Medicare Supplement Plan N

by Pamela Turner on March 28, 2011

The new Plan N has been receiving lots of buzz lately. Aside from plan F, it is the most searched Medigap plan on Google.

Why the Popularity?

This plan offers all the benefits of a supplemental plan at a lower premium. To keep the costs down, the plan has implemented cost sharing for office visits and emergency room visits. Office visits require up to a $20 copay, and ER requires up to a $50 copay (waived if admitted).

These benefits include: freedom to go to any doctor or hospital in the U.S. that accepts Medicare (most do), no referrals required, and coverage of the 20% part B coinsurance.

How does it stack up against Plan F?

Here is a comparison between the ever popular Plan F, and the newer Plan N.

Plan F
(*The most comprehensive plan; you are likely to have little, if any, additional expense aside from premiums).

  • Sample Premium for Age 65 in San Diego County (Blue Shield of CA): $130
  • Covers Part B 20% coinsurance
  • Covers Part A Hospital deductible of $1184
  • Covers Part B deductible of $147
  • Covers Skilled Nursing Facility coinsurance & Foreign Travel Emergency
  • Covers Part B excess charges (Doctor’s charges that exceed the Medicare approved amount)

Plan N

  • Sample Premium for Age 65 in San Diego County (Blue Shield of CA): $82
  • Covers Part B 20% coinsurance
  • Covers Part A Hospital deductible of $1184
  • Covers Skilled Nursing Facility coinsurance & Foreign Travel Emergency
  • You pay the annual Part B deductible of $147
  • You pay all Part B excess charges (Doctor’s charges that exceed the Medicare approved amount)
  • You pay up to a $20 copay for office visits & up to a $50 copay for Emergency Room visits

Bottom Line

The difference in monthly premium between Plan F and Plan N, from our example above, is about $48. This gives you an annual savings of $576 on a plan N, IF you do not visit the doctor, the emergency room, or incur any Part B excess charges.

Let’s imagine the following scenario: You are generally healthy, but happen to catch the flu this year. You currently have a Medicare Supplement Plan N. The sickness comes on quickly, so you decide to visit the ER. It is your first visit with a doctor for the year, so you are required to pay part of the bill out of pocket up to the $147 deductible. On top of that is a $50 copay. You end up following up with the doctor two more times, with copays adding up to $40. Your out-of-pocket costs so far are $237.

As you can see, on a plan N, your savings in premium may or may not be worth it. You could conceivably end up spending more on this plan than what you would pay on a Plan F. It is up to you to weigh the risks based on your Medical History, and also consider what you are comfortable with.

Although there is no out-of-pocket cap on spending for Part B excess charges, office visits, and ER visits on Plan N, it would take a catastrophic illness to far exceed the difference in premium between Plan F and Plan N.

Do you feel the savings in premium is worth it on a Plan N?

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