Page 4 - Cover Letter and Evaluation for Judy Thomas

2) Anthem Medicare Advantage Plan #2. This plan’s annual premiums are $1,000
lower than those of Plan #1, but the tradeoff is that you are accepting more risk. This
plan is ideal for people in good health who do not use a large number of medical
services. The out-of-pocket maximum for medical expenses is $6,000, or three times
as high as that of Plan #1. These limits are in line with those of many Advantage PPO
plans that are available without an employer subsidy.

Rx Drug Plan Coverage

Please check the Rx drug list attached to this letter – these are the drugs, dosages and monthly
quantities that were entered in the Medicare web site to find the lowest-cost Part D stand-
alone plans. As mentioned earlier, if you purchase a Medigap policy you will also need to enroll
in a Part D stand-alone plan. For the Rx drugs that you take, the lowest-cost stand-alone plan is
the SilverScript Choice Prescription Drug plan. Annual costs are $1,339 for mail-order refills and
$1,473 for monthly refills at a CVS pharmacy, which is a preferred pharmacy in this plan.

The drug coverage is the same in both PERA Advantage plans. The costs in these plans are not
directly comparable to those of the SilverScript Choice plans, though. The reason is that the
SilverScript Choice Plan’s estimated annual costs include premiums, but the PERA plans’ annual
costs do not (the Rx drug premium is bundled with the plan’s medical premium).

In the PERA plans, your costs in will be $720 a year if you get mail-order refills. Your three
generic drugs are in Tier One and Xarelto is in Tier Two of the Anthem formulary. You can cut
your annual costs by one-third ($360) by using mail-order instead of monthly refills.

Analysis

Because they are subsidized, the PERA plans have lower fixed prices and from a cost
perspective are preferable to the Medigap policies/Part D stand-alone drug plans. And unlike
the Medigap plans, the PERA plans have out-of-pocket limits for medical services. Because their
coverage is so comprehensive, the absence of an out-of-pocket limit in two Medigap plans in
your evaluation is not a major consideration.

Mrs. Thomas, please let me know if you have any questions.

Sincerely,

David Armes, CFP®

Attachment
WDA:12115

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