Page 2 - Cover Letter and Medicare Evaluation for Donald Pender

the physician what it owes (usually 80%). Then the doctor’s office forwards the 20% balance to
the Medigap insurer, which in turn sends a check to the physician for what it owes. If there still
is a remaining balance, the physician’s office sends you a bill for that amount.

This type of coverage has several good points: first, you can go to any medical provider in the
United States who accepts Medicare (as 99% do). You do not have to be concerned about
whether a provider is in a plan’s network – only whether the provider accepts Medicare. And
you do not need to get referrals from your primary care doctor before you can see a specialist,
as often is the case with Advantage HMO plans.

Since Medigap policies cover you when you go to any doctor who accepts Medicare, they are
the best option for people who often travel within the U. S. or who have a vacation home in
another area. Moreover, if you plan to travel to other countries, the two Medigap plans in your
evaluation both include some coverage for medical emergencies while traveling abroad. This
coverage has a $250 deductible, after which the Medigap policy will pay 80% of the cost, with a
$50,000 lifetime limit. The benefit summaries of the two Advantage plans in your evaluation
also indicate that they have some worldwide emergency coverage, but no details are provided.

Another strong point of Medigap policies is that Medicare (and not an insurance company)
makes the decisions about whether a service or treatment will be covered. When Medicare
agrees to cover something, the Medigap insurer cannot decline coverage, up to policy limits.
And because Medicare is more lenient in approving certain treatments and procedures than are
insurance companies, people with serious pre-existing conditions will typically get a Medigap
policy if they can afford it.

The downside of Medigap policies is their high premiums. During a long retirement, someone
who has a Medigap policy may spend $80,000 or more for Medigap premiums. That does not
include Part B premiums or costs for prescription drugs.

Perhaps the most important thing to be aware of is that during the first six months that you
have Part B, you can get a Medigap policy without having to answer health-related questions.
But after that six-month period is past, in California and most other states you will have to
answer questions about your health before you can get a Medigap policy. And individuals with
serious pre-existing conditions may not be able to get a Medigap policy after this six-month
guaranteed-issue period is past.

Medigap policies typically do not cover dental, vision, and hearing care, none of which are
covered by Medicare. In California there may be one or two “innovative” Medigap plans that
include some dental and vision coverage, but you would want to evaluate whether this
coverage is worth the additional cost as well as whether your dentist and optometrist will
accept it. Finally, because Medigap policies do not cover prescription drugs, people who get a
Medigap policy will also need to enroll in a Medicare prescription drug plan (PDP), known as a
stand-alone drug plan.

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