Page 2 - Cover Letter & Evaluation for Mr. Henry Stiepel

the Rx drug coverage section below, and let the plan know that you want your
drug coverage to begin on April 1.

Your medical providers are listed in the Medicare directory

All your providers accept Medicare, and with the possible exception of Dr. Salib, they accept
Medicare-approved rates (Appendix A). There are a few doctors who accept Medicare but who
do not accept Medicare-approved rates. Physicians may also accept Medicare-approved rates
for certain procedures but not for others. When a doctor does not accept the approved rates,
he or she can charge up to 15% more than the Medicare-approved rates. These “excess
charges” are typically small amounts, e.g., $10 or $15, although for an expensive medical
procedure they could be substantially more.

Medigap Plan G, one of three plans compared in your evaluation, covers these 15% excess
charges, but the other two plans do not. So, if you want to consider Plan N, for example, you
might contact Dr. Salib’s office to see if he accepts Medicare-approved rates. If he doesn’t and
if you want to have any excess charges covered by your Medigap policy, then you would get
Plan G.

The three Medigap plans in your evaluation

The most comprehensive Medigap plan available to you is Plan G. Your evaluation also
compares two other Medigap plans – Plan N and Plan L. Comparing these three plans will help
you see their coverage differences.

It might help to review some features that all Medigap policies share (you may already be
aware of these). Their strongest point is the flexibility you will have in choosing providers. 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). With a Medigap policy, then, you can go to
virtually any doctor, hospital or clinic in the United States and you’ll be covered.

Another strength of Medigap policies is that Medicare, not the insurance company, makes the
coverage decisions. And if Medicare approves a service or treatment, the Medigap insurer must
also cover it, up to policy limits. Because Medicare is more lenient in approving certain
treatments than are insurance companies, Medigap policyholders may in some cases be
covered for treatments that people in Advantage plans may not be (an Advantage plan could
say that the treatment is not medically necessary). For that reason, people with pre-existing
conditions will typically get Medigap policies.

As a rule, Medigap policies do not cover routine vision/dental care or hearing aids, although
one or two California insurers may offer “innovative benefit” Medigap plans that include
limited dental/vision benefits. Also, Plan G and Plan N have some coverage for foreign travel
medical emergencies -- it includes a $250 deductible for each event, after which the Medigap
plan covers 80% of the balance, with a $50,000 lifetime limit.

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