First introduced on June 1st of 2010, Medigap Plan N has quickly become one of the most popular Medicare Supplement plans available. When first eligible for Medicare, many people will simply just enroll in Plan F as it offers 100 percent coverage of the gaps in Medicare. But are they missing out and overpaying on their premiums?
Prior to Medicare Plan N being offered there existed four other Medigap plans that many people today do not even know about. The plans that got eliminated were plans E,H, I, and J. These plans offered few extra benefits that were underused by beneficiaries. At this time Medicare brought on Plan N as an another choice for seniors looking for lower premiums in return for additional out-of-pocket expenses. For those who are healthy or looking for a great alternative to a Medicare Advantage plan, Medigap Plan N is an outstanding choice.
But What Does Medicare Plan N Cover?
You should not be afraid of the term “cost sharing” with Plan N. This means that the plan does not pay everything and you will have to come up with some out of pocket money should you need to use your coverage. This is very similar to most employer health insurance plans that require deductibles and co-pays for office visits. In return for taking on some of the responsibility of first dollar costs however, you get the luxury of lower monthly premiums and the savings over something like Plan F could in fact be significant.
Medicare Supplement Plan N offers the same basic coverage as other plans, including:
- Any Medicare Part A coinsurance (Hospital services) as well as any costs up to an extra 365 days after regular Original Medicare Part A ends
- Medicare Part A Hospice costs and coinsurance
- Plan N pays the Part A deductible should you be admitted into the hospital ($1184 per benefit period in 2013)
- Medicare Part B Coinsurance
- Preventative care coinsurance under Part B
- First three pints of blood deductible
- Skilled nursing facility coinsurance of $148 per day up to 100 days
Similar to Plan G, Medigap Plan N does not cover the annual Part B deductible. This deductible amount changes each year but averages around $150 and needs to be paid by you or your Medigap plan once per calendar year prior to Medicare covering any approved expenses.
Plan N is unique in that once you meet this Part B deductible out-of-pocket, you will have up to a $20 co-pay per doctor’s visit. This co-pay amount is determined by what you are seeing the doctor for, therefore in some cases it could be zero, or $5 to $10, but never more than $20 per visit.
In addition with Plan N there is a $50 co-pay if you visit the emergency room but are not admitted. As well, Plan N does not cover any Part B excess charges.
What are Part B Excess Charges?
Doctors who accept Part B Medicare can either work on assignment or charge up to an additional 15 percent of the Medicare approved amount of each bill. It is estimated that over 90 percent of physician’s in the United States accept the assigned rates from Medicare
Accepting assignment simply means that whatever Medicare deems as an acceptable cost for a visit or procedure, the doctors accept as payment. Therefore if you visit your doctor and Medicare states the visit can only be billed at $80, Medicare will pay 80 percent of only $80 and you or your Medigap plan are responsible for the remaining 20 percent. The doctor cannot charge you anything extra over that amount.
Doctors may not pick and choose which cases they want to accept the assigned rates for, or which cases they wish to charge excess charges, therefore just ask your doctor if they accept Part B assignment and you will know. Again, most doctors you will visit on an outpatient basis take assignment.
The same goes with doctors who elect to includePart B excess charges. They must do this for their entire practice, and they may not ever charge more than an extra 15 percent. Even in the small amount of instances where this occurs the amounts typically add up to a small fraction of the bill.
Why Not Just Choose Plan F or Plan G Then?
Medigap Plan N is simply just another option of Medicare Supplement plans that you absolutely should know about. The major benefit of considering a Plan N is the fact that the premiums are often quite less than a Plan F and Plan G. Like every insurance policy, the goal is to minimize an amount of risk at a cost that is acceptable to you. Knowing that Plan N does have some out of pocket expenses should you need to use it, you’ll need to check premiums from several companies for it as well as get quotes for Plan F and Plan G. Then compare these costs with how many times you visit your doctor each year, your overall health condition, and whether or not you would rather just have all of your medical bills paid such as in a Plan F.
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