Page 4 - Evaluation and cover letter for Jack Barnhill

In addition, the UnitedHealthcare/AARP Medigap policies have an early enrollment discount
that in your case is 21% below AARP’s standard rate. The discount is calculated by multiplying
3% by the number of years that ou are younger than 75. In your case, the discount equals 7
years x 3%, or 21%, and that discount will be reduced by 3% each year until you turn 75.

If you acquire an AARP policy, you may have two increases a year – one a 3% increase
associated with the reduced discount (until you turn 75) and the other an increase for health
care inflation. AARP policies can be good choices if they are attractively priced, but you should
be aware that because of the reduced discount each year until you are 75, your premiums may
rise more quickly than with many other insurers. After you turn 75, the AARP premiums will
likely increase more slowly.

In addition to discounts, some insurers provide extra benefits such as membership in Silver
Sneakers, which give you access to more than 12,000 gyms and health clubs nationally.

Medicare Advantage plans

As you are aware, Advantage plans are managed-care plans – primarily HMO’s and PPO’s.
Before enrolling in an Advantage plan, you should verify with your doctors’ offices that they are
in the plan’s network -- occasionally the online directories that we use are out of date. Here are
summaries of the two Advantage plans compared in your evaluation.

1) AARP Medicare Complete Secure Horizons Plan 2 (an HMO). This is a highly rated
Advantage plan – Medicare gives it a score of 4.5 stars for 2018, an excellent score
(plans are rated on a scale of five stars). This plan has no fixed costs – premiums or
deductibles -- and no co-payments for the two drugs you take. Your only fixed costs,
then, are your Part B premiums.

Moreover, there are no co-payments for doctors’ office visits or hospital stays, and
there’s a very low $2,200 out-of-pocket limit for network medical services (not including
any Rx drug costs you might incur).

As you probably know, HMO’s are the most cost-effective type of managed care plan,
and people in good health can save substantial amounts in HMO’s. For some people, the
downside is that they are restrictive – in most HMO’s people have to get a referral from
their primary care doctor to see a specialist, and tests and treatments often require
prior approvals. Also, there is no coverage when you see an out-of-network doctor
unless it’s an emergency. Both of your physicians are listed in this plan’s network, as
indicated in Appendix A, but before enrolling you should verify that with their offices.

2) Aetna Medicare Choice PPO Plan. I wanted to include one PPO plan in your evaluation,
and this one seems to be the best option – other PPO’s in Orange County have much
higher costs for the two Rx drugs you take. This plan has some good features – a large
network of more than 5,500 providers and an above-average 4-star quality rating.

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