Plan N is a Medicare Supplement that often gets overlooked. More people are interested in Plan F or Plan G, as they offer slightly more benefits. However, a growing number of people have been enrolling in Plan N and enjoy lower premiums - still with minimal out-of-pocket costs.
Today, we’re going to review the coverage offered by Plan N, how much it costs, and who might be a good candidate.
Plan N is one of the ten Medicare Supplement, or Medigap, plans. It’s sold by various private insurance carriers and is a secondary insurance option for Medicare beneficiaries. People choose to enroll in a Medicare Supplement plan to help pay for the costs that remain after Original Medicare (Parts A and B) pay their share. Without a Medigap plan, you’d be left with deductibles, copayments, and coinsurance costs. Medigap plans pick up all or some of those expenses, depending on which letter plan you choose.
Plan N coverage includes payment for the following leftover costs:
So, what does that leave you with? There are three things you’ll be responsible for if you enroll in Plan N.
First, the Part B deductible. As of 2020, no newly-eligible Medicare beneficiary could enroll in a Medigap plan that offered payment for the Part B deductible. Plans that do offer that benefit are Plans C and F. However, since Plan N’s main competitor (Plan G) also has this same limitation, we hardly see this as a disadvantage.
Next, Part B excess charges. An “excess charge” is an amount that is over and above the Medicare-approved amount for services. If your doctor does not accept Medicare, they’re allowed to charge an additional 15% for their services. This may not be as big of a deal as it sounds, though. Excess charges are pretty rare. Approximately 96% of providers nationwide accept Medicare, meaning Part B excess charges aren’t common. In addition, there are eight states that prohibit excess charges altogether. These states, referred to as MOM (Medicare Overcharge Measure) states include Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont.
The biggest thing you’ll notice if you enroll in Plan N is that you’ll be responsible for some copayments. A visit to the doctor will cost up to $20, and a visit to the emergency room will cost up to $50. Notice how we used the words “up to?” Your providers or the facilities can choose to charge less. Plus, if your emergency room visit is followed by an inpatient admission, your copayment is waived.
One reason people choose to enroll in Plan N is due to the lower monthly premiums. Premiums are calculated by using a few different factors. Your age, gender, location, and tobacco use are all used to determine your Medigap premium. Insurance carriers are also allowed to set their own rates. Some charge more than others, and some offer household discounts.
Let’s look at the average cost for a 65-year-old female. The average premium for Plan N in Arizona is between $80 and $300. Compare that to Plan G, whose average is between $100 and $360.
You may think that $20 per month isn’t a huge difference. You’re right; it might not be. But there is one more thing to consider: rate increases. Medicare Supplements increase in price as you get older. It’s not uncommon for Plan G to increase at a rate of 3-5% per year. Plan N, on the other hand, has been seeing lower increases. In fact, there are some states and insurance companies that didn’t raise rates for Plan N for two years.
Why? Medigap prices increase because, generally speaking, we have more healthcare costs the older we get. However, people who choose to enroll in Plan N are often healthy. (More on that in the next section.) For that reason, there are fewer medical claims to be paid by the insurance company. They pass those savings on to their customers.
Plan N doesn’t make sense for everyone. Remember, you can save an average of $20 per month on Plan N versus Plan G. However, if you are someone who makes frequent trips to the doctor, your copayments will quickly exceed that savings amount. People who choose Medigap Plan N in Arizona are generally healthy. They don’t have chronic conditions and rarely see their doctor.
If you’d like to enroll in Plan N, call your Local Medicare Specialists today! Our licensed agents can help you decide if Plan N is the right choice for you, and we can explore your other Medicare options.
Schedule a FREE Medicare consultation with an agent in your neighborhood.