One of the first questions we get asked by a new Medicare beneficiary is, “What’s the best Medicare plan?” We wish we could give you an answer to that, but it’s not always so simple! What we can do is talk about a few of the more popular options and then compare them to your needs and budget.
When it comes to Medigap plans, both Plan G and Plan N are great choices. Let’s review their coverage and costs so you can make a decision about which one might be right for you.
If you turned (or will turn) 65 in the year 2020 or later, Plan G is the Medigap plan that will offer the most coverage. (Plan F offers slightly more benefits, but you must have turned 65 prior to 2020 to be eligible to enroll.) Plan G will pick up every remaining cost after Parts A and B have paid, save for the Part B deductible. The Part A deductible and all other cost-sharing amounts left by Parts A and B are paid by Plan G.
Sounds pretty good, right? It is! That’s why Plan G is so popular among new beneficiaries. Now, you will pay a premium for Plan G, which can make it less appealing to some people. Medigap premiums are based on several things, such as your age, gender, location, and tobacco use. Premiums will also vary across insurance carriers, which is why it’s so important to enlist the help of an independent advisor when choosing your Medicare plans. The average cost for Plan G in 2022 was $132 per month.
Plan G is a great option for individuals who know they need more medical attention than others. If you have a chronic condition or require frequent visits to your doctor or the hospital, Plan G might be a great fit for you. The premiums will be higher than our other contender, Plan N, but the extra benefits will far outweigh the cost.
There is also a high-deductible version of Plan G. The benefits are the same, but it requires you to pay an annual deductible of $2,490 (in 2022) before benefits begin. The advantage is that it comes in at a lower premium, with the average falling somewhere between $40 and $90 per month.
Plan N actually has the fastest-growing pool of enrollees. As more and more people are trying to cut costs, they look to Plan N as a way to save on premiums. However, it’s not a good fit for everyone.
Like Plan G, Plan N does not include coverage for the Part B deductible. In addition, there are two other differences between these plans. Plan N does not cover any Part B excess charges. An “excess charge” is an amount that is over and above the Medicare-allowable rate. If a provider or facility does not accept Medicare, they are allowed to charge an additional 15% on top of the Medicare fee. If you’re enrolled in Plan N, you’d be responsible for that extra 15%.
This “flaw” in Plan N might not be as bad as it sounds. First, most providers and facilities accept Medicare. There are certainly some out there who don’t, but it’s pretty rare. Second, there are currently eight states that prohibit the practice of excess charges. These states are referred to as MOM states - Medicare Overcharge Measures. They include Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont.
The most notable difference between Plan N and Plan G is that Plan N requires you to pay copays when you visit your doctor or an emergency room. You’ll pay up to $20 for a doctor’s visit and up to $50 for an emergency room visit. Note that we used the words “up to” because your provider could decide to charge less. If you are admitted to the hospital after an emergency room visit, your copay will be waived.
Plan N does enjoy lower premiums than Plan G. The average premium for Plan N in 2022 was $112. Another thing to note about Plan N is that the market has seen lower rate increases with Plan N than with Plan G. It’s not uncommon for your premiums to increase every year, but Plan N tends to increase at slower rates.
Who is a good fit for Plan N? If you are a healthy individual who has no medical concerns and rarely sees a doctor, Plan N might be a great choice. If you live in one of the MOM states, it would be even better!
We wish there were easier answers when it came to making decisions about your Medicare, but healthcare is just too personal! You’ll have different needs than your spouse, your neighbor, or your friend, so it’s important to consider your own situation before choosing any Medicare plans. If you’d like to speak with one of our local Medicare specialists, give us a call! Our advisors are happy to learn more about what coverage you’re looking for and then find plans that fit those needs.
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