What Plan K and Plan L Actually Are (And Why Most People Skip Them)
Plan K and Plan L exist because Congress wanted to give Medicare beneficiaries a lower-premium Medigap option that still provides some cost-sharing protection. Sounds good in theory. In practice, these two plans are the most misunderstood options in the entire Medigap lineup, and the people who buy them often end up wishing they hadn’t.
That’s not me being dramatic. I’ve seen people choose Plan K or Plan L because the monthly premium looked attractive, then get surprised by a $1,000+ bill after a hospital stay. So before you make that same call, let me give you the full picture.
Plan K and Plan L are what’s called “cost-sharing” Medigap plans. Unlike Plan G, which covers almost everything Medicare doesn’t pay, Plan K and Plan L only cover a portion of your cost-sharing gaps. The trade-off is a lower monthly premium. But there’s a ceiling on your annual out-of-pocket costs, which is the piece that actually makes these plans worth considering for a narrow group of people.
Here’s how the basic structure works. Plan K covers 50% of most cost-sharing gaps. Plan L covers 75%. Both plans have an annual out-of-pocket maximum, after which they pay 100% of covered costs for the rest of the calendar year. In 2026, that out-of-pocket maximum is $7,220 for Plan K and $3,610 for Plan L.
What Plan K and Plan L Cover (And What They Don’t)
Let’s get specific, because the vague descriptions you’ll find on most insurance sites don’t actually help you make a decision.
Neither Plan K nor Plan L covers the 2026 Part B deductible, which is $257. That’s already a difference from Plan G. Neither plan covers Part B excess charges, which is what happens when a doctor doesn’t accept Medicare assignment and bills above the Medicare-approved rate. And neither plan covers foreign travel emergency care.
What they do cover, partially, is most of the other standard Medicare gaps. Here’s a side-by-side breakdown:
| Benefit | Plan K | Plan L | Plan G (for comparison) |
|---|---|---|---|
| Part A hospital coinsurance and costs up to 365 days after Medicare benefits are used | 100% | 100% | 100% |
| Part A deductible ($1,676 in 2026) | 50% | 75% | 100% |
| Part A hospice care coinsurance or copayment | 50% | 75% | 100% |
| Skilled nursing facility care coinsurance | 50% | 75% | 100% |
| Part B coinsurance or copayment | 50% | 75% | 100% |
| Part B deductible ($257 in 2026) | Not covered | Not covered | Not covered |
| Part B excess charges | Not covered | Not covered | 100% |
| Foreign travel emergency (up to plan limits) | Not covered | Not covered | 80% |
| Annual out-of-pocket maximum (2026) | $7,220 | $3,610 | None (virtually unlimited protection) |
One thing worth highlighting: Plan K and Plan L both cover 100% of Part A hospital coinsurance costs up to 365 days beyond Medicare’s coverage period. That one matters more than people think. A long inpatient stay is exactly the kind of catastrophic event that can wipe out someone’s savings, and both plans protect you there.
That said, the 50% and 75% coverage on the Part A deductible is real money. The 2026 Part A deductible is $1,676 per benefit period, not per year. If you’re hospitalized twice in a calendar year and it counts as two benefit periods, you owe that deductible twice. With Plan K, you’d be responsible for $838 each time. With Plan G, you’d owe nothing.
The Out-of-Pocket Maximum: The One Reason to Consider These Plans
The out-of-pocket maximum is the thing that saves Plan K and Plan L from being totally irrelevant. Once you’ve paid $7,220 (Plan K) or $3,610 (Plan L) in covered out-of-pocket costs during the calendar year, the plan pays 100% for the rest of the year.
Here’s the thing: Plan G doesn’t have an out-of-pocket maximum. It’s structured so that it covers almost everything, so you rarely need one. But if something catastrophic happens and you’re on Plan G, your only real exposure is the $257 Part B deductible and any Part B excess charges from non-participating providers.
With Plan K, your worst-case scenario in a given year is $7,220 in covered costs plus your monthly premiums. That’s not nothing. For a healthy 65-year-old who’s comparing Plan K premiums to Plan G premiums, you’d need to run the actual numbers for your state and age.
In most states, Plan G premiums for a 65-year-old run $100 to $200 per month. Plan K premiums for the same person often run $60 to $100 per month. The annual premium savings might be $700 to $1,200 depending on your situation. If you’re healthy and rarely use healthcare, that premium gap might feel worthwhile. But if you have one moderate hospital stay, you could quickly eat through those savings and more.
For a 72-year-old in Ohio who’s managing a chronic condition and expects regular specialist visits, Plan K almost certainly isn’t the right call. The math usually doesn’t favor it once you account for realistic healthcare use at that age.
The Biggest Mistake People Make With Plan K and Plan L
I’ve seen this mistake more times than I can count. Someone sees the lower monthly premium, signs up for Plan K or Plan L, and assumes the out-of-pocket maximum works the same way it does in the Affordable Care Act marketplace. It does not.
The out-of-pocket maximum in Plan K and Plan L only applies to covered benefits under those plans. It doesn’t cap your total Medicare spending. So if you see a doctor who charges excess fees above the Medicare-approved rate, those charges don’t count toward your out-of-pocket limit because Plan K and Plan L don’t cover excess charges at all. You’re just responsible for them, period.
Same thing with the Part B deductible. That $257 doesn’t count toward your out-of-pocket limit because the plan doesn’t cover it. You pay it out of pocket, and it’s not tracked against your cap.
People also get tripped up by the “per benefit period” structure of Part A. The out-of-pocket maximum resets every January 1. But the Part A deductible is per benefit period, which doesn’t follow the calendar year. If you’re hospitalized in November and then again in January, those are potentially two separate benefit periods, meaning two separate Part A deductibles. Plan K covers 50% of each one, but you’re still on the hook for the other 50% twice.
That’s not how most people are picturing it when they sign up. They think they’ve got a clean $7,220 annual limit on everything. They don’t.
Who Plan K and Plan L Actually Make Sense For
I want to be straight with you: Plan K and Plan L are right for a small group of people, and wrong for most.
They might make sense if you’re in your mid-to-late 60s, genuinely healthy with no chronic conditions, and you’re trying to minimize monthly costs right now while still having a catastrophic backstop. If your alternative is going without any Medigap coverage at all because premiums feel too high, Plan K is better than nothing. The out-of-pocket max does protect you from a truly catastrophic situation.
They might also make sense if you have significant savings and you want to self-insure the smaller costs while protecting against the big stuff. A 67-year-old in Ohio with $300,000 in savings and no ongoing health issues might rationally choose Plan K, pocket the premium difference, and accept the risk of a few hundred dollars in cost-sharing per year.
But if you’re managing heart disease, diabetes, COPD, or any condition that means regular specialist visits, labs, or potential hospitalizations? Plan K and Plan L will likely cost you more in total than Plan G would have, even accounting for the lower premiums. That’s not a guess. That’s what the math shows when you run realistic scenarios.
Plan L is the easier sell of the two because the out-of-pocket maximum is half of Plan K’s limit. If you’re going to choose one of these, Plan L gives you meaningfully more protection for what’s usually a modest premium increase over Plan K.
Bottom Line
For most people turning 65, Plan G is the better choice. It covers nearly everything, it’s widely available, and the peace of mind it provides is worth the higher premium for the vast majority of situations. Plan K and Plan L are built for a specific type of buyer: relatively healthy, cost-conscious, with savings to absorb moderate healthcare costs. If that’s not you, don’t let a lower monthly number talk you into a plan that leaves you exposed when you actually need it.
Frequently Asked Questions
Does the Plan K or Plan L out-of-pocket maximum reset every year?
Yes, both maximums reset on January 1 each calendar year. In 2026, Plan K’s limit is $7,220 and Plan L’s is $3,610. These amounts are set by the federal government and can change from year to year, so check the current figures when you’re comparing plans.
Can I switch from Plan K or Plan L to Plan G later?
Technically yes, but you may not be able to do it without medical underwriting. Outside of your initial enrollment period, most states allow insurers to ask health questions and potentially deny coverage or charge higher premiums based on your health history. A few states like New York and California have guaranteed issue protections year-round, but most don’t. Don’t assume you can upgrade easily later.
Why don’t Plan K and Plan L cover the Part B deductible?
Federal law actually prohibits any Medigap plan sold to new Medicare enrollees after January 1, 2020 from covering the Part B deductible. That’s why Plan C and Plan F are no longer available to people new to Medicare. Plan K and Plan L predate that rule, but they were never designed to cover the Part B deductible anyway. It’s a deliberate design choice to keep premiums lower and put some skin in the game on Part B costs.
Is Plan L worth the extra premium over Plan K?
In most cases, yes. The jump from 50% coverage to 75% coverage is meaningful, especially on the Part A deductible and skilled nursing facility coinsurance. And Plan L’s out-of-pocket maximum of $3,610 in 2026 is substantially less exposure than Plan K’s $7,220. The premium difference between the two is usually smaller than the protection difference, which makes Plan L the smarter pick if you’re committed to this category of plans.
