How to Choose the Right Medicare Supplemental Plan: Plan G or Plan N?

Medicare supplemental plans are insurance policies that are designed to fill in the gaps left by Medicare Part A (hospital insurance) and Part B (medical insurance). Today, there are numerous supplementary options available, but approximately 95% of people opt for either Plan G or Plan N.

Let’s unravel the key differences between these two plans to ensure you make an informed decision that best suits your healthcare needs.

Understanding Original Medicare

To fully understand how supplemental plans work, let’s take a glimpse at how Original Medicare Part A and Part B function.

• Medicare Part A provides premium free inpatient and hospital coverage.
• Medicare Part B covers outpatient care, including doctor’s services with a premium of $164.90. If you’re on Social Security, this amount is deducted from your check automatically. Otherwise, you’ll be billed quarterly with the option to sign-up for automatically monthly deductions through Medicare Easy Pay.

It’s worth noting high-income individuals could pay more than the standard Part B premium. This additional surcharge is known as the Income related Monthly Adjustment Amount (IRMAA). For individuals on Medicare in 2023, if your modified adjusted gross income is $97,000 or less as a single person, or $194,000 or less for couples filing a joint tax return, your premium will be $164.90. However, if your income exceeds these thresholds, you will be subject to an IRMAA surcharge.

While Original Medicare provides satisfactory coverage, it falls short in covering all expenses. The remaining bills, known as coverage gaps, become your financial obligation.

Gaps in Original Medicare

There are six major gaps in Original Medicare;

1. Medicare Part A Deductible
2. Extended hospital stays (days 61 to 90 and then days 91 to 150)
3. Extended stays in a skilled nursing facility (days 20 – 100 and beyond)
4. Medicare Part B Deductible
5. 20% Coinsurance for Part B services
6. Excess charges of up to 15% above of the Medicare approved amount charged by doctors for Part B services

The first three pertain to Medicare Part A, while the last three are related to Medicare Part B.

Introducing the Plans G & N

Here’s where the G Plan and N Plan come into the picture. Both plans are designed to cover these gaps, though they vary slightly in their offerings.

G Plan

The G Plan provides near-complete coverage, filling five out of the six gaps.

• G Plan covers full costs of Medicare Part A including its deductible, extended hospital stays, and extended skilled nursing facility stays. Therefore, you will not be charged for any of these services.
• As for Medicare Part B, the G Plan covers the 20% coinsurance and all excess charges, but does not cover the Part B deductible. Once a year, you will have the responsibility of paying the first $226, the amount set by Medicare as of 2023.

N Plan

The N Plan on the other hand, covers four out of the six gaps.

• Like the G Plan, it provides complete coverage for Medicare Part A.
• Under Medicare Part B, the N Plan covers the 20% coinsurance but leaves you with the responsibility of the Plan B deductible ($226 as set by Medicare in 2023), excess charges, and potential copayments when you see a doctor ($20) or visit the emergency room ($50).

Key Similarities Between G Plan and N Plan

Despite the distinctions outlined previously, there are several consistent features shared by both Plan G and Plan N:

• No network restrictions: You can receive care from any provider that accepts Medicare.
• No pre-authorizations: Medicare supplemental plans do not require pre-authorization for procedures or services.
• Lifelong coverage: Once approved, the insurance company cannot cancel your policy unless you default on premium payments.

Making Your Decision

When considering whether to go with Plan G or Plan N, it’s important to carefully assess your healthcare needs, budget limitations, and risk tolerance. Keep in mind that this decision could have lifelong implications, as switching plans after your first six months usually requires medical underwriting.

By carefully evaluating these factors, you can make an informed choice that provides the greatest value and peace of mind. Remember, your health coverage should be a source of comfort, not confusion or stress.

And always bear in mind that we are here to guide you towards the best possible health outcomes. You can rely on us throughout your entire Medicare journey.