Page 4 - Cover Letter and Evaluation for Marilyn Shelton

CSG Actuarial comparisons list the insurers’ financial ratings in most cases as well as the
number of years they have been in the market.

Discounts

The insurance companies that sell Medigap policies usually offer discounts of various kinds. As
an example, some companies have discounts for automatic debit payments of monthly
premiums or for paying for a year’s premiums in advance.

The largest discounts are typically available when both spouses buy their policies from the
same company. While not all companies offer “household discounts,” those that do often have
substantially reduced premiums. Because you and your husband both plan to get Medigap
policies, you will qualify for a “household discount.” These discounts can range between 3% and
10%, and they are included in the premiums listed in Appendices B2 through B5.

In addition, the UnitedHealthcare/AARP Medigap policies have an early enrollment discount
that in your case is 21% below AARP’s standard rate. The discount is calculated by multiplying
3% by the number of years that you are younger than 77 -- your discount equals 7 years x 3%,
or 21%, and that discount will be reduced by 3% each year until you turn 77.

If you acquire a UHC/AARP Medigap policy, that means you may have two increases a year –
one a 3% increase associated with the reduced discount (until you turn 77) and the other an
increase for health care inflation. AARP policies can be good choices if they are attractively
priced, but you should be aware that your premiums may rise more quickly than with many
other insurers.

As you can see in the premium comparisons from CSG Actuarial, the UnitedHealthcare/AARP
premiums are substantially lower than those of other insurers, and the reason is the early
enrollment discount. You can, of course, use the Birthday Rule to switch to a different insurer
when premiums are higher than those of other companies.

In addition to discounts, some insurers provide extra benefits such as membership in Silver
Sneakers, which give you access to more than 12,000 gyms and health clubs nationally.

Rx Drug Plan Coverage

People who get Medigap policies are required to have Part D stand-alone plans. For mail-order
refills, the lowest-cost stand-alone plan for Bepreve in 2020 is the Wellcare Wellness Rx Plan,
with an estimated annual cost of $1,034. That includes the plan’s $13.70 monthly premium and
quarterly co-payments.

Another plan sponsored by Wellcare – the Wellcare Value Script Plan – has a $16.80 monthly
premium and is less expensive plan if you get your refills at a CVS pharmacy (which is a

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