Medigap Plan K – What You Need To Know

People refer to Medigap Plan K by these other names: Medicare Plan K, Medicare Part K, Part K and Plan K.   If you hear others mention these words, they are referring to Medigap Plan K.

If you are not a resident of Idaho (or planning on moving to Idaho in the near future) be aware that all Medigap policies must follow Federal and state laws that protect people with Medicare.

Call your State Health Insurance Assistance Program (SHIP) or your State Insurance Department for more information; ask how your state may have implemented laws affecting Medigap plans.

Minnesota, Massachusetts, and Wisconsin are waiver states. This means they:

• Provide different kinds of Medigap policies NOT labeled with letters
• Provide comparable benefits to standardized plans
• Have a different system that includes basic (“core”) and optional (“rider”) benefits

Medigap Plan K is NOT on our recommended list of Medigap plans for Idaho residents.

Why?  Because:

the plan has limited Idaho and National enrollment (although this is growing) and we feel there are better choices for people wanting a Medigap plan.  Medigap Plan G, and Plan N are on our Medigap plan recommended list (Plan A, B, D in select situations) are more than suitable alternatives for Medigap Plan K.

Why is limited enrollment in Medigap Plan K across the Nation an issue?

 First, what is ‘limited enrollment’?  According to the AHIP report* (found here) the national enrollment in Plan K was 74,565 policies issues through December 2015 (1% of all Medigap policies in force at the end of 2015).  This is the 3rd lowest national enrollment in any ‘Standardized’ Medigap plan currently available (Plan M has a lower enrollment than Plan K and we do not recommend Plan M either).   The insurance company with the largest Medigap market share included Plan K in their Medigap plan portfolio; their marketing muscle still has not moved the needle on this plan.

A key point to remember is insurance companies are in business to make money and they have to generate enough revenue to cover potential losses (coming from claims) as well as overhead (plan administration costs and a contribution to the bottom line…make a profit).   A key ratio used to monitor the financial condition of insurance companies offering Medigap plans is called the Medical loss ratio (annual claims divided by annual revenue from plan premiums).  In 2016 the average medical loss ratio for companies offering individual Medigap policies was 77.3 (according to the NAIC Medicare Supplement Loss Ratio Report available here).  We prefer companies with a ratio no higher than 2 points above the national average.

Other Medigap Plans offer better value than Medigap Plan K

Reference the Idaho Medigap monthly premium rate table found here.  This table is maintained by personnel at the Idaho Department of Insurance.  Notice the out of pocket limit for Medigap Plan F-Hi Deductible.  It is less than half of Medigap Plan K.  This means Medigap Plan F Hi-Deductible starts paying 100% of your Medicare-approved costs much sooner than Plan K.  Notice the premium for Medigap Plan F-Hi Deductible is available for far less than Medigap Plan K.

What should I do if I have a Medigap Plan K policy?

That is up to you.  Don’t forget if you are outside of your Medigap open enrollment period and do not have a ‘guaranteed issue‘, you will have to answer the underwriting (health history) questions on the application of the new company you are considering.  Read should I change Medigap policies and if you wish to pursue and want help call us.  We will help you find a Medicare supplement insurance plan that offers good value and meets your needs (and retirement budget).

What Medigap Plans do you recommend?

Each of the 10 Medigap plans pays a different combination of the costs left over by Medicare Part A and Part B.  At this time we feel Medigap Plan F Hi-Deductible (certain situations), Medigap Plan G, and Medigap Plan N are Medigap plans Idaho residents should consider.  All of these plans have a decent market share, monthly premiums are attractive and provide good value.  Note the monthly premiums offered by the different insurance companies offering these plans can vary by 200% for the same exact coverage.  Also be aware that some insurance companies can and do raise monthly premiums after the policy has been in place less than 12-months; others guarantee the rate to stay the same for 12 months.  All things being equal, we prefer those insurance companies offering the 12-month rate guarantee.

We encourage Idaho residents to work with a professional Medicare insurance broker when selecting both a Medigap plan and the right insurance company.  We have screened each of the companies offering these plans and have identified ones we would do business with ourselves and would recommend to Idaho residents.

Idaho residents interested in a Medigap Plan

Call us at (208)-867-0296 if you would like to talk about Medigap plans.  Be aware when using internet-based resources providing quotes on Idaho rates for Medigap Plans.   Some of these sources do not cover 100% of the insurance companies offering Idaho Medigap Plans.  This may mean the quotes they provide may not be for all of the companies serving our market. Also, be aware that the plan with the lowest premium may not be suitable for you.

Insurance companies offering Medigap Plans are on their own schedule for raising their rates.  We keep track of these companies and update our files every month.

We help Idaho Medicare beneficiaries find the Prescription Drug plan that covers all of their med’s and at the lowest annual out of pocket cost for them.

Learn more about us before you call and then learn the answer to the question ‘Why should I use an independent agent?‘.

*We are monitoring the AHIP website to see if/when they provide an updated report on Medigap enrollment figures by plan and will update this page when the figures are available.

We are here to help.

This page was last modified on Aug 22, 2021 @ 9:19 PM