Medicare parts A and B may not cover all of a person’s medical expenses. Medicare supplement Plan L is designed to make up for some of the gaps in coverage.
There are various parts of Medicare. Part A primarily covers the costs of inpatient healthcare. These costs may, for example, stem from care at a hospital or hospice, or a short stay at a skilled nursing facility.
Part B covers many costs of outpatient medical care, such as visits to a doctor, medical supplies, and preventive care. Parts A and B together are known as original Medicare.
Medicare also includes Part C, also known as Medicare Advantage, and Part D, which includes prescription drug coverage.
A person may choose to buy a Medicare supplement insurance plan, such as Plan L. These policies are intended to help fill gaps in Medicare’s coverage. Supplement plans are sometimes called “Medigap” insurance.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Plan L policies are sold by private insurance companies, like all other Medicare supplement, or Medigap, plans.
Medigap policies may provide more extended coverage than Medicare or benefits that Medicare does not offer, such as coverage for healthcare costs when a person is traveling outside the United States.
In order to qualify for Medigap Plan L, a person must:
- be enrolled in Medicare parts A and B
- not be enrolled in a Medicare Advantage plan, also known as Part C
A Medigap policy only covers one person. If a person wants the coverage for their spouse, they must buy an additional policy.
Insurance companies can offer different policies in different states. However, if an insurance company sells Medigap plans in a state, they must at least offer plans A, C, and F.
If a person lives in a state where no companies offer Plan L, they will be unable to buy the policy.
The best time to buy a Medicare supplement plan is during the 6-month Medigap open enrollment period.
This period is usually determined by a person’s birthday — it begins in the month when the person turns 65 and enrolls in Medicare Plan B, and it ends 6 months later.
During the open enrollment period, a person has more choices and finds better prices. After the period ends, an insurance company can choose not to sell a policy to a person, or a policy may be more expensive, depending on the person’s health.
All Medigap policies are standardized: They must offer the same basic benefits and be aligned with federal and state regulations. However, an insurance company can choose to offer additional benefits.
Medigap policies do not include prescription drug coverage. For this, a person can buy Part D or enroll in an Advantage Plan that covers prescription drugs.
After January 1, 2020, no Medigap policy can cover Part B deductibles.
The chart below shows the coverage provided by Plan L.
|Benefit||Medigap Plan L Covers|
|Part A deductible||75%|
|Part A coinsurance for 365 days after Medicare benefits are used up||Yes|
|Part A hospital costs for 365 days after Medicare benefits are used up||Yes|
|Part A hospice care coinsurance or copayment||75%|
|Skilled nursing facility coinsurance||75%|
|Blood (first 3 pints)||75%|
|Part B deductible||No|
|Part B coinsurance or copayment||75%|
|Part B excess charges||No|
|Foreign travel coverage||No|
|Out-of-pocket limit in 2021||$3,110.00|
Below, we describe how much a person pays for Plan L, as well as its limitations.
The cost of a Medigap plan includes its premium and the amount that a person must pay out of pocket.
In 2020, the out-of-pocket limit for people with Plan L is $3,110, plus the Part B deductible.
After a person pays the out-of-pocket limit for their medical expenses, the plan pays 100% of covered services for the rest of the year.
While each Plan L policy provides the same benefits, the premium depends on a person’s state of residence, their age, and their sex. The premium may also be higher if the plan has added benefits.
People can find the cost of a Plan L policy in their area using the Medigap Policy Finder. It shows all the Medigap policies offered in each state, as well as the benefits of each plan and estimated out-of-pocket costs.
The policy finder can also help a person contact companies that offer these plans in their state.
In some states, doctors can charge 15% more than Medicare allows for some services. These are called Plan B excess charges.
Medicare does not cover the added 15%. Some Medigap policies cover the excess, but Plan L does not.
Plan L is a Medigap policy — it is designed to fill gaps in Medicare’s coverage. Medigap plans are sold by private insurance companies.
These supplemental policies all provide the same basic benefits, but each insurance company can choose to offer additional coverage. Various factors, including additional benefits, affect the amount of the plan’s premium.
The best time to purchase Plan L is during the open enrollment period, when there are more options and better prices.