Today there are over 61 million Medicare beneficiaries, and that number is projected to grow to over 86 million in the next 15 years. Of all those enrolled in Medicare, more than 14 million have Medicare Supplement policies. The remainder are enrolled in Medicare Advantage, Original Medicare only, or supplemental coverage through Medicaid, employer groups, or other private or public sector coverage.
When it comes to Medicare beneficiaries who want a Medicare Supplement, also known as a Medigap plan, there are several plans available to choose between.
Medicare Supplement plans are standardized and have been given letter designations from A through N. The benefits provided in each are the same regardless of which insurance company offers the coverage. There are three states (Massachusetts, Minnesota, and Wisconsin) that have benefits that are a little different, but they are still standardized within each of those states.
Medigap Plans for 2021
Beginning on January 1, 2020, Medicare Supplement plans are no longer allowed to cover the Part B deductible. As a result, Plan C and Plan F (highlighted in red above) are no longer allowed to be sold to those newly eligible for Medicare beginning January 1, 2020. For those currently enrolled in Plan C or Plan F (or the high deductible version of Plan F), you will be able to stay enrolled in those plans. For those eligible for Medicare before January 1, 2020, but did not enroll for any reason, you may be able to buy plan C or Plan F, but there are cost concerns to consider before making that decision.
Before Plan F was eliminated as an option for new Medicare beneficiaries, it was by far the most popular plan with the most comprehensive benefits. Although Plan F offered the highest coverage level, it often also came with a very high price tag.
Whether you are new to Medicare, or already enrolled in Medicare, there are much more cost-efficient options for your Medicare Supplement plan, with coverage extremely similar to Plan F.
Medicare Supplement Plan G vs. Plan N: What Is the Difference?
Plan G has the most comprehensive coverage of all of the Medicare Supplement plans available with the top benefits, including:
- 100% coverage for Part A coinsurance & hospital costs
- 100% coverage for Part B copays/coinsurance
- 100% of Part B Excess Charges
- 80% of Foreign Travel Emergency coverage.
It is the only Medicare Supplement plan that covers Part B Excess Charges for new Medicare enrollees after January 1st, 2020. Coverage for Excess Charges is the most significant difference between Plan G and Plan N.
Plan N pays 100% of the Part B coinsurance but has a copay of up to $20 for some office visits and up to $50 for emergency room visits that don’t result in an inpatient admission.
So why is not covering Excess Charges so significant? To understand, you must first understand what Excess Charges are and the potential financial exposure resulting from not having coverage for Excess Charges.
Medicare Excess Charges
Let’s first start with a definition of Medicare Assignment. By agreeing to Medicare Assignment means that your doctor or other healthcare provider has decided that the Medicare-approved amount for the Medicare-covered services they provide is sufficient payment. In most cases, doctors and other healthcare providers will accept Medicare Assignment, but not all do. Because of this fact, you should always ask before receiving any services.
When doctors or other healthcare providers agree to become Medicare participating providers, it means they are agreeing to accept Medicare Assignment. By accepting Medicare Assignment, providers are agreeing not to charge more than the Medicare deductible or coinsurance amount. However, if a doctor or healthcare provider is a non-participating Medicare provider, it means that they do not accept Medicare Assignment. These non-participating providers may charge an additional fee on top of the Medicare deductibles and coinsurance, known as an excess charge.
An excess charge can be up to 15% over and above the Medicare-approved amount. You may be thinking 15% is nothing to worry about. Let’s run through a few examples.
Excess Charges Example:
Your provider does not accept Medicare Assignment, and you have a $150 office visit. They then charge you an Excess Fee of the maximum 15%, which means you will have to pay the additional $22.50. No big deal, right?
While not all excess charges are high, the uncertainty about potential high out-of-pocket expenses for Excess Charges makes Plan G the most popular because it covers Excess Charges at 100%.
Other Things to Consider When Comparing Medicare Plan G vs. Plan N
When choosing a Medicare Supplement, think about what plan is right for you now but will also be the right plan design for you if your health or financial situation changes. This is important because of the rules around changing from one Medicare Supplement Plan to another.
In most cases, if you want to switch to another Medicare Supplement plan after your Initial Enrollment Period, you will not have Guarantee Issue rights. While there are some situations like, for example, if you move and the policy is not available where you move to, you may still have Guarantee Issue rights. However, in most cases, if you just want to switch plans, you won’t. That means if you’re going to change plans, you will be subject to medical underwriting when you apply for a new plan. Medical Underwriting means the insurance company can deny you coverage or charge higher premiums based on your health status.
Understanding the implications of differences in benefits between Plan G and Plan N can be tricky. Luckily, Medicare On Video is here to help you understand the differences and make a decision that is right for your situation today and down the road
Plan G Vs. Plan N Premiums in 2021
Outside of benefits and cost-sharing (copays, coinsurance, and deductibles), the other important aspect of your decision is plan premiums. In most states, Plan G costs somewhere in the neighborhood of about 20% to 25% more a month than Plan N. Plan premium can vary widely depending on where you live and your health status (if you don’t have Guarantee Issue rights). You have to weigh the benefits of higher premiums and richer benefits against lower premiums and more potential out-of-pocket costs both for today and in the future when deciding between Plan G and Plan N. A trusted independent Medicare agent like the experts at Medicare on Video can help walk you through the options and put together quotes for the plans you want to compare and help you make a final decision on the right plan for you.
If you enroll in a Medicare Supplement Plan, don’t forget you will also need to enroll in a Medicare Part D prescription drug plan to cover any medications you take as Original Medicare. Although Original Medicare ad Medicare Supplement plans don’t provide coverage for drugs. Premiums for Medicare Part D plans are separate from Medicare Supplement plans, which is important to understand when developing your health care budget.
Give us a call at 877-88KEITH (53484) we can review the benefits of MediGap plans in your area
Is Medicare Supplement Plan G Going Away?
In a word, no. Plan G is not going away and will remain an option until the Medicare program changes. In fact, it may be one of your best options for coverage.
Please note that while this was previously the “default plan” offered by many insurance companies for people 65 and over, it may not be as appealing to those who have been paying into Medicare for years.
Plan G is a part of the standard medigap plan offered by your insurance company that protects you from out-of-pocket costs incurred while receiving care at hospitals and other institutional settings. It also helps cover some deductibles and co-insurance costs that Medicare doesn’t cover.
Can I switch from Plan N to Plan G?
You can change Medigap plans anytime during the year. It is not necessary to wait for the Medicare Open Enrollment period. It is important to understand though that in most states you will need to be approved through medical underwriting in order to change plans. It is simply a list of questions that need to be answered. You can find a sample list of questions that are asked here.
There are a handful of states that do not allow medical underwriting. Give us a call and we can tell you what is needed in your state.
Watch my video below for more information on how to change a Medicare supplement plan.