Page 3 - Memo to Randy & Nancy

Pros and cons of Medigap policies.

PROS
 Medigap policies do not have networks, and so policyholders are covered
when they see any provider who accepts Medicare.

 Medicare -- not the insurance company -- makes the coverage decisions, and
it is much more lenient than are the insurance companies that sponsor
Advantage plans. As an example, Medicare always pays for a second and in
some cases a third opinion. Advantage plans, on the other hand, are
sometimes reluctant to cover second opinions.

 With comprehensive Medigap plans like Plan G, medical costs are easy to
predict because they are almost entirely in the premiums. Advantage plans,
on the other hand, typically have very low premiums but often have high out
of pocket limits – thus they cost less but often involve more risk. Their costs
are less predictable, then, than those of Medigap policies.

CONS
 They are most expensive type of supplemental coverage. Over a 25-year
period, people with comprehensive medical plans will pay between $80,000
and $100,000 in Medigap premiums, depending on the plan they choose.
That’s in addition to their Part B premiums, Rx drug costs and their costs for
services like routine dental/vision care that Medicare doesn’t cover.

Let me know in the coming months if you have questions.

Sincerely,

David Armes

Appendices