Plan F or Plan N: What most agents don’t tell you… or don’t know.
Medicare Supplement plans, often called Medigap plans by Medicare, are plans that work in combination with Medicare. The most popular plans are Plan F and Plan N.
Before we compare these plans, it’s important that you understand how Medigap plans work and how they differ from Medicare Advantage plans. Click here to read Medigap vs. Medicare Advantage.
Plan F vs. Plan N Benefits
Ok, now that you have the basics, its time to get more specific with these two plans.
Referring to the chart below you can see that all the Medicare benefits boxes are checked for Plan F. That means when Medicare approves a medical expense, Plan F covers 100% of your out-of-pocket expenses (copayments, coinsurance and deductibles).
Plan F also covers 80% of foreign travel emergency expenses with a $250 deductible and $50,000 lifetime maximum.
The chart above shows that Plan N covers as much as Plan F covers except for:
- The Medicare Part B deductible
- Medicare Part B excess charges
- Doctor Visit and Emergency Room Copays
- Part B deductible
The Part B deductible for 2016 is $166. You are responsible for this yearly amount whenever you begin to receive any Part B services with Plan N.
Part B Excess Charges
When you compare Medicare supplement plans, it is essential that you understand Part B excess charges.
Many people, and many insurance agents for that matter, struggle to understand what a Medicare Part B Excess charge is.
Simply put , it is an additional amount that a physician or other healthcare provider can charge you over and above the Medicare approved amount.
There are many doctors and facilities who accept the Medicare allowed charge. However, there are also doctors and other healthcare providers who DO NOT accept the allowed charge and have excess or additional charges.
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Still unclear about the differences?
Here is an example that should make it clearer:
Let’s say you are visiting your doctor for an office visit and you have Original Medicare Part A and Part B, but no other insurance or plan. Medicare’s allowed charge for your visit is $100. Your doctor has the option and a right to charge up to 15% over the Medicare approved amount.
If your doctor doesn’t accept the Medicare maximum allowed payment (called “assignment”) and charges the additional 15 percent or, in this case, $15.00. The allowed charge is $100 and Medicare will pay 80%, which means Medicare will pay your doctor $80.00. You are responsible for the 20% ($20 in this case) and the 15% ($15 in this case) excess charges or making your out-of- pocket cost $35.
Remember, if a doctor or other healthcare provider does not accept Medicare assignment, they can charge you, the patient, for the co-insurance plus an additional 15% of the total allowed charge.
Doctor Visit and Emergency Room Copays
Under a Plan N, you may also have to pay up to $20 copay per office visit, and a $50 copay per emergency room visit. The $50 is waived if you are admitted to any hospital, and the emergency room visit is covered as a Medicare Part A expense.
The main point for you to understand is that if your doctor or other healthcare providers accept Medicare assignment, you will not be paying for Part B excess charges. And if you were enrolled in plan N, your out-of-pocket costs would be the same as Plan F, except for having to pay the annual Part B deductible, and doctor visit and emergency room copays.
If the cost of a Plan N is substantially lower than the cost of a Plan F, perhaps a plan N would make a lot of sense for you.
Let’s take a look at those costs by showing a Medicare supplement Plan F rate comparison with that of Plan N.
Plan F vs. Plan N Cost
Below you will see costs with Plan F and Plan N rates. The first one shows the monthly premium for 5 of the top insurance companies that offer a Plan N in Maine, and the second shows those rates for Plan F. These rates are for any residents of Maine:
Plan F and N Premiums
Among these 5 companies, the average cost savings between plan F and Plan N for someone age 65 is $68.58 per month or $822.91 per year.
So, if your doctors and other healthcare providers accept Medicare assignment, and you choose Plan N, your cost savings per year would be about $822.91, minus $166 (your Part B deductible which you must still pay), office visit copays and perhaps emergency room copays.
Keep in mind that these savings will occur if all health care providers accept Medicare assignment.
But also keep in mind, that even if some of those health care providers do not accept assignment and charge the allowed 15% extra, your savings could still be significant.
- Both Plan F and Plan N are popular, comprehensive plans.
- Plan N benefits are almost the same as Plan F benefits.
- Plan N can be significantly less expensive than Plan F, without giving up, in many cases, a lot of benefits.
- You will need to do some homework to determine which plan is better for you, or if you should buy a supplement plan at all.
A professional, experienced agent like myself can help make your homework and the entire process to compare Medicare supplement plans so much simpler and easier.
If you would like help comparing your needs against the many Medicare plans out there or if you just want to ask a few questions, you can call me directly at 207-370-0143 or use my simple form on the CONTACT page of this site to send an email message.
The best part about working with me is that it will not cost you anything to talk with me to discuss your options and review the plans that are available. I am paid by the insurance companies in the form of a commission when you enroll in a plan. You will not pay anything to meet with me and you will pay the same price for your insurance that everyone pays whether they had my help or not.
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