Page 3 - Cover letter and evaluation for Peter Smith

4) The Aetna Medicare Choice Plan (a PPO). As noted earlier, this plan does not seem to
be a good match for you. It does, though, have some strong features including a
network of more than 2,500 providers and an above-average 4-star quality rating from
Medicare. But this plan’s costs for the Rx drugs that you take are high (if you chose this
plan you would want to switch from mail-order refills to monthly refills). Also, this plan
has a high $6,700 out-of-pocket limit for network services (PPO’s usually have much
higher OOP limits than do HMO’s). There are also stiff penalties for going to non-
network doctors, where you will typically pay 40% of the cost. Finally, this plan has a
$750 health plan deductible, which the evaluation assumes you will spend. Dr.
Dunsmoor is listed in this plan’s network.

Rx Drug Plan Coverage

Because your prescription drug expenses are high, they may play a larger-than-usual role in
your choice of coverage. In any of the three HMO plans, you will save a substantial amount
compared to what you’d pay in a Part D stand-alone plan such as the one you have. As a point
of reference, in 2018 the least expensive stand-alone plans for your drugs will cost $3,906 for
refills at a local pharmacy and $4,575 for mail-order refills – both of which are much more
expensive than in any of the three HMO plans in your evaluation.

In 2018 the lowest-cost option for the Rx drugs you take is the Anthem Value Plus Plan, where
your total costs if you get mail-order refills will be $2,840. The other two HMO plans’ costs for
your drugs are an estimated $528 more in 2018 than those of the Anthem Value Plus Plan. That
may not be a decisive cost difference, however, because in either of the HMO plans with higher
Rx drug costs you will have access to more providers and slightly better benefits for routine
dental and vision care and for hearing aids.

Peter, please let me know if you have any questions.

Sincerely,

David Armes, CFP®

Appendices

WDA:12115

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