Medicare Supplement Plans can be a little confusing, particularly because there are 10 standardized versions of them. These plans are sanctioned by the federal government and administered by private insurance companies. It’s not just the plans themselves that can seem overwhelming, but even the terminology. Medicare Supplement Plans are also called Medigap Plans for short. Medigap Plan C is the most commonly used supplement plan. However, it may not meet your particular needs if you are searching for a low cost option that fills some of the basic coverage gaps in original Medicare Part A or Part B. Medicare Supplement Plan K may be your best alternative. We’ll explain why.

What Plan K covers

Medicare Supplement Plan K generally pays a percentage for the benefits it covers, except for Medicare Part A hospital costs. If you incur an extra year of hospital costs after your Original Medicare benefits are exhausted, Plan K will cover these benefits in full. One down side to Plan K is that out-of-pocket costs tend to be higher than other Medigap plans. Conversely, Plan K usually has lower monthly premiums than other Medigap offerings.

Medigap Plan K features an annual out of pocket limit. In 2016, this limit is $4,960. If your out-of-pocket expenses exceed this number (which also includes the Original Medicare Part B deductible), Plan K will cover all of your Medicare-approved expenses for the rest of the year. Plan K’s out-of-pocket limit can be extremely helpful if you have a chronic health condition that requires extensive or ongoing care. It can also be useful in cases of unexpected medical emergencies, which otherwise could prove incredibly costly.

In a nutshell, Plan K will cover:

  • partial coverage of Original Medicare out-of-pocket costs
  • half of the Medicare Part A deductible
  • half of the Medicare Part A hospice co-payment or co-insurance costs
  • half of skilled nursing facility co-insurance
  • half of Medicare Part B’s co-payments and co-insurance
  • the first three pints of blood for a covered medical procedure on an annual basis

What Plan K costs

Medigap Plan K patients are responsible for paying the Medicare Part B deductible and any excess charges out of pocket. Excess charges are defined as the difference between the Medicare-approved amount for a medical service and the price that your doctor or specialist actually charges for that service. There is an upper limit to excess charges that Medicare allows doctors to administer. Typically they are allowed to charge up to 15% over the Medicare-approved cost for a given service, which the patient is ultimately responsible for paying.

Keep in mind that you will have higher out-of-pocket costs with Plan K than if you elect to go with another Medigap plan. Plan K covers 50% of its benefits as described above, which means you will be responsible for the other half. The advantage of Plan K is that you will pay lower monthly premium costs and thus, lower health care bills altogether, if you are reasonably healthy past the age of 65. A good rule of thumb is to estimate your current out of pocket costs by taking into account how often you see doctors and specialists. If you find that you only need minimal coverage, Medigap Plan K may be a good fit for your needs.

Because Medigap plan offerings are standardized by the federal government, you shouldn’t have to spend a lot of time researching what plan is right for you. Depending on your location, though, the costs for Plan K or other Medigap offerings may vary, so be sure to contact local insurance providers and ask them about your particular needs. You can also contact Medicare directly by dialing 1-800-633-4227.

by Lindsay Malzone, Lindsay Malzone is the Medicare expert for She's been contributing to many well-known publications as an industry expert since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.