Page 3 - Cover Letter and Evaluation for Margaret Rockey

When people first get Part B, they have a six-month period to acquire a Medigap policy without
answering questions about their health. After that initial six-month guaranteed issue period is
past, they will likely have to answer health-related questions and disclose any pre-existing
conditions when they apply for a Medigap policy. The same requirement for health disclosure
applies to those who already have a Medigap policy and are more than six months past their
Part B start date. If they want to switch their policy to a difference insurance company that has
lower premiums, they will first have to answer questions about their health.

Still, some retirees who are in relatively good health wait until their 70s to get their first
Medigap policies. But there’s a risk that if they develop a serious pre-existing condition, they
will either pay higher Medigap premiums or in some cases will be denied coverage. There are a
few special enrollment periods that people may use to get Medigap policies without answering
health questions, but these are limited to specific situations, e.g., when they move out of their
Advantage plan’s service area.

Below are summaries of the two Medigap plans compared in your evaluation. The benefit
designs of the eight Medigap plans that are available to you are shown on pages 6-7 of the
evaluation.

1) Medigap Plan G. This is a comprehensive plan that covers all the gaps in Medicare
except for the Part B deductible, which this year is $198. In this plan, after you’ve
satisfied the Part B deductible you will not have any co-payments or other cost-sharing
for Medicare-covered services. Plan G is the most comprehensive Medigap plan that’s
available to people who turn 65 this year or later (those who turned 65 before this year
can get Plan C or Plan F, both of which cover the Part B deductible).

Medigap premiums vary widely, as you can see in Appendices B1 and B2. For Plan G, you
should be able to get a policy for around $115 a month, or just under $1,400 a year.

2) Medigap Plan N. This plan is slightly less comprehensive than Plan G but is still solid
coverage. Its gaps include the $198 Part B deductible, co-pays of up to $20 for doctor’s
office visits, and a $50 co-pay for emergency room visits. Its annual premiums are
roughly 25% lower than Plan G’s.

Pricing and Discounts

The premium comparisons in Appendices B1 and B2 are from CSG Actuarial, a consulting firm
that provides quotes to insurance agents. CSG Actuarial advertises that these premiums are
updated daily and so they should be current. But some of the quotes may not include
commissions, and therefore may be lower than you can get (there’s no way for me to know
which ones these are).

Insurance companies that sell Medigap policies often offer discounts of various kinds. Some
insurers have small discounts for automatic debit payments of monthly premiums or for paying

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