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Medicare Supplement Plans M And N Have Lower Premiums

Slightly higher out-of-pocket costs result in lower premiums for Plans M and NBar Chart with Declining Red Arrow

Buying a Medicare supplement with a lower premium is often a trade off between adequate coverage and price.

In June of 2010 Medigap policies were re-tooled and two new plans, Medicare supplement Plans M and N, were introduced.

These plans are designed for people who are willing to pay a little more out-of-pocket  in return for a lower monthly premium.

Although not as popular as Medicare supplement Plan F, Plans M and N are gaining a share of the market. Plan N, in particular has become popular for people looking for an alternative to a Medicare Advantage plan.

Following is a side-by-side comparison of Plans M and N and a discussion of who may find these plans appealing.

Medicare Supplement Plans M and N Benefits

The differences between Medicare supplement plans lies in what cost-sharing gaps are paid by the plan and which are not.

The following table highlights the differences between Plans M and N.

 

Medicare Supplement Plans M and N
M
N
Basic Plan (Part A Coinsurance up to an additional 365 days)
x
x
Basic Plan (Part B Coinsurance / Co-payment; 1st 3 Pints Blood; Part A Hospice Care Coinsurance / Co-payment)
75%
x
100% except up to $20 co-pay for office visits and $50 co-pay for ER visits
Skilled Nursing Co-payment ($144.50/day for days 21 – 100 for 2012)
x
x
Part A Deductible ($1,156 for 2012)
50%
x
Part B Deductible ($140 for 2012)
Part B Excess Charges (additional 15% for providers not accepting Medicare assignment)
Foreign Travel Emergency
x
x

 

Medicare supplement Plan M has the potential fro a greater amount out-of-pocket but also comes with a lower premium than Plan N.

The main differences include the amount you must pay for Part B outpatient services. Medicare requires that you pay 20% of the charge for covered services.

Plan M pays 75% of that amount, effectively requiring you to pay 5% of outpatient charges. Plan N, on the other hand, pays the 20% for all outpatient services with the exception of office visits and emergency room visits.

Office visits require a copayment up to $20 and ER visits a copayment up to $50. Both an office visit and ER visit will most likely cost you less with Plan M.

If you are hospitalized you will be required to pay $578 (or 50% of current year’s deductible) towards the Part A deductible with Plan M, while Plan N will require nothing on your part.

Both plans will require you to pay the Part B deductible and Part B excess charges.

10 Reasons to Buy a Medicare Supplement

Should you buy Medicare supplements Plan M or N?

As stated earlier, Plan F is by far the most popular plan but many people cannot afford the premium. Medicare supplement Plan A is the least expensive but most people feel the coverage is inadequate.

Either Plan M or N are good options if you would like to purchase a supplement but are on a budget. If you have disposable income in reserve and you feel because of your good health that a inpatient stay is less likely, you may be able to save some money with Plan M.

Many people who have had a Medicare Advantage plan non-renew for the following year have purchased Plan N. The copayment requirements are a familiar feature and the freedom to choose any provider that accepts Medicare is a welcome bonus.

If you are interested in either plan, here are some things to remember:

  • The best time to buy is during Medigap open enrollment
  • You are not subject to medical underwriting if you are entitled to Guarantee Issue Rights
  • Neither plan includes drug coverage and you should enroll in a Part D plan
  • As standardized plans, coverage will be the same with all companies
  • The Medigap pricing model will effect future rate increases

Shopping for and comparing Medicare supplement policies is a relatively easy endeavor since plans are standardized.

If you are interested in the peace of mind of owning a supplement and want to have lower premiums, you should consider Medicare supplement Plans M and N.

2 comments

  1. what is the 2013 yearly rate for plan N . want to pay all at beginning of 2013. thanks

  2. R. Mosley, That will depend on which company you are going to buy it from. Medicare supplement Plan N has standardized benefits but the rates will vary depending on the company.

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