What Is Medicare Supplement Plan K?

What Is Medicare Supplement Plan K?

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Medicare Plan K is a Medicare supplement policy that fills in coverage gaps that exist in traditional Medicare. Supplement plans make it easier for beneficiaries to meet their overall Medicare expenses.

Like other Medigap supplement policies, Medicare Plan K has several distinguishing characteristics setting it apart from other supplemental policies. It does not, for example, cover the Medicare Part B deductible, which is $203 a year in 2021. Medicare Plan K also does not cover foreign travel emergencies or Medicare excess charges — the amount Medicare allows a provider to charge over and above what Medicare reimburses.

How Plan K works

Medicare Plan K is one of 10 Medicare supplement policies labeled A through N in most states. All of these Medicare Supplement plans differ in terms of reimbursement rates, monthly premiums and levels of coverage.

It is important to remember that Medicare supplement plans augment and do not replace Medicare, serving as true supplemental policies. Original Medicare provides coverage to disabled individuals as well as people 65 and older. The original program is broken into parts — Part A pays for inpatient and hospital care while Part B covers outpatient medical services. Together, the two parts pay for about 80% of Medicare costs, creating gaps in coverage that are filled by supplement Medigap insurance policies.

Medicare Plan K only covers 50% of costs for many services until the beneficiary meets the Plan’s out-of-pocket limit, which is $6,220 in 2021. After a beneficiary meets that out-of-pocket threshold, the plan pays 100% of costs for the rest of the calendar year. It is important to note that Medicare excess charges do not count towards the yearly out-of-pocket limit, but the Medicare deductible of $203 does count toward that limit.

Medicare Plan K coverage

Medicare Plan K benefits
Medicare Part A coinsurance and hospital care
Medicare Part B coinsurance50%
Blood (first 3 pints)50%
Part A hospice care coinsurance and copay50%
Skilled nursing home coinsurance50%
Medicare Part A deductible50%
Medicare Part B deductible
Medicare Part B excess charges
Foreign travel emergency

How much does Medicare Plan K cost?

Plan K’s monthly premiums are cheaper than many of the other Medigap policies, averaging between $62 and $135 a month in 2020, rates determined by location, current health status, age and gender. The lower cost of the monthly premiums makes Plan K an attractive option for some even though the plan’s coverage is not as extensive as some of the other plans. But the fact that Medicare Plan K only pays 50% for various benefits discourages many beneficiaries from choosing a Medicare Plan K.

The following provides an example of how Plan K works. The Medicare Part A deductible is $1,484 for the first 60 days of hospitalization in 2021. With a Plan K, the beneficiary pays half of that amount while Plan K picks up the other half, assuming, of course, that the beneficiary has not met the out-of-pocket limit, $6,220 in 2021. Medicare beneficiaries receiving skilled nursing care under Medicare’s Part A benefit do not pay anything for the first 20 days. But after the 20th day, Medicare charges $185.20 daily. With Plan K, the beneficiary is responsible for half of that amount.

When and where to buy Medigap Plan K

Medicare Supplement plans, including Plan K, can be purchased during the open enrollment period each year (Oct. 15–Dec. 7). Additionally, you can purchase Plan K during your initial enrollment period. The initial period starts three months before you turn 65 and is a total of seven months. Beneficiaries can also make changes to their Medicare insurance during the open enrollment season.

Plan K is offered through private health insurance companies such as UnitedHealthcare. Insurance carriers selling Plan K policies vary from state to state. It is important that you compare rates among various providers to get the best Medicare rate possible, and to find out which companies provide plans that best meet their needs for the best possible rate.

Does Medicare supplement Plan K cover SilverSneakers?

Some Plan K plans may also cover the SilverSneakers program, which encourages older adults to participate in physical activities that promote a healthier lifestyle. With this arrangement, your insurer pays for a basic membership at any gym in the SilverSneakers network. Coverage of the SilverSneakers program depends on whether the insurer offers SilverSneakers as part of Plan K. This may depend on where you purchased Plan K and where you live. You can check whether you’re eligible for a SilverSneakers policy at its website.

Are Medicare Plan K premiums tax-deductible?

Like other Medigap policies, Medigap Plan K premiums are considered health expenses, making them tax deductible on a federal tax return. If you spend more than 10% of your adjusted gross income on eligible medical expenses, then itemizing may help you save.

Plan K vs. Plan L

Medicare Plan K is sometimes compared to Medicare Plan L, and the two plans share some commonalities. Both plans, for example, pay a percentage of certain services, and both have annual out-of-pocket limits. Like Plan K, Plan L does not cover the Medicare Part B deductible, foreign travel emergencies or Medicare excess charges. The major differences between Plan K and Plan L are between costs and how much the plans cover. Below we have outlined all the differences between the two plans:

Medicare supplement plan
Plan K
Plan L
Medicare Part A coinsurance and hospital care
Medicare Part B coinsurance50%75%
Blood (first 3 pints)50%75%
Part A hospice care coinsurance and copay50%75%
Skilled nursing home coinsurance50%75%
Medicare Part A deductible50%75%
Medicare Part B deductible
Medicare Part B excess charges
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Deductibles, copays, coinsurance, limitations, and exclusions may apply.

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