Medigap Plan N – A Stable Choice

Medigap Plan N has steadily grown in popularity with Medicare Beneficiaries since inception. The lower premium and freedom to see the doctor of your choice without network restrictions makes it a solid choice to Medicare Advantage plans. With the MACRA changes that started in January 2020 to Plan F and Plan G, the Plan N is now primed the Cadillac of Medicare Supplement plans for most beneficiaries. A lower premium and a protected class, make Plan N a stable choice. Lets take a look at the reasons why.

Guaranteed Issue Plans 2020 and Beyond

As mentioned above that MACRA was making changes to Plan F. Starting in 2020, Plan F will no longer be available to those new to Medicare. Since Plan F is not available, rates will start to rise like other discontinued plans. The math is pretty simple as to why Plan F rates will increase. Without new members allowed to purchase Plan F, there is not a class of healthy newer members to offset claims made by those grandfathered into Plan F. This will make Plan F support itself with rate increases.  MACRA is also affecting Medicare coverage and how it manages Guaranteed Issue cases. Beneficiaries with a guarantee Issue allowance starting in 2020 will have a choice of Medigap Plan G (for the first time as guaranteed issue) and Plan D. Guaranteed Issue enrollees are those that are losing their existing coverage. Guaranteed Issue will also include Medicare Advantage members. If you have a Medicare Advantage plan and your plan sponsor decides they want to terminate or no longer service your area of coverage or you move from one service area to another, you will be granted a Guaranteed Issue right to purchase a Medicare Supplement policy without having to meet healthcare eligibility. For many with chronic conditions this is a break they may need.

Guaranteed Issue and Plan G

These days when a person qualifies for a Guaranteed Issue plan, they can only choose between to Plan G, or D. If they want the lower premiums of Plan N, they would need to qualify through medical underwriting. In other words they need to be healthy to qualify for Plan N.

This means that the Plan G, newly available for guaranteed Issue, will now be accepting Medicare beneficiaries who are sicker, have chronic or pre-existing conditions. This will, without a doubt lead to higher premiums for Plan G regardless of which carrier.  This will lead to a larger price gap between Plan N and G as time goes on.

Contain your Price Increases with Plan N

Are you missing something?  For starters a lot of brokers are paid on the annual premium so selling a plan with a higher premium may make sense to them in terms of getting paid for the time on the case.  For those of you that are not aware or just new to Medicare – Medicare supplement plans will increase year after year for as long as you have the plan. It’s not so much about your costs today but the future you in 3, 5, and 10 years.  Would you like to contain your price increases in the lower single digits or leave things up to chance with 20% or possibly more year over year price increases?

Exactly how is Medigap Plan N different from Plan G?

Like Plan G, Plan N does not cover the Part B deductible. In 2020, that deductible is $198.00. With Plan N, you may have an office visit co-payment of up to $20 per visit and a $50.00 copayment for a trip to the emergency room. If you are admitted to the Hospital, you will not be subject to that $50 copayment.

Medigap Plan N – What are Excess Charges?

Many ask if excess charges are something to be worried about, and in most cases they are not. Excess charges are only billed if your Doctor does not accept Medicare assignment. Statistically, less than 5% of doctors nationally do not accept Medicare assignment.  Furthermore there are certain state protections that do not do not allow for the billing of any excess charges. If you live in one of the following states excess charges are nothing to worry about.

Pennsylvania
Rhode Island
Ohio
Minnesota
Massachusetts
New York
Connecticut
Vermont

Medigap Plan G Rates Will Increase

There have already been larger than average price increases for Medicare Plan G. This can be attributed for the Guaranteed Issue cases that are entering and have been priced in to the formerly protected class of Plan G.  This allowance of Guaranteed issue into Plan G will cause Plan G to have a class of policy holders with more health issues, and higher loss ratios. Resulting in higher rate increases and prices going forward. If you are new to Medicare or still in your Initial 6 month open enrollment window and you may want to look at plan N as a stable alternative.