Page 2 - Evaluation with Cover Letter for Henry Rose

overstate this risk because individuals who are well into their 70s and 80s purchase their first
Medigap policies, but it’s still something to be aware of.

Perhaps the best feature of Medigap policies is the flexibility they offer. There are no networks,
and you do not need referrals to see specialists -- you will be covered when you see any
provider who accepts Medicare. That means you can go to virtually any doctor, hospital or clinic
in the U. S. and be covered. Medigap policies are nationally standardized, so that the coverage
for a given plan like Plan F is identical regardless of the state where it’s issued or the insurance
company you buy it from.

One thing to be aware of in choosing a Medigap plan is that if you see a doctor who does not
accept Medicare assignment, he or she may charge up to 15% more than the Medicare-
approved rate. As shown in Attachment A, Drs. Fuch and Walsh accept assignment, but neither
Dr. Stier nor the Northern Virginia Urology Group is listed on the Medicare web site. That’s not
unusual, and it’s likely that Dr. Stier accepts assignment. If he doesn’t, you could pay Part B
excess charges, as they are called, when you see him.

In most cases these additional charges are small amounts between $10 and $25, but with an
expensive treatment or surgery, they can be substantial. Plans F covers Part B excess charges,
but the other three plans in your evaluation do not. Benefit summaries for all Medigap plans
are on pages 6-7 of the evaluation.

Medigap policies do not cover prescription drugs, so you will also need to enroll in a Part D
stand-alone drug plan. Unless they have creditable prescription drug coverage from an
employer plan, people who do not enroll in Part D coverage may be subject to lifetime
penalties. Neither do Medigap policies cover routine dental and vision care or hearing aids.

Here are summaries of the Medigap plans compared in your evaluation:

1) Medigap Plan F. This is the most comprehensive of all Medigap plans, covering all of
Medicare’s gaps. That means that you will have no cost-sharing (co-payments or
deductible) for Medicare-covered services. In this plan, then, your entire cost for
Medicare-covered services is in the premiums (Medigap premium + Part B premium)
and therefore your healthcare expenses are predictable.

While this plan does not have an out-of-pocket limit, its benefits are so solid that this is
rarely an issue – the only individuals who would be penalized by the absence of an OOP
limit are those with serious illnesses, extended stays in hospitals and skilled nursing
facilities, and the need for benefits that exceed Medicare’s coverage limits. You can
likely buy a Plan F policy with annual premiums in the $1,800 or less range.

2) Medigap Plan L. This plan is less comprehensive but it still provides good coverage. It is
also one of only two Medigap plans (the other being Plan K) that has an out-of-pocket
limit. Its annual premiums are about $625 less than those of Plan F. The low $2,560 out-

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