Medigap Plan L offers reduced premiums if you share costs
Medicare Supplement Plan L is another cost-sharing medigap policy. In exchange for slightly lower premiums than what you might pay for a Plan F, if you enroll in a Medigap Plan L, the insurance carrier will pay 75% of your covered medical expenses on most items, and you will pay the other 25%. You also agree to pay the Medicare Part B deductible and any excess charges on your own.
Medicare Supplement Plan L – Out of Pocket Maximum Cap Protection
A Plan L Medigap policy also includes a cap on your expenses. This is referred to as your out-of-pocket limit or maximum. Medicare sets this limit annually, and in 2020, the limit for Plan L is $2,940. This means that if in any one calendar year your spending reaches $2,480 in Medicare-approved covered expenses, then the Medigap insurance carrier pays the rest. The cap makes it much easier to agree to share in 25% of the costs on the items listed because you know that even if a year of bad health occurs, you won’t have more exposure than the maximum cap figure.
Plan L example
Let’s say that Mr. Jones purchases a Medigap Plan L policy. He has an outpatient surgery to remove his gall bladder. If Medicare’s approved amount for this surgery is $1,000, then his Plan L supplement will pay $750, and Mr. Jones will be responsible for the other $250.
This amount is also tallied by his Medigap carrier against his out of pocket maximum, and if his costs in that calendar year go over $2,940 in 2020, then his Medigap Plan L will pay 100% of any Medicare approved expenses for the rest of the year.
Mr. Jones’ policy also functions similarly for his share of outpatient expenses under Part B, except that he will be responsible for the once-annual Part B deductible.
Let’s assume Mr. Jones has already paid his deductible earlier this year when he had an ordinary doctor appointment. Later that year, his doctor orders an MRI. Medicare will pay 80% of the cost for that MRI, and his Medigap Plan L will pay 75% of the rest. If the MRI cost is $1000, then Medicare pays $800, his Medicare Plan L pays $150 (75% of the remaining $200), and Mr. Jones is responsible for the $50 difference.
Medigap Plan L Carriers
In most states, each carrier gets to decide which Medicare supplements it will offer to consumers for purchase. While it is easy to find carriers for the ever-popular Plan F, not as many carriers offer the Plan L Medicare supplement. Working with a trusted insurance agent who specializes in Medicare insurance products doesn’t cost you a dime and can minimize the amount of time and effort you put into researching companies and prices.
Our agency works with the major insurance companies in most states. Call us or fill out our online form for quotes from Boomer Benefits today!