Page 3 - Cover Letter & Evaluation for Mr. Henry Stiepel

Medigap guaranteed issue protection

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 is over, insurers can ask applicants about pre-existing conditions and
can charge higher premiums or deny coverage.

Medigap premiums

To get current quotes, you will need to call the insurance companies that sell Medigap policies.
These companies’ phone numbers are in Appendix B1, which is from the California Department
of Insurance. Each companies’ premiums are also listed in this appendix, but many of them
appear to be out of date.

Appendices B2 through B4 are the premium comparisons for Plans G, N, and L, respectively.
These comparisons are from CSG Actuarial, a firm that provides quotes for insurance agents.
These premiums are current, but in a few instances may not include agents’ commissions (there
is no way for me to know which ones these are). Since your coverage will not start until April,
some companies may increase their premiums before your policy goes into effect.

The premium comparisons from CSG Actuarial also show each company’s premium increases
for the last four years and its financial ratings from AM Best and Standard & Poor’s (S&P). A
government study a few years ago indicated that larger and financially stronger companies tend
to have slightly lower annual increases in the Medigap premiums.

California’s Birthday Rule

The Birthday Rule allows Medigap policyholders to switch their policies to another insurance
company without answering health-related questions – but only during the 60-day period
following their birthdays each year. This law is further explained in Appendix B5.

The Birthday Rule is something to keep in mind if at some future point you have a steep
premium increase. You cannot, however, use the Birthday Rule to upgrade to a more
comprehensive plan (for example, from Plan N to Plan G). Below is the link to the California
DOI’s listing of each company’s premiums, and you might use this in future years to look for
lower premium insurers, although as mentioned, some premiums appear to be out of date:

https://interactive.web.insurance.ca.gov/apex_extprd/f?p=111:31:::NO:::

The three Medigap plans compared in your evaluation

The benefit designs of the eight Medigap plans available to you are on pages 6-7 of the
evaluation. Here are summaries of the three plans compared in your evaluation:

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