- 100% of Part A Coinsurance and Hospital Costs
- 75% of Part B Coinsurance/Copayment
- 75% of the First 3 Pints of Blood for Transfusions
- 75% of Part A Hospice Care Coinsurance or Copayment
- 75% of Skilled Nursing Care Facility Coinsurance
- 75% of the Part A Deductible
Plans K and L Comparison
Almost all of your benefits under either K or L are a percentage of the entire cost—the rest comes out-of-pocket, plus your premiums and deductibles. But what are the benefits of such an arrangement?
A lot of Medicare beneficiaries skip over plans like K and L in favor of the higher coverage. The difference? K and L have significantly cheaper premiums and deductibles than the other options.
While you pay more when you use a benefit, you do not pay nearly as much on a regular basis. Plans K and L are incredibly useful, especially for individuals who use benefits a little less often so that you can save money on your premiums and deductibles instead.
