Medicare Supplement Plan N is a relatively newer choice among the 10 Federally-standardized Medigap plans. Many people are unfamiliar with what it covers and how it works because it was added to the portfolio of Medigap plans in June 2010. However, despite it’s “newness” as an option, it is growing in popularity and may be a viable option for some people.
Plan N comes in at a lower premium than more common plans, such as Plan F and Plan G. Plan F has the majority of the market share, around 50% according to recent studies. Plan N, typically, is priced about $30-50 (depending on zip code) lower per month than ‘F’.
Coverage-wise, Plan N provides almost identical coverage to ‘F’ at the hospital/inpatient (Medicare Part A). The differences are found under Medicare Part B coverage – Part B is outpatient or doctor’s office coverage.
First of all, Plan N does not cover the Medicare Part B deductible, which currently is $147/year. After that deductible is met, you are responsible for an up to $20 doctor’s office co-pay (can be 20% if that amount is less) and a $50 ER co-pay. Lastly, Plan N does not cover the “Medicare Part B Excess charges”. Because this is terminology that most people are not familiar with, it scares many people away from this plan. “Excess charges”, though, are when a doctor does not accept the Medicare fee schedule as payment in full. They are permitted to charge up to 15% above that – these are called “Excess charges”. By recent studies, this occurs in 2-3% of instances nationally. And, there are some states (PA and OH in particular) that have prohibited the charging of “excess charges”. Because it is rare and limited to 15% of Part B charges, which are generally smaller than Part A charges anyway, the loss of this benefit on ‘N’ (as compared to plans that cover it) is not that significant, in my experience.
So, is Plan N the right choice for you? This depends on several factors. First of all, what is your current health like? Are you going to the doctor many times a year? Or, are you only going 3-4 (or less) times on average?
Also, do you have any known, upcoming surgeries or procedures which will require rehab or multiple follow-up visits? This can be a major deciding factor, as you would pay the up to $20 co-pay each visit, regardless of whether it is for the same type of visit.
For many people, particularly those in good health or those who do not go to the doctor often, the savings on Plan N can be significant enough to warrant looking at this option instead of Plan F. Much of what you will hear from insurance companies themselves and people you know who have it is certainly advocating Plan F. And, that is a great option. But if you can save $400/year in exchange for paying the $147 deductible and $20 a couple of times, it just makes sense to consider Plan N as an option.
On the flipside, most analysts agree that the Plan N model will be the way of the future for Medigap plans, because it incorporates cost-sharing. That can be a factor in favor of Plan F, because frankly, this type of “full coverage” that Plan F offers may not be around forever. But if you purchase a plan now, it is “guaranteed renewable” and cannot be cancelled (unless you don’t pay the premium).
If you have questions about Plan N or how it works, please feel free to contact us on our website – http://medicare-supplement.us or call us at 877.506.3378.