Page 6 - Cover Letter and Evaluation for Steve Decker

if so, their names. Most but not all Part D plans designate preferred pharmacies, and it’s
possible that neither of these plans does.

Summary

In general, Medigap policies have high premiums and low out-of-pocket risks. The opposite is
true for Advantage plans, most of which have low premiums but high risk. As an example, the
UnitedHealthcare Medicare Advantage Plan 3 has no premiums and no deductible for health
coverage, but it has a high $6,700 out-of-pocket limit for medical services.

One way to think of the premium/risk tradeoff is that you pay higher premiums to reduce your
out-of-pocket risk. The same principle applies to property and casualty insurance -- you may
decide to pay a higher premium to get a lower deductible. With Medicare supplemental
coverage, younger and healthier retirees may be willing to accept the higher risk, but those
with health issues may be less inclined to do so.

Because of Connecticut’s guaranteed-issue protections for Medigap policies, you have the
option of starting with an Advantage plan and in later years switching to the more expensive
Medigap policies if you need more medical services or are undergoing expensive tests and
treatments. In most cases you will only be able to change your coverage during Medicare’s
annual open enrollment period (October 15 – December 7), with the change going into effect
on January 1.

During this annual open enrollment period, you can switch from one Advantage plan to
another, from one stand-alone drug plan to another, or you can dis-enroll from an Advantage
plan and get a Medigap policy and a stand-alone drug plan with an effective date of January 1.

In conclusion, Steve, there are a couple of things to keep in mind as you make the transition to
Medicare. On your initial visits to your doctors after July 1, show the office staff your new
enrollment cards. That will help to avoid any billing confusion. Also, you’re entitled to a free
“Welcome to Medicare” physical (see page 11 of the evaluation), but you’ll probably have to
request it.

Sincerely,

David Armes, CFP®

Attachment to this letter: Part B and Part D premiums for high-income individuals

WDA:12115

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