Page 2 - Cover Letter and Evaluation for Mr. Michael Johnson

Your evaluation

Because Medicare has not yet announced the Part B premiums and various cost-sharing
amounts for 2020, many of the costs shown in your evaluation are for the 2019 plan year. But
the prescription drug costs shown for 2020 should be the amounts that you will pay.

Medigap policies

You indicated that you plan to enroll in a Medigap policy and stand-alone drug plan for your
supplemental coverage. Thus it might be helpful to review some features that all Medigap
policies share.

As you know, Medigap policies can be purchased during the first six months you have Part A
and Part B without your having to answer health-related questions. But after that six-month
period has past, if you want to acquire a Medigap policy you will likely have to answer
questions about your health before receiving a premium quote. I verified with the Medicare
Rights Center that people can enroll during the sixth month they have Part B even though their
coverage doesn’t begin until the first day of the seventh month

Perhaps the most desirable attribute of Medigap policies is the flexibility they offer. There are
no networks, and you will be covered when you see any provider who accepts Medicare (as
some 99% of doctors and public hospitals do). That means you will have the ability to go to
virtually any doctor, hospital or clinic in the U. S. and be covered. All your doctors accept
Medicare-approved rates, as shown in Appendix A

Medigap policies do not cover routine dental and vision care or hearing aids. Both Medigap
plans in your evaluation include some benefits for medical emergencies while traveling outside
the United States (as shown in the benefit designs on pages 6-7).

Here’s a brief summary of the two Medigap plans that are compared in your evaluation.

Medigap Plan F. This plan covers all of Medicare’s gaps, and so your entire cost for
Medicare-covered medical services is in your Part B and Medigap premiums. Plan F and
Plan C will no longer be sold beginning in 2020 to people whose initial Medicare
eligibility dates are January 1, 2020, or later. Plan F is the most widely held of all
Medigap plans, with about 7 million policyholders. It is the most expensive Medigap
plan, and insurance agents tend to promote it because it generates higher commissions.

Some actuaries have voiced concern that as the number of Plan F policyholders slowly
declines, people could be faced with quickly rising premiums. This is less a concern in
California because of a consumer protection law known as the Birthday Rule,
summarized below. Another concern is that Plan F is overpriced relative to Plan G

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