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Plan F vs. Plan N

Is your Medicare Supplement Plan overcharging you?

Most people are wasting $300-$800 on the wrong Medicare Supplement Plan.  That’s not to say that Medicare supplements themselves are a waste money.  The point is that choosing the wrong plan may be harmful to your pocketbook.

If you ask 100 California Medicare beneficiaries which Medicare supplement is the best, almost all of them will say “Plan F.”  Sadly, you’ll get the same response from almost every insurance agent and certainly will get that answer if you call an insurance company directly.

Most people have the mistaken belief that their plan must cover all possible out of pocket costs that Medicare might have them pay.  This is a mistake because most people look at benefits not value.

While it’s true that Plan F does leave a Medicare supplement policyholder with virtually no out of pocket costs, the premium paid does not justify such “luxury.”  Let’s look at Plan N as an alternative and why 90% of my clients have agreed this is a better choice.

Our example will be a 70 year old non-smoker.  The rating area is the lowest in California so the same premium in a higher populated area (such as Los Angeles) will be much higher.

Let’s use the United Healthcare costs from AARP as our benchmark.  It is close to the lowest priced so it’s a fair plan to use.  Plan F for our 70 year old is $150 per month.  It’s a very good plan and the price is reasonable.

However, let’s look at Plan N which is $600 per year lower in cost.  Here’s what this person will likely see as far as out of pocket costs for Plan N:

1)  $147 for the Medicare Part B deductible

2)  $15-20 (but never more than $20) for an office visit

3)  $50 for an emergency room visit that does not result in being admitted the hospital

The plan does not pay excess charges but that item so rarely happens since 97% of all physicians accept assignment as to be a non-issue.

So let’s look at the reality.  Most people see a physician fewer than 6 times a year but let’s assume our 70 year old goes once a month.  That would result in $147 plus an average of about $17 for each additional visit.  That would amount to $351 and let’s be honest.  Most people do not see a doctor every month.

The real question is what the value of paying an insurance company $600 to avoid a $351 expense.  The answer is obvious.

By the way, in more expensive areas and at older ages, the difference is even greater.  An 80 year old in Los Angeles County would save about $1,300 in premium by choosing Plan N over Plan F.   That’s a lot of office visits.

Keep mind, the ONLY differences are what are listed about.  There would still be no out of pocket for other covered services including lab work, MRI, hospital, etc.

If you haven’t checked with a insurance agent who can explain value to you lately, please contact us.  We’ll be happy to compare your current plan with others.  You only have your money to save.

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