Page 3 - Cover Letter and Medicare Evaluation for Andrea Masters

than $100,000 on their Medigap premiums over a 25-year period, not including Part B
premiums and drug costs.

In New York, insurance companies are required to sell Medigap policies to anyone who has
Medicare (see Appendix B1). The insurance company must charge the same premiums to all its
policyholders, regardless of their ages or pre-existing conditions. But premiums vary widely
from one insurer to the next.

Since insurers cannot decline coverage or adjust premiums for age or health, New York’s
Medigap premiums are among the nation’s highest. This is partly offset by giving people
virtually unlimited latitude – the ability to switch from one Medigap plan to another or from
one insurer to a different insurer. They can switch back and forth between an Advantage plan
and a Medigap policy, although to switch to/from an Advantage plan, they will need to wait
until annual open enrollment (October 15-December 7 each year).

These consumer protections result in high premiums. An Advantage plan enrollee whose
physician recommends a joint replacement can switch to a Medigap policy at the end of the
year. Then after the joint replacement is completed, he or she can switch back to an Advantage
plan the following year. In another example, people in good health during early retirement can
wait to switch to a Medigap policy until they start having health issues and need to see their
physicians more often, shifting added costs to the Medigap insurer.

The two Medigap plans compared in your evaluation are the two most popular plans, and both
provide excellent medical coverage:

1) Medigap Plan G. This is the most comprehensive Medigap plan available to people who
turn 65 in 2020 or later. It covers all Medicare’s gaps except for the annual Part B
deductible, which is $233 this year. After you’ve paid the Part B deductible, then, you
will not have any cost-sharing for Medicare-covered services. Estimated annual
premiums are $2,400, ($200 a month), but you may be able to get a policy for less.

2) Medigap Plan N. While this plan is slightly less comprehensive than Plan G, it still
provides solid coverage. The main differences between this plan and Plan G are that you
will have co-payments of up to $20 for doctors’ office visits and $50 if you go to the
emergency room. You should be able to get Plan N for about $2,100 a year or perhaps
less. Unless you go to your doctors frequently, you will likely come out ahead in this plan
vs. Plan G, although you will have several small co-payments. You could start with Plan
N, though, and later upgrade to Plan G.

Pricing Medigap policies

Premiums for the two Medigap plans compared in your evaluation are in Appendices B3 and
B4. There are two sets of quotes in each of these appendices – the first is from the State of New
York’s Department of Financial Services (DFS), and the other set is from CSG Actuarial, a quoting

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