Page 2 - Cover Letter and Evaluation for Mike Peaseley

will pay higher premiums than they otherwise would but that older retirees may pay lower
ones. If you initially enroll in an Advantage plan and a few years from now decide to switch to a
Medigap policy, you will have to answer health questions and could be declined coverage if you
have a serious chronic illness or pre-existing condition.

Perhaps the most desirable attribute of Medigap policies is the flexibility they provide. You do
not need referrals to see specialists and will be covered when you see any provider who
accepts Medicare (as more than 98% of doctors and public hospitals do). Because Medigap
policies are nationally standardized, your benefits and coverage are the same in every state.

Medigap policies do not include prescription drug benefits, and so if you decide to get a
Medigap policy you will also need to enroll in a Part D stand-alone drug plan, discussed below.
Also, Medigap policies do not cover routine dental and vision care or hearing aids. Both Plan G
and Plan N include some benefits for medical emergencies while traveling outside the United
States. The benefit designs and premium estimates for all 10 Medigap plans are shown on
pages 6-7.

Here are summaries of the two Medigap plans that are compared in your evaluation.

1) Medigap Plan G. This is a comprehensive plan that covers all of Medicare’s gaps except
for the Part B deductible ($183 in 2017). The only two Medigap plans that are more
comprehensive than Plan G are Plans F and C, both of which will no longer be sold
beginning in 2020 (although people who already own either of these plans may continue
to keep them). People often save money in Plan G (vs. Plan F) because their premium
savings are greater than the Part B deductible. Estimated annual premiums are $2,640,
although you can probably get a policy for less.

2) Medigap Plan N. This is slightly less comprehensive than Plan G and it has some small
gaps. In this plan, people in relatively good health who don’t go to their doctors
frequently will likely save $200-$300 a year vs. the higher-premium Plan G. But you will
have co-payments from time to time. Estimated annual premiums are $1,950.

Medicare assignment and Medigap Plans G and N

As shown in Appendix A, Dr. Dawson accepts Medicare assignment. When a doctor accepts
assignment, he or she agrees to accept Medicare-approved rates. There are some doctors who
accept Medicare but do not accept assignment, and they can charge up to 15% more than the
Medicare-approved rates. Plan G covers this 15% surcharge, but Plan N does not.

The pricing of Medigap policies

There’s wide variation in premiums, and we recommend that you call a minimum of three
companies to get current quotes. Premiums for the two Medigap plans in your evaluation are
shown in Appendices B1 through B3. Appendix B1 is the Washington Insurance Commissioner’s

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