Medicare Supplement Plan L offers a cost-sharing option for those looking for lower premiums compared to Plan F. By enrolling in Medigap Plan L, the insurance provider will cover 75% of your medical expenses, while you are responsible for the remaining 25%. Additionally, you will need to pay for the Medicare Part B deductible and any excess charges out of pocket.
A Plan L Medigap policy comes with an out-of-pocket limit, also known as a maximum cap, on your expenses. Medicare determines this limit on an annual basis, and for the year 2024, the cap for Plan L is set at $3,530. Essentially, if your spending on Medicare-approved covered expenses reaches $3,530 within a single calendar year, the Medigap insurance carrier will cover the remaining costs. This cap provides peace of mind when agreeing to cover 25% of the listed costs, as it ensures that even in the event of a year with significant health expenses, you will not be responsible for more than the maximum cap amount.
Plan L example
Clara decided to purchase a Medigap Plan L policy. In the event that she undergoes an outpatient surgery to have her gall bladder removed, and Medicare approves $1,000 for the procedure, her Plan L Supplement will cover $750, leaving him accountable for the remaining $250.
This sum is recorded by her Medigap provider towards her out-of-pocket maximum. If her expenses exceed $3,530 in 2024, her Medigap Plan L will cover 100% of any Medicare-approved costs for the remainder of the year.
Similarly, Clara’s policy applies to her share of outpatient expenses under Part B, with the exception of the once-annual Part B deductible that she is responsible for.
Assuming Clara has already paid her deductible earlier in the year during a routine doctor’s appointment, if she later requires an MRI, Medicare will cover 80% of the cost. Her Medigap Plan L will then cover 75% of the remaining amount. For instance, if the MRI costs $1,000, Medicare will pay $800, his Medigap Plan L will pay $150 (75% of the remaining $200), and Clara will be responsible for the $50 difference.
Takeaways
Plan L is designed to offer reduced monthly premiums, but it requires you to bear higher out-of-pocket expenses throughout the year. This plan provides coverage for 75% of approved benefits, excluding the Part B deductible, Part B excess charges, and foreign travel emergency coverage. However, once you reach the maximum out-of-pocket limit, Plan L will cover 100% of your approved costs.
Mario Arce
I have been working with Medicare clients since 2016. I serve California members in San Bernardino & Riverside county.
