Benefits of Plan N as a Medigap Plan

By Rachel Brammeier

Having background knowledge and expertise is why clients choose to select an independent agent over an internet search. Helping your client select a Medigap Plan is an essential part of an agent’s role as an advisor. Read more to make sure you have the background knowledge necessary to help your clients.

Historically, Plan F was the “Cadillac Plan,” covering everything that Medicare picked up after a premium. Plan F was also a Guaranteed Issue plan, meaning that it took individuals without underwriting when, for example, they lost their group plan past age 65 or their Medicare Advantage plan pulled from the market (see page 22-23 of the Choosing a Medigap Policy Booklet). This made Plan F great for first-dollar coverage, but its rates were not as stable as other plans like Plan G and Plan N.

The difference in coverage between Plan G and Plan N is that Plan G covers all Medicare-approved expenses, including excess charges after Medicare and premium except for the Part B deductible. Plan N requires the client to pay the Part B deductible, up to a $20 doctor copay and up to a $50 emergency room visit copay. The other thing Plan N does not cover is the Part B excess charges. Excess charges occur when the provider does not accept Medicare assignment. Currently, more than 9 in 10 primary care physicians accept Medicare assignment.

On January 1, 2020, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) changes took effect to the Medigap plans to limit who had access to first-dollar coverage. On January 1, 2020, Plan F became available only to individuals eligible for Medicare before 2020. Also, Plan G became the new guaranteed issue plan, essentially taking on more significant risk and increasing the potential for larger rate increases.

While Plan N does have a potential of fees that the patient is responsible for, its rate increase history has and will remain low as it is not a guaranteed issue plan. This secures your client in a stable plan for a longer amount of time.

Overall the benefits of Plan N are:

Lower Premiums than Plan G
Stable plan
Not taking on guaranteed issue business
History of low increases

Page 11 of the Choosing a Medigap Policy Booklet

How to Explain Plan N to Clients:

When discussing the difference in benefits, you will need to be sure to mention that with Plan N, your client is responsible for copayments up to $20 when you visit the doctor’s office and up to $50 for emergency room visits. Your client may also be responsible for any excess charges, the additional amount a doctor who does not accept assignment may charge for services above what Medicare covers. Remember to remind your client that 9 out of 10 doctors accept assignment.
Discuss the differences in premium by running a quote so your client can make an informed decision on the differences in benefits and premium.
Verify their doctors accept assignment by using this site https://www.medicare.gov/care-compare/. If the doctor accepts assignment (meaning that the excess charges don’t apply to that doctor), then it will have a green checkmark and say, “charges the Medicare-approved amount.”