Medigap Plans are supplemental insurance policies designed to cover the gap between what Medicare pays and what health services actually cost. Medigap plans are given letters of the alphabet for ease of reference. The government regulates these plans, and the benefits are standardized across most states. Medigap Plans E, H, I and J are no longer available for sale; however those who are covered by such plans can elect to continue the coverage. The new Plans are M and N. Plan M pays only 50% of the deductible under Part A of Medicare that was $1,100 in 2010. Plan M also pays no deductible for Part B, $155 in 2010, and no Part B excess charges. Plan N is comparable to Plan M, only it covers the Part A deductible fully, participants pay a $20 co-pay for office visits to physicians, and $50 co-pay for visiting the emergency room. Plan N is more common and can cost 33% less than Plan F.
If you are signing up for a Medigap Plan for the first time or are thinking about switching policies there are several points to consider. Plan M and Plan N do not pay Part B excess charges which is the difference between what the service actually costs and what Medicare thinks it should cost; however, Plan F does pay these excess charges. You will have lower premiums with Plan N as compared with Plan F, but you will have the Part B deductible to pay, which is $155. You will also be responsible for co-payments on doctor’s visits and emergency room visits, which are $20 and $50 respectively. If you frequently visit the doctor’s office or have a condition that can require frequent emergency room visits Plan N may not be a true bargain.
There are two new plans, Plan M and Plan N. They have lower premiums than Plan F, but require deductibles to be paid as well as co-payments. People who are considering these new plans should weigh all the options and various scenarios thoroughly.