Page 1 - Memo to Randy & Nancy

June 12, 2019

Dear Randy & Nancy,

Attached are premium comparisons for Medigap policies in California, an overview of these
policies’ enrollment rules, coverage, and premiums, as well as their pros and cons.

Enrollment

When people first enroll in Part B, they have a six-month period when they can get a Medigap
policy without answering health-related questions or disclosing pre-existing conditions. After
this six-month period is past – say a few years from now – they may still be able to get a
Medigap policy, but they will first have to answer questions about their health status and could
be charged a much higher premium or denied coverage.

In addition to this initial six-month period, there are other limited periods when people may be
able to get a Medigap policy without answering health-related questions, but they involve
unusual situations – when they move out of their Advantage plan’s service territory, when their
Advantage plan goes out of business, and a few others.

People who have Medigap policies can later switch to an Advantage plan if they want to,
although they will need to do it during each year’s annual enrollment period (October 15-
December7). People wanting to switch from an Advantage plan to a Medigap policy and Part D
stand-alone plan can also do so during annual open enrollment, but they will have to answer
questions about their health status before they receive a Medigap quote.

California has a rule that allows current Medigap policyholders to shop around for a lower
premium each year during the 30-day period that follows their birthdays. If they can save
money by switching to a different insurer, they can switch during this 30-day period each year.
The rule does not allow people to upgrade to a more comprehensive Medigap plan – it only
applies if they are remaining with the same plan or downgrading to a less comprehensive plan.
This rule is summarized in Appendix D. If you get a Medigap policy, it’s a good protection to be
aware of.

Basics of Medigap coverage

When someone who has a Medigap policy sees a doctor, the doctor sends the bill to Medicare.
Then Medicare pays what it owes (usually 80%) and forwards the balance to the Medigap
insurance company. The Medigap insurer is required to pay what it owes – as noted below, a
Medigap insurer cannot question whether a treatment was medically necessary.

There are 10 Medigap plans, A through N (there are gaps in the lettering because four plans
were discontinued several years ago). Plans C and F are the two most comprehensive (and
expensive) plans, but neither of them will be sold after this year (although current policyholders