Did you know that Medicare Plan L could save you thousands of dollars annually while still providing solid coverage? Most people have never even heard of it.
After helping thousands of folks navigate the Medicare maze for over 25 years, I’ve noticed Plan L sits in this weird middle ground that confuses people. It’s not as comprehensive as Plan F or G, but it’s definitely more robust than those high-deductible options. And here’s the kicker – for the right person, it might be the smartest choice on the table.
Look, I get it. Medicare supplements feel like alphabet soup sometimes. But Plan L deserves your attention, especially if you’re relatively healthy and want to keep more money in your pocket without sacrificing peace of mind.
What Is Medicare Supplement Plan L?
Medicare Supplement Plan L is basically the middle child of Medigap policies – often overlooked but surprisingly practical.
Here’s the deal: Plan L covers 75% of most Medicare-approved costs after you’ve met your deductibles. Yeah, you read that right – not 100%, but 75%. Before you run away thinking that’s terrible, hear me out.
This plan works differently than your traditional supplements. Instead of covering everything after Medicare pays its share, Plan L asks you to chip in a bit. But – and this is huge – it caps your annual out-of-pocket spending at $3,310 for 2024.
Think of it like having a safety net with slightly bigger holes than Plans F or G, but those holes can only let so much fall through before the net tightens up completely.
I’ve sold hundreds of these over the years, and you know what? The people who buy them usually love them. They’re typically folks who want protection against catastrophic medical bills but don’t mind sharing some routine costs.
Plan L still covers all the big-ticket items that keep people up at night:
- Medicare Part A coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are exhausted)
- Medicare Part B coinsurance or copayments
- Blood (first three pints)
- Part A hospice care coinsurance or copayments
- Skilled nursing facility care coinsurance
- Medicare Part A deductible
But remember – except for that 365 days of hospital coverage, everything else is at 75% until you hit that out-of-pocket max.
Key Features And Coverage Areas
Hospital And Medical Services
Let me break down what actually happens when you use Plan L for hospital and medical services.
Say you need surgery. Medicare Part A covers your hospital stay, but you’re still on the hook for that Part A deductible ($1,632 in 2024). With Plan L, you’ll pay 25% of that deductible – about $408. Not bad, right?
For doctor visits and outpatient services, after you meet your Part B deductible ($240 in 2024), Medicare typically covers 80%. That leaves you with 20% coinsurance. Plan L picks up 75% of that 20%, meaning you only pay 5% of the total Medicare-approved amount.
Here’s a real-world example from one of my clients last year. She had knee replacement surgery with a total Medicare-approved cost of $30,000:
- Medicare paid $24,000 (80%)
- Her 20% coinsurance would’ve been $6,000
- Plan L covered $4,500 (75% of the coinsurance)
- She paid $1,500
Not too shabby when you consider some plans with 100% coverage cost way more in monthly premiums.
Preventive Care Benefits
Here’s where Plan L really shines – and most agents don’t even mention this.
All Medicare-covered preventive services that don’t require cost-sharing are still 100% free with Plan L. Your annual wellness visits? Free. Flu shots? Free. Mammograms and colonoscopies? You guessed it – free.
This is huge because staying healthy is half the battle with healthcare costs. I always tell my clients: “The best medical bill is the one you never get.”
Plan L doesn’t mess with these preventive benefits at all. You get the same access to preventive care as someone with the most expensive Plan F. Smart, right?
How Plan L Differs From Other Medicare Supplement Plans
Cost-Sharing Structure
Okay, let’s get into the nitty-gritty of how Plan L stacks up against its cousins.
Unlike Plans F, G, or N that cover most or all of your Medicare cost-sharing, Plan L takes a different approach. It’s like the difference between buying comprehensive car insurance versus getting a policy with a higher deductible to save on premiums.
Plan G covers everything except the Part B deductible. Plan N covers everything except the Part B deductible, copays for some doctor visits ($20) and ER visits ($50). But Plan L? It covers 75% of pretty much everything until you hit that magic number.
Here’s what I’ve noticed after selling these for decades: Plan L premiums typically run about 25-35% less than Plan G. In some states, I’ve seen differences of $50-80 per month. That’s $600-960 per year in your pocket.
And get this – if you’re relatively healthy and only see your doctor for routine stuff, you might never even come close to that out-of-pocket maximum.
Out-Of-Pocket Maximum Protection
This is Plan L’s secret weapon, and honestly, it’s what sells me on recommending it to certain clients.
That $3,310 out-of-pocket maximum (for 2024) is your absolute worst-case scenario. Once you hit it, Plan L transforms into Plan F – covering 100% of everything for the rest of the year.
Compare that to having no supplement at all, where a major health crisis could leave you with tens of thousands in medical bills. Or even compare it to Medicare Advantage plans, where out-of-pocket maximums can reach $8,850 or higher.
I had a client last year who got diagnosed with cancer in February. By April, he’d hit his out-of-pocket max. From May through December? Everything was covered 100%. His total out-of-pocket for the year was $3,310, plus his premiums. Without Plan L, he would’ve faced over $40,000 in medical bills.
Who Should Consider Medicare Plan L?
Ideal Candidates For Plan L
After helping thousands choose their Medicare coverage, I can spot a perfect Plan L candidate from a mile away.
First up – the healthy 65-year-old who just enrolled in Medicare. You’re active, maybe still working part-time, and your biggest medical expense is your annual physical. Why pay for Cadillac coverage when a reliable Honda will do?
Then there’s the budget-conscious retiree who’s got some savings but doesn’t want premium payments eating up their Social Security check. These folks understand risk management. They can handle paying $3,310 in a bad year but want protection against something catastrophic.
I also love Plan L for people who travel frequently. Since Medigap plans work anywhere in the U.S. that accepts Medicare, you’re covered whether you’re visiting grandkids in California or wintering in Florida. Try doing that with a Medicare Advantage plan.
Here’s who probably shouldn’t get Plan L though. If you’ve got multiple chronic conditions requiring frequent specialist visits, those 25% copays add up fast. You’d likely hit the out-of-pocket max every year, making a more comprehensive plan potentially cheaper overall.
Financial Considerations
Let’s talk turkey about the money side.
Plan L makes sense if you can comfortably handle up to $3,310 in medical expenses without breaking a sweat. I always tell clients to think of it like this: Can you write a check for $3,310 without losing sleep? If yes, Plan L might be perfect.
But here’s what really matters – the math. Say Plan L saves you $70 per month compared to Plan G. That’s $840 per year. Even if you have $2,000 in medical costs with Plan L (where Plan G would’ve covered everything), you’re still ahead by $840.
I’ve tracked my clients’ experiences for years. About 60% of my Plan L folks never spend more than $1,000 out-of-pocket annually. Another 30% spend between $1,000-2,500. Only 10% hit that maximum.
Those are pretty good odds if you ask me.
Costs And Premiums Associated With Plan L
Let me give you the straight scoop on Plan L pricing – no insurance jargon, just real numbers.
In most states, a 65-year-old non-smoker can get Plan L for anywhere between $100-150 per month. Compare that to Plan G at $140-200 or Plan F at $160-220, and you’re looking at serious savings.
But here’s where it gets interesting. Plan L premiums increase slower than comprehensive plans. Why? Insurance companies know their maximum risk is capped at that out-of-pocket limit. With Plan F or G, they’re on the hook for potentially unlimited costs.
I’ve seen Plan L rate increases averaging 4-6% annually, while Plan F increases often hit 8-10%. Over 10 years, that difference is huge.
Geography matters too. In Florida, Plan L might run $135 monthly. Same plan in New York? Could be $180. Rural Montana? Maybe $115. It’s all about local healthcare costs and state regulations.
Here’s a pro tip barely anyone knows: some companies offer household discounts if your spouse has any policy with them. I’ve secured 7-12% discounts this way. On a $130 premium, that’s another $10-15 monthly in your pocket.
And don’t forget about rate structures. Most companies offer either attained-age, issue-age, or community-rated pricing. For Plan L, I usually recommend issue-age rating if you’re enrolling young. Your premium stays more stable over time.
Enrollment Requirements And Timing
Timing is everything with Medicare supplements, and Plan L is no exception.
Your golden ticket is the six-month Medigap Open Enrollment Period starting when you’re 65 and enrolled in Medicare Part B. During this window, insurance companies must sell you any plan they offer – no health questions, no medical exams, no BS.
Miss that window? Things get trickier. You’ll likely face medical underwriting unless you qualify for guaranteed issue rights. That means answering health questions, possibly getting denied, or paying higher premiums.
Guaranteed issue situations include losing employer coverage, your Medicare Advantage plan leaving your area, or your Medigap company going bankrupt. If any of these happen, you’ve got 63 days to enroll in a new plan without medical underwriting.
Here’s something most people don’t realize: some states have additional protections. New York and Connecticut have continuous open enrollment. California and Oregon have birthday rules letting you switch to equal or lesser coverage around your birthday.
I always recommend applying for Plan L about 30 days before you want coverage to start. This gives time for processing and avoids any coverage gaps.
One weird quirk about Plan L – not every insurance company offers it. In some states, you might only have 3-4 carriers to choose from versus 10+ for Plan G. Less competition sometimes means slightly higher prices, but the savings versus comprehensive plans usually still make sense.
Don’t wait until you’re sick to think about this stuff. I’ve seen too many people miss their enrollment window and get stuck with expensive coverage or no options at all.
Leave a Reply