Medicare supplements Plan G and Plan N have a lot in common. Both plans cover inpatient care, foreign travel emergency care, hospice care coinsurance, skilled nursing facility care and no plan limits on coverage within the U.S. Our licensed agent staff at May River Medicare Insurance has been trained to help you find the right supplement plans with the out of pocket maximum that fit your situation.

The Plan G has higher premiums and higher price increases on average. Medicare supplement Plan N has a lower monthly premium and much lower rate increases to helping the Medicare beneficiary save money yet have robust coverage with little out of pocket costs.

                                        The information below will help you in comparing Medicare Plan N and Plan G.

With the Medicare supplement Plan  G you can spend a year as an inpatient in the hospital and it won’t cost you a dime. Medicare Part A is your inpatient coverage and when you add a Medigap Plan G, Medicare and your Medigap Plan pay 100% of your inpatient stay. It is full and complete inpatient coverage.

For outpatient and physician services, your only expense will be the annual Medicare Part B deductible. This is Medicare’s deductible, not a Medicare supplement plan deductible. Part B is your outpatient services coverage, and with a Medigap Plan G everything is covered at 100% except you will pay the first $240 billed to you for 2024. That’s the 2024 Part B deductible. It can change from year to year.

Medicare supplement Plan G is what we call your “No worries, peace of mind plan.” You have no copays for doctor visits and no coinsurance. The plan covers everything except the Part B deductible. Your annual maximum out-of-pocket is the Part B deductible. Again, for 2024 that is $240.

Keep in mind, the term annual Maximum Out-of-Pocket (MOOP) refers to the maximum amount you are liable for your medical bills in any calendar year.  It does not refer to your monthly premiums.

In 2010 when Plan N was new, Medicare released a clarification on the copays that gave specific billing codes required to charge an office copay . The office visit copay is 20% of the bill up to a maximum of $20. Those billing codes were exclusive to in-office visits to your primary care physician or a specialist and can be no more than $20.

Medicare’s guidance specifically indicated there is to be no office visit copay for telehealth or urgent care visits.

There is one other feature of Plan N that differs from the Plan G. That is that Plan N has no insurance against Medicare Part B Excess charges.

When a doctor decides to accept Medicare insurance, they must choose between one of two contracts with Medicare: A Participating contract or a non-participating contract.

A Medicare Part B excess charge is when a physician charges the patient more than the Medicare approved amount for an outpatient service. Only Medicare providers with a non-participating contract are allowed to charge an excess charge, and they are limited to no more than 15% of the Medicare approved amount.

Medicare Part B excess charges are rare. Only 2% of doctors contracted with Medicare are allowed to charge an excess charge and more than 40% of those are in the mental health industry.   These doctors may charge an excess charge, but do not have to. You can request they charge the standard Medicare rate. Most people go through their entire Medicare experience without ever encountering a doctor that can charge an excess charge. 

The thought of doctors charging Medicare beneficiaries more than the Medicare approved amount is frightening for some. However, as we will detail in this article,  Medicare excess charges are rare, easily avoidable, and typically minimal in size. Keep in mind that  original Medicare insurance does not cover excess charges. Still, with very little effort, you can avoid unwanted charges.

According to Medicare, more than 98% of doctors choose what is called a Participating Provider contract. This is a fancy way of saying that they agree to accept Medicare assignment and only charge the Medicare approved amount. In return, they only bill Medicare. Medicare is their one-stop biller. Medicare then communicates electronically to the Medicare supplement plans and informs them how much to pay, and to whom.

According to my discussions with upper management at the major insurance companies, on average, 85% of medical bills are paid by the Medicare supplement plans within 48-hours and with no human intervention .

According to KFF.org, fewer than 2% of doctors in the U.S. who accept Medicare choose the  N contract.  These are the ones that are contractually allowed to charge an excess charge. They are paid 5% less by Medicare than a providers that accept Medicare assignment. They are allowed to charge up to 15% more than what Medicare paid them. That is the excess charge. Up to 15%, no more than the 95% they are paid.

Very few doctors will choose this contract because Medicare penalizes them. Medicare will not be their one stop biller. They must bill Medicare, but they cannot bill your supplement, they don’t have a contracts with Medicare: A Participating contract or a non-participating contract.

So, the easy way to tell if your doctor charges an excess charge is that they will ask you to pay up-front for their services. You can also find out by looking them up on  Medicare.gov.

A couple quick, but important points on excess charges.

There are no excess charges for Part A inpatient services.

There are no excess charges for emergency services.

And lastly, if you go to a doctor or hospital, either everyone in that doctor’s group or hospital charge an excess charge, or no one does. It’s all or none. There is an exception for teaching hospitals, but the truth is that doctors who charge an excess charge are so rare that you are unlikely to come across one for the entire time you have Medicare. Less than 2% of doctors that accept Medicare, charge an excess charge, and 40% of those are Psychiatrist’s.   source KFF.org

FYI Medicare Advantage Plans do allow excess charges.

Why Become a Participating Medicare Provider:

All physicians, practitioners and suppliers – regardless of their Medicare participation status – must make their calendar year (CY) 2024 Medicare participation decision by December 31, 2023. Those who want to maintain their current PAR status or Non-PAR status do not need to take any action during the upcoming annual participation enrollment period. If you wish to become a PAR provider, you will need to sign a participation agreement, as described below. To sign a participation agreement is to agree to accept assignment for all covered services that you provide to Medicare patients in CY 2024. The overwhelming majority of physicians, practitioners and suppliers choose to participate in Medicare each year. During CY 2023,
98 percent of all physicians and practitioners are billing under Medicare participation agreements.

If you participate in Medicare and bill for services paid under the Medicare physician fee schedule (MPFS), your fee schedule amounts are 5 percent higher than if you do not participate. Your Medicare Administrative Contractor (MAC) publishes an electronic directory of providers that choose to participate.

There are certain situations where you may be able to buy a Medigap policy outside of your Medigap Open Enrollment Period. Situations where an insurance company can’t deny you a Medigap policy are called “guaranteed issue rights” or “Medigap protections.”  What are guaranteed issue rights? 

You have a guaranteed issue right when your other health coverage changes in some way, like if you lose your other coverage. You may also have a “trial right” to try a Medicare Advantage Plan (Part C) and still buy a Medigap policy if you change your mind.

If you have a guaranteed issue right, an insurance company:

• Must sell you a Medigap policy
• Must cover all your pre-existing health conditions
• Can’t charge you more for a Medigap policy because of past or present health problemsm

› An employer transitions retirees from self-funded plans to defined-contribution plans when medical claims become too expensive.

› An MA plan reduces service area because medical claims exceed their payment from CMS to provide coverage.

› An MA customer decides to switch back to Original Medicare and buy a Medicare Supplement plan because cost-sharing from frequent use of health care services is a financial bur den.

Prior to January 1st folks enrolled in the Plan F or Plan C (those plans are not available to new to medicare folk turning 65, and now if you want to get a medicare supplement with no underwriting or health questions and you were eligible for medicare after 1/1/2020 you can only enroll in the Plan G. You can also enroll in the Plan A, Plan B, Plan D, or K  or L but these outdated and very unpopular plans cost more than the Plan G and they have fewer benefits and coverage. That is why nobody enrolls in them.

In these situations, insurers must offer certain Medicare Supplement plans without the ability to screen for high-cost chronic health conditions (medically underwrite). The portion of customers granted these rights is relatively small, but the impact on their health plan is significant.

The increase in medical claims is a problem because insurers need to cover the additional expense by increasing premiums. Medicare Supplement plans are required to maintain a claims-to-premium ratio of at least 65%. For most insurers, the ratio is between 75% and 85%. Therefore, every dollar increase in the average cost of care results in more than a dollar increase in the average premium charged to customers.

The impact of federal GI rights on premiums can be generalized by the 80/20 Rule. Therefore, a small increase in the number of high-cost customers in a plan can cause a large increase in the premium charged to all customers.

As a result of MACRA, MACRA was passed as a law on January 1st of 2020, and before January 1st of 2020, the Plan F was the plan that had to except folks with no underwriting or health questions who used their Guaranteed Right Issue to avoid underwriting, bit now the Plan G is the supplement that’s available to customers with six of seven federal GI rights for the first time. This will increase the portion of high-cost customers and place more and more pressure on insurers to raise premiums. In 2020, the pressure was low. There was only one year of newly eligible customers with federal GI rights, but the pressure will increase each year as more and more people age into Medicare.

This means Plan G premiums will increase faster than those of plans with fewer GI rights, such as Plan N.

Growth in Plan N enrollment was strong during the first several years but slowed with the surge in Plan G popularity. This will increase the portion of high-cost customers and place more and more pressure on insurers to raise premiums. In 2020, the pressure was low. There was only one year of newly eligible customers with federal 48%;”>However, the impact of MACRA, through Plan G federal guaranteed issue (GI ri)ghts and customer plan-selection behavior changes, will shift some of the appeal from Plan G to Plan N.

Customers who preferred comprehensive coverage and no cost-sharing purchased Plan F.

Most customers who preferred a lower premium and some out-of-pocket costs purchased Plan G or Plan N.

Typically, customers who anticipate frequent physician visits tend to gravitate toward the comprehensive coverage Plan G. Customers who are relatively healthy and anticipate infrequent physician visits tend to gravitate toward the lower premium Plan N.

Before January 1st of 2020 customers who anticipated frequent doctor visits tended to gravitate towards the most comprehensive coverage which was Plan F.

But the Plan F was discontinued in 2020 so if you were under 65 on January 1st you CAN NOT ENROLL IN PLAN F.

THE MOST COMPREHENSIVE PLAN AVAILABLE TO YOU IS NOW THE PLAN G.

This decision process changed for customers newly eligible to Medicare in 2020

› Customers who prefer comprehensive coverage purchased Plan G. 

› Most customers who prefer a lower premium and additional cost- . sharing purchased Plan N.  

Looking forward, we can expect that, at some point, higher Plan G premiums will exceed the additional Plan N physician copays for most customers, regardless of health status. The value proposition of Plan N will prove relative to Plan G just as the Plan G’s value proposition exceeded the Plan F before 2020.

So when customers choose between the two most popular plans, G and N, what determines their preference?

It depends on what’s important to the customer based on the best value for their health care needs. They evaluate options by comparing the difference in premium between plans against the difference they expect to pay in cost-share.

There are eight states who have adopted laws that override Medicare plans for the benefit of the consumer. These eight states are Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont.  Residents of these states cannot be charged a Medicare Part B excess charge when visiting a medical provider in their state. In all other states, the consumer is responsible if they wish to avoid Medicare Part B balance billing.

Because of the rules Medicare put in place to dissuade and prevent doctors from becoming a non-participating provider and charging more than the Medicare approved amount, very few providers decide to become non-participating and charge Part B excess charges.   According to KFF.org 98% of health care providers accept assignment and cannot charge Part B excess charges.