If you’re enrolled in Original Medicare, Part A and Part B, you probably know it comes with out-of-pocket costs, like deductibles and co-payments. Medicare Supplement (Medigap) plans, available from private insurance companies, are designed to cover some of these expenses. Different Medigap plans cover different portions of your Medicare costs.
Medigap plans are standardized in most states; there are 10 of them, named with letter designations such as Medigap Plan L.
Medigap Plan L includes somewhat less coverage of Original Medicare costs than most Medigap plans, but it does have a cap on your out-of-pocket spending, which most Medigap policies don’t have.
Because of the higher degree of cost-sharing, these Medigap Plan L policies sometimes have lower premiums than more comprehensive Medicare Supplement plans, such as Medigap Plan F. Medigap Plan L covers the basic benefits that all Medicare Supplement plans are required to offer, but covers some costs partially instead of fully.
Medigap Plan L covers 100% of the costs of:
- Medicare Part A coinsurance and hospital costs up to one year after Original Medicare benefits are exhausted
Medigap Plan L covers 75% of the costs of:
- Medicare Part A hospice care coinsurance or copayment
- Medicare Part A deductible
- Medicare Part B coinsurance or copayment
- First three pints of blood used in a medical procedure
- Skilled Nursing Facility care coinsurance
Medicare Supplemental Plan L Costs
As noted above, Medigap Plan L has a higher level of cost-sharing than most other Medicare Supplement plans; that is, you’ll still pay some Original Medicare out-of-pocket costs, such as your Medicare Part B deductible and Part B excess charges. Part B excess charges refer to the amount a Medicare doctor may charge you that’s more than the Medicare-approved amount. The doctor isn’t allowed to charge more than 15% over that amount.
Premiums associated with Medigap Plan L policies are generally lower than those associated with other Medigap plans, but these costs may differ among insurance companies. Some companies may set age-based premiums, while others may set a standard premium unrelated to age.
Unlike most other Medicare Supplement plans, Medigap Plan L policies include an out-of-pocket limit. After you spend $2,480 (in 2016) in Original Medicare out-of-pocket costs and pay your Medicare Part B deductible ($166 in 2016), the Medicare Supplement plan pays 100% of the Original Medicare costs that it’s required to cover, for the remainder of the calendar year.
If you have any questions please call Stephen or Carla Fowler at 205-417-5027. They are Medicare Advisors with Prosurity. They will be happy to meet with you over the phone or in person and answer any questions you may have.