Page 1 - Cover Letter & Evaluation for Blanca del Real

November 12, 2018

Mrs. Blanca M. Del Real
th
4300 W. 164 Street
Lawndale, CA 90260

Dear Mrs. Del Real:

Enclosed is your Medicare evaluation, which compares your current Boeing retiree health plan
to three Medicare Advantage HMO plans.

As you know, your current Boeing coverage is expensive, and you will be able to save a
substantial amount by switching to a Medicare Advantage HMO plan. But there are tradeoffs
you should be aware of before making this change. Probably the main one is that you will lose
the ability see any doctor who accepts Medicare and still be covered. Also, in an Advantage
plan, you will be subject to the plan’s rules and restrictions, as discussed below.

The way your current coverage works

Your current Boeing retiree health plan is underwritten by Blue Cross Blue Shield of Illinois. It is
a Medicare supplemental plan – a type of coverage also known as a fee-for-service or
indemnity plan. It might help to explain how this type of coverage works, as well as its strengths
and weaknesses, and the ways that it is different from Medicare Advantage plans.

If you have a Medicare supplemental plan and go to the doctor, he or she will send Medicare
the bill. Then in most cases, Medicare will pay 80% of the approved amount and forward the
20% balance to the insurance company that issues your supplemental plan. Then the insurance
company will pay some or all of the 20% balance, depending on the plan and what it covers.

From the patient’s perspective, this approach offers a great deal of flexibility. Because Medicare
does not have networks, you can go to any provider who accepts Medicare, as 99% of doctors
and public hospitals do. Also, Medicare makes the coverage decisions and not the insurance
company. If Medicare approves a procedure or treatment, the company that issues the
supplemental policy – in your case, Blue Cross and Blue Shield of Illinois -- cannot question the
decision. And Medicare is much more likely to approve some types of treatments, particularly
expensive ones, than are insurance companies.

All in all, then, Medicare supplemental plans typically provide better coverage because you can
go to any doctor and because you will have fewer restrictions on your medical care. But their
chief downside is that they are expensive, and insurance companies set their premiums high to
compensate for their lack of control over the doctors you choose and the treatments you get.