Page 5 - Cover Letter and Evaluation for Forrest Hoover

“household discounts,” the ones that do often have substantially reduced premiums. The
premiums listed in Appendices B2 and B3 have the household discounts applied for those
companies that offer them

In addition, the UnitedHealthcare/AARP Medigap policies have an early enrollment discount
that in your case is 15% below AARP’s standard rate. The discount is calculated by multiplying
3% by the number of years that you are younger than 75. In your case, the discount equals 5
years x 3%, or 15%, and that discount will be reduced by 3% each year until you turn 75.

If you acquire an AARP policy, you may have two increases a year – one a 3% increase
associated with the reduced discount (until you turn 75) and the other an increase for health
care inflation. AARP policies can be good choices if they are attractively priced, but you should
be aware that because of the reduced discount each year until you are 75, your premiums may
rise more quickly than with many other insurers. After you turn 75, the AARP premiums will
likely increase more slowly.

In addition to discounts, some insurers provide extra benefits such as membership in Silver
Sneakers, which give you access to more than 12,000 gyms and health clubs nationally. You
indicated that you are interested in using Silver Sneakers.

Medicare Advantage plans

As you are aware, Advantage plans are managed-care plans – primarily HMO’s and PPO’s. They
are different from Medigap policies because they are not considered supplemental coverage.
When you enroll in an Advantage plan, it replaces Medicare for as long as you remain enrolled
in the plan (Medicare assigns your benefits to the plan).

Advantage plans must follow Medicare’s coverage rules and provide the same overall benefits
as traditional Medicare, but they have some flexibility to impose restrictions and vary co-
payments between in-network and out-of-network providers.

Medicare pays the plans a monthly amount -- $900 a month, say – for each enrollee. These
amounts are adjusted for an enrollee’s age and health status. Because the Advantage plan gets
$900 a month for your care, for example, for as long as you are enrolled, the plan can offer
attractive benefit packages that include zero premiums for health and Rx drug coverage, etc.

Before enrolling in an Advantage plan, you should verify with your doctors’ offices that they are
in the plan’s network -- occasionally the online directories that we use are out of date.
According to the current provider directories, all your doctors are in the networks of both the
plans that are compared in your evaluation (again, though, you should verify this with your
doctors’ offices prior to enrolling).

In your zip code there are 20 Medicare Advantage plans that include prescription drug
coverage. These plans are listed in Appendix D1, where they are sorted by their Rx drug

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