Page 6 - Cover Letter and Medicare Evaluation for Rod Morgan

Rx Drug Plan Coverage

Please check the first page of Appendix C1 to make sure I entered your Rx drugs and dosages
correctly, since these were used by Medicare’s Plan Finder to identify the plans that have the
lowest costs for these drugs. All the plans in your evaluation include Safeway as one of their
preferred pharmacies, and you should get the best pricing there. Your pharmacist will transfer
your current prescriptions to whichever Part D plan you choose.

The lowest cost option for your Rx drugs is the Anthem MediBlue Access Advantage PPO Plan,
with an estimated annual cost of $444. Not far behind is the Aetna Medicare Prime 1
Advantage PPO Plan, which has an estimated annual cost of $564 for your drugs. As noted, your
costs should be slightly less than those shown since you won’t be enrolled for the full year.

If you get a Medigap policy, the stand-alone drug plan with the lowest costs for your Rx drugs is
the Wellcare Value Script Plan with an estimated annual $1,008 cost (premiums + co-
payments). Drugs are usually more expensive in stand-alone plans than in Advantage plans
because Advantage plan sponsors can subsidize their drug coverage with the monies they
receive from Medicare for health coverage. The Wellcare Value Script Plan’s enrollment
number is (888) 293-5151.

Comments

If you get a Medigap policy + stand-alone drug plan, your fixed (or minimum) costs are roughly
$2,300 more than in either of the Advantage plans. The two Medigap policies compared in your
evaluation have very comprehensive benefits, and so almost all of your medical costs will be
covered by your premiums.

With the Advantage plans, on the other hand, you will have numerous co-payments and co-
insurance requirements. Your costs, then, will depend on the number and types of medical
services you need. In a worst (and unlikely) case, you could spend several thousand dollars
more in the Advantage plan than you would with a Medigap policy.

People in good health will typically save money in Advantage plans. As they grow older and
need more (as well as more expensive) medical services, however, Medigap policies may turn
out to be a better deal, both because of the flexibility they offer and because their coverage (at
least for the two plans in your evaluation) is so comprehensive.

Some people wait until they are well into their 70s to get their first Medigap policy – which they
should be able to do if their health is reasonably good. But if they have serious health issues,
they may not be able to get a Medigap policy.

Rod, please let me know if you have any questions. There are a couple of things to keep in mind
as you make the transition to Medicare as your primary coverage. On your initial visits to your
new doctors after February 1, show the office staff your enrollment cards for Medicare A&B

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