Page 6 - Cover Letter and Evaluation for Stephen Spero

On your questionnaire you indicated that you get your prescriptions filled at Rite Aid, which is
not a preferred pharmacy the lowest-cost plans. Despite this, in some cases you will pay less at
Rite Aid than at a Walmart Pharmacy, as you can see on page 4.

Your Rx drug costs are substantially lower in the Anthem MediBlue Plus HMO Plan than in the
other options. If you get a Medigap policy, the lowest-cost stand-alone plan is the the Cigna-
HealthSpring Rx Secure Prescription Drug Plan, which you can enroll in at (800) 735-1459. In
this plan, it is much less expensive to get your prescriptions filled by mail order than at either
Rite Aid or Walmart. This plan’s benefit summary is in Appendix D2.

Summary

As you can see from the costs shown on pages 2-4 of your evaluation, your fixed (or minimum)
costs (premiums + deductibles) are much higher with Medigap policies + stand-alone drug plans
than they are with the Advantage plans.

But in a worst-case, your costs could be higher with the Advantage plans – one has a $3,400
out-of-pocket limit for medical services and the other a steep $6,700 OOP limit. These limits do
not include your prescription drug costs.

One risk you take when you enroll in an Advantage plan is that if you later want to switch to a
Medigap policy, you will have to disclose any pre-existing conditions and could be assessed
higher premiums or even denied coverage.

In most cases, you will be able to change your coverage only during Medicare’s annual open
enrollment period each year (October 15 – December 7), with the change going into effect on
January 1. During this open enrollment period, you can switch from one Advantage plan to
another or from one stand-alone drug plan to another. You can also dis-enroll from an
Advantage plan and get a Medigap policy and a stand-alone drug plan, although you will have
to answer questions about your health before you can get the Medigap policy.

In conclusion, Stephen, there are a couple of things to keep in mind as you make the transition
to Medicare. On your initial visits to your doctors after October 1, show the office staff your
new enrollment cards. That will help to avoid any billing confusion. And show your Part D
enrollment information to your pharmacist. Also, you’re entitled to a free “Welcome to
Medicare” physical (see page 11 of the evaluation), but you’ll probably have to request it.

Sincerely,

David Armes, CFP®

Attachment to this letter: California Birthday Rule for Medigap Policies

WDA:12110

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