Medicare Supplement Plans – Medigap Plans M and N

Medicare Supplement plans have been primarily the same since 1992, when they were originally standardized. However, as of June 1, 2010, two new plans, M and N, are being introduced, among other changes to Medicare Supplements. This article is intended to explain how the two newest plans, Medigap Plan M and Medigap Plan N, work and the coverage that they will provide.

Medicare Supplements, Plan M and N, are the newest standardized Medigap plans offered by private insurers in South Carolina and nationwide. These two new plans provide a lower-premium alternative to the existing Medicare Supplements, and many feel that these new plans will gain traction as very popular choices in the Medicare Supplement marketplace, particularly with the upcoming major changes to the Medicare Advantage program.

Medigap Plan M

Plan M, one of the two new standardized plans, uses cost-sharing as a method to keep your monthly premiums lower. What this means is that, in exchange for slightly lower monthly premiums, those on M would split the Medicare Part A deductible ($1068 in 2009) with the insurance company 50/50. The insurance company pays half, and you pay the other half. Plan M does not cover the Medicare Part B deductible at all; however, there are no doctor’s office co-pays after you meet the Part B deductible. Most analysts project this plan’s premiums to be around 15% lower than current F (most common plan) premiums.

Medigap Plan N

Plan N, one of the two new standardized plans, also uses cost-sharing as a method to reduce your monthly premiums. However, rather than uses the deductible-sharing method, like M, it uses co-pays to help reduce the premium costs. The system of co-pays is set at $20 for doctor’s visits and $50 for emergency room visits. It is currently projected that this co-pay system will take effect after the Medicare Part B deductible is met. This plan should provide 30% lower premiums than the Medigap Plan F premiums.

These plans, M and N, may particularly be of interest to those coming off of the Medicare Advantage program, either by necessity (cancellation of their plan) or by choice, since the Medicare Advantage premiums are expected to go up with upcoming changes and the premiums for these two plans will be going down (from the original Medicare Supplement plan premiums). Most expect there to be a small, if any, difference in the M and N premiums when compared to the new Medicare Advantage premiums.

When these plans are released in June of 2010, those on Medicare Advantage programs, as well as those on existing Medicare Supplement plans, should carefully consider the merits of the two new plans as compared to their current coverage.