Plan N has the fastest-growing enrollment of all the Medigap policies. While it doesn’t offer the most comprehensive coverage, it does have exceptional value for the cost. As a result, it’s one of the three most popular Medicare supplements on the market today.
How Medigap Plans Work
Medicare beneficiaries usually choose to supplement their Original Medicare coverage (Parts A and B) with either a Medicare Advantage plan or a Medicare supplement, also known as a Medigap plan. Before you decide which of the two options is right for you, you’ll need to understand how each works.
Today, we’re going to discuss Medigap plans. Their coverage is more predictable than Medicare Advantage plans because there are only ten Medigap policies to choose from: Plans A, B, C, D, F, G, K, L, M, and N.
No matter where you live or which insurance company you purchase a Medigap policy from, the coverage remains the same. They also don’t change their benefits from one year to the next. The only change you’ll notice with a supplement is the monthly premium. (They typically increase with age.)
Think of a Medicare supplement plan as your secondary coverage, your primary being Original Medicare. Whatever costs remain after Part A and Part B pay their portion can be taken care of by your Medicare supplement. The amount your supplement pays will depend on which of the ten plans you choose.
Let’s talk about your expenses if you choose not to enroll in a Medicare supplement insurance plan.
Medicare Part A
Part A is your hospital insurance. It will cover your room and board expenses during an inpatient hospital stay. Before coverage begins, you’ll need to pay the Part A deductible of $1556. That deductible applies to each hospital admission, so it’s possible to pay the deductible several times in one year. (It will not apply a second time until you have been out of the hospital for more than 60 consecutive days.)
After the deductible, Part A pays for 60 days of room and board with no coinsurance expense. From days 61 to 90, your portion will be $389 per day. After day 90, you can use your 60 lifetime reserve days if you have them available. If using a reserve day, your coinsurance expense is $778 per day. If you don’t have any of those reserve days left, you’ll have no insurance coverage on day 91 and beyond and will be responsible for the full amount each day.
As you can see, Part A expenses can add up quickly.
Part A also has similar benefits for skilled nursing facility stays. You’ll need to pay your deductible again, and then Part A will pay for the first 20 days of your stay. From day 21 to day 100, your coinsurance cost is $194.50.
Medicare Part B
Part B is your outpatient insurance. Part B helps pay for doctor’s visits, surgeries, diagnostic tests and images, durable medical equipment, and preventive services. The Part B deductible is $233 and is paid only once per year. After meeting the deductible, Part B is an 80/20 split on Medicare-approved expenses. Part B covers 80% of the cost, and you’ll be responsible for the remaining 20%.
An important thing to understand about Parts A and B is that there is no out-of-pocket limit on what you could pay during the year. This is different than what you may be accustomed to on an employer’s group plan, which usually has an annual maximum for out-of-pocket expenses.
Now that you understand how Parts A and B work and what they pay, let’s talk about how Medicare supplement Plan N can help with all those leftover expenses.
Benefits of Medicare Supplement Plan N
Plan N will pick up a good portion of the expenses that remain after Original Medicare pays.
Plan N covers:
- Medicare Part A deductible
- Part A coinsurance and hospital costs
- An additional 365 hospital days after Part A benefits are exhausted
- Medicare Part A hospice care coinsurance
- Medicare Part B coinsurance or copayments*
- First three pints of blood used in a medical procedure
- Skilled nursing facility care coinsurance
- 80% of foreign travel emergency care (up to plan limits)
What is not covered by Plan N?
There are two main things not covered by Plan N: the Part B deductible and any Part B excess charges.
As of January 2020, no newly-eligible Medicare beneficiaries could enroll in a Medigap plan that paid for the Part B deductible. If you turn 65 in 2020 or later, you won’t be able to enroll in Plan F, which does pay the Part B deductible. Considering the higher premiums associated with Plan F, this lack of coverage in Plan N is not something to be concerned about. As we mentioned earlier, the Part B deductible in 2022 is $233, so you will be responsible for this amount.
Plan N also does not include coverage for any Part B excess charges. An “excess charge” is an amount that your provider adds to the Medicare-approved amount for services. If your provider does not accept Medicare assignment, they can charge an additional 15% for services. Under Plan N, you would be responsible for that extra 15%.
How common are Part B excess charges?
Many people argue that since Part B excess charges are so rare, they should not deter you from enrolling in Plan N. Across the United States, only about 5% of providers have been found to charge Part B excess charges.
There are also some states that do not allow excess charges or at least limit them to far less than 15%, regardless of the provider’s Medicare participation status. The eight states that participate in this measure are:
- New York
- Rhode Island
Plan N Does Require Copayments
The last thing to note about Plan N is that there are copays required for office visits and emergency room visits.
You will pay up to $20 for every visit to your doctor or a specialist. You’ll also pay a $50 copay for emergency visits. However, that $50 copay will be waived if you are admitted.
Individuals who rarely seek medical care may not mind paying $20 a couple of times a year. However, copays for others with more health conditions could quickly add up.
Eligibility for Plan N
You must be 65 years old and enrolled in both Medicare Part A and Medicare Part B to be eligible for Plan N.
If you are eligible for Plan N, you have “guaranteed issue rights” during your Initial Enrollment Period. The guaranteed issue right means that no insurance company can deny coverage based on your current health status or past medical conditions. In addition, you will not have to answer health questions to enroll.
Once your Initial Enrollment Period has lapsed, you may not have the same rights. Each state has its own rules, so you should work with your agent to determine when you may have guaranteed issue rights for Plan N.
The Cost of Medicare Plan N
Monthly premiums will depend on personal factors and which pricing method the insurance company uses. Your premium will be based on your age, gender, tobacco use, and where you live. (Higher cost-of-living states have higher premiums.)
The average cost for Plan N is between $80-$180 per month.
The great thing about Plan N is that its rates have not been shown to increase as quickly as other Medicare supplement plans. In fact, we often see a 0% increase from one year to the next. The reason is that since Plan N has high enrollment numbers, there are more cost-sharing opportunities. Also, because it does not pay for the Part B deductible, which increases every year, it has fewer overall expenses.
Alternatives to Medicare Supplement Plan N
The closest alternative to Plan N, meaning the one that has the most similar coverage, is the very-popular Plan G.
Plan G differs from Plan N in two ways. First, it does pay the Part B excess charges. Second, it does not require plan members to pay copays for doctor’s visits. So the only thing you’ll be responsible for paying if you have Plan G is the Part B deductible.
How to Enroll in Plan N
The easiest way to enroll in Plan N – or any other Medicare insurance plans – is to work with a licensed insurance agent. Our Medicare advisors will educate you on the entire Medicare program and make sure you know about all of your options. We’ll get to know you and your unique needs so that we can make recommendations that make sense for you. Once you’ve decided on coverage, we’ll compare rates from many insurance companies so that you get competitive pricing. The best part? There’s absolutely no additional cost to work with one of our agents!
Call our office today to learn more about Plan N!
Does Plan N cover prescription drugs?
No, you’ll need a Part D prescription drug plan to get prescription drug coverage.
Does Plan N cover dental care?
It may cover emergency dental treatment in a hospital setting, but it does not offer routine dental benefits.
Which insurance company sells Plan N?
Many private insurance companies offer Medicare supplement plans. Work with a licensed insurance agent to find a company with competitive rates.