Exploring Medigap Plan N: Benefits and Coverage Details

What Is Medicare Supplement Plan N?

Medigap is a supplemental health insurance plan that provides payment for services outside of Original Medicare (Part A and Part B), such as deductibles, coinsurance, and copayments. There are ten standardized Medigap plans, each named after a letter of the alphabet.

Medicare Supplement Plan N offers fairly comprehensive coverage similar to those offered under Plan C and Plan F. However, Plans C and F are no longer available to new enrollees. Plan N also has lower premiums, which can make it an attractive option for some Medicare recipients.

How Medigap Works  

When receiving Medicare-covered services, individuals are typically responsible for certain out-of-pocket costs, such as:

• Copayments: A set dollar amount owed for each service rendered
• Coinsurance: A percentage of the Medicare-approved costs
• Deductibles: An amount you must pay before Medicare begins to make payments

Medigap plans help cover these “gaps” in coverage, minimizing out-of-pocket costs and unexpected medical bills.

Each Medigap plan follows federal and state-regulated standards, meaning the same lettered plan offers identical coverage no matter which insurance company you purchase from. Pricing is one of the primary differentiators between the various plan types. However, it is important to note that not every Medigap plan is offered in all states.

There are ten Medigap plans, A, B, C, D, F, G, K, L, M, and N, each covering a different assortment of out-of-pocket costs associated with Original Medicare. However, as of 2020, Plans C and F are unavailable to new Medicare enrollees.

Each plan covers Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are exhausted. However, only certain plans cover costs such as the Medicare Part B deductible or excess charges, which is an amount a doctor or healthcare provider may charge above the Medicare-approved amount. Some plans also pay a percentage of copayments and coinsurance, while others cover the full amount.

How Does Medigap Plan N Work?  

Medigap Plan N provides a balance between affordable monthly premiums and comprehensive coverage. It covers several significant out-of-pocket costs associated with Original Medicare but requires copayments for some services.

Eligibility 

Individuals enrolled in Medicare Part A and B are eligible for a Medigap plan, including Plan N for Medicare Supplement Insurance. However, Medigap is intended to supplement Original Medicare, so it cannot be used in conjunction with Medicare Advantage plans.

Once enrolled in Medicare Part B, a 6-month Medigap Open Enrollment Period (OEP) begins. During the OEP, you can select the Medigap plan of your choice without having to go through medical underwriting.

What Is Not Covered?  

Plan N does not cover the Medicare Part B deductible or Part B excess charges. It also does not cover the copayment for emergency room visits that do not result in an inpatient admission. Further, Plan N does not provide a cap on out-of-pocket costs.

Other Medigap Plan Types  

Medigap policies offer a range of coverage options to suit various healthcare needs and budgets. While a Medicare Plan N supplement is quite comprehensive, understanding available options can help you make an informed decision. Here’s a brief overview of each plan:

• Plan A: The most basic Medigap plan, Plan A offers coverage for the essentials but excludes many benefits. Unlike Plan N, Plan A does not include coverage for the Part A deductible, skilled nursing facility coinsurance, or foreign travel emergencies.
• Plan B: This is similar to Plan A, but Plan B also covers the Medicare Part A deductible. It does not offer the extra benefit Plan N provides, such as foreign travel emergency coverage.
• Plan C: A comprehensive plan that covers the bulk of Medicare out-of-pocket costs, including the Medicare Part B deductible, which Plan N does not cover. However, Plan C is unavailable to those enrolled in Medicare after Jan. 1, 2020.
• Plan D: This is similar to Plan N but does not require copayments for office or emergency room visits.
• Plan F: A high-coverage option that pays all of the gaps in Original Medicare, including Part B excess charges. Plan F is not available to Medicare beneficiaries who enrolled after 2020.
• Plan G: This is similar to Plan N but includes coverage for Part B excess charges. The primary difference between Plan N and G is the absence of copayments in Plan G. As a result, Plan G has higher premiums than Plan N.
• Plan K: Plan K covers fewer upfront costs but offers a lower monthly premium. Unlike Plan N, it covers 50% of several benefits until you meet the yearly out-of-pocket limit.
• Plan L: Similar to Plan K, Plan K covers 75% of the costs until the out-of-pocket limit is reached, as opposed to Plan N’s more comprehensive coverage.
• Plan M: This offers similar coverage to Plan N but covers 50% of the Part A deductible and excludes coverage for Part B excess charges.

Medicare Plan N Costs  

The cost of Plan N is influenced by various factors, such as where you live, your age, and the insurance company’s pricing model. The average monthly premium for Medigap Plan N ranges between $80 and $120. On average, Medigap plans tend to range from $50 to $300 per month, making Plan N a moderately priced option. 

Each insurance company sets its own plan premium rates, and the rates can be priced based on three different systems: community-rated, issue-age-rated, and attained-age-rated. Community-rated plans charge the same premium to each participant, regardless of age.

Issue-age-rated plans base your premium on your age when you first buy the policy. Attained-age-rated plans increase your premiums as you age. Understanding the pricing structure and comparing plans can help you choose a plan that fits your budget and healthcare coverage needs.

Plan N Pros and Cons  

As with any healthcare plan, Medicare Supplement Plan N has its strengths and weaknesses. Potential enrollees may want to consider the following factors. 

Pros  

• Affordability: Plan N often has lower monthly premiums than other Medigap plans, making it a budget-friendly option.
• Comprehensive coverage: Plan N covers a majority of Medicare Part A and Part B deductibles and coinsurance, hospice care, skilled nursing facility care, and more.
• Emergency travel coverage: Plan N provides foreign travel emergency healthcare coverage, which original Medicare does not cover.
• No referral needed: With Plan N, you can visit your choice of specialists without needing a referral from a primary care physician, as long as the specialist accepts Medicare.

Cons  

• Excess charges: Plan N does not cover Part B excess charges, potentially leaving you with out-of-pocket costs.
• Copayments: Unlike other Medigap plans, Plan N requires copayments for office and emergency room visits.
• No out-of-pocket maximum: Plan N does not have an out-of-pocket maximum, which could lead to higher costs if you require frequent medical care.
• Range of premiums: Plan N premium rates can vary widely from one insurance provider to another, making it essential to shop around.

Who Should Consider Medigap Plan N?  

While each individual is unique, in general, a Medigap Plan N may be appropriate for those who fall into one of the following categories:

• Health conscious Medicare recipients: Medigap Plan N can be an attractive choice for individuals who maintain a generally healthy lifestyle and do not anticipate frequent doctor visits or hospitalizations. Thanks to its cost-sharing attributes, such as copayments for office and emergency room visits, Plan N can be an economically savvy choice for those requiring less frequent healthcare services.
• Individuals comfortable with cost-sharing: Plan N requires out-of-pocket payments for certain costs, such as copayments for office and emergency room visits, Plan N could be an appropriate choice if you’re comfortable with some cost-sharing and do not mind paying out-of-pocket costs when receiving care.
• Budget-conscious beneficiaries: Compared to other Medigap plans, Plan N tends to have lower monthly premiums and offer more comprehensive coverage, making it a popular choice among budget-conscious Medicare recipients.
• Individuals who accept the risk of Part B excess charges: Since Plan N does not cover Medicare Part B excess charges, it may be an appropriate choice if you’re willing to take on the risk of paying excess charges out-of-pocket.

How to Enroll in Medigap Plan N  

The Initial Enrollment Period (IEP) for Medigap plans is a six-month period that begins on the first day of the month in which you are 65 or older and enrolled in Medicare Part B. During the IEP, insurance companies may not refuse to sell you a policy or charge you more due to your health conditions. You can still apply for Medigap coverage after the IEP but generally do not receive these protections.

Some states offer annual Medigap open enrollment periods, allowing you to change your plan without health-related restrictions. Check the regulations in your area to understand how these periods work.

Take Advantage of the Medigap Free Look Period

The Medigap Free Look Period is a crucial provision that allows a 30-day window to “test drive” a new Medigap policy without losing your current coverage. If you purchase a new policy and decide within the 30-day window that it’s not a good fit, you can revert to your old plan without penalties. However, you do have to pay premiums for both policies during the free look period, and the free look only applies if you are switching from one Medigap plan to another.

What It All Means for You

Medigap plans can help offset out-of-pocket medical expenses by covering some of the gaps in Original Medicare coverage. While there are ten standard Medigap plans, Part N is popular due to its fairly comprehensive coverage and relatively low monthly premiums. However, there are also some limitations.

Understanding the eligibility requirements, key features, and other available Medigap plan types can help you decide on your healthcare coverage. Consider the pros and cons carefully, and remember to utilize the Medigap Free Look Period. If Plan N aligns with your healthcare needs and financial circumstances, it might be an appropriate choice for you.