Page 4 - 2020 Cover Letter and Evaluation for Donna Yacoe

Discounts

Insurance companies that sell Medigap policies may offer discounts of various kinds. As one
example, some companies have small discounts for automatic debit payments of monthly
premiums or for paying for a year’s premiums in advance. The largest discounts are typically
available when both spouses buy their policies from the same company. While not all
companies offer these “household discounts,” the ones that do often have substantially
reduced premiums. Moreover, some insurers provide extra benefits like health club
memberships.

In addition, the UnitedHealthcare/AARP Medigap policies have an early enrollment discount
that in your case is probably 33% below AARP’s standard rate. In most states the discount is
calculated by multiplying 3% by the number of years that you are younger than 77 -- your
discount equals 11 years x 3%, or 33%, and that discount will be reduced by 3% each year until
you turn 77.

If you acquire an AARP policy, that means you may have two increases a year – one a 3%
increase associated with the reduced discount (until you turn 77) and the other an increase for
health care inflation. AARP policies can be good choices if they are attractively priced, but you
should be aware that your premiums may rise more quickly than with many other insurers.

Then after you turn 77, the AARP premiums will likely increase more slowly. If you get a quote
from AARP, you might verify the amount of the early enrollment discount, which can vary
depending on the state.

The two Medicare Advantage plans in your evaluation

Medicare Advantage plans are managed-care plans – HMO’s and PPO’s, for the most part.
There are several excellent Advantage plans in Harris County, and for your evaluation, I selected
two HMO plans. Both plans had above-average 4-star quality ratings from Medicare for 2019
(the 2020 ratings aren’t available yet). And both plans have good catastrophic coverage.

Both plans have zero premiums and zero deductibles for their medical/health benefits, and
both have zero Rx drug premiums. Also, your physicians are listed in both plans’ networks, but
you should verify that with their offices prior to enrolling. In some cases, the network
directories that we rely on are out of date, and it is important that you verify that your doctors
still accept the specific plan that you want to enroll in..

Finally, as with all HMO plans, your coverage is good only when you remain in network.
Exceptions are emergencies, when you can go to any hospital or doctor and be covered.

Following are brief descriptions of each plan, with more detailed benefit summaries in the
appendices.

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