Page 3 - Cover Letter and Evaluation for Fred Heald

don’t often go to their doctors will likely save money in this plan compared to choosing
the higher-premium Plan G. Estimated annual premiums are about $1,750 a year.

3) Medigap Plan L. This is an even less comprehensive Medigap plan but it has a low
$2,940 out-of-pocket limit – this plan and Plan K are the only two Medigap plans that
have out-of-pocket limits. But those limits do not include premiums and apply only to
the services the plan covers. As an example, the Part B deductible is not covered by this
plan and so any money you spend on the deductible will not apply to the out-of-pocket
limit. Annual premiums for Plan L are in the same price range as for Plan N, or roughly
$1,750 a year.

Finally, a reminder that if you were to get Plan N and Plan L and later wanted to upgrade to
Plan G, you would need to answer questions about your health. That may not be a problem, of
course, but it’s something to be aware of. Also, both Plan N and Plan L offer solid coverage and
you could come out ahead in the long run by choosing either of them instead of Plan G.

How to shop for a Medigap policy

It’s good to give some thought to the company you will get your policy from. While you want a
company that has low premiums, you also want a company that is financially strong (most
companies’ financial ratings are shown in Appendices C2, C3, and C4). Larger companies tend to
have slightly lower annual premium increases, according to a government study several years
ago. And we suggest that you get current quotes from at least three companies (each
company’s phone number is shown in Appendix C1).

Florida is one of four states that requires Medigap insurers to use what’s known as an “issue
age” rating when they set their premiums. With an issue age rating, Medigap premiums are
initially higher but their annual increases are lower because insurance companies are not
allowed to adjust premiums for age. As a result, annual premium increases are based solely on
health care inflation. That’s the primary reason that Florida’s premiums for 65-year-olds are
higher than in most other states and premiums for 80-year-olds are lower.

The premium comparisons for Plans G, N, and L in Appendix C1 are from the Florida Office of
Insurance Regulation and include insurance companies’ toll-free telephone numbers. Because
these listings do not indicate the last revision date, it’s possible some premiums are in this list
are out of date.

Appendices C2 through C4 also list insurance companies’ premiums for Plans G, N, and L. These
premiums are from CSG Actuarial, which advertises that they are updated daily. CSG Actuarial is
a service that provides quotes for insurance agents, and some of the premiums here may be
lower than you can get because the commissions are not included (there’s no way for me to
know which ones they are).

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