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The Case For Plan N Supplemental Insurance

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Plan N Medicare Supplement InsuranceIf you’re shopping for Medicare supplement insurance, you might be considering Plan N as your policy of choice. With all Medigap coverage, you’re weighing benefits vs. premiums.

It’s important to know that the gaps uncovered by Plan N are small. Rarely do they expose the insured to significant expenses.

There are three gaps Plan N does not cover. We will explain the out-of-pocket costs and exposure associated with each gap below.

Understanding The Plan N Out Of Pocket Gaps

First let’s talk about the gaps in Medicare Part A & B that Plan N does not cover. There are three:

  • Part B Coinsurance (Plan N has a $20 doctor’s office copay and $50 emergency room copay)
  • Plan N does not cover the Part B deductible
  • Plan N does not cover Part B Excess Charges

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.

Plan N Medicare Supplement Has Doctor’s Office Copays

Plan N is unique in that it’s the only Medicare supplement with doctor’s office and emergency room copays. This means you may be responsible for a small copy when you visit your primary care doctor or nay specialist. In this way, Plan N is much like most traditional, under age 65 health plans that require copays at the doctor’s office.

The Plan N copay is $20 for a doctor’s office visit – and $50 for the emergency room. These fixed amounts have not increased or decreased since the inception of Plan N in the summer of 2010. Medicare (CMS) could choose to change these amounts in the future, but it’s unlikely they will. If they do, it will affect all N plans – both new and old.

It’s interesting to note that your doctor’s office copay could be less than $20, but never more. It depends on the billing practices of your doctor’s office. Specialist visits are also $20 – they are not allowed to charge more. You should also know there is no special copay for Urgent Care. It would be $20 as well.

If you visit several doctors on a monthly/regular basis, then Plan N may not offer significant savings over a Plan G or Plan F. But for most, this supplement can reduce premiums on an ongoing basis.

It Does Not Cover The Small Medicare Part B Deductible

Like Plans G and D, Medicare supplement Plan N does not cover the Part B deductible. Of the two Medicare deductibles this is the smaller one – Part A is the larger one. Part B applies to doctors visits and out-patient procedures whereas Part A occurrences are for hospital and in-patient procedures.

For 2018, the Part B deductible is only $183 – just like it was in 2017. It was $166 in 2016. As you can see, it does not move much. This is because it’s tied to inflation. The increases are not arbitrarily set rather they are tied to inflation metrics that tend to mover very slowly, if at all.

If the Part B deductible does increase significantly, you should know that Medicare supplements covering this gap will just increase their premiums in kind. They will not absorb this cost. It will be passed on to you. One way or the other you are paying for it. At least with Plan N, you have some control over it.

And as you may have heard, no new supplements can be sold after 2020 that cover the Part B deductible. This will force consumers to have a little more skin in the game when it comes to their Medicare coverage. These changes will make Plan N even more attractive. It may end up being the Medigap policy with some of the smallest rate increases.

It Does Not Cover Part B Excess Charges

You would only face Part B Excess Charges if you choose to see a doctor who does not accept Medicare assignment. This could be a doctor who charges more than what is allowed by Medicare. The maximum Part B Excess amount is 15% above what Medicare deems to be normal and customary.

Plan N does not cover Part B excess charges, but these fees are very rarely encountered. In many states, like Ohio for instance, Part B excess charges are not allowed. If you are considering Plan N in a state like Ohio, then you need not worry about Part B Excess Charges. Doctors cannot charge them even if they want to.

The states where Part B Excess Charges are not allowed, include: Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island and Vermont. (You can compare the list of what each supplement covers here.)

But most doctors simply won’t charge Part B Excess – even if they are in a state where they’re allowable. It would be hard for them to stay in business. Consumers would simply find another doctor. We have several Plan N clients here at our independent insurance agency. No one has told us they are running into this gap and it’s causing them problems. 

The Argument For Plan N Medicare Supplements

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. It’s unlikely they ever will.

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.

The Argument Against

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 or Plan G. There is nothing wrong with that idea – it goes a long way in retirement. We always recommend drilling down a little further, however. Peace of mind today can lead to frustration tomorrow.

But in other cases, you may be visiting several doctors on a fairly regular basis. You may worry about the copays adding up over time. Or perhaps you have a favored doctor who doesn’t accept Medicare assignment and you’re running into frequent Part B Excess charges.

These are valid arguments against Plan N. It has more gaps needing to be covered by you the insured than some other supplements. In this case, perhaps on of the other more comprehensive plans would be of better value.

Contact Us To Learn More About Medicare Supplements

Hyers and Associates is an independent insurance agent specializing in Medicare supplements, Advantage plans, and Prescription Part D drug coverage. We license direct with all of carriers and can help you compare Medigap quotes from several insurance companies.

If you are considering Plan N Medicare Supplement insurance or any other Medigap plan, contact us today and we can help you compare rates, benefits and out of pocket exposure so you can enroll in the plan that best fits your needs and budget.

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Category: Medicare Supplements