Page 4 - Cover Letter & Evaluation for Mr. Henry Stiepel

1) Medigap Plan G. This is the most comprehensive Medigap plan available to people who
turn 65 in 2020 or later. It covers all of Medicare’s gaps except for the Part B deductible,
which is $203 in 2021. So, after you’ve paid this annual deductible you won’t have any
co-payments for Medicare-covered medical services during the year. You should be able
to get Plan G for about $1,900 a year (roughly $160 a month) or perhaps less.

2) Medigap Plan N. This plan is somewhat less comprehensive than Plan G but still
provides solid coverage. Its gaps include the $203 Part B deductible, co-pays of up to
$20 for doctor’s office visits, and a $50 co-pay for emergency room visits. If you do not
go to the doctor frequently you would probably save money in this plan compared to
Plan G. Annual premiums for Plan N are in the $1,600 a year range.

3) Medigap Plan L. This is the least comprehensive of the three Medigap plans compared
in your evaluation, and it requires co-insurance payments for most Medicare-covered
services. Its best feature is its $3,110 annual out-of-pocket limit, although that limit does
not include the plan’s premiums or the costs of services that the plan doesn’t cover,
e.g., the Part B deductible. Annual premiums are about the same of those of Plan N.
Only six insurers sell Plan L in California.

Medigap Pricing and Discounts

Insurance companies that sell Medigap policies often offer discounts. As an example, some
companies offer small discounts for automatic debit payments or for paying a year’s premiums
in advance. And some companies offer household discounts when both spouses get a policy.

In California, the UnitedHealthcare endorsed by AARP offer an early enrollment discount of 3%
a year for each year that the policyholder is younger than 77. In your case, this discount is 36%.
One thing to be aware of with this discount is that you will likely have two premium increases a
year – the first a 3% increase as the discount gradually vanishes, the other an increase for
health care inflation. With an UHC/AARP policy, then, your premiums may go up more quickly
until you turn 77. And after that, they may increase more slowly than those of other insurers
since they are based on a modified community rating that favors older retirees.

Rx Drug Plan Coverage

The names, dosages, and monthly quantities of your Rx drugs are listed in Appendix C1. Please
check to make sure that this information is correct. And in Appendix C2, you can see a the
lowest-cost plans for the drugs listed in Appendix C1.

The lowest-cost stand-alone plan for your drugs next year is the Express Scripts Medicare-Saver
plan (its benefit summary is in Appendix C3). The estimated annual costs for your Rx drugs in
2021 is $1,166 if you get monthly refills at a Sav-On pharmacy. Your costs for the last nine
months of the year should be about $1,025.

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