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What Is Medicare Supplement Plan N?

Couple relaxing on the beach as they discuss their supplement plan N.

We all know that retirement is supposed to be a time of relaxation, peace, and joy. This can be difficult if you’re facing high healthcare expenses. Original Medicare helps minimize this, but many people want to do more to protect themselves against high healthcare costs. Medicare Supplement Insurance, also called Medigap, is a great option to help with this. However, this kind of coverage can be expensive later in life. A good compromise between cost and comprehensiveness of coverage is Medicare Supplement Plan N. In this article, we’ll review the basics and some of the details of this popular option.

The Basics Of Medicare Supplement Insurance

Before we dive into the details of Plan N, we’ll review the basics of Medigap coverage. Medicare Supplement plans work as secondary coverage. Original Medicare, Parts A, and B are primary; they will cover the majority of your medical expenses. Your Supplement plan will pay as secondary coverage. There are ten standardized Medigap plans and each one of them will cover a different level of the expenses you’re expected to pay. Some are very or even totally comprehensive, and others are less so. No matter which standardized plan you use, your Medigap plan helps pay the costs that you’d normally have to pay out of pocket.

What Does Medicare Supplement Plan N Cover?

Now that we’ve reviewed a few of the basics of Medicare Supplement Insurance, we can dive deeper into the specifics of Plan N. Plan N is one of the three most popular Medigap plans around. Plan N covers all of these “gaps” in Original Medicare (the costs you’re expected to pay):

  • Part A coinsurance and hospital costs for an additional 365 days beyond what Original Medicare covers
  • Part B coinsurance or co-payments (normally you’d have to pay 20% of the cost for every Part B service or procedure)
  • Your first three pints of blood
  • Part A hospice care co-insurance
  • Part A Skilled Nursing Care co-insurance
  • Part A deductible
  • Foreign travel emergency health care (up to plan limits)

There is one aspect of this coverage that you need to know about: you will have to pay a $20 co-payment when you use Part B services. Here are the details of how this works. When you use Part B services, say to see the doctor, Original Medicare Part B pays the first 80% of the cost. Normally you’d pay the remaining 20%. But, with Plan N, all you pay is $20. Plan N will pay the rest, no matter how large the charges are.

Another aspect of Plan N to be aware of is that if you visit the Emergency Room, you’ll have to pay a flat copayment of $50. This is also a Part B service, so you’re paying $50 instead of the 20% of the total cost you’d normally have to pay under Original Medicare. This co-payment is waived if you’re admitted to the hospital as an inpatient.

Basically, Plan N works more like traditional health insurance, with a small co-payment to see the doctor or visit the ER. Under Original Medicare, you’re exposed to a higher percentage of the costs. These small and fixed co-pays help you save money.

However, this is different than the way most other Medigap plans work. Other, more comprehensive plans like Plan G will cover the cost of Part B services without requiring you to pay any co-payment. In other words, other Medigap plans will completely close the Part B co-insurance gap. You might wonder why you should choose Plan N if you’ll pay more out of pocket. The answer is that the premiums for Plan N (the amounts you pay to the insurance company for coverage) are significantly lower than for more comprehensive plans like Plan G. If you’re willing to pay these small costs to see the doctor, you’ll save money on premiums every year. If you figure that you’ll have Medigap coverage for fifteen or twenty years, your savings can really add up.

Couple laying in bed reading about their plan N supplement as they laugh.
The answer is that the premiums for Plan N (the amounts you pay to the insurance company for coverage) are significantly lower than for more comprehensive plans like Plan G.

There are only two Medicare costs that Medicare Supplement Plan N will not cover:

  • Part B deductible
  • Part B excess charges

The great thing about Medicare Supplement Plan N is that these costs are either small or avoidable. The Part B deductible is only a couple of hundred dollars per year. Once again, your savings on monthly premiums will be higher than what you’ll have to pay for the Part B deductible each year.

Part B excess charges are only rarely relevant. You’ll encounter these costs if you see a provider who doesn’t accept Medicare’s standard prices. This is known as Medicare Assignment. Providers who don’t accept Assignment are allowed to charge up to an additional 15% on Medicare’s base prices. If you only have Original Medicare, you’d have to pay the 15% extra out of pocket. Many Medicare Supplement plans, including the most comprehensive one, Plan G, cover these extra costs for you. Plan N doesn’t.

Again, you might wonder why you’d choose a plan that left this gap uncovered. The reason why you might consider doing so is that these Excess Charges are pretty rare. And, they’re avoidable. You can find out in advance if a provider accepts Medicare Assignment. If they do (and most do), then they are not allowed to impose Excess Charges. You will always have the ability to know in advance if your provider imposes these charges. In other words, you can avoid them. Since this is the case, it’s probably not going to harm you to leave this gap uncovered. Given that, you might as well save the premium dollars. You’re likely to come out way ahead over the years that you’ll have Medicare coverage.

Choosing Or Switching To Medicare Supplement Plan N

The absolute best time to enroll in Medicare Supplement Plan N is during your Medigap Open Enrollment Period. This is a six-month window that opens when you meet both of these criteria:

  • You are at least 65 years old
  • You are enrolled in Part B

If you like the idea of saving money on your Medicare Supplement premiums, but still want to keep comprehensive coverage, this is the time to enroll in Medicare Supplement Plan N. On the other hand, what if you chose a different Medigap plan when you first enrolled, say Plan F or G? Can you switch to Plan N? The answer is “maybe.” The nice thing about Medigap coverage is that you can apply for it at any time; you don’t have to wait for certain enrollment periods.

If you apply outside of your Medigap Open Enrollment Period, though, you’ll likely have to go through medical underwriting. You’ll have to answer health-related questions. It is possible that you won’t qualify because of your health status, but it is also possible that you’ll be able to get coverage that will lower your monthly premiums. On the other hand, there are some circumstances that will allow you to apply for Medicare Supplement Plan N with a Guaranteed Issue right. When you qualify for Guaranteed Issue, you don’t have to answer health-related questions, and you can’t be declined.

The best way to switch to Medicare Supplement Plan N is to work with a licensed health insurance agent. An independent agent can help you compare quotes from multiple insurance companies. They can also help you navigate the application and underwriting process. Plus, they can help you find out if you qualify for Guaranteed Issue. If you’d like to investigate the savings available from Plan N request a free consultation from us today.

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