Cost sharing is the portion of the costs covered by both you and your insurance company that you pay out of your own pocket. This cost ranges from deductibles, coinsurance, co-payments, or similar charges. Although, it does not include premiums, balance billing amounts for non-network providers, or the cost of non-covered services. While other plans may offer full coverage for certain benefits, cost-sharing plans provide only partial coverage for specific benefits.

 

What Are Some Examples of Cost-Sharing Plans?  

In the Medigap or Medicare Supplement Insurance Plan space, these include Medigap Plan K and Medigap Plan L. While these are not the only types of Medicare Health Plans that incorporate cost-sharing, they serve as a good example for how cost-sharing works in the Medicare space. They both offer similar benefits, but their cost sharing structures differ. How are they similar? Both plans have an annual out-of-pocket limit which is essentially a limit or cap, put in place to prevent cost-sharing from getting out of control. Once you pay up to this annual limit in cost-sharing expenses, the plan covers 100% of all included benefits going forward. In 2017, this limit is set at $5,120 for Medigap Plan K and $2,560 for Plan L.

 

How Does Cost-Sharing Work with Plans K and L?

Medigap Plan K is a 50% cost-sharing plan. It essentially provides “half” coverage for five and full coverage for one “traditional” Medicare Supplement Insurance Plan benefits.

Medigap Plan K includes the following benefits:

  • Medicare Part A co-insurance (100%).
  • Medicare Part B co-insurance and co-payment (50%).
  • First 3 pints of blood (50%).
  • Part A hospice care co-insurance or co-payment (50%).
  • Co-insurance for skilled nursing facility (50%).
  • Medicare Part A deductible (50%).

 

Medigap Plan L on the other hand, is a 75% cost-sharing plan. This plan provides “partial” coverage for five and full coverage for one “traditional” Medicare Supplement Insurance Plan benefits. Plan L works similarly to Plan K, in that it works after Medicare pays its portion of the approved services.

Medigap Plan L includes the following benefits:

  • Medicare Part A co-insurance (100%).
  • Medicare Part B co-insurance and co-payment (75%).
  • First 3 pints of blood (75%).
  • Part A hospice care co-insurance or co-payment (75%).
  • Co-insurance for skilled nursing facility (75%).
  • Medicare Part A deductible (75%).

 

When is Cost-Sharing Plan ideal for me?

Cost-sharing plans may be ideal for clients who:

  • Are first aging into Medicare.
  • Are accustomed to having coverage through an employer sponsored group plan.
  • Have no or only minor health problems.
  • Have out-of-pocket expenses.
  • Live in states that prohibit excess charges.

 

How Do I know if a Cost-Sharing Plan is Right for Me?

To find out more about cost-sharing plans or other Medicare Health Plan options, contact a Medicare Pathways sales agent today by calling 866-466-9118, or request a no-cost, no-obligation quote by clicking here now.