Page 4 - Evaluation with Cover Letter for Henry Rose

hospitalized you would pay $658. For other services, you will pay a higher percentage of
the cost than you would in other Medigap plans. This plan has a relatively high annual
$5,120 OOP limit, which does not include premiums and expenses you pay for benefits
that the plan does not cover, e.g., the Part B deductible. I’ve estimated annual
premiums for this plan are about $625.

Medigap premiums from the Virginia State Corporation Commission and CSG Actuarial are
listed in Attachments B1 through B5. The state of Virginia’s premium comparisons are shown
for ages 65, 70, etc. and thus are not very accurate for you. They’re included here mainly
because they list each insurance company’s toll-free number, unlike the premium comparisons
from CSG Actuarial.

Before purchasing a Medigap policy, we suggest that you call at least three insurance
companies. As you can see from the premium comparisons in the attachments, there is a wide
variation in costs for the same plan even though the benefits are identical regardless of which
company you buy it from. A government study a few years ago indicated that larger insurance
companies tend to have slightly smaller annual premium increases. The attachments from CSG
Actuarial also indicate the insurers who provide household discounts (when both spouses buy a
policy) as well as the discount percentages (I think you mentioned that your wife will also be
choosing her coverage).

If you choose a less comprehensive Medigap plan like Plan K, the UnitedHealthcare (or UHC)
policies endorsed by AARP may allow you later to upgrade to a more comprehensive plan
without answering health questions. That would give you some protection from the (slight) risk
that a serious health issue in later retirement might prevent you from upgrading. If that is
something you want to consider, you should verify with UHC that you’ll later be able to switch
to one of the more comprehensive plans -- from Plan K to Plan F, for instance -- without
answering questions about your health or pre-existing conditions.

But my understanding is that this ability to upgrade without going through underwriting in UHC
Medigap policies is a UHC practice, not a contract provision, and therefore could later be
changed. In Virginia, UHC apparently does not sell High-Deductible Plan F in Virginia, and so
that wouldn’t be an option if you purchase HDF.

Rx Drug Plan Coverage

As noted above, you will also need to enroll in a Part D stand-alone plan. According to the
Medicare web site, your lowest-cost option for the last three months of 2017 is the Humana-
Walmart Rx plan. Your estimated costs for this three-month period are $75 ($300 if you’d been
enrolled the full year). Those costs include the plan’s $17 monthly premium and your co-
payments.

Costco Pharmacy is in the Humana-Walmart Rx Plan’s network, but it is not a preferred
pharmacy. If you need short-term prescriptions filled at a local pharmacy, you would likely get

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