Page 4 - Cover letter and evaluation for John Johnson

The premium comparisons in Appendices B1, B2, and B3 are from CSG Actuarial, a firm that
provides quotes for insurance agents. Some of these premiums may be lower than you can get
because the commissions are not included (there’s no way for me to know which ones these
are). Also, many companies schedule their annual premium increases for the start of the
calendar year, and by the time your policy goes into effect on April 1, some premiums may be
higher.

The CSG Actuarial premiums may be helpful in a couple of ways. First, they are sorted from
lowest to highest, which makes it easier to identify the lowest-premium companies. Second, in
most cases the CSG Actuarial comparisons give you the insurers’ financial ratings.

In the appendices, I included only the 25 or so lowest-premium companies, and the complete
list of insurers and premiums is more than twice as long. If you would like to see the full list of
any set of Medigap premiums, I can send you a PDF version (it will be about 60 pages). But
probably you are interested only in the lower-premium companies.

The CSG Actuarial lists do not include the companies telephone numbers, which can be found in
Appendix B4.

Discounts

Insurance companies that sell Medigap policies offer discounts of various kinds. As an example,
some companies have discounts for automatic debit payments of monthly premiums or for
paying for a year’s premiums in advance. The largest discounts are typically available when
both spouses buy their policies from the same company. While not all companies offer these
“household discounts,” the ones that do often have substantially reduced premiums.

In addition, the UnitedHealthcare/AARP Medigap policies have an early enrollment discount
that in your case is 30% below AARP’s standard rate. The discount is calculated by multiplying
3% by the number of years that you are younger than 75 -- your discount equals 10 years x 3%,
or 30%, and that discount will be reduced by 3% each year until you turn 75.

If you acquire an AARP policy, that means 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 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 like health club memberships.

The Medicare Advantage Plan in your evaluation

The Aetna Medicare Choice PPO plan is probably not a good choice for you, chiefly because not
all your doctors are listed in its network. Still, this plan has several good features – a large

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