When purchasing Medigap insurance, you are weighing benefits versus cost. At some point, the monthly premiums for more comprehensive coverage (like Plan F) may outweigh the extra benefits.
In our experience, a Plan N Medicare supplement insurance policy can offer good value when compared to supplements that fill in more gaps.
There are several reasons we’ve arrived at this conclusion, but in a nutshell, Plan N has little in additional out-of-pocket exposure when compared to some of the other more comprehensive plans – and the monthly premiums can be $40-$50 less in many cases.
First let’s talk about the gaps in Medicare Part A & B that Plan N does not cover. There are three:
Those are the only three gaps not covered by Plan N that are covered by Plan F. As you can see, your out-of-pocket exposure is low and predictable.
The first gap is simply an office copay. When you see the doctor or visit the emergency room, you may have a small copay to pay. This is very much like any insurance plan you had before you became eligible for Medicare. If a copay is due, the provider will usually collect it upfront.
The maximum amount for a primary care physician (or specialist) is $20, but it can be less – or none at all. In the event you visit the emergency room, the copay is a maximum of $50 . If you see several doctors every month, Plan N may not be the best value, but these small copays do work for most people.
Plan N does not cover the small, one-time per year Part B deductible. In this way Plan G and Plan N are the same. If you are considering Plan G, then Plan N might be a good choice for you as well.
The Part B deductible is $183 for 2018 (same as 2017) and was $166 in 2016. When the officials at Medicare change this number, it affects all plans – both new and old. The Part B deductible is a yearly, one-time amount. It has remained low for several years.
The officials at Medicare (CMS) can raise this deductible each year due to inflation metrics. If this deductible does increase significantly, then plans that do cover this amount (like Plan F) will simply pass that cost on to policyholders. In other words, you are paying for it one way or the other, but Plan N gives your more control.
In our opinion, Part B Excess Charges are the only gap worth further thought. The first two gaps should not be too costly over the long haul. But what about Part B Excess – what is it? Basically, this is the amount above and beyond what a doctor can charge you if s/he doe not accept Medicare assignment. In other words, your doctor does not accept the Medicare reimbursement amounts.
If that’s the case, then your doctor can charge a 15% surcharge on top of your regular bill. There are a couple of things to know. First, it is very rare that doctors do not accept Medicare assignment – it would be hard for them to stay in business. Second, some states (like Ohio for instance) do not allow for Part B Excess charges. Doctors cannot charge this fee even if they wanted to in Ohio.
In a nutshell, it is very, very rare for someone on Medicare who purchased a Plan N to run into Part B Excess charges. And in the rare event that your doctor does not accept Medicare assignment, then you might consider finding a new doctor. Our colleague wrote a very good article posted here about the rarity of Part B Excess charges.
The argument for Plan N is a simple one: You can lower your monthly premiums without adding significant out-of-pocket exposure. The premiums you save in most cases will more than make up for the gaps not covered by this particular supplement.
The copays are small and have not increased since Plan N was released in June of 2010. The Part B deductible is the smaller of the two Medicare deductibles (Part A deductible is much higher and covered by Plan N) and will not break the bank.
Part B Excess charges are very rare and in the event you encounter them, you can always change doctors so that you do not run into that problem again. And if you live in Ohio, it’s a moot point – doctors are not allowed to charge Part B Excess amounts.
This may be more of a “peace of mind” argument. Many of our clients simply want the best coverage money can buy. So they buy Plan F – and there is nothing wrong with that idea.
In other cases, some of our clients are visiting various doctors on a regular basis and do not want to pay the Part B deductible or encounter a regular office copay. These are also valid arguments against Plan N. It has a couple of more gaps that need to be filled and some people simply don’t like that idea.
At Hyers and Associates, we are your one-stop shop for all things Medicare insurance. We offer traditional supplements, Medicare Advantage plans and Part D drug insurance.
We can help you compare the direct rates from several different Medigap carriers side by side. We can also help you enroll direct – at no additional cost. Contact us today to compare the lowest rates on the supplement of your choice.
Category: Medicare Supplements