Page 3 - Cover Letter and Evaluation for Frank Levy

Medigap policies do not cover routine dental and vision care or hearing aids. Plan F includes
some benefits for medical emergencies while traveling outside the United States. And as noted
above, if you decide to get a Medigap policy, you will need also to enroll in a Part D stand-alone
drug plan.

The 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 entire cost for these services will be in 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. You can likely purchase a Plan F policy for $2,300 a year or
perhaps slightly less.

2) Medigap Plan N. This is a less comprehensive plan that was introduced in 2010 and has
become a popular alternative for people in good health who are looking for ways to
reduce their Medigap premiums. This plan does not cover the Part B deductible ($183 in
2018) and there are co-payments of up to $20 for each doctor’s office visit (and $50 for
an emergency room visit). You can probably purchase this plan for $1,725 a year or less.
People who do not go to their doctors frequently will likely come out a few hundred
dollars ahead of the amount they will pay in Plan F premiums.

In addition, there are other good Medigap plans. Plan G’s benefits are similar to those of Plan F,
the only difference being that Plan G does not cover the Part B deductible ($183 in 2018). And
Plan L has a low out-of-pocket limit – it is one of only two Medigap plans that has an out-of-
pocket limit.

The pricing of Medigap policies

If you decide to get a Medigap policy, it’s prudent to give some thought as to the company that
you will buy your policy from and to make a few calls to get current quotes. While it’s important
to go with a company that has relatively low premiums, you may also want to factor in a
company’s financial strength and size. As a rule, larger companies have slightly lower annual
premium increases, according to a government study a few years ago.

The premium comparisons in Appendices B1 and B2 are from CSG Actuarial, a firm that
provides quotes to insurance agents. Some premiums in the CSG lists may be lower than you
can get because the commissions may not be included (unfortunately, there’s no way to filter
these out or for me to know which ones they are). Most of these premiums, though, should be
close to current quotes.

3