Page 4 - Cover Letter and Evaluation for Sue Marx

companies offer these “household discounts,” the ones that do often have substantially
reduced premiums.

In addition, the UnitedHealthcare/AARP Medigap policies have an early enrollment discount
that in your case is probably 36% below AARP’s standard rate. In most states the discount is
calculated by multiplying 3% by the number of years that you are younger than 77 -- your
discount equals 12 years x 3%, or 36%, and that discount will be reduced by 3% each year until
you turn 77.

If you acquire an AARP 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.

After you turn 77, the AARP premiums will likely increase more slowly. If you get a quote from
AARP, you might verify the amount of the early enrollment discount, which may vary depending
on the state.

In addition to discounts, some insurers provide extra benefits like health club memberships.

The two Medicare Advantage plans in your evaluation

Medicare Advantage plans are managed-care plans – HMO’s and PPO’s, for the most part.
There are 33 Advantage plans in your area, and they are listed in Appendix B1. For your
evaluation, I selected an HMO and a PPO. You indicated that you plan to use the highly
regarded UPMC healthcare system and its providers for your medical care. Both plans in your
evaluation, including one that’s sponsored by UPMC, give you access to this system.

In addition, both plans have above-average four-star quality ratings from Medicare and both
include additional benefits for routine dental and vision care. One excellent benefit that they
both have are zero co-payments for doctors’ office visits. And while they are not the lowest-
cost Advantage plans for the Rx drugs that you take, their costs are comparable, Also, these two
plans have relatively low health plan premiums.

Following are brief descriptions of each plan, with more detailed benefit summaries being
available in Appendices B2 and B3.

1) Advantra Gold PPO Advantage Plan: This plan has more than 20,000 providers in
Allegheny County, giving you a wide selection of doctors, clinics, and hospitals to choose
among (a provider is a physician, skilled nursing facility, hospital, etc.). It has a $5,900
out-of-pocket limit for network services, which is average for an Advantage PPO plan.
But the OOP limit jumps to $10,000 if you include out-of-network services, where you
will pay between 20% and 40% of the cost, depending on the service.

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