I. What Medicare Plan K Covers

Plan K is a Medigap policy, so it is bound to provide at least partial coverage for all of the categories of expenses included in the other Medigap policies. Where the plan differs from other options is in the amount it pays and the premiums it charges. In return for a very low monthly premium, which varies from place to place depending on local healthcare costs, the plan pays less of a share of your medical bills than other policies in this category.

Plan K pays 100% of your Part A co-payments, coinsurance, and hospital costs. This does not include the tests and treatments you get while you’re in the hospital, which often cost more than the room fee itself. These extras include blood transfusions, IV drugs administered in your room, and surgical procedures that are not entirely covered by Part A. For these services, Plan K can pay up to 50% of the unpaid balance after Part A coverage is exhausted.

To understand this, imagine you need emergency surgery and are admitted to the hospital. If you have Part A, your room and basic care are completely paid for after you meet the annual deductible, also known as a spend-down amount. If your unpaid extra costs amount to $1,000, then your Plan K benefits can pay $500 toward the balance. This would leave you responsible for the other $500 out of pocket.

Plan K performs in a similar way for Part B coverage. Part B is the element of Medicare that pays for outpatient care. This includes medical office visits, ambulance transportation, drugs your doctor gives you in the office, and durable medical supplies you need for home care. Medicare Part B has a $198 deductible in 2020, all of which must be paid before any Medicare or Medigap benefits kick in. Once this maximum is paid, Part B pays 80% of your total cost, after which Plan K can pick up 50% of the rest.

If, for example, you take a ride to the hospital in an ambulance that costs $5,000 total, Medicare Part B can pay $4,000 for the trip, assuming your deductible has already been paid. The remaining $1,000 would then be half-covered by Plan K, for $500 off the final bill, leaving you with $500 to pay out of pocket on your own. Another way to think about Plan K’s supplemental coverage is that it’s 10% of your total bill, which leaves you with the other 10% Part B doesn’t cover.

II. Eligibility for Medicare Plan K

Seniors become eligible for Medigap plans as soon as they qualify for Original Medicare coverage. This usually happens on the first day of the month you turn 65, and it continues for six months after your birth month. During this time, you can sign up for Medicare and its supplemental plans and be sure of getting coverage at the lowest rate available in your state, as a matter of federal law. You cannot be denied a Medigap plan during this initial sign-up period for pre-existing conditions.

In addition to age, Medicare applicants must be U.S. citizens or permanent legal residents who have lived in the United States for at least five years. Medicare requires eligible seniors to have worked and paid into the Social Security system for at least 10 years or 40 quarters to qualify for benefits when you become eligible.

Some adults become eligible for Medicare before they reach age 65. In general, these are people who will soon be 65, who have also been receiving SSDI benefits for a chronic and disabling medical condition for at least 24 continuous months. Some parts of Original Medicare, along with optional supplemental plans, become available to beneficiaries prior to the usual age minimum.

III. Enrolling in Medicare Plan K

To enroll in a Plan K policy, first, you must sign up for and begin receiving benefits from Original Medicare Plans A and B. Seniors in the United States who meet the other eligibility requirements automatically get Part A coverage in the month they turn 65. Part B must be signed up for separately, and you have a range of options to cover it. Once you have your Original Medicare in place, you can sign up for a Medigap plan from your state’s health insurance exchange within the first six months after your qualifying birthday.

The initial sign-up period for Plan K begins on the first day of the month of your 65th birthday. It continues until the last day of the month, six months after your birthday. During this time, you are free to browse plans and choose one that meets your insurance needs. By law, you cannot be refused coverage during this period for a pre-existing condition. You must also be offered a rate that does not consider the state of your health or harmful habits such as smoking.

If you sign up for any Medigap plan outside of an open enrollment period, normal underwriting requirements may apply, and you can be charged according to your health habits and even be denied coverage for any pre-existing condition you may have. The exception to this exclusion rule is in the states of Massachusetts, Minnesota, and Wisconsin, where state law prevents exclusion for pre-existing conditions and requires group rates based only on geographic area.

Once a year, you have the option of changing your Medigap coverage without incurring a penalty rate. These open enrollment periods begin on the first day of your birth month, and they close on the last day of the same month. During this period, you can sign up for coverage, switch between plans, drop Medicare Advantage and opt into Medigap, or change insurance carriers.

Special enrollment periods (SEPs) are individual open enrollment periods that last 63 days and begin when you lose supplemental coverage you had from another source. This can be after you lose your employer- or your spouse’s employer-provided health insurance. You may also be eligible for an SEP enrollment in Plan K if your previous carrier has gone out of business, canceled your policy through no fault of your own, or declared bankruptcy. You may also qualify for an SEP if you were overseas during your open enrollment period or you were institutionalized during the initial sign-up period. You can also trigger an SEP by canceling your Medicare Advantage coverage within the first 12 months you have it. During these times, you can shop around for a Plan K option without penalty.

IV. FAQs

Why does Plan K only cover half of the costs of my co-pay?

Plan K is able to charge low monthly premiums because it limits its benefit amounts to 50% of your share of cost. This reduces the benefits available to you when you need care, but for beneficiaries who need very little regular coverage, it can be an attractive month-to-month option.

Does Plan K work with Medicare Advantage?

No. Medicare Advantage plans do not work with Medigap policies by federal law. You cannot have both types of coverage at the same time. You can, however, often switch between Medicare Advantage and Medigap plans during any available open enrollment period. This can be during initial signup, once a year, or during an SEP.

Can I use Medicaid with Plan K?

Yes. Medicaid provides comprehensive coinsurance coverage for the gaps in Original Medicare, and it can integrate with your Medigap policy in almost all circumstances. Income and asset limitations apply to Medicaid in all states, and it is a good idea to speak with a plan representative during signup.