Are you looking for detailed information to help you decide if you should enroll in a Medicare supplement plan N? This post will provide considerable details about the Medicare supplement plan N.
Back To The Beginning
To start, we’re going to begin by going back in time to a little bit before the plan N was first introduced to the market. To do that, we’ll need to go back to the year 2010.
In the year 2010 the Medicare supplement plan letters that were available to the marketplace went through a little bit of an update. During this time, there were a few plans that were very similar, for example the plan G, plan H and the Plan I were very similar. The plan H and the plan I were removed and just the plan G was left to replace those three plans.
The plan J and the plan F were also very similar so those plans were also merged together to give us what’s considered the current day standard Plan F. There was a plan E that was removed from the list and then there were four different new plans that were added to the choice of Medicare supplement plan letters. Those include plan k, plan L, plan M and plan N. I’ve never sold a plan K or plan L or plan M as these plans do not have a good value, therefore we do not recommend them to our customers.
Plan F and Plan G – Both Popular For a Long Time
Primarily we were looking at the plan F and the plan G. The reason we’re talking about the plan F and the plan G is because things that changed with respect to these two plans do affect our decision-making process whenever we may recommend a plan N to our customers.
For several years after these updates were made back in 2010, we would look at the plan F and we would look at the plan G when we were recommending plans to one of our current or prospective customers.
We would first look at the list of companies that we felt confident in doing business with and then we would find the least expensive plan F that our customer could get in their area and then we would look for the least expensive plan G.
We would then compare the difference in price of those two plans and see how much different the monthly premium was. We would then multiply that by 12 we would see what an
individual’s annual savings would be if they were to switch to a plan G.
Then we would compare that to the difference in the plans, which is the Part B deductible. If the annual savings was more than the current Part B deductible, then sometimes it made sense to change to a plan G to save money and in this case we were only looking at what is going to happen as far as the monthly premium for the following 12 months.
The reason for this is that we know that every insurance company that we currently work with, when we quote a rate for a Medicare supplement plan, that rate is locked in and will not change for 12 months. At the end of 12 months, the Medicare supplement policy that you’re on may have a rate increase, and this is another important factor that we take into consideration when we might be considering more of a long-term strategy as compared to just looking at the next 12 months.
The plan F had been a very popular plan during this period of time for a few reasons. It had been around for a while, people knew what it was, people understood how it worked and it paid for all of the out-of-pocket expenses that Medicare did not cover for doctor and hospital bills that were covered under Part A or Part B. An individual could be confident to know that if they had a Medicare supplement plan F, they would not have any other out-of-pocket expenses for doctor hospital bills and this was certainly a good thing.
One issue was we started to see larger increases in the plan F than we did for individuals that we started moving to a plan G and there are a number of reasons why this was happening.
How Rate Increases Happen
Before we continue, I want to explain a little bit about how rate increases happen on a Medicare supplement policy. Whenever you get a Medicare supplement plan, you are added to a group of people. That group is determined by where you live, what plan letter that you choose and also what insurance company that you enroll with.
When you join a group of people you then share the risk together for the future. Your insurance company is required to keep very accurate records of all of the premiums that are paid to the insurance company from that group and also all of the claims that they pay out to individuals in that group. They are required to maintain a minimum ratio 80% premiums to claims.
What this means is that for every $100 everyone in your group pays to the insurance company, they are required to pay back out at least $80 in claims. If the insurance company, after submitting their numbers to the insurance commissioner each year can show that they have paid out more than 80%, they do ask permission for a rate adjustment.
Therefore you will normally see a rate increase on your Medicare supplement premium on an annual basis. The insurance company can not single you out. If you get a rate increase on your Medicare supplement plan, so does everyone else on that plan in your area.
What was happening is we started to notice that customers that we had on a Plan F, compared to those that had the plan G, when there was a rate increase, the percentage of increase
on the plan F tended to be a larger percentage. This caused some difficulty because what it made us do is we had to move these customers more often.
When I say move, what I mean is that we do an annual review for all of our customers every year. We’re going to know in advance when a rate increases is coming. We will know what your current rate is and we will know what your new rate is going to be in the near future. We can compare the new rate to other companies offer that same plan in your area and then we can make a change or move you if doing so would assist you in getting the cost of your
Medicare supplement plan down to a lower amount. Obviously if we can wait longer before we have to consider making a move it is a good thing for our customer.
Plan F Was Getting Larger rate Increases Compared to Plan G
There are a few reasons that the plan F was experiencing larger increases and it has to do with some of the rules in the Medicare system. One reason why the plan G was getting smaller increases is because of the difference between a plan F and a plan G. The plan F does not have a deductible, but the plan G does have a Part B deductible.
In the year 2019, when this was written, the Part B deductible was $185. That can change in the future. If a person has a Medicare supplement plan G, their Part B deductible will reset each calendar year. The first $185 of Part B medical care that an individual receives each year that’s not covered by Part A, that is, it’s under Part B, you are responsible for the first $185.
This simply means that as a group, individuals who have a plan G, there is at least a slight psychological deterrent built in to prevent unneeded overuse. Simply put, an individual who has a Medicare supplement plan G, they might be a little more cautious and a little less likely to receive medical care when it’s not needed, therefore the claims in the group who have the plan G are going to be smaller, therefore their rate increases will also be less in the
future.
Guaranteed Issue
Another important factor to understand why the plan F was receiving larger rate increases has to do with the idea that there are some circumstances where a plan F group would have to accept new enrollees without asking any health questions. There are a couple of reasons why individuals who aregetting a Medicare supplement plan can get a plan F without asking any health questions.
In other words, it is guaranteed issue. If the individual, in the same circumstance wanted to get a plan G, they would have to go through underwriting and answer health questions before they could get an approval.
One common situation is if an individual turns age 65 and they are eligible to get Part A and Part B of Medicare, but they may still be working or they have access to a group health plan at a spouse’s place of employment. When they do stop working and leave the group plan, they do have the option to get a Medicare supplement plan.
They do not have an open enrollment, but they do have guaranteed issue rights. The guaranteed issue rights state that an individual has the right to purchase certain plan letters without answering any health questions. Currently that includes Plan F but it does not
include plan G.
Another example is if an individual may have a Medicare Advantage plan, which is a network policy and for one or more different reasons they are losing that coverage. This could include moving or it could be that the Medicare Advantage plan has decided to no longer offer that plan in their area.
If this is the case, then this individual also has a guaranteed issue right and they can get a Medicare supplement plan F without answering any health questions. If the same individual wants a plan G, they will have to go through underwriting and answer health questions and get approved.
Why Is This Important?
The reason why this may be important to you is because if you are in a group of individuals and your rates in the future depend on the claims that are experienced by everyone in your group, it’s better for you to have healthy people join your group as compared to those who may have some health challenges.
Therefore if you are on a plan F, it is possible, if you stay on the plan F for a few years in a row there are a considerable number of individuals who may be joining your plan that may have higher claims then someone else who might decide to get on a plan G.
On the other hand, if you do have a plan G and individuals are joining your group who have had to go through underwriting, who have had to answer some health questions and may be a little healthier, that’s good for you because they will be paying into the system and they may not be taking out of the systemin the area of claims as much as an individual who has had to go to a plan F.
This Trend Has Begun To Change!
This is a trend that we started to see over time. Individuals that we put on a plan F compared to those who we put on a plan G saw higher rate increases percentages. However we are now starting to see some changes in this trend and this is one of the reasons why the plan N has become more of an attractive offer. People are more interested in the plan N. People are asking about it and doing research about plan N.
One of the things that has caused this change is a law that was passed back in 2015. This law was called MACRA. MACRA stands for the Medicare Access and Chip Reauthorization Act. For the purposes of post, we are talking about MACRA for a couple of reasons.
The first thing to mention is that in the future, individuals who are new to Medicare, this means individuals who turn 65 on or after January 1, 2020 will no longer be able to get a
Medicare supplement plan F. Plan F is not going away. Anyone who has a plan F now can keep it. Anyone who turns 65 before January 1, 2020 will still be able to get a plan F.
However no new individuals can get a plan F. If you currently have a plan F and there are no new to Medicare people able to choose a Plan F, you are basically in what we refer to as a closed group. If you are in a closed group, really the only thing that can happen is people can leave your group, but no new healthy individuals are able to join your group. If we look at that situation as far as the long term impact is concerned, that’s
not a good place to be.
Another thing that has been determined is that individuals who have guaranteed issue situations in the future will no longer be able to get a plan F. In the future is guaranteed issue is going to be plan G. What this means to you is if you are considering a plan G or if you currently are on a plan G in the future there are individuals who will be able to join your group and these individuals may be joining your group under guaranteed issue circumstances. They do not have to answer any health questions.
This all brings us back to the very beginning:
– Should you consider a plan N? –We are going to say YES. You should at least be aware of the plan N. Starting next year the plan N will be a plan that you can go to and know that for the foreseeable future, no individuals will be able to choose the plan N under guaranteed issue circumstances. This will be helpful in the future. We have also continued to see very low very stable price increases on individuals who have the plan N.
How Does Plan N Work?
Plan N is very similar to a plan F or a plan G in several situations. It is exactly the same if you receive medical care covered under Part A. Part A of Medicare is called Hospital. Part A covers you if you are admitted to the hospital or if you are in a skilled nursing facility or rehab center or hospice care.
A plan F, a plan G and a N in will all pay 100% for any medical care that is received under Part A. If you’re admitted to the hospital, when you come home you should not receive any medical bills from the hospital.
The plan G and the plan N are also the same in that you are responsible for the Part B deductible. The Part B deductible for the year 2019 is $185. This number can change in the future. This resets each calendar year. If you have a Plan N, you will pay the first $185 or whatever the Part B deductible is in the future. You will pay that deductible for any Part B medical care, starting at the beginning of each calendar year.
There are a few things that are different about the plan N. First, if you have a doctor visit after your Part B deductible is covered, if the doctor sends a claim to Medicare that includes a doctor office visit fee, you will have a co-payment. You’re going to pay twenty percent of the doctor office visit fee on a sliding scale, but with a maximum of $20.
If we’re talking to individuals who do have a number of different health conditions that they are dealing with maybe they have a number of specialists and they go to the doctor quite often, maybe once a month or so, we most likely will not recommend the plan N to them because of the co-payments.
However if you are like many of the individuals that we work with and are relatively healthy and only go to the doctor on a routine basis a few times a year, then considering a plan N certainly is a good option.
Another possible out-of-pocket expense on a plan N is a maximum $50 co-payment at a hospital emergency room. If you are treated at the hospital emergency room and then are admitted to the hospital, there is no co-payment, If you go to some other urgent care facility that’s not a hospital emergency room, there is also no co-payment.
What Are Part B Excess Charges?
The last thing to mention about a Medicare supplement plan N is that the plan N does not pay for Part B excess charges. The Part B excess charge is a charge that a doctor can charge you up to 15% more than what Medicare combined with your Medicare supplement is normally paying a doctor.
Information that’s available to us from insurance companies that have researched this issue have shown that somewhere around 96% of doctors do accept assignment. This means that they will accept whatever Medicare is willing to pay together with the Medicare supplement plan as payment in full.
This means if a doctor does accept assignment, you will not have a Part B excess charge. It is very rare that an individual will have a Part B excess charge. Other information that has been made available to us by one of the major companies that we work with, Aetna Health and Life, has indicated that they were able to do some research and report to us that in the claims that they have processed in recent, 99% of those claims did not involve any Part B excess charges.
Based on this information, we do not feel like the issue of a Part B excess charge is a reason to be worried about getting a plan N or should cause
you to decide not to get a plan N. We do not consider this to be an important issue when you are considering getting get a plan N.
When Can You Get a Medicare Supplement Plan N?
Medicare supplement plans are considered guaranteed renewable insurance. This means as long as you pay your monthly premium, you can change your Medicare supplement anytime. You only agree to stay on a Medicare supplement plan one month at a time as you pay your monthly premium.
If you have a Medicare supplement plan now, you can price shop or consider changing your plan letter at any time. If you currently have a Medicare Advantage plan and you are considering changing to a Medicare supplement plan N, you most likely will need to wait until the Annual Election Period.
The Medicare Annual Election Period is from October 15th through December 7th. During this timeframe, you could send an application to an insurance company requesting enrollment in a Medicare supplement plan N. The plan N would start on January 1 of the following year.
If you are replacing a Medicare supplement policy or if you are moving from a Medicare Advantage plan to a Medicare supplement plan and you send an application to an insurance
company asking to enroll in a Medicare supplement plan N, in most cases you will have to answer some general health questions to get an approval.This is not a big problem, because we do help individuals move or change their Medicare supplement plan on a regular basis.
Should YOU Change to a Medicare Supplement Plan N?
If you would like to find out if you could qualify for a Medicare supplement plan N. If you are curious to see what the rates would be for you in your area, we would be very happy to talk to you about your options. I am an independent agent. I work with many different companies. I am currently licensed in 35 states.
This means I do work with individuals all throughout the United States My services to you are always free We are very friendly. We are very easygoing we would be very happy to spend the time to look at your situation, explain any options that you have and also assist you in the application process. We do most of the work for you.
I certainly do hope that you have found that the information in this post has been helpful to you. I know the choices of health insurance are very important. It is important for you
to have the proper information to help you in the decision making process.
If you have any questions about this subject or would like to speak to us about any of your Medicare needs in regards to Medicare supplement, Medicare Advantage or Part D prescription drug plans, I would certainly be very happy to speak with you.
I am an independent agent specializing in the senior market. I would be very happy to look at your current coverage and compare it to the marketplace to make sure that you are still getting a good value.
My services to you will always be FREE.
Billy Williams
800-499-1942
MedicareHealthInsuranceOptions.com
