Page 2 - Evaluation for 2018

Medigap policies

It might be helpful to review some features that all Medigap policies share (you may already be
aware of these). They can be purchased during the first six months you have Part A and Part B
without your having to answer health-related questions. Once that six-month period
guaranteed-issue period has past, however, if you do not already have a Medigap policy, you
will likely have to answer questions about your health before you can acquire a policy.

The state of Washington has a unique rule concerning Medigap policies – once you have a
Medigap policy (unless it’s Plan A) you can later switch Medigap plans or insurance companies
without having to answer questions about your health. So long as have any Medigap policy
other than Plan A, in the state of Washington you have the freedom to change Medigap plans
or insurance companies to save money. This rule is explained in Appendix A1.

Perhaps Medigap policies’ most desirable feature is the flexibility they offer. You do not need
referrals to see specialists and are covered when you go to any provider who accepts Medicare
(as more than 98% of doctors and public hospitals do).

Medigap policies do not cover routine dental and vision care or hearing aids. Plan F in your
evaluation includes some coverage for medical emergencies while traveling outside the United
States. Benefit designs for all 10 Medigap plans are shown on pages 6-7. Here are summaries of
the two Medigap plans in your evaluation.

1) Medigap Plan F. This is the most comprehensive any Medigap plan, covering all of
Medicare’s gaps. That means you will not have any cost-sharing for Medicare-covered
services and that your only cost will be your premiums. Beginning in 2020, Plan F (and
Plan C) will no longer be sold, although people who already own this plan at that time
may keep it. In the state of Washington, you can likely purchase a Plan F policy for
$2,400 a year or less.

2) Medigap Plan L. This is less comprehensive than Plan F. An appealing feature is its low
$2,620 out-of-pocket limit – it is one of only two Medigap plans that have an OOP limit.
But that limit does not include premiums and it applies only to the benefits that the plan
covers. As an example, the Part B deductible ($183 in 2018) is not covered by Plan L, and
so any money you spend toward the deductible will not apply to the out-of-pocket limit.

Annual premiums for Plan L are about $1,650, although you may be able to purchase a
policy for less. In the state of Washington few insurers sell this plan, but based on the
premiums shown in the appendices, if go to your doctors infrequently and do not have
expensive treatments, you will likely come out between $200 and $400 ahead each year
compared to what you’ll pay in premiums for Plan F. As you can see, Plan L is designed
for people in good health who do not use a lot of medical services.

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