Medicare Supplement plans have long been the original way for beneficiaries to supplement medical coverage and protect against out-of-pocket expenses. They have seen a resurgence as uncertainty and changes have plagued the Medicare Advantage market. One cornerstone of Medicare Supplement is that its coverages have been standardized since 1992. That means, outside a few states (Massachusetts, Minnesota, and Wisconsin), all plans of the same letter (i.e., G or N) have the exact same benefits and coverage. For example, a Plan G from UnitedHealthcare has the same policy benefits as a Plan G from Blue Cross Blue Shield.
Today, the two most common Medicare Supplement Plans are Plan G and Plan N. For reference in what is discussed below, check out our coverage chart on our Medicare Supplement page. Coverage differences are commonly misunderstood. Let’s get into the differences.
Medicare Supplement Plan G
Medicare Supplement Plan G is currently the most comprehensive Medicare Supplement for beneficiaries eligible for Part A or B after January 1, 2020. As stated above, a Plan G with one company is the same as a Plan G with another company. A supplement pays secondary to original Medicare Parts A and B. A Plan G supplement has only one out-of-pocket expense: the Part B deductible. Medicare sets the Part B deductible amount annually (it is not set at the carrier level). So once a beneficiary has paid the standard Part B deductible (projected to be around $300 in 2027; CMS will release the number sometime in Nov.), the beneficiary will have 100% coverage for Medicare-covered services. So, with Original Medicare Parts A & B and a Plan G, a beneficiary has a maximum annual out-of-pocket expense of around $300; that’s it.
As you can see, a Plan G is very comprehensive coverage with very little out-of-pocket costs. That comprehensive plan comes with a premium. Given everything it covers, it’s an incredible value even with the premium.
Medicare Supplement Plan N
Medicare Supplement Plan N is often misunderstood. It is similar to Plan G, but with a few extra items to note. The big hang-up I’ve seen when talking to clients about Plan N (Medicare Supplement Chart) is the lack of coverage for excess charges. To understand excess charges, we first need to understand what they are.
Medicare excess charges are fees a provider can charge on top of what Medicare would pay them for the services they rendered. These providers are nonparticipating doctors and do not accept Medicare assignment (Medicare payment fees) for services. Nationwide, about 2% of doctors and hospitals fit these criteria. The question I always pose to clients is: if you are on Medicare, why are we seeing doctors and hospitals that don’t participate in Medicare? I know that is overly simplified; some people use private concierge medicine or have a niche specialty care like a psychiatrist, where non-participation comes in at 8%, not the 2% national average. All in all, the point is that non-participation is an ultra-rare occurrence and can happen before you receive care from that facility or provider.
Outside the excess charges we addressed above, Plan N functions much like Plan G, with a few slight differences. Both plans have the Part B deductible that the beneficiary pays out of pocket. Plan N adds two other minor wrinkles in the form of copays. With Plan N, a beneficiary can receive up to a $20 copay for outpatient services (aka Part B services). The key is that it’s up to $20. Usually, things like routine blood work might result in a $5 copay billed to you later. An MRI might be more expensive, like a $17 copay, for example. An outpatient service will never have a copay over $20.
The other area of copays on a Plan N is for ER visits that do not result in an admission. Those visits can have a $50 copay. This applies only to ER visits when you are not admitted, but an increase in observation stays may slightly increase the likelihood of a higher copay.
Plan N is a very attractive option. It has limited out-of-pocket exposure. It is a good value and solid coverage without any major out-of-pocket cost exposure. The premiums are lower than Plan G and offer an attractive option for those who want comprehensive coverage with minimal out-of-pocket exposure. Plan N works very well for those with moderate doctor use who want very comprehensive coverage with little exposure for the big stuff.
Both Plan G and N are great options and the most popular supplement plans on the market right now. They are very similar, but the differences matter. To help you decide which option is best for you, speak with an independent broker like Senior Legacy Partners.