Medicare Supplement Plan N: Not Fixed?

Published by Mike Lovell on September 21, 2020September 21, 2020

Medicare Supplement Plan N

What is Medicare Supplement Plan N, which is also known as Medigap N?

Here’s a few insights into what makes Plan N unique.

2^nd Most Popular for people new to Medicare

If you are starting Medicare in 2020 or later, Plan G is the most comprehensive and popular Medicare supplement that exists today.

But Plan N is second.  It’s less comprehensive than Plan G so its monthly premium is also lower.

It’s very popular with people that

• Want to keep the flexibility to see any doctor
• Don’t use their health plan as much
• Are willing to pay some extra costs like copays to lower their monthly premium

2^nd Fastest Growing

As of 2017, which is the most recent year of information available Medicare Supplement Report , Plan N is the third most popular plan as far as number of people enrolled into a plan.

But it is the second fastest growing Medicare supplement plan.  In one year, enrollment grew by nearly 400,000 people.  The second largest increase was Plan N with growth of about 137,000 people.

Click here to schedule time to talk with Mike

Why do people choose a Plan N?

Many people choose it because it’s popular with other people.  It tries to keep the monthly premium lower than other Medicare supplements.  But in exchange for a lower premium, you have a few extra costs if you need to use the plan

You pay your monthly premium and if you need to use your plan then you pay:

• Medicare Part B deductible ($203 in 2021)
• After deductible, up to a $20 copay for Office Visits
• After deductible, up to a $50 copay for emergency room
• Medicare Part B Excess Charges

You can see any doctor or hospital that accepts Medicare.  Not just in your state but nationwide.

How does Plan N work?

Here’s an example about how Medicare supplement Plan N works in the real world.

Frank has Medicare and a Medicare supplement Plan N. His knee has been bothering him for quite some time now and his doctor recommended knee replacement.  He’s going to have outpatient surgery, some doctor follow up appointments, as well as physical therapy.  Who is going to pay those bills?

This is the first time this calendar year Frank has seen a doctor so:

1. Frank is going to pay his Medicare Part B deductible ($203 in 2021)
2. Medicare is going to cover 80% of:
   1. Outpatient surgery
   2. Doctor appointments
   3. Physical therapy
3. Frank’s Medicare supplement Plan G is going to pay the other 20% that Medicare didn’t cover
4. Frank pays: ?
   1. Medicare Part B deductible
   2. $20 for each office visit copay
   3. Any Medicare Part B Excess Charges (up to 15% of Medicare allowed charge)

This is why I personally refer to plan N as not fixed.

We know Frank will have to pay the Medicare Part B deductible.  He’ll also pay office visit copays of up to $20 for each visit.  But we don’t know how many visits he’ll have.

Most doctors don’t charge excess charges.  But some do.  And we don’t know if Frank’s doctor, surgeon, or hospital do.

Frank does keep the flexibility to go wherever he wants for treatment.  And he doesn’t need a referral.  That obviously offers a ton of peace of mind for Frank.  So he can focus on his knee and getting better instead of wondering how he’s going to pay his medical bills.

What are Part B Excess Charges?

Part B Excess charges happen when a provider like a doctor or hospital will bill Medicare but reserves the right to charge extra on top of what Medicare allows.

That situation is a doctor that accepts Medicare but not Medicare assignment.  Medicare allows them to charge extra but limits the extra charge to 15% above what Medicare allows.  Here’s an example:

Medicare allows $1,000 for a certain procedure.  The doctor can charge 15%, which is $150, on top of what Medicare allows.

So if you have already met your deductible and have plan N:

• Medicare pays 80% of allowable amount = $800
• Medicare supplement Plan N pays 20% of allowable amount = $200
• You pay Part B Excess charges = $150

Remember, Excess charges only happen when a doctor accepts Medicare but not Medicare assignment.  That gives them the option to bill excess charges.  But as a percentage of providers, it’s quite low nationwide compared to the number of providers that accept Medicare.

Plan N is the same from every company

Medicare determines the coverage of Medicare supplements according to the plan letter.

What does that mean?

It means that a Plan N is mandated to cover the same bills, the same doctors, and the same hospitals no matter what company offers it.

But they can charge you very different prices for that exact same coverage.

So this is a situation where when you pay more, you are NOT getting more!

If you have had a Medicare supplement for more than a few years, it’s a great idea to compare your options to see how much you can save.  And since Medicare requires the coverage to be the same, you don’t have to worry about the new company paying the bills for you.

An annual review of Medicare Supplement Plan N prices can save you lots of money over the years.

If you’d like an easy way to compare rates please complete the form below or call me at 855-712-7316.

Medicare Mike