Page 2 - Cover Letter and Evaluation for Steve DIckhaus

charge them higher premiums for pre-existing conditions. Some people with serious illnesses
may not be able to buy a Medigap policy after the guaranteed issue period is past.

As you noted in your e-mail, you prefer a Medigap policy because the coverage will be good in
all 50 states. If you acquire a Medigap policy in Minnesota and move to another state, your
coverage remains the same. After you move you can apply to get a different type of Medigap
policy, but in most states, including Arizona and Florida, you will have to answer health-related
questions and disclose pre-existing conditions before you are given a quote. Usually this is not a
problem if you want to switch to a different Medigap plan in another state, but it’s something
to be aware of.

You probably know that Minnesota’s Medigap plans are different than the Medigap plans in
most other states. Your state has two primary types of plans – the Basic Plan and the Extended
Basic Plan – both of which offer solid coverage. You can also get one of four nationally
standardized plans that were introduced in 2010 – Plans K, L, M, and N – but because few
insurers sell these plans in Minnesota there is little competition and premiums are much higher
than in most other states.

Medigap policies do not cover prescription drugs, and so you will also need to enroll in a stand-
alone prescription drug plan. Neither do Medigap policies cover routine dental and vision care.

One other thing to be aware of is that people like you whose initial Medicare eligibility period
begins after December 31, 2019, cannot purchase a Medigap policy that covers the Part B
deductible ($198 in 2020). Those whose initial eligibility dates were prior to 2020 can still get
Medigap policies that cover the Part B deductible.

The reason is that Congress believed that people with Medicare supplemental policies should
not be able to buy coverage that eliminates every gap in Medicare. There’s a further
explanation of this change in Appendix B1. From the standpoint of cost, it should not make
much difference because premiums for policies that do not cover the Part B deductible are
reduced by amounts equal to or greater than the Part B deductible amount.

Before buying a plan, we suggest that you contact a minimum of three insurance companies to
get a quote. Large companies tend to have slightly smaller annual premium increases,
according to a government study a few years ago. Each insurance company’s premiums and
toll-free telephone number are listed in Attachment B2. Also, premiums from CSG Actuarial are
shown in Appendices B3 and B4. It’s possible that some of these premiums are out of date.

Here’s a brief summary of each plan, with more detailed information shown in the evaluation
and the appendices.

Minnesota’s Basic Plan. This plan fills most of Medicare’s large gaps, the exception being the
$1,408 Part A deductible (which can be covered by purchasing a rider at an additional cost).
Otherwise, this plan’s other coverage gaps are small ones. This plan also includes 80% coverage

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