Page 2 - Cover Letter & Evaluation for Blanca del Real

Another way of saying this is that the insurers have almost no ability to manage your care and
control your costs except by charging high premiums and co-payments.

That said, your current Boeing supplemental plan does not appear to plug many of Medicare’s
gaps. For most doctors’ and outpatient services, Part B covers 80% of the cost and a Medicare
supplement plan will cover some of the balance. But in your current plan you will pay 20% of
most Part B costs – the same as you would if you didn’t have any supplemental insurance –
until you reach the plan’s $3,200 out-of-pocket (OOP) limit.

In Appendix B there’s an example from the BCBS benefit summary you sent me, and it appears
that in this example the Boeing plan pays almost nothing. The benefit summaries also show
that you will pay 20% for almost all medical expenses except for recommended preventive tests
(Medicare fully covers preventive tests).

The benefit summary also indicates that you will pay 20% of hospital-related costs, which are
covered by Part A. It’s unclear what that means. If you didn’t have any supplemental insurance
and were hospitalized, once you pay the Part A deductible ($1,364 in 2019) you would be fully
covered for up to 180 days in a benefit period. So it’s not clear what the 20% applies to,
because except for the Part A deductible your hospital costs are 100% covered by Medicare. It
could mean that if hospitalized you would pay 20% of the $1,364 deductible.

The Boeing supplemental plan has a $3,200 out-of-pocket limit, which is an added benefit to
Medicare’s coverage (Medicare does not have an out-of-pocket limit). And it’s possible that the
Boeing plan’s Rx drug coverage benefits are better than a standard Part D plan’s benefits, but
that’s not the case for your drugs. For expensive drugs, though, it might be superior coverage,
although there’s no way to know without seeing the plan’s drug formulary and prices.

If you like the idea of having a Medicare supplemental plan and do not want the constraints of
an Advantage plan, you might consider switching to a Medigap policy, which is a nationally
standardized, commercially sold Medicare supplemental plan. There are 10 different Medigap
plans (Plan A, Plan B, etc.) and their benefit designs and estimated annual premiums are shown
on pages 6-7 of the evaluation.

One option is to get Medicare Plan L, whose premiums are about $700 a year less than your
Boeing premiums and which has a $185 Part B deductible (compared to your current $200 plan
deductible). It will also cut your Part B co-payments by 75% – from your current 20% to 5% of
Medicare’s approved cost. And it has a $2,780 out-of-pocket limit, which is $420 lower than
your Boeing plan’s OOP limit. As you may know, OOP limits do not include plan premiums and
prescription drug costs.

Appendix D lists insurance companies’ premiums for Plan L in Southern California. If you call an
insurance company to get a Medigap policy quote, you will be asked questions about your
health (people who have serious pre-existing conditions may be charged higher premiums or
denied coverage).

2