Page 2 - Cover Letter and Appendices for Jerry Ellsworth

lowest premiums are listed first). The CSG Actuarial premiums also show average annual
increases for the last four years.

Occasionally the premiums from CSG Actuarial do not include commissions and are therefore
lower than you will be able to get. The premiums in the California DOI list are in some cases
slightly higher (and more accurate) than those shown in the California DOI list. That may be
because they are more recent or because they include commissions.

Since you are more than 30 days past your birthday, you will be asked questions about your
health and any pre-existing conditions if you call to get a Medigap quote. Each insurance
company has its own underwriting standards, but typically the process is simple – you will be
asked a few yes-or-no questions. If your health is generally good, you should be able to get a
quoted premium that’s in line with those shown in Appendix B2.

As mentioned in your wife’s review, the premiums shown in Appendix B2 and Appendix B3 do
not include the household discounts that many companies offer when both spouses get their
Medigap policies from the same company. These discounts can range between 3% and 10%.
The CSG Actuarial premium comparisons in Appendix C3 indicate the companies that have
household discounts as well as the size of the discounts – but the premiums shown do not
include those discounts.

I think it’s likely that you and your wife can reduce your combined Medigap premiums by $400
a year or perhaps more. But it may require two or three phone calls from each of you. And if
you decide to switch your policy to a different insurer, it’s safest to have some written form of
verification that you will be issued a policy before you drop your Blue Cross policy.

Finally, you can switch Medigap insurance companies at any time of year. But only during the
30-day period following your birthday each year do you have a guaranteed right to do so
without answering health related questions.

Jerry, please let me know if you have questions.

Sincerely,

David Armes, CFP®

Attachments: Cost comparison of your current prescription drug plan and lowest-cost plan
Changing your Medicare prescription drug plan
Switching your Medigap policy to a different insurance company

Appendices

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