Page 3 - Cover Letter and Medicare evaluation for Dr. Peter Yesawich

include limited dental/vision benefits). Nor do Medigap policies cover prescription drugs, and if
you get a Medigap policy you will also need to enroll in a stand-alone drug plan. With the
exceptions of Plan K and Plan L, Medigap policies do not have out-of-pocket limits, although
that is rarely an issue because Medicare’s underlying catastrophic protection is excellent.

The two Medigap plans compared in your evaluation have some coverage for foreign travel
medical emergencies. This benefit includes a $250 deductible for each event, after which the
Medigap plan covers 80% of the balance, with a $50,000 lifetime limit.

Guaranteed-issue protections for Medigap policies

During the first six months that people have Part B, insurance companies are required to sell
them Medigap policies without asking health-related questions. After this six-month
guaranteed issue period, insurers can ask applicants about pre-existing conditions and can
charge higher premiums or deny coverage (that’s also true when people later try to upgrade to
a more comprehensive plan, e.g., from Plan N to Plan F).

Medigap premiums

You will need to call the insurance companies that sell Medigap policies to get current quotes.
Their phone numbers are included in the list of Medigap premiums from the Florida Office of
Insurance Regulation in Appendix B1.

Appendices B2 and B3 are premium comparisons from CSG Actuarial, a firm that provides
quotes for insurance agents. These premiums should be current, but in a few cases they may
not include the agents’ commissions (there is no way for me to know which ones these are).
CSG Actuarial’s premiums also show most companies’ financial ratings from AM Best and, for
the larger companies, Standard & Poor’s (S&P).

Medigap premiums in south Florida are among the highest in the nation, mainly because
medical costs there are high. Also, Florida requires Medigap insurers to use an “issue-age”
pricing approach, which results in higher initial premiums and lower annual increases – an
important consideration in states that have large numbers of retirees. Your premiums may also
be adjusted for your age and gender. A few companies use a modified community ratings
approach to set premiums (these are the only exceptions to the issue-age ratings).

While it’s important to get your policy from a company that has low premiums, you might also
take into account a company’s size and its financial strength. A large government study several
years ago found that larger insurers have slightly lower annual premium increases. So, the goal
is to choose a lower-premium insurer that is financially strong.

As mentioned, the benefit designs of the 10 Medigap plans are on pages 6-7 of the evaluation.
Here are summaries of the two plans compared in your evaluation:

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