Page 4 - Cover Letter and Medicare Evaluation for Scot Paltrow

may subsidize their drug benefits with a portion of the funds they receive from Medicare for
health coverage – whereas stand-alone plans do not have that option.

The lowest-cost plan for your drugs next year is the SilverScript SmartRx prescription drug plan
(PDP), and its estimated costs for the year are $4,282 for monthly refills at CVS. In this plan
Dexilant and Testosterone are both Tier 4 (non-preferred) drugs that have co-insurance
payments of 49% of cost. When the manufacturers raise the prices of these two drugs in 2022,
your co-insurance payments will increase, although probably not by a great amount.

The SilverScript SmartRx plan has a “prior authorization” requirement for Testosterone. Prior
authorizations are not uniformly enforced by drug plans, but in a typical case your physician
would need to submit a statement justifying your need for a specific drug instead of a similar
drug that the plan recommends.

Drug plans are not required to disclose their rejection rates, but my sense is that most prior
authorizations are resolved in favor of the client. Your current Aetna Advantage plan also has a
prior authorization requirement for Testosterone (which you probably resolved earlier). The
benefit summary for the SilverScript SmartRx plan is in Appendix D1.

Comments

If you switch to a Medigap policy and stand-alone drug plan, your minimum (fixed) costs will be
about $4,100 a year more than if you remain in your Advantage plan (as shown on page 4 of the
evaluation). Minimum costs are the sum of your premiums, deductibles, and Rx drug costs. And
if you get Plan G, your minimum costs for Medicare-covered services will be very close to your
maximum costs.

In the Advantage plan, then, you begin the year approximately $4,100 ahead. But as the year
progresses, the difference will narrow as you make co-payments to the Advantage plan. At the
end of the year, you could wind up having paid more in the Advantage plan. Whether that
happens depends on the number and types of the medical services you use during the yearand
whether they are in-network.

In estimating these tradeoffs, you may want to take into the account the value of the dental
and vision benefits you will lose if you switch to a Medigap policy. On the other hand, with the
Medigap policy you may gain coverage for some services that are probably not covered by your
Advantage plan.

As an example, if your two providers who do not accept Medicare refer you to other providers
that do accept Medicare (labs, imaging centers, other physicians), then your Medigap policy will
probably cover those costs. The Advantage plan, on the other hand, will probably not.

One option is to try the Medigap policy + stand-alone drug plan for a year in order to compare
its costs/service levels to those of an Advantage plan. In a year you might decide to switch back

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