Medicare Supplement Plan N Excess Charges
Updated: Jul 25, 2019
While Medicare Supplement Plan F and Plan G might be the most popular Medigap plans, Plan N is at least worth exploring. Unlike Plans F and G, Medigap Plan N has co-pays, but many folks find them manageable: $20 for doctor visits and $50 for emergency room visits. Ultimately, whether paying $20 each time you visit the doctor sounds tolerable or not depends on how often you visit the doctor. Setting aside the Plan N co-pays, the aspect of Medigap Plan N that usually draws the most questions from our clients is related to Plan N not covering Medicare Part B excess charges.
What Are Medicare Excess Charges?
Medicare excess charges occur when a doctor does not accept Medicare's approved rate for their services. The Medicare-approved rate is called "Medicare assignment." In some instances a doctor will charge more for their services than the Medicare assignment. The portion of the doctor's charge that is in excess to the Medicare assignment is defined as the Medicare excess charge.
So this actually sounds a little scary, right? Luckily it's not as scary as it sounds. First, most doctors that accept Medicare patients accept Medicare assignment. In 2016, 96% of doctors who provided Medicare-covered services accepted Medicare assignment. Second, even if a doctor doesn't accept Medicare assignment, their excess charge is capped at 15%. In other words, the doctor can't charge more than 15% beyond the Medicare-approved amount.
For example, if Medicare assignment for a particular procedure is $1000, but your doctor chooses not to accept Medicare assignment, then the most the doctor can charge is $1,150.
Plan N Medicare Excess Charges
Let's look at Medicare excess charges in the context of Medicare Supplement Plan N by breaking down your expected savings and expenses as compared to Plan F and Plan G.
Typically, with Plan N you can expect to save about $50 per month on premium as compared to Plan F and $20 compared to Plan G.* Over the course of a year, that's a premium savings of between $600 and $240 over Plan F and Plan G, respectively. (If you want to look at actual quotes for your zip code, just request a Medicare quote and we'll email you your quotes for free.)
If you end up having to go to the doctor, you'll be responsible for the $183 Medicare Part B deductible with both Plan N and Plan G, knocking down your savings to $417 over Plan F, while remaining $240 over Plan G.
You'll also have a $20 co-pay each time you visit the doctor if you have Medigap Plan N. For our example, let's say you visit the doctor twice a year. That's $40 in co-pays, meaning your savings over Plan F is $376 and your savings over Plan G is $200.
This is where an analysis of Medicare excess charges comes into play. In our example, for Plan N to make sense, you'll need to keep your Medicare excess charges under $200. If your Medicare excess charges are more than $200, then you'd have been better off with Plan G.
How To Protect Yourself from Medicare Excess Charges
For starters, you already have one big Medicare excess charge protection in place: the 15% cap. Your doctor can't charge you more than 15% above the Medicare assignment. So if Medicare deems your procedure to be a $250 service, the most the doctor can charge is $287.50. With Plan N you'd have the $250 portion of the bill covered and be personally responsible for the remaining $37.50 Medicare excess charge.
In addition to the 15% cap, most of our clients find peace of mind knowing less than 5% of doctors don't accept Medicare assignment. In other words, there's a really good chance you'll never end up paying any Medicare excess charge at all with Plan N.
Finally, prior to visiting your
doctor, you can check with them to make sure they accept Medicare assignment. Usually we recommend not only calling the doctor to confirm that they accept Medicare assignment, but also taking advantage of Medicare's physician comparison website. Typing your doctor's name into the search option at that link will let you know whether or not they accept Medicare assignment.
Plan N Excess Charges Conclusion
Ultimately, Medicare excess charges usually don't have too much of an impact on Plan N members. It's a risk, but one that is tempered by the 15% cap and the infrequency of doctors not accepting Medicare assignment. Finally, the people who tend to enroll in Part N are healthier (otherwise Plan G would make more sense with its lack of co-pays), so their risk of having to pay a Medicare excess charge is even lower.
We're happy to provide you with a free quote comparison (and we promise no spammy emails or pushy phone calls) if you'd like. You can request a quote here: Medigap Quote.
*The figures used in these calculations are only estimates. It is important to obtain actual Medigap quotes personalized to your zip code, age, and gender. Further, the number of doctor visits used in the calculations is only an example. For more accurate numbers, make sure to take into account your own health history. As always, we suggest speaking with a licensed agent before making any Medicare supplement insurance decisions.