Joanne (00:00):

Which Medicare supplement plan might be right for you? Should you get a Plan G or get a Plan N?

Cameron (00:04):

Before we start, my name is Cameron Giardini and together with my co-host Joanne Giardini Russell, we operate GIARDINI Medicare, which is an independent insurance agency based out of Southeast Michigan. Although we are based in Michigan, we work virtually over the phone to directly help consumers in about 13 different states to find the right Medicare coverage for them. So if we do not work in your state, we will connect you with another trusted independent agent that can help you find the right coverage that you want. And of course, even if you choose not to work with us, we know the information in today's podcast will help you have a successful and stress-free transition to Medicare. So now Joanne can give us an overview of today's episode.

Joanne (00:42):

Sounds good. Here's what we're going to be talking about today. So, number one, we'll talk and discuss what are Medigap plans exactly. We'll talk about the different types of standardized Medigap plans. We're going to talk about plan N and plan G. We'll talk about the differences in coverages between those two plans. We're going to discuss Medicare Part B, and excess charges, which are important to understand. And then we're going to talk about at the end, the Plan N vs. Plan G enrollment trends and what you should be considering long-term when you're making your selection and purchasing your coverage.

Cameron (01:10):

Yeah, exactly. And as you said, we're going to start with what are Medigap plans. And you'll often hear us refer to “Medigap” when we're talking about Medicare supplements. So if you hear either of those phrases, we are talking about the exact same thing. And according to medicare.gov, Medicare supplement insurance helps fill the gaps left by Original Medicare. These policies are sold by private insurance companies. Original Medicare pays for much, but not all of the cost of covered healthcare services and supplies. So, a Medicare supplement policy can help pay some of those remaining costs and they help with the deductibles, coinsurance, and copays that are left behind by original Medicare. Now with Medigap policies always keep in mind that original Medicare Part A and Part B remain your primary coverage and your Medigap policy would be secondary to original Medicare. So, if you ever need any more details about that, feel free to go back to our episode, which does a deeper dive into Medigap policies.

Cameron (02:06):

But for today's episode, it's good to remember too that these policies are standardized by the plan letter. So what do we mean? While there are 10 total Medigap plan letters that are currently available and these range from A to N. So, you can look on page 76 of the Medicare and You book for reference if you want to follow along with this. And if you don't have the paper version, we will also link to the online PDF version in the show notes for this episode. There can be some extra benefits or variations of coverage between different companies, even if they do have the same plan letter. But everything you see on that chart is the basic standardized benefits that are provided by Medigap plans based on their planned letter. Of course, that will come in handy when you're comparing G to N like we're going to talk about. But before G and N, what about Plan F?

Joanne (02:53):

We are not going to be talking about it today. The reason we're not going to be talking about it is that this whole episode is about G and N and you must understand that number one, anyone that is first eligible for Medicare after January 1st, 2020, cannot enroll in a plan F any longer. That’s likely many of you listening to this podcast, which is a good reason not to be talking about it here. You may have heard of Plan F in the past being referred to as the Cadillac plan since it covered the cost of all Medicare-approved services. Meaning after Medicare approved something Plan F took over and paid 100% of everything. However, just because it had the most coverage and still does have the most coverage, that doesn't make it the best plan. Consider this, even if Plan F is available to you due to your age, it is rarely as good of a value as Plan N or Plan G will be.

Joanne (03:38):

When you compare the premiums that you're going to pay versus the coverage you're going to get, you want to make sure in addition to looking at Plan F, you're going to look at plan N and plan G if you're old enough to consider Plan F. Even more importantly, we believe long-term that Plan F has a lot going against it simply due to the average age of the enrollees that are in Plan F. With newly eligible people, 65-year old’s coming in, they don't have access to Plan F. The average age of those enrolled in a plan F is going to continue to increase and so will the premiums as time goes on. So if you have any questions about Plan F, feel free to reach out. But for the rest of this episode, we're going to focus solely on plan N and plan G.

Cameron (04:14):

Yeah, perfect overview. So, forget about F and we're going to talk about the plans that I hate to say are the ones that matter, but are the ones that matter. Let's compare the actual coverage of Plan G and Plan N. Again, feel free to look at that chart in the Medicare and You book. First off, both plans have the exact same deductible since neither plan covers the Part B deductible. This is set by Medicare; it's not set by insurance companies. Basically, every year Medicare says here's the part B deductible, and then Plan N and Plan G both say, well we're not going to cover that deductible. So you are responsible for it as a consumer. And for this year it is $226 for the year. In 2023 it went down a few dollars compared to 2022. So, it's usually in the low 200’s and usually increases slightly.

Cameron (04:59):

But again, both Plan G and Plan N do not cover that deductible. After you've paid your $226 plan G is very straightforward. It covers the remaining costs of all Medicare-approved procedures. So anything else you have basically acts like that Plan F that Joanne was talking about. And it will cover 100% of the remaining costs left behind by Original Medicare. Plan N on the other hand also has copays and some other things we'll talk about. So as you see, it might be an asterisk on the chart, but if you go down below it, it will tell you that Plan N has up to a $20 copay for office visits. This does include specialists and it also has a $50 copay or up to $50 copay if you go to the emergency room and you're not admitted as an inpatient.

Cameron (05:41):

Now of course you're probably looking at that and you'll notice that the $20 copay tends to be more of a concern just based on how often that may come up for you as a consumer. Now remember the plan N $20 copay, again, it's up to $20. So it could be less than $20, it often is less than 20, but worst case, just expect $20 when we're using these examples. Also, you're not responsible for these copays until you have met that $226 Part B deductible we just talked about. Now, some agents out there, they'll use scare tactics, and they'll say, well you can't get Plan N because you know if you have a copay for every physical therapy visit you have every other type of therapy, whatever it might be. They think you're going to have a copay anytime you step foot in a building. But it doesn't work that way.

Cameron (06:22):

There are certain billing codes that will trigger copays on Plan N, and physical therapists should not be using those copays most of the time. So we'll link to all of those. They're called CPT codes and are in the show notes for this episode. But just keep in mind that not everything is going to be subject to a $20 plan N copay. It's really going to be those primary care and specialist visits when you're getting medical treatments. And then last but not least, plan G covers part B excess charges in full if you are charged them while Plan N does not cover Part B excess charges. We're going to talk about this in much more detail very soon since this is by far I think the number one reason that consumers don't choose Plan N, even though it is often misunderstood. So, Joanne can start and talk about excess charges.

Joanne (07:06):

For sure, and Cameron knows because just a side note, he's married to a physical therapist so believe him, it really holds true with physical therapy. Okay, let's dive into Medicare excess charges. What it really means, how it works, and things like that. So, whether a provider could charge excess charges, just depends on whether they are one of two things. They're going to be either a participating or a non-participating provider. So what does that really mean? The non-participating provider, these folks that are contracted with Medicare, but don't accept Medicare's payment as full payment for their services. And they can do that and instead, they can directly bill the consumer up to 15% of a Medicare-approved amount. This 15% is actually called the limiting charge. So again, they don't accept what Medicare pays them as full payment.

Joanne (07:52):

So, they can bill the consumer up to 15%. If you go to a non-participating provider such as this, you will likely have to pay for the services upfront and you'll end up getting reimbursed by Medicare and your Medigap plan afterward. On the flip side, we have what we call participating providers. These doctor's facilities, et cetera, agree to accept Medicare assignments. Essentially that just means that they're agreeing to accept Medicare's fee schedule for all the services they perform. So they're just taking what they get from Medicare and they move on. There's no 15%. A couple of things that are super, super key to remember, according to CMS in 2022, 98% of physicians and practitioners billing Medicare are participating providers. And that means, again, remember that they accept what Medicare pays as full payment. They do not charge an excess charge. So, it's much less common than people think.

Joanne (08:41):

So again, 98% are not even charging excess fees because they can't. Different specialists may be more likely to charge those excess charges and we find that psychiatrists and podiatrists are very good examples of that. Also, this is a really key stat that I found super interesting. According to Kaiser Family Foundation in 2018, 99.6% of claims, again 99.6%, a high number of claims from the non-participating providers (Again, those are the ones that can charge excess fees) were paid what Medicare pays them as full payment because they can choose to accept assignment on a case-by-case basis. So again, you've got the 2% of practitioners that are not participating, but you can see many, many of them are actually accepting what Medicare pays. So, they're not even charging the excess charges. And one other thing to note, you can find out upfront if your doctors are participating or non-participating, it's not that hard to do this at all. So before you even go to the doctor or enroll in any Medigap plan that we're talking about here, you can do that. You can go to Medicare.gov and you can use the provider search tool which is on the homepage, and you can look up the doctor and it'll tell you right there very clearly whether this doctor is participating or a non-participating provider.

Cameron (09:54):

Yeah, it might not say exactly “participating” or “non-participating”, but it would say something like does accept Medicare's assignment or they accept Medicare's assignment, which again, that means they are participating, and you do not have the danger of excess charges with those providers. 

Joanne (10:09):

And it does say that on there. It says that you won’t incur extra costs. 

Cameron (10:13):

Yeah, and I'll continue a little bit here with excess charges since you're probably thinking, “well why aren't more providers non-participating? I mean it lets them collect 15% more than normal Medicare payments.” Well, it doesn't. That's the short answer. So here's a really quick billing example. I know I go into numbers too much sometimes, but hopefully, this will be helpful. So, the reason that it's not as lucrative for non-participating providers is they take a lower cut from Medicare if they are participating. Let's say a participating provider, they do a service and Medicare assignment for that service, and their full fee schedule is one hundred dollars. So, the participating provider does the service, they get a hundred dollars, that's it. Now a non-participating provider, they have to take 95% of what Medicare would normally give a participating provider. So, for a $100 charge, that's $95.

Cameron (11:04):

Then the 15% excess charge is 15% of that $95. So, in this case, that's about a $14.25 charge. Doesn't really matter if you know that exact number, but when you add it all together, basically it's $95 + 14.25, which gives you a grand total for the non-participating provider getting $109.25 for that exact same procedure that the participating provider got one hundred dollars for. So it's about a 9.25% increase in payments to that provider. So, it's not 15% on top of everything for them it's 9.25%. According to the American Psychiatric Association, non-participating providers, also face other hurdles like not being included in Medicare directories. They also face slower claims processing and a worse experience for patients because as Joanne had mentioned, you are likely going to have to pay upfront for these services if you go to a non-participating provider.

Cameron (12:00):

Now, something to keep in mind before we get off excess charges here, there are states that implemented the Medicare Overcharge Measure. These are called “MOM” states if you want to think of it that way. But a handful of states have made it illegal for providers to charge excess charges. So, if you're in any of these states, you should always consider Plan N, at least look at the cost and compare N, and G even more than anybody else in another state. These states are Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont. And for anybody out there listening to that wants to get technical and say, oh, New York has excess charges, yes they do allow a 5% excess charge. So their limiting fee is all the way down to 5%. So there's no financial incentive for providers in New York to charge excess charges because they're already taking a 5% pay cut.

Cameron (12:48):

So yes, they can technically do it, but you're not gonna see it. And then just from our personal experience, I know we've kind of made it sound like excess charges don't really happen and it's because they really don't often. So during our several years of selling Medicare supplements, we've helped thousands of people enroll in Medigap plans. Out of all our clients, we have only had one that has received excess charges. So just like Joanne had mentioned, this was actually a visit to a psychiatrist and this has resulted in an excess charge of about $22 per visit. And this is something that thankfully they have a plan G to cover. But again, if you know this going into it, of course, that shifts what plan you might want to look at. But again, that is the only person out of thousands. And I guarantee if you ask agents if you want to check us across the country, very few of them have had access charges. Now maybe some in the past Mayo Clinic was a non-participating provider, but beyond that it's, it's just not common.

Joanne (13:37):

And just an aside, Cameron, we had a popular plan in Michigan that didn't cover excess charges either. And just for years and years that plan existed, we have never heard about excess charges, or once it was like $8 somebody paid, and they don't even know why they paid it.

Cameron (13:49):

Yeah, it was a plan C. All we ever heard was “my plan covers everything”. So right, if you look at the chart, technically it doesn't, there are excess charges, but none of the consumers on the ground experienced those. Joanne, you can also talk about what to consider when choosing a Medigap plan letter. Because of course, the pricing is going to play a big role in Plan N versus plan G

Joanne (14:08):

And it does. One place to look at, which is obvious is your premium, right? What is your premium going to be with plan G versus plan N? The calculation is always going to depend on your state and even down to the zip code. Then again, in these cases, we're talking about new age 65 people who are basically new to Medicare. So, we are using the preferred rates in these cases too, so keep that in mind. I'm going to go through a couple of states, we'll give you three states just as examples. We're in Michigan, so I'm going to tell you about a 65-year-old male turning 65 preferred rates for plan G. It’s going to cost that person $118/month if that gentleman would like a plan N instead is going to be around $90/month. And that's per month. 

Joanne (14:49):

Okay, that same 65-year-old male is going to pay $106/month in Texas and is going to pay $83/month for a Plan N. Now compare that to Florida. Florida is $188/month for that plan G or $140/month for Plan N. So obviously big swings, and different states, but what you want to do after looking at a premium is think about realistically, how about those plan N copays? How many times do you think it's going to impact you? Do you think it's going to impact you at all? How often are you really going to go to the doctor or the ER? Add those copays to the premium differences between Plan N and Plan G. Now, a couple of things to remember here that are significant. So, when you start your plan G or your plan N, you always want to keep in mind that you may not be able to change from one Medigap plan to the other in the future.

Joanne (15:38):

So don't forget, and we have other episodes about this, but there is the key feature, the Open Enrollment Period for Medicare Supplements. If you're over 65 and starting your part B for the very first time, you must remember that you have a six-month window to go pick any of these supplement plans that you are eligible for without any medical questions being asked of you. So, if you pick one of these plans today and in three years you want to change, you may or may not be able to do that. It all depends on your health. So that is a very important consideration to make.

Cameron (16:16):

Yeah, it can also depend on the state. So of course, there are always exceptions to that, but for the most part, choose a Medigap plan that you're comfortable with long term and think about the future because it's not something you can just change during that fall annual election period. Even changing from one G to another plan G in most states is still going to require those health questions and underwriting. And another thing to remember, and this is important as well, is you really must think long-term because when it comes to Medigap premiums, they increase over time. Now there are some policies that increase in different ways, but everywhere across the board you're going to see increases in Medigap premiums in one way or another. So when you compare plan G and Plan N and you're estimating how many times you go to the doctor to think if the copays are worth it, you can't just think of the copays right now.

Cameron (17:00):

You have to also think about how they might separate from each other over time. You know if there's a $20 difference per month in Plan G versus Plan N. Don't just think, do I go to the doctor once per month? Because although that might be true, what about the difference between plan G and Plan N as they continue to grow over time? I'll talk about that right now because there are pretty much three reasons why Plan N should have a lower rate increase trend than Plan G. Out-of-pocket costs with Plan N on average, attract healthier consumers. If you look at a Plan N, if you are comfortable with excess charges, if you're comfortable with copays, odds are you're probably slightly healthier than somebody that might gravitate towards a plan G. So, what happens is this means that most people on the Plan N if you average everybody together, they may have fewer claims or medical claims which can drive down those rates over time.

Cameron (17:48):

Because a lot of the time these companies, they're doing rate increases because they get a lot of claims from people on the plan that we've talked about in different episodes. Also, plan G is a guaranteed issue plan for those eligible for Medicare after January 1st, 2020. Plan N is not a mandated guaranteed issue plan. So, this means if you need to (and qualify for) use guaranteed issue if your health does not allow you to go through underwriting, you can use guaranteed issue for Plan G, but very unlikely for Plan N. And then lastly, plan N almost always has a lower premium than Plan G at the beginning. Even if both plans have the same percentage increase, plan G would go through a larger dollar amount increase when you compare the actual numbers.

Cameron (18:36):

So what we've actually seen, we've tracked this, we've tracked rate increases of dozens of Medicare supplement companies and plans across the country over the past few years. We have found that on average, and this is our own math, using again dozens of companies and hundreds of points of data, but we have found that Plan G increased by 5.9% per year and Plan N increased by 3.5% per year. So we'll do another episode later about more of that data, but you can just get a feeling right there. Plan N was almost close to half of the Plan G increases, but now I'm going to have Joanne tell you why that probably doesn't matter.

Joanne (19:09):

<laugh>. So yeah, we'll just kind of wrap up with the trends, what we actually see with Plan N versus plan G. So again, Cameron just went through a great little recap of Plan N vs. G rate increases.

Cameron (19:24):

And those are the claims increases. Age is another thing.

Joanne (19:28):

Yeah, we're just talking raw claims data. So based on everything that we mentioned about Plan N and the highlights, you're probably thinking it's the most popular option for consumers. It sounds like it should be maybe on paper, but Plan G ends up being more popular by a pretty wide margin. So, there's this great Telos actuarial study out there and it shows from 2019 to 2021 when they looked at total plan G versus plan N enrollments. Plan G made up about 85% of those enrollments. Only 15% was for Plan N. So, we do, we actually see this occur in our own practice and we typically speculate all the time that it comes really down to two things. Number one, is lack of exposure to plan N. A lot of agents and companies simply don't talk about Plan N, a multitude of reasons. We're not gonna even get into that today. But it's

Cameron (20:14):

Harder to sell <laugh>,

Joanne (20:15):

It's harder to sell. Yeah, if it's not talked about then you don't know about it, right? So lack of exposure is key. And at the end of the day, we all feel this as a group, what we see when we're talking to people on the phone every day, that many consumers really prefer paying a higher monthly premium for more coverage technically and the predictability of having it included so that currently is plan G, right or wrong, it really comes down to your personal preference.

Cameron (20:38):

Yeah, like Joanne said, we just end up doing more Plan G at our agency than Plan N. We talk about both options, and it just comes down to you, the consumer choosing Plan N or Plan G. They're both excellent options when it does come to choosing a Medigap plan. Just like all things when it comes to Medicare, you should always consider both options and decide what makes sense for you, your specific health needs, and just what you want in coverage. So just like with Medicare Advantage versus Medigap, just be aware of anyone that says you should only consider one option over the other. And this applies to just choosing Plan G and not even considering Plan N or just considering Plan N and not considering Plan G. But as always, please leave us a review on your podcast app and subscribe so you can listen to future episodes. You can also find more Medicare content from us by going to YouTube and searching Giardini Medicare. If you have any questions, you can also email us at info@gmedicareteam.com