Page 3 - Cover Letter and Evaluation for Gary Caskey

to factor in a company’s financial strength and size. As a rule, larger companies have slightly
lower annual premium increases, according to a government study a few years ago.

Premiums for the two Medigap plans were sent to you yesterday. These premiums are from
CSG Actuarial, a firm that provides quotes to insurance agents. Some premiums may be lower
than you can get because the commissions may not be included (unfortunately, there’s no way
to filter these out or for me to know which ones they are). Most of the premiums, though,
should be accurate.

CSG Actuarial’s premiums can be helpful in a couple of ways. First, they can serve as a starting
point to identify the companies that have lower premiums. Then you can call two or three of
those companies for current quotes; second, CSG Actuarial also shows the insurance
companies’ financial ratings by A.M Best and (for the larger companies) Standard & Poor.

Georgia is among a handful of states that require Medigap insurers to set their initial premiums
high enough to account for future age increases. This is called an “issue-age” rating and, in
theory at least, it results in higher initial premiums but lower annual increases. The initial
premium is based on the policyholder’s age when he/she applies. In most other states,
Medigap insurers increase their premiums by about 3% a year because you are a year older,
and then add in other costs for health care inflation, claims experience, and so forth.

Discounts

Many insurance companies that sell Medigap policies offer discounts of various kinds. As an
example, some companies offer discounts for automatic debit payments of monthly premiums.
And many insurers offer a discount when both spouses buy a policy. This household discount
can range between 3% and 12%, depending on the company.

In addition to discounts, some insurers offer additional benefits like membership in Silver
Sneakers, which give you access to more than 12,000 gyms and health clubs nationally.

Rx Drug Plan Coverage

The costs shown in this section do not include the dosage revisions you made earlier today, but
those revisions were minor and may reduce your annual costs by $150-$200 on a 12-month
basis (that’s the result of lowering the dosage for Nucynta from 180 to 150 tablets a month).
Please check the revised list, which does show today’s revisions and is attached to this letter, to
verify its accuracy. Also, Appendix B1 shows a list of the 10 lowest-cost plans for your drugs,
and that list reflects the revised dosages.

For the last seven months of 2018, the lowest-cost Part D stand-alone plan for your Rx drugs is
the First Health Part D Value Plus Plan. In this plan, you will pay $4,282 for the remainder of the
year -- an amount that includes premiums, deductible, and co-payments and that assumes you

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