Medicare Supplement Plan N vs Plan G

Medigap Plan N vs. Plan G

Medicare supplement Plan N  is the one Medicare supplement often considered to be the best value of all the Medicare supplement insurance plans.   For those who are value oriented, this article provides a wealth of information on the pros and cons of Medigap Plan N. 

Medicare supplement Plan G is often referred to as the “Peace of Mind” Medicare supplement plan because it offers the most benefits of the Medigap Plans available to those who are new Medicare beneficiaries today.  “Medigap Plan” is just another term for Medicare supplement plans. 

In this article we will compare Medicare supplement Plan G and Medicare supplement Plan N so you can determine which is best for you.

Federal Medicare Program

The Medicare program is health insurance for people 65 and older as well as under 65 and disabled. While the program administers Medicare A & B, Medicare supplement plans (aka Medigap plans) are offered by private insurance companies. They are not available to people under 65 in all states. Medicare Parts A & B are referred to as Original Medicare.

Choosing a Medigap Plan

When you are new to Medicare and just learning the terminology and ABC’s of Medicare coverage, making sure you choose the right Medicare supplement can be stressful.

It’s important to understand that regardless of your health history, you have 6-months from the start of Medicare Part B where you can change your mind all you want without any consequence.  After that 6-month (180-day) initial enrollment period, in most states you will need to qualify via medical underwriting for Medigap coverage.  If you don’t qualify, your application can be denied.

What Are Standardized Medigap Plans

A standardized Medigap insurance policy is designed specifically to work with Medicare Part A and Part B to add to your Medicare benefits and limit your out-of-pocket expenses. 

The Medigap policy is secondary to Original Medicare.  That means Medicare pays first, then your Medigap policy pays their portion.  Medigap policies add benefits in addition to Original Medicare by paying the deductibles, copays and coinsurance Medicare sees as your financial responsibility.

The term “standardized” is very important.  It means that the benefits of all Medicare supplement (aka Medigap) Plans are identical regardless of which insurance company you use.  For example, all Medigap Plan N’s have the same benefits.  All Medigap Plan G’s have the same benefit, and so on.

The benefits of these standardized policies are written into Social Security Law.  They cannot be changed except by an act of Congress, signed by the President.  This is the exact opposite of a Medicare Advantage Plan.  Medicare Advantage Plan benefits change every year.

Guaranteed Renewable Contracts  

Medicare supplement plans are also Guaranteed Renewable contracts.  Guaranteed renewable means that the benefits are guaranteed to remain the same for as long as you own the policy.  No one can change your benefits or cancel your plan.  Even if Congress were to change the benefits of the plan type you have, they can’t change your plan.  They can only change plans for people in the future. The only feature that will change from year to year is the price.

Why Buy a Medicare Supplement Plan?

One of my favorite questions to answer is “Why buy a Medicare supplement plan instead of a Medicare Advantage plan?”

There are two reasons why.  First is because the benefits are standardized and will remain as is for as long as you own the policy.   That makes planning for future medical costs easy.   Second is that with a Medicare supplement plan you get to keep all the benefits of Original Medicare.  Let me elaborate.

The Benefits of Original Medicare

Medicare Part A and Part B together are  also called Original Medicare.  When you receive your red, white and blue Medicare card, you have original Medicare.  With Original Medicare you can see any medical provider or facility in the country as long as they accept Original Medicare.  That is over 95% of all doctors and medical facilities.  You have national insurance coverage.  In fact, if you develop a medical issue and wish to see a specialist 1,000 miles away, you can.  As long as they accept that red, white and blue Medicare card your Medicare bills are covered. 

In addition, there is no limiting network of providers you are restricted to.  You do not have to ask permission or approval from a Primary Care Physician to see a specialist or anyone else. 

The second great benefit of Original Medicare is that there is no insurance company between you and your doctor’s decisions.  Your doctor does not need to get preapproval to perform a recommended treatment.  No one can deny or delay treatment.  Your medical decisions are between you and your doctor.

With supplemental insurance you keep the above two benefits of original Medicare. You can see any healthcare provider or facility that accepts Part A & B.  Over 97% of healthcare providers accept Medicare. Your medical decisions are guided by you and your doctor.  The supplemental coverage has no say in what is or is not covered by your Medicare. In addition, you can limit your potential medical expenses to just a few hundred dollars per year.

How To Choose Between Plan G and Plan N?

Medicare supplements Plan G and Plan N have a lot in common. Both plans cover inpatient care, foreign travel emergency care, hospice care coinsurance, skilled nursing facility care and no plan limits on coverage withing the U.S. Our licensed agent staff at Medigap Seminars has been trained to help you find the right supplement plans with the out of pocket maximum in your comfort zone.

The Plan G has higher premiums and higher price increases on average. Medicare supplement Plan N has a lower monthly premium helping the Medicare beneficiary save money.

The information below will help you in comparing Medicare Plan N and Plan G.

Medicare Plan G

Medicare supplement Plan G is the most comprehensive plan coverage you can get in the US and the most benefits of all the Medicare supplement plans. This is the supplement that replaced Plan F for new beneficiaries as of 2020. Like Plan F, Medicare supplement Plan G comes with a High Deductible plan option. While that option can be a great choice for some, it is not the subject of the article. You can find more on the high deductible Medigap Plans at this link.

Plan G Has Full Inpatient Coverage

With the Medicare supplement Plan G you can spend a year as an inpatient in the hospital and it won’t cost you a dime.  Medicare Part A is your inpatient coverage and when you add a Medigap Plan G, Medicare and your Medigap Plan pay 100% of your inpatient stay.  It is full and complete inpatient coverage.

Medigap Plan G has Full Outpatient Coverage

For outpatient and physician services, your only expense will be the annual Medicare Part B deductible.  This is Medicare’s deductible, not a Medicare supplement plan deductible.  Part B is your outpatient services coverage, and with a Medigap Plan G everything is covered at 100% except you will pay the first $226 billed to you for 2023.  That’s the 2023 Part B deductible.  It can change from year to year. 

Medicare supplement Plan G is what we call your Peace of Mind Plan.  You have no copays for doctor visits and no coinsurance.  The plan covers everything except the Part B deductible. Your annual maximum out-of-pocket is the Part B deductible.  Again, for 2023 that is $226.

By the way, the term annual Maximum Out-of-Pocket (MOOP) refers to the maximum amount you are liable for your medical bills in any calendar year.   It does not refer to your monthly premiums.

Is Medigap Plan G the Best Medicare Supplement?

Does that make Medicare Plan G the best Medicare supplement plan? No. Not necessarily.  The best Medicare supplement plan is the one that is right for you. Plan G has its downside that you must consider.  But the downside isn’t healthcare coverage, it’s cost.  Your monthly premium. Comparing Plan G vs supplement Plan N with the same insurer, Medicare supplement plan G has a higher premium than Medicare supplement Plan N.

I am going to compare the monthly premium between the supplement Plan G and Plan N in a moment.  And I will share with you how I measure the monthly premium to find the best value.  But first let’s look at the Plan N and what has changed.

Medicare Supplement Plan N

Medigap Plan N is full coverage, which means that just like the Medicare Plan G you can spend a year as an inpatient in the hospital and it won’t cost you a dime.  

Also just like the Medigap Plan G you will be billed for the annual Medicare Part B deductible when or if you first see a doctor during a calendar year.

Now here is where Medicare supplement Plan N differs. There is also a small office visit copay when you have a doctor visit for diagnosis or evaluation. Only office visits for diagnosis or evaluation are eligible for the small copay. But Medicare’s definition of office visits has changed since 2020.

In addition, there is a $50 copay for an emergency room visit that does not result in inpatient hospital stay.

Medicare’s Original Guidance on Plan N Copays

In 2010 when Plan N was new, Medicare released a clarification on the copays that gave specific billing codes required to charge an office copay.  The office visit copay is 20% of the bill up to a maximum of $20.  Those billing codes were exclusive to in-office visits to your primary care physician or a specialist and can be no more than $20.

Medicare’s  guidance specifically indicated there is to be no office visit copay for telehealth or urgent care visits.

Plan N and The Pandemic

During the pandemic, under part of the emergency order, billing rules were bent for telehealth doctor visits and Urgent care.  In both cases, Medicare quietly allowed doctors to bill these visits using the same billing code for in-office primary care visits.

So, where telehealth and urgent care visits were originally excluded from the $20 copay prior to the pandemic.  Doctors are now allowed to charge the copay for those visits.

Originally, these were intended to be short term exceptions during the “emergency” of the pandemic.   But the emergency, as declared by the government, has extended much longer than I ever anticipated, and Medicare has intimated that changes in Medicare beneficiaries habits warrants a likely permanent change in the billing guidance.

The New Definition

What visits are excluded from the copay?  There is still no copay charged for physical therapy.  No copay for preventive care or flu shots.  No copay for chemotherapy or infusion treatments.  The copay is still just for medical consultations that are intended to diagnose or evaluate your condition.  But that now includes Urgent Care and Telehealth visits.

The emergency room visit copay has not changed.

Medicare Part B Excess Charges

So, there is one other feature of Plan N that differs from the Plan G.  That is that Plan N has no insurance against Medicare Part B Excess charges.

When a doctor decides to accept Medicare insurance, they must choose between one of two contracts with Medicare: A Participating contract or a non-participating contract. 

Participating Providers

According to Medicare, more than 98% of doctors choose what is called a Participating Provider contract.  This is a fancy way of saying that they agree to accept Medicare assignment and only charge the Medicare approved amount.  In return, they only bill Medicare.  Medicare is their one-stop biller.  Medicare then communicates electronically to the Medicare supplement plans and informs them how much to pay, and to whom.

According to my discussions with upper management at the major insurance companies, on average, 85% of medical bills are paid by the Medicare supplement plans within 48-hours and with no human intervention. 

Non-Participating Providers

According to KFF.org, fewer than 2% of doctors in the U.S.  who accept Medicare choose the Non-Participating Provider contract.   These are the ones that are contractually allowed to charge an excess charge.  They are paid 5% less by Medicare than a providers that accept Medicare assignment. They are allowed to charge up to 15% more than what Medicare paid them.  That is the excess charge.  Up to 15%, no more than the 95% they are paid.

Very few doctors will choose this contract because Medicare penalizes them.  Medicare will not be their one stop biller.  They must bill Medicare, but they cannot bill your supplement, they don’t have a contract with your supplement, and Medicare will not do that for them.

Does My Doctor Charge An Excess Charge?

So, the easy way to tell if your doctor charges an excess charge is that they will ask you to pay up-front for their services. You can also find out by looking them up on Medicare.gov. 

A couple quick, but important points on excess charges. 

There are no excess charges for Part A inpatient services.

There are no excess charges for emergency services.

And lastly, if you go to a doctor or hospital, either everyone in that doctor’s group or hospital charge an excess charge, or no one does. It’s all or none.  There is an exception for teaching hospitals, but the truth is that doctors who charge an excess charge are so rare that you are unlikely to come across one for the entire time you have Medicare.

Less than 2% of doctors that accept Medicare, charge an excess charge, and 40% of those are Psychiatrist’s.  source KFF.org

FYI Medicare Advantage Plans do allow excess charges.

Conclusion

While Plan N and Plan G are similar, offering the same coverage for many services, there are significant differences.

Medicare supplement Plan N has a lower monthly premium, and can be a great value as long as you choose doctors that accept Medicare assignment. Use the physician finder on Medicare.gov to identify doctor’s that accept Medicare assignment.

Medicare Plan G has more comprehensive coverage and a higher premium. No supplement Plan covers more for those new to Medicare today.

How We Can Help

Our motto is “Make an informed decision”. Our goal is to offer free Medicare help with the intent to help understand the Medicare program fully and know all your Medicare options. We first review the Medigap Plans available, including comparing Plan G vs Plan N and even Plan F if eligible. We can offer free Medicare help to you because we are paid by whichever insurance company you decide to work with when we help you with the application

In addition, we help our clients avoid the Medicare Mistakes made by so many DIY Medicare beneficiaries.