Medigap plans also called Medicare supplement plans are secondary to Medicare insurance plans offered by private insurance companies. The plans are standardized in most states and range from plan A to N.
Traditionally, plan J (now a retired plan) and plan F have been the most popular as they both cover 100% of secondary costs not covered by Medicare. Plan F can be costly with an premium ranging from $170 a month to $250 a month depending on the state you live in.
There are lower cost alternatives that are worthy of consideration. The plan L supplement has only been around for a few years and is not well know but it should not be ignored. Plan L premium is about 1/3 the cost of plan F. (Around $120 a month) ($114.25 in CT) It covers 75% of the costs not covered by Medicare and has a total out of pocket limit of $2,400 per year. A 25% cost share may seem like a big risk at first glace but it is more than reasonable if you consider how Medicare bills costs.
Plan L covers 75% of what Medicare does not cover. For part B of medicare, it will cover 75% of the 20% Medicare does not cover. This leaves the insured with a 5% cost share. Further, the 20% cost share is based on what Medicare allows the provider to charge. It is not based off the regular rate.
Under Medicare Part A, the hospital deductible is $1140 which Plan L covers 75% of. This leaves only $285.00 for the insured to pay. Part A covers at 100% for the first 60 days of hospitalization after the deductible is met so there is little risk of owning any more than $285.00
My personal experience with clients using plan L has been overwhelmingly positive. Clients that do not use many medical services for the year experience huge savings over plan F and those that utilize a lot of services rarely spend more than than the premium savings vs. a plan F.
Plan L is a solid choice for those that want to take the time to understand why it will save them money.