Sorting through Medigap plans can be a bit of an ordeal. There are many choices available to meet an individual’s needs, but knowing which the best plan is for you can be a real challenge. Below, we discuss the main features and benefits of Medicare Supplement Plan N.
A Brief Review of Medicare
Turning 65 means you have the option to enroll in the federally-facilitated health insurance program known as Medicare. It is a program you have been paying into for your entire career. Original Medicare (Parts A and B) will cover some, but not all, of your medical expenses. The portion not covered is often referred to as a “gap”. Medicare supplement plans, appropriately named Medigap plans, are private policies designed to compensate for the medical expenses not covered by Medicare.
About Medicare Supplement Plans
Medigap plans have been standardized1 by the federal government. This means that the only difference in plans offered from one insurance company is the monthly premium. You are eligible to purchase a Medicare supplement insurance plan if you are currently covered under Medicare Parts A and B, are about to turn 65, or are about to receive Part B coverage.2
There are 11 Medigap plan options in total. They are labeled A, B, C, D, F, high-deductible F, G, K, L, M, and N. Plans E, H, I, and J are no longer available. For this piece, we are going to focus specifically on Medicare Supplement Plan N.
What is Medicare Supplement Plan N?
Medicare Plan N is an additional product designed to help pay for the out-of-pocket expenses not covered by Medicare Parts A and B. It helps fill in the gap for hospital, medical, and skilled services. It has similar benefits to other Medigap plans such as Plan F, but generally costs less. This makes it an attractive option for many people.
What is Covered?
Medigap Plan N has coverage for 4 basic areas:
- Hospitalization: pays Part A coinsurance and provides coverage for 365 additional days after Medicare benefits end.
- Medical Expenses: pays Part B coinsurance (excluding copays for office visits and ER) and 20% of Medicare-approved expenses or copayments for hospital outpatient services.
- Blood: pays the first 3 pints of blood annually. Original Medicare pays for any pints beyond 3.
- Hospice Care: pays Part A coinsurance.
Additionally, Medicare Supplement Plan N pays for skilled nursing facility care and the Medicare Part A deductible for hospitalization.
What’s Not Covered?
There are some things Medigap Plan N will not cover. It does not cover the Medicare Part B deductible or excess charges. Excess charges are the difference in cost between what a health provider charges for a medical service and the Medicare-approved amount. It also will not cover the copay or coinsurance for doctor’s office and emergency room visits.
The Cost of Coverage
- Community-rated: everyone with the policy pays the same price regardless of age. Pricing can still change based on inflation, but cannot increase due to your age.
- Issue-age-rated: the premium is based on the age you are at the time of purchase. Therefore, it costs less for people who buy at a younger age. The price cannot increase after the issue date due to age.
- Attained-age-rated: the premium starts low and increases as you age.
There can be a wide variance amongst cost. Differences may exist based on whether or not the insurance company selling the policy offers discounts or uses medical underwriting.
When shopping for a Medigap Plan N policy, it’s important to know which price rating system is in use. This awareness will help you better understand your quote and some of the reasoning used to set the premium.
Also, when price shopping for any Medicare Supplement policy, always compare apples to apples. You want to be certain you are comparing a Medigap Plan C from one company to a Medicare Plan C from another company. You don’t want to compare Plan N at one company to Plan B at another because you won’t get a clear comparison between the prices and benefits.
Enrollment for Medigap Plan N
Enrollment begins the first day of the month you turn 65 and are covered under Medicare Part B. You have a six-month period in which to enroll in benefits. Applying for benefits during this time is crucial, as insurance companies are not permitted to use medical underwriting. Applying for benefits outside of the 6-month time window could mean higher premiums or a denial of coverage due to your health.3
Medicare Supplement Plan N Versus Other Medigap Plans
How does Plan N compare to other Medigap Plans? It provides more coverage than Plans K and L. For example, it covers 100% of the Medicare Part B coinsurance and copayments, whereas K and L only pay 50% and 75%, respectively. The same is true with the Medicare Part A deductible.
Plan N has a lower premium than Plans A through G. Additionally, the only out-of-pocket expenses beyond the monthly premium are a $20 copay for office visits and a $50 copay for a trip to the ER.
Generally, Medicare Supplement Plan N costs about 25% less than the more comprehensive Plan F.4 But a lower cost also means that Plan N will fill in fewer gaps in Original Medicare. There is generally always a trade-off for savings. So when comparing Medicare Plan N to other Medigap plans, always weigh the costs against the level of benefits. The chart below will help you make these comparisons.
With Medigap plans there are no networks to worry about. Medicare Plan N covers you no matter where you go throughout the country. Because your plan is standardized by the federal government, you can go anywhere that accepts Medicare regardless of which insurance company you have.
Only certain Medigap insurance plans cover emergency medical services outside of the United States. Plan N has foreign travel benefits that include emergency care within the first 60 days outside of the country. These benefits will pay for up to 80% of the treatment costs. But it is still advisable that you first check with your Medigap insurance agent about coverage before leaving the United States.
What You Should Know Before Making a Purchase
If you are interested in enrolling in Medicare Supplement Plan N, or any Medigap plan, there are a 5 things you should know beforehand:
- You must be enrolled in Medicare Parts A & B.
- You can have a Medicare Advantage Plan or a Medigap policy, but not both. You can apply for a Medigap policy if you have Medicare Advantage, but make sure you leave the Medicare Advantage Plan before your new Medigap policy begins.
- A Medigap policy only covers one individual. Therefore, your spouse will need to purchase a separate policy.
- Medigap policies are guaranteed renewable even if you have health problems. Your Medigap policy cannot be cancelled as long as you continue to pay your premiums.
- Medigap policies, including Medicare Plan N, do not cover everything. Medicare Plan N typically excludes long-term care, vision or dental care, hearing aids, private-duty nursing, and most importantly, prescription drugs. If you need prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
Is Medigap Plan N Right for You?
Choosing the right supplemental insurance means considering the cost of the Medigap insurance plan along with what is covered and what is not. With Plan N, considerations should include the cost of the Medicare Part B deductible and the small deductibles required for each doctor’s office and emergency room visit. Compare these costs to the cost of the Medigap Plan N premium.
It is equally important to consider any drawbacks, such as the plan not covering a stay beyond 365 days in the hospital or beyond 100 days in a skilled nursing facility.5 Additionally, Plan N does not cover any Medicare Part B excess charge that a doctor may charge a patient beyond that which is covered by Medicare.
Managing these pros and cons can be tricky. Luckily, there is help available that can bring all of these details into focus for you and help you shop for the best deal. Check out the video and information below to learn how you can get help with Medicare Plan N and your other health insurance needs.
If you need help finding a Medigap plan to supplement your Original Medicare, call HealthMarkets Insurance Agency. We can help you review the different features of Medicare Supplement Plan N or any Medigap policy. Plus, we offer this guidance at no cost to you. Contact us today at (800) 488-7621.