The brand new Medicare Supplement Plan N is proving to be very popular with seniors who want lower premiums but comprehensive coverage to fill the gaps in Medicare. I was just talking with a representative of a well-known Medicare Supplement company that has been overwhelmed with 30,000 applications for Plan N coverage.  I can’t provide the name of this company because they think my writing about them constitutes advertising and they track what is written about them on-line and in the press.

The reason this company is overwhelmed with applications is because they are allowing seniors to apply for their new Plan N Medicare Supplement without having to answer any medical questions – no matter how old the person is.  While other Medicare Supplement companies are asking more medical questions of their applicants, this company has decided to make an exception for everyone applying for Plan N.

Plan N is a new Medicare Supplement that went into effect on June 1st.  This plan costs about 25% less than Plan F, which is a Medicare Supplement that fills all the gaps in Medicare.  Plan N costs less because it will require seniors to pay $20 co-pays when they see a doctor in the doctor’s office.  Seniors will also pay $50 if they go to the emergency room. Additionally, the Part B deductible ($155) is not covered by Plan N, and the plan does not cover excess charges (which very few doctors charge anyway).  Every other service (hospital stays, labs, physical therapy, chemotherapy, radiation treatment) is covered completely beyond the co-pays mentioned here.  Medicare pays its part of the bill and Plan N will pay the balance.

I asked this company representative how long they will continue their open application policy for Plan N.  I was told they have no plans to change it in the next few months.  Hopefully the policy will continue through the end of the year when Medicare Advantage enrollees will be able to get out of their plans, go back to Medicare, and get a Medicare Supplement.  Plan N might be the only option for people who might not pass the health questions required by most Medicare Supplement companies. Hopefully they will still have a chance to get Plan N with no questions asked by this company.

NOTE: When you turn 65, or when you first get Part B, you have a six month “guaranteed issue period” during which you can sign up for a Medicare Supplement without answering medical questions. This is very important for people with pre-existing conditions because they cannot  be refused a Medicare Supplement during their guaranteed issue period.

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Beginning in June, new “modernized” Medicare supplement plans will be sold, including two new plans, M and N.  In Arizona, insurance companies don’t seem interested in Plan M, but they are offering Plan N.  Plan N is an interesting development for seniors because it will have a monthly premium that will be 25-30% less than Plans C, F, and G.

Seniors who buy a Plan N Medicare supplement will pay $20 dollars (or 20%, whichever  is less) when they go to the doctor.  They will pay $50  for an emergency room visit. Medicare and their supplement will pay the rest of the doctor bill or emergency room bill.  Except for these co-pays, all other bills are covered by Medicare paying first and the supplement paying the balance of the bills, including hospitalization, physical therapy, lab tests, etc.  The only other out-of-pocket cost for the senior is the Medicare Part B deductible, which is $155 each year.

The modernized Medicare supplements, which begin in June, offer seniors more options for their Medicare coverage. But the real impact may be felt this fall when the Annual Election Period allows seniors to change their Medicare Advantage plans – or dis-enroll from a Medicare Advantage plan and go back to Medicare.  Plan N, with a monthly premium of $80 to $89 per month, might be attractive to seniors who are accustomed to paying $0 – $140 per month for their Advantage plan, but want better coverage through a Medicare supplement.

If/when Medicare Advantage plans raise their premiums and co-pays, seniors will move back to Medicare and Medicare supplements in droves.  Plan N will be an attractive, lower-cost Medicare supplement.

Here is a summary of changes coming to Medicare supplements after June 1, 2010:

1. Plans E, H, I and J will be eliminated.
2. Plan G will be modified. Home Care benefit will be removed and excess charges covered at 100%.
3. Lower cost Plans M and N will be offered. Co-pays for doctor and ER visits will be included in these new plans.
4. Companies offering Plan A must offer Plan C and Plan F.
5. A hospice benefit will be included in all new plans being introduced.

For more information, check out http://arizonamedicarenews.com

FOR MORE INFORMATION ON MEDICARE CHOICES IN ARIZONA, checkout my website.

In the list of provisions included in the health care bill that will be passed this evening (March 21), it looks like the most important element is the Independent Payment Advisory Board, which will have the ability to set policy for Medicare.

I was just reading on the Health Beat Blog that the Independent Payment Advisory Board will be able to propose changes in Medicare payments that “will become law unless Congress enacts its own proposal to achieve the same level of cuts.”  A super-majority of votes would be required in Congress to overturn the board’s decisions.

The Payment Advisory Board will be made up of physicians and health care experts. They will be able to enact changes in Medicare payment policy without dealing with the Congressional politics that have stopped  changes to Medicare in the past.  For example, Medicare will be able to convert successful pilot projects nationwide without waiting for Congressional approval. The Health Beat Blog says that, in the past, Medicare has launched many successful demonstration projects that improved quality and cut costs, but Medicare was not  allowed to implement them without going through Congress.

Making changes in the fee-for-service payment system is supposed to be a key to cutting Medicare costs.  This has been tested in many pilot projects, and the Independent Payment Advisory Board will be able to implement changes without lobbyists and special interest groups pressuring them to maintain the status quo. 

This is where the action will be when it comes to Medicare changes.