There are many decisions to make with Medicare. Even if you’ve decided to supplement your coverage with a Medigap plan, there are ten plans to choose from. One plan that has been growing in popularity is Medigap Plan N.
Original Medicare
Medicare supplement plans work in conjunction with Original Medicare. They fill in the financial gaps of original Medicare but do not offer additional benefits such as dental, vision, hearing, or prescription drugs. They will, however, help to cover your deductibles and copays/coinsurance.
Original Medicare is Part A, your hospital insurance, and Part B, your outpatient insurance. Together, they will cover most of your medical needs. But there are deductibles and copays/coinsurance, which can squeeze people financially.
The Part A deductible is applied per benefit period. So, if you are hospitalized more than once a given year, you might enter into an additional benefit period. If this were to happen, you would have to meet your deductible again. In 2023, the Part A deductible is $1600.
You may also have coinsurance for Part A depending upon your length of stay and the type of treatment facility. This could potentially be up to several hundred dollars per day!
Part B also has a deductible. This is a once annual deductible and in 2023 it is $226. Your coinsurance is 20% of the Medicare approved amount (except in the case of Part B excess charges).
Plan N
Plan N will step in to cover almost all of your out of pocket expenses.
- Part A Deductible
- Part A Coinsurance
- Part B Coinsurance (except Part B excess charges)
- 80% of Foreign Travel Exchange
Plan N will not cover the Part B deductible. However, no plans offered to new enrollees will cover this.
Costs
But what does it cost? Basically, you’ll pay an additional monthly premium to cover these financial gaps. It will give you a better idea and better control over your yearly healthcare spending. Your premium is determined by your age and location and of course, whether you have to undergo medical underwriting.
Remember, although you can enroll in a Medigap plan year-round, you are best served to enroll when you are first eligible. In the six months after you turn 65 and enroll in medicare part B, you will not be subject to medical underwriting. After that, you may be subject to medical underwriting, which means you could be charged more or denied outright.
Plan N is most similar to Plan G. The main difference is the Part B excess charges. Basically, if a doctor accepts Medicare, they accept the amount Medicare is willing to pay out. But they can choose to charge up to 15% more. If your plan does not cover Part B excess charges (which Plan N does not), then you would be responsible for that amount.
Now, to be fully transparent, Part B excess charges are not all that common, and they are not even allowed in all states. Still, if you want to ensure you do not have any surprises, you could opt for Plan G. We recommend that you work with a broker to determine whether Plan G or Plan N is right for you.
Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.
