Medigap Plan G vs. Plan N: How to Read the Letters

This post assumes you have already decided that a Medicare Supplement is the right structure for you. If you are still weighing that against Medicare Advantage, read Medicare Advantage versus Medicare Supplement first — that is a different and larger decision.

What follows is about choosing among Medigap plans, which for most people today means Plan G or Plan N.

The most useful fact about Medigap

Medigap plans are standardized by federal law. A Plan G is a Plan G. Every carrier selling one must provide exactly the same benefits.

Which means when you compare Plan G from one company against Plan G from another, you are not comparing coverage. The coverage is identical. You are comparing three things:

• Price today
• How the carrier has raised rates historically
• How they handle claims and answer the phone

That is genuinely all. Anyone telling you their Plan G covers something another company's Plan G does not is either confused or hoping you are.

Massachusetts, Minnesota and Wisconsin standardize differently — worth knowing if you are moving.

Why Plan F is not on the menu

Plan F used to be the default recommendation, and you will still hear about it.

Medigap policies sold to people new to Medicare on or after January 1, 2020 are not allowed to cover the Part B deductible. Because that was the distinguishing feature of Plans C and F, both closed to newly eligible people on that date.

Two clarifications people get wrong. Plan C closed too, not just F. And if you were eligible for Medicare before January 1, 2020, you can still buy Plan F — it is closed to new eligibles, not withdrawn from the market.

If you turned 65 after that date, Plan G is the closest equivalent: identical to Plan F except you pay the annual Part B deductible yourself.

Plan G

Plan G covers the Part A deductible, the Part A hospital coinsurance and an additional 365 days, the Part B coinsurance in full, skilled nursing facility coinsurance, the first three pints of blood, hospice coinsurance, Part B excess charges, and foreign travel emergency care up to plan limits.

What you pay: the annual Part B deductible, once. After that, Medicare-approved services are generally covered in full.

The practical experience is that you pay a monthly premium and almost nothing else. For people who want a single predictable number, that is the appeal.

Plan N

Plan N covers nearly the same list, with three differences.

Office visit copays. Up to $20 for some office visits.

Emergency room copays. Up to $50 for an emergency room visit that does not result in an inpatient admission. If you are admitted, the copay is waived.

Part B excess charges are not covered. This is the one that requires explanation.

What an excess charge is

Most providers accept Medicare assignment, meaning they accept the Medicare-approved amount as full payment. A minority do not, and those providers are permitted to charge up to 15% above the Medicare-approved amount. That extra 15% is an excess charge.

Plan G covers it. Plan N does not — you pay it yourself.

In practice, the large majority of providers accept assignment, so most Plan N holders never encounter an excess charge. But "most" is doing work in that sentence, and the exposure is uncapped by state law here.

How to actually decide

The comparison is straightforward arithmetic once you have the premiums.

Start with the annual premium difference between G and N for your age and ZIP code. That figure is worth getting quoted rather than estimated, because it varies more by carrier than most people expect. Whatever it comes to, that is what Plan N saves you in a year.

Then estimate your office visits. Multiply by up to $20. If you see doctors four times a year, that is $80 against the savings. If you have a condition that puts you in an office twenty times a year, it is $400, and the math tightens considerably.

Then ask whether your providers accept assignment. Your regular doctors will tell you if you ask.

Plan N tends to win for people who use care lightly, see providers who accept assignment, and want the lower premium. Plan G tends to win for people who see doctors frequently, use specialists who may not accept assignment, or simply want no variable costs at all.

Want the actual Plan G and Plan N premiums available to you? Book a 15-minute call.

Pricing over time matters more than pricing today

This is where people get burned, and it has nothing to do with the letter.

Carriers use different methods to set premiums — community-rated, issue-age-rated, and attained-age-rated. Under an attained-age structure, the premium rises as you get older, so a policy that looked cheap at 65 can be uncomfortable at 78. In all three structures, premiums can also rise for inflation and claims experience.

You may read that Florida requires all Medigap policies to be issue-age rated, so your premium can never rise because you got older. Be careful with that. The Florida statutes and the Office of Insurance Regulation's rules do not actually mandate any single rating method — the only rule addressing rate classification permits age as a factor without specifying which kind. Rating structure varies by carrier and by policy form, and the authority that settles it for any given policy is that carrier's approved rate filing with the Office of Insurance Regulation.

What I will say without qualification: ask which method a policy uses, and ask about the carrier's rate increase history over the last five to ten years. The cheapest policy at 65 is frequently not the cheapest policy over twenty years, and switching later means medical underwriting.

Two things this does not include

Prescription drugs. No Medigap plan sold today includes drug coverage. You need a separate Part D plan, and going without creditable drug coverage accrues a permanent late enrollment penalty.

Dental, vision and hearing. Not covered by Medigap. Those are separate policies if you want them.

What to do next

Timing matters more than the letter you choose. During your six-month Medigap Open Enrollment Period — beginning the first month you are 65 or older and enrolled in Part B — no carrier can decline you or charge you more for your health. It is one-time and does not repeat.

Inside that window, choose freely. Outside it, you may not have the choice.

If you are approaching that window, let's compare the actual premiums available to you. The benefits are identical, so this comes down to numbers, and it takes about fifteen minutes.