Page 2 - Cover letter and evaluation for Jerry Sicherman

 You should not need new prescriptions from your doctors, but you should verify
that with Ralphs Pharmacy when you show them your new enrollment card that
you’ll receive within a couple of weeks after you call AARP.

Option One: Continue with Medigap standard Plan F but switch your policy to a company that
has lower premiums

You can probably get a substantially lower premium for your standard Plan F from another
insurer, but you will need to call two or three companies to make sure of that. Unlike
prescription drug plans, Medigap policies can be changed at any time of year, and you’ll
probably get the lowest premium quotes if you wait until after your birthday to call companies
and get current quotes.

The reason to wait until January 13 is a California law that’s usually referred to as the “Birthday
Rule,” as explained in Appendix B4. The Birthday Rule protects Medigap policyholders from
having to remain with an insurance company that has sharply raised its premiums.

This law gives Medigap policyholders a guaranteed right to switch to another insurance
company without answering health questions during the 30-day period following their
birthdays each year. Your premiums can be adjusted for your age and gender, however. And
you cannot use the Birthday Rule to upgrade to a more comprehensive Medigap plan, e.g., from
Plan L to Plan F. You can use the Birthday Rule more than once, if need be.

The premium comparisons in Appendix B1 are from the California Department of Insurance and
include insurance companies’ toll-free telephone numbers. It’s possible that some of these
premiums are a few months out of date, in which case the quotes you receive could be slightly
higher.

Appendix B2 shows premiums from CSG Actuarial, a firm that provides quotes for insurance
agents. Some of the premiums here may be lower than you can get because the commissions
are not included (there’s no way for me to know whether the commissions are included).

The CSG Actuarial premiums may be helpful in a couple of ways. The premiums are sorted from
lowest to highest, which makes it easier to identify the lowest-premium companies. Also, the
CSG Actuarial comparisons give you the insurers’ financial ratings in most cases. The CSG
premiums do not include the companies’ phone numbers, which you’ll have to get from
Appendix B1.

By law, the health coverage and medical benefits of Medigap policies are standardized. That
means that Plan F’s medical coverage is identical regardless of which insurance company you
buy it from. But insurers can provide extra benefits like membership in health clubs, 24-hour
nurse hotlines, and so on.

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