Page 3 - Cover letter and evaluation for Lee Palmiter

Finally, if you have one of the comprehensive plans like Plan F or Plan G, you will rarely have
any co-payments, and most of the cost for Medicare-covered services will be in your premiums,
making it easy to predict your costs.

Another strong point is that Medigap policies are standardized and they rarely change their
benefit designs. Because the medical benefits are the same regardless of the insurance
company you buy your policy from, you can focus mainly on premiums and the quality of the
companies. The chief downside of Medigap policies is their cost.

As mentioned, Medigap policies do not cover prescription drugs, and so you will also need to
enroll in a Part D stand-alone drug plan. Neither do Medigap policies cover routine dental and
vision care or hearing aids. So long as your wife continues working, you might consider using
her plan’s dental/vision benefits, which have separate premiums. In the material I sent you it
appears as though you have dental coverage through her plan in 2019.

Finally, three of the Medigap plans in your evaluation include some benefits for medical
emergencies while traveling outside the United States (only Plan N does not).

The benefit designs for all 10 Medigap plans are shown on pages 6-7 of the evaluation. Here are
summaries of the four plans compared in your evaluation.

1) Medigap Plan F. This is the most comprehensive of the 10 Medigap plans, having no
gaps for Medicare-covered services and no deductibles. In this plan, then, your only cost
for Medicare-covered services will be your premiums. One reason this plan is popular is
that people like the convenience of rarely having to make a co-payment for a medical
service or treatment.

Plan F and Plan C will no longer be sold beginning in 2020, although people who already
have either of these plans at that time may keep it. There’s some concern that when
Plan F is no longer be sold, the policyholder base will begin shrinking and large premium
hikes will become more likely. While there’s no way to know for certain, this doesn’t
appear to be a short-term concern because there are millions of people who currently
own Plan F. Longer term, it could be concern, although people could likely downgrade to
Plan G with the same insurance company.

As with all other Medigap plans, there are wide variations in premiums for Plan F (even
though the coverage is identical from one insurer to the next). In your evaluation I’ve
estimated that you can get Plan F for $2,300 a year.

2) Medigap Plan G. This is the next-most comprehensive Medigap plan (in 2020 it will
become the most comprehensive plan). The only difference between this plan and Plan
F is that Plan G does not cover the Part B deductible ($185 in 2019). Thus if your Plan G
premiums area $200 less than your Plan F premiums, you’d come out $15 ahead for the
year even if you pay the deductible. Your premiums are estimated to be $2,100 a year.

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