Page 3 - Cover letter and evaluation for Janet Clayton

don’t often go to their doctors will likely save money in this plan compared to choosing
the higher-premium Plan G. Estimated annual premiums are about $1,400 a year, or
approximately $950 for the last eight months of 2020.

3) Medigap Plan L. This is an even less comprehensive Medigap plan. One of its good
features is its low $2,940 out-of-pocket limit – this plan and Plan K below are the only
two Medigap plans that have out-of-pocket limits. But those limits do not include
premiums and apply only to the services the plan covers. As an example, the Part B
deductible is not covered by this plan and so any money you spend on the deductible
will not apply to the out-of-pocket limit. Annual premiums for Plan L are about $1,300 or
perhaps slightly less (approximately $860 for the last eight months of the year).

4) Medigap Plan High Deductible G. This is the least comprehensive of the plans in your
evaluation and it has the lowest premiums, estimated at about $800 a year. This plan’s
annual deductible is $2,340, which includes the Part B deductible. It’s unlikely that most
people reach that limit, though, because Medicare supplement plans are secondary
coverage, paying after Medicare has paid.

As an example, if you go to the doctor and the Medicare-approved cost of the visit is
$100, then Part B will in most cases pay $80 of that amount. With High Deductible Plan
G, you would pay for one-half of the remaining $20 balance until the plan’s deductible is
satisfied. So you’d have to use almost $10,000 in Part B services before you would reach
the deductible. Only two companies currently offer this plan in California, with annual
premiums in the $800 or lower range, or approximately $525 for the last eight months
of this year.

The pricing of Medigap policies

While it’s important to choose a company that has relatively low premiums, you may also want
to factor in a company’s financial strength and size. As a rule, larger companies have slightly
lower annual premium increases, according to a government study a few years ago.

Unlike most other states, California has a law – the Birthday Rule – to protect Medigap
policyholders from having to remain with an insurance company that has rapidly raised its
premiums. This law, explained in Appendix B2, gives people a guaranteed right to switch their
Medigap coverage to another insurance company without answering health questions during
the 30-day period following their birthdays each year.

If in the future you find another insurance company that has substantially lower premiums, you
can switch to that company during the 30-day period following your birthday each year without
disclosing pre-existing conditions. But you cannot use the Birthday Rule to upgrade to a more
comprehensive Medigap plan, e.g., from Plan L to Plan G. You might be able to upgrade on your
own, of course, but you would first have to answer questions about your health and wouldn’t
be protected by the Birthday Rule.

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