Page 4 - Cover Letter and Evaluation for Susan Marx

know which ones these are). These comparisons also show each company’s premium increases
for the last four years, and in some cases the company’s financial strength ratings from AM Best
and from Standard & Poor’s (S&P).

Companies that sell Medigap policies may offer discounts of various kinds. Some companies
have small discounts for automatic debit payments or for paying a year’s premiums in advance.
Also, some insurers provide extra non-medical benefits with their Medigap policies, e.g., health
club memberships and in a few cases, limited dental/vision coverage.

The UnitedHealthcare/AARP policies may offer an early enrollment discount that equals 3% a
year for each year you are younger than 77. In your case, this discount would be 33%. The only
thing to be aware of with the early enrollment discount is that you will likely have two premium
increases a year – the first a 3% increase as the discount gradually vanishes and the other an
increase for health care inflation.

With an AARP policy, then, your premiums may go up more quickly until you turn 77. After that,
they may increase more slowly than those of many other insurers because the AARP premiums
are based on a modified community rating that tends to favor older retirees.

The two Medicare Advantage plans in your evaluation

Medicare Advantage plans are managed-care plans – mainly HMO’s and PPO’s. For your
evaluation, I selected an Advantage PPO plan and an Advantage HMO plan. Some people prefer
the greater flexibility of a PPO plan, but I was unable to find an Advantage PPO plan that has
your doctors in its network and that also appears to be cost-effective. And while the PPO plan
in your evaluation has several strengths, it may not be a good choice because of its high
medical deductible, as discussed below.

Both Advantage plans compared in your evaluation have zero premiums for medical coverage
and are among the lowest-cost Advantage plans for your drugs (Appendix C1 lists the
Advantage plans in your area with the lowest costs for your drugs). In addition, both plans have
superior 4.5-star quality ratings from Medicare. And your three physicians are listed in both
plans’ networks (see Appendices C3 and C5).

Sometimes the online provider directories are out of date, and it’s important that prior to
enrolling in an Advantage plan, you check with your physicians’ offices to make sure that they
are still in the plan’s network. In an HMO plan, as you know, you will pay full cost for any out-
of-network services (emergencies are exceptions). And in a PPO plan, you will have higher co-
payments when you see a doctor or other medical provider who is not in the plan’s network.

Both plans provide some dental and routine vision care benefits, but before relying on this
coverage you might check with your dentist and optometrist to see if they will accept the plan.

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