Medicare Supplement Plan N
In this video, I review Medicare Supplement Plan N and compare the benefits and cost to Medicare Supplement Plan G and Medigap Plan D.
Medicare Supplement Plan N can be a great value anywhere in the country but is an especially worthwhile consideration in Florida, Connecticut, Massachusetts, Minnesota, New York, Pennsylvania, Ohio, Rhode Island and Vermont. These are states that either have state laws that make Medigap Plan N more attractive or the average Medicare Supplement rates for other plans are unusually high, improving the attractiveness and value of Medicare supplement Plan N.
Although our agency is based in Jupiter, Florida (Palm Beach County), we help people with their Medicare from coast-to-coast, literally from California to Virginia and Michigan to Miami and the Florida Keys. I am proud to be an independent Medicare insurance broker representing my clients’ best interest.
Medigap Plan N is often the best value Medicare supplement and one of the most overlooked plans available. This is especially true if you live in one of the MOM states (States with laws called the Medicare Override Measure) where Medicare Part B excess charges are restricted or forbidden. This includes Pennsylvania, Connecticut, New York, Ohio, Rhode Island and Vermont.
Medicare supplement Plan N can be a better value than Medicare supplement Plan G. This is especially true in states that have specific laws reducing the value of Plan G. In addition, some insurance companies are preparing for Medicare Supplement Plan D to be one of the top selling plans in Medicare. To be clear, I am referring to the Medicare Supplement Plan D and NOT Medicare Part D prescription drugs. Medicare supplement plan D is a direct competitor to Medicare supplement Plan N.
Before we get into today’s video on Medicare Supplement Plan N; you should know that whether you are new to Medicare and researching your options or already have Medicare, but have questions that need to be answered, my website MedigapSeminars.org is where you will find the information you are looking for. I created a series of educational Medicare videos laid out in an easy to follow format so that you can learn what you need to know about Medicare on your schedule, on demand. These videos take you from how and when to enrol, the ins and outs of Medicare, through how to find which plan is right for your needs and your budget.
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Choosing which Medicare supplement is right for you can be a bit daunting. Certainly, when you are new to Medicare and just learning the ABC’s of Medicare coverage, making sure you choose the right Medicare supplement is just a little-added stress.
So, first off, let me reduce some of that stress away with a Medicare secret: Regardless of your health history, you have 6 months where you can change your mind all you want without any consequence if you are new to Medicare. If you are not new to Medicare, you still have a 30-day time period. Here is why…
Most people new to Medicare confuse their Medicare Initial enrollment period with their Medicare supplement initial enrollment period. They are two separate events and time frames. Your Medicare initial enrollment period ends three months after your birthday month. Your Medicare supplement initial enrollment period ends six months after the day you start Medicare Part B.
During that six months, you can change your mind about your Medicare supplement plan all you want. Every day even. The insurance companies are required to automatically accept your application for any plan available to you without health questions or pre-existing conditions. If you are changing your Medicare Supplement plan after that six month period, you can still do so as often as you wish and whenever you choose as long as you qualify medically. After you have changed plans you have a 30-day free-look time period where you can reverse your decision without consequence.
So if you’re stressed about making the perfect decision, relax. Make a decision based on what you believe is the best plan for your needs and your budget, knowing you have plenty of time to change your mind.
Is Medicare Supplement Plan N the right plan for you? Let’s take a look.
This table illustrates the benefits of each of the ten different Medicare supplement plans. The plans are identified by letter across the top row. The category of Medicare services are in the left-hand column. In the column below the Plan letter, you can see the percentage of insurance coverage offered by that plan.
Remember, Medicare Part A & Medicare B is your primary insurance. The supplement you choose will pay the gaps, some of the deductibles and co-pays that Original Medicare leaves as your responsibility. Medicare supplement plans are also called Medigap plans because they fill in or pay the gaps in coverage left as your responsibility. But with Medicare Parts A & B as your primary insurance coverage, you can see any doctor or go to any medical facility in the country as long as they accept Medicare. Those doctors and hospitals will accept any Medicare supplement you have, from any insurance company.
With Medigap Plan N we see that it covers 100% “Medicare Part A coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are used up.). Notice that all the supplements have this coverage. Also, notice down here that Medicare Supplement Plan N pays the Medicare Part A deductible.
In 2017 that deductible is $1,380 per event. It will change every year, but with a Medigap Plan N that doesn’t matter. Your supplement will pay it.
Without a supplement, you pay the deductible up front, then have 60-days of hospital coverage before you start paying a copay. With Medicare supplement Plan N you can be an inpatient in the hospital for more than 365 days with 100% coverage. You will have no out of pocket costs for Part A.
You should already know that Medicare Part B only covers 80% of your costs after you pay an annual deductible. You are responsible for 20% of the bill (that is called your co-pay or coinsurance), plus you pay the annual deductible. Thankfully Medicare supplement Plan N covers 100% of the co-pay or coinsurance. You pay the annual Medicare Part B deductible up front. That deductible is expected to change every year. In 2017 it’s $183. We will talk about what to expect in the years ahead in just a moment.
So what do these asterisks indicate? Notice no other plan has asterisks. This points to an important feature of Plan N that no other supplement plan has.
Medicare Supplement Plan N Copays
The asterisks indicate that you have the Medicare supplement Plan N copay. You will be required to pay up to a $20 co-pay for every doctor visit and a $50 copay for every emergency room visit unless you end up an inpatient in the hospital. Then the $50 copay is waved. The important qualifying words here are “up to”…$20. Here is what you can expect.
For many common office visits, your Medicare supplement Plan N copay will be something less than $20. I have seen as low as a $9 copay. It depends on the reason for your visit. You should expect to pay a $20 copay when you see a specialist. So notice that with Medicare supplement Plan N you have 100% coverage until you get down to this line item referring to the Medicare part B deductible and Medicare Part B excess charges. Here Medigap Plan N has no coverage at all. You are expected to pay those fees out of pocket. That’s important.
Later in this video, I am going to go over a real life example using a common joint replacement that will clear up some of the most common questions and misunderstandings about Medigap Plan N.
In order to evaluate if Medicare supplement Plan N is right for you, you need to know what the Medicare Part B deductible is and what it is expected to be in the future. It’s also critical that you understand Medicare Part B excess charges. So let’s focus on these and then go over a real life example to show you how Medicare supplement Plan N works with office visits, hospital stays and physical therapy.
The Medicare Part B deductible is simple. It’s just an annual deductible you pay before your Medicare Part B starts to pay its share. In 2017 that annual deductible is just $183. You will pay that the first one or two times you see a doctor during the year. You may pay that at the doctor’s office or you may be billed for it later. It depends on your doctor.
It is expected that the Medicare Part B annual deductible could increase up to $250 within the next five to seven years. As a side note: The two Medicare supplement plans that are being phased out in 2020 are the only two plans that paid this deductible. Medicare does not want any supplement to pay that deductible. They want you to pay it because when people have even a small deductible they are less likely to go to a doctor for unnecessary visits.
Please note that preventive care visits, also known as wellness visits, are completely exempt from all deductibles and copays
What about these Medicare Part B excess charges? How much are they?
This can be a little involved, but it is important you understand. When a doctor or hospital sign a contract with Medicare they have two choices. One; they can either accept the rates that Medicare has assigned for each service, or two; decide they will charge more than Medicare advises. If they accept the rates that Medicare assigns for each service (also called Medicare assignment), Medicare will be their one-stop billing destination. The doctor can only charge what Medicare says, but then they just bill Medicare. They don’t bill your supplement. Medicare pays its portion and then tells the supplement insurance company the amount they owe and when to pay it.
If a doctor or hospital does not accept Medicare assigned rates, they are paid 5% less from Medicare but allowed to charge you 15% more. The amount the doctor or hospital charges you that is more than what Medicare pays the doctor for that service is called an excess charge.
Excess charges are only allowed for Medicare Part B services. Those are outpatient and physician services.
Medicare supplement Plan N does not insure against those excess charges, so you are expected to pay them entirely out of pocket. Here is the good news, there is an easy way to completely avoid Medicare Part B excess charges…
How, you ask?
Paying excess charges are easily avoided by researching your doctor using the Medicare.gov website before you see them for the first time. If Medicare indicates that your doctor does not accept Medicare assigned rates, then you can expect a bill for excess charges. If you have a Plan N and you don’t want to pay excess charges, just avoid doctors that do not accept Medicare assigned rates.
Medicare supplement Plan N Warning;
Do not call up your doctor’s office and ask them if they take Medicare assignment.
The odds are that the people working in your doctors’ office have no idea what Medicare assignment is. It’s a conversation that more likely than not leads to confusion and misinformation. I can’t tell you how many times I have received a call from a client who called their doctors office to see if they accept Medicare assignment. Not having a clue what the client is asking, the conversation inevitably leads to “what insurance company do you have?” and then they look on the list of Medicare Advantage companies they might accept and respond “we don’t take that insurance company”.
All doctors that accept Medicare accept all Medicare supplement plans from any insurance company.
That is worth repeating: All doctors that accept Medicare accept all Medicare supplement plans from any insurance company.
Remember, most doctors don’t even bill the supplement company. They bill Medicare. Medicare takes care of communicating with your supplement company.
Here is how you avoid the confusion:
All you have to do is go to Medicare.gov. Type in “Physicians finder” in the search bar.
You can type in the doctor name, group name or search by speciality.
Then right here under the name, Medicare will tell you if they take Medicare assignment. If they take Medicare assignment, they cannot charge an excess charge. If you have Medigap Plan N you want a doctor that accepts Medicare assignment.
How many doctors don’t accept Medicare assignment? According to Medicare, over 97% of all doctors in the US accept Medicare assignment.
That statistic includes paediatricians and research psychologist. That means that less than 3 out of 100 can charge an excess charge. In reality, most people on Medicare go through their entire Medicare experience without ever meeting a doctor that can charge an excess charge.
What if you are on an operating table in a hospital? Will one of the attending doctors charge you an excess fee even if the others don’t?
First, remember that only Medicare Part B can have excess-charges. Medicare Part B is for outpatient and physician services. Not inpatient, in a hospital. If the operation is as an inpatient there can be no excess charge. However, many common operations and procedures done at a hospital are done under outpatient services. Still, when you are dealing with a hospital either all the doctors in the hospital charge excess charges or none. Hospitals are all or none! Very, very few hospitals can charge a Medicare Part B excess charge.
In fact, Mayo clinic is the only large hospital I know of that charges excess charges. There may be others, but they are few and far between.
There are also some states that either forbid or severely restrict Medicare Part B excess charges. These state laws are called Medicare Override Measure or MOM laws.
If you live in either Connecticut, Massachusetts, Minnesota, New York, Pennsylvania, Ohio, Rhode Island or Vermont your state either forbids or limits Medicare Part B excess charges.
You still have to be concerned if you get services out of state, but in these states, you do not have to worry about it. You don’t have to go through that extra step of checking your doctor on Medicare.gov. These state laws have a significant impact on the value of Plan N relative to Medigap Plan F and Plan G. Let’s go back to table and I will show you how. Note that both Medicare supplement Plan G and Plan F insure you against Medicare Part B excess charges. That cost you extra money each month. If you are comparing Medigap Plan N vs Plan G take note:
If you live in one of the states I just mentioned, paying for insurance against Medicare Part B excess charges may be a waste of money. Why pay more for insurance against excess charges if you don’t need it?
That’s some serious food for thought. It changes the equation.
In my personal consultations I, like to tell people that Medicare supplement Plan N is priced between 25% and 30% less than Plan G. People who prefer Medigap Plan N know that it takes a little effort to avoid Medicare Part B excess charges. They don’t mind trading a little effort for a lower premium.
When comparing Medigap Plan N vs. Plan G, people that prefer the Plan G to the Plan N tend to be people who would rather pay a little extra each month and avoid having to do the extra work to avoid excess charges.
Which are you?
Of course, if you live in a state that forbids excess charges, you don’t even need to make that extra effort. There is one other point you should consider when researching Medigap Plan N, have you looked at Medigap Plan D?
Take a look at this;
The benefits for Medicare supplement Plan D are exactly the same as they are for Medigap Plan N, except for the asterisks. That means that the only difference between Medigap Plan N and Medigap Plan D are the Medicare supplement Plan N copays. Remember, the up to $20 per office visit, and $50 emergency room copay?
To answer a FAQ; the emergency room copay is not charged when you use urgent care.
Here is the catch with Medicare supplement Plan D.
Right now as I make this video in late 2017 the price of Medigap Plan D is not competitive in most states. It often costs more than a Medicare Supplement Plan G even though Plan D offers fewer benefits. There simply has not been a demand yet and too many people confuse Medigap Plan D with Medicare Part D. ..and I don’t blame them. You can tell that Medicare worked really hard to come up with helpful and descriptive names for all these supplement plans and Medicare parts!
However, I expect that as we near 2020 and Plan F and Plan C are taken off the table, insurance companies will start to reprice Medigap Plan D and make it a competitive choice. In fact, in some areas of the country that has already happened, indicating the insurance companies are thinking ahead.
For now, just ask your independent agent to take a look and let you know if Plan D is priced competitively in your area.
To wrap this up, let’s look at an example that will help you evaluate if Medigap Plan N is right for you. This example may surprise you. I chose this example because it will resolve many of the common misperceptions about Medicare Supplement Plan N.
Let’s say you have been to your Orthopedist and are told you need a hip replacement.
A hip replacement requires multiple office visits with your Orthopedists, an operation, two or three nights stay in the hospital as an inpatient, followed by physical therapy. Lots of physical therapy.
You have Medicare Supplement Plan N. What’s it going to cost you?
You already checked and your Orthopedist does accept Medicare assignment. So by doing your homework upfront, you have avoided any possibility of being charged an excess charge.
If you have not yet paid your annual Medicare Part B deductible. You will pay that first. Probably on your first visit to the office. Then you will pay a $20 per visit copay to your Orthopedist for each visit to the doctors’ office.
Your operation and stay in the hospital is a Medicare Part A charge. There are no excess charges with Medicare Part A. This includes in-hospital physical therapy. Your Medigap Plan N pays your Medicare Part A deductible. You pay nothing out of pocket for your semi-private room. It’s paid by Medicare and your Medigap Plan N.
You will then have at home physical therapy for a week or so and then travel to physical therapy for a couple weeks.
Physical therapy is not an office visit with the doctor. You will not pay a copay for physical therapy.
Warning # 2
- If you are billed for a copay, then your physical therapy visit was coded incorrectly. It happens, and I can help with that.
You are now an expert on Medicare supplement Plan N!
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I am Matthew Claassen with Medigap Seminars.org, thank you for watching
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