Page 3 - Evaluation with Cover Letter for Henry Rose

of-pocket (OOP) limit does not include premiums and it applies only to the services that
the plan covers. As an example, Medicare’s $183 Part B deductible is not covered by
Plan L and so any money you spend toward the deductible will not apply to the OOP
limit.

3) High-Deductible Version of Plan F. Other than its $2,200 annual deductible, this plan’s
benefits are identical to those of the standard Plan F. That means that after you satisfy
the deductible, you will have no cost-sharing sharing for any Medicare-covered services.
Annual premiums in this plan are roughly $1,300 less than in standard Plan F. In a worst
case, if you spent the entire $2,200 deductible, you would “lose” $900 compared to
what you would have paid in standard Plan F.

In the cost comparisons on page 3 of your evaluation, I’ve assumed you would spend
$500 a year on the deductible (including the Part B deductible). It is possible, of course,
for healthy people to go through the year with very low costs while still getting of all
their recommended preventive tests and screening (Medicare covers these at 100%).

This plan was designed for individuals in good health who use relatively few medical
services. As people age, their premiums in this plan will typically increase at a faster rate
than the deductible amount, which is adjusted every couple of years or so. But their
premiums may increase at slightly lower rates than those of standard Plan F, which
during the guaranteed issue period attracts many people who have serious health issues
and whose frequent use of medical services tends to drive premiums up.

People who choose the HDF plan should also understand that the deductible applies
only to their policy’s supplemental coverage. That is different from a high-deductible
plan that is not supplemental, i.e., that is someone’s only policy. Because Medicare pays
the majority of most medical costs, Medigap policies typically pay much smaller
amounts.

As an example, if you see a specialist who charges $200 for your visit, Medicare will
cover 80% of the cost ($160) and the Medigap policy will cover all, some, or none of the
$40 balance, depending on the plan. With the Medigap HDF plan, you would pay the
entire $40 until your plan’s deductible is met (but you would not pay the full $200).

In addition to this Medigap plan’s $2,200 annual deductible, Medicare has its own
annual deductibles. In 2017, Medicare’s Part B deductible in $183 and the Part A
deductible, which you’ll pay only if you are hospitalized, is $1,316. In the HDF plan, you’ll
pay these amounts in full until you reach the annual deductible limit. This plan’s annual
premiums are roughly $550.

4) Plan K. This is the least comprehensive of the four plans. And while in Plan K there is no
plan deductible, it does not cover Medicare’s Part B deductible ($183 this year) and it
covers only 50% of the Medicare’s $1,316 Part A deductible, i.e., if you were

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