Page 3 - Cover Letter and Medicare Evaluation for Dorothy Smith

Advantage plans must comply with Medicare’s coverage requirements, and they cannot deny
coverage for something that Medicare covers. And these plans can be exceptional bargains for
healthy people who do not need costly treatments. During the past 15 years or so, Advantage
plan enrollment has grown rapidly – currently almost one-half (48%) of all Medicare enrollees
are in Advantage plans. In your case, because your health is good, you might save roughly
$2,000 a year in either of the Advantage plans compared in your evaluation. But if you later
want to switch back to a Medigap policy, you will probably have to be medically underwritten
before you can get a policy.

Comparing the two Medigap plans

The two Medigap plans compared in your evaluation are Plan F (your current plan) and Plan N,
a slightly less comprehensive (and less expensive) plan. Here are brief summaries of each plan:

1) Medigap Plan F (your current plan). This plan covers all of Medicare’s gaps. Some
people prefer it because of the convenience of never having to make a co-payment for a
service that Medicare covers. Plan F also includes some coverage for foreign travel
medical emergencies, which Medicare does not cover. In your evaluation, I’ve estimated
that Plan F premiums are about $160 a month (roughly $1,900 a year), but you may be
paying less if you received AARP’s early enrollment discount. Plan F premium quotes
from CSG Actuarial are in Appendix B1 (the quotes are for a 70-year-old woman in
Sussex County, even though you won’t turn 70 until the end of the year).

If you want to switch from Plan F to the next most comprehensive Medigap plan, you
might consider Plan G, which is not compared in your evaluation. The only difference
between Plan F and Plan G is that Plan F covers the Part B deductible ($226 in 2023) and
Plan G does not. So, if you can reduce your annual premiums by more than $226 by
switching to Plan G, you’ll come out ahead in 2023, although you’ll have co-payments
until the deductible is satisfied.

2) Medigap Plan N. This plan is slightly less comprehensive than Plan F, but it still provides
solid coverage. The only differences between this plan and your current Plan F are that
in Plan N you will pay the $226 Part B deductible in 2023 and will have co-payments of
up to $20 for doctors’ office visits and $50 if you go to the emergency room.

According to the premiums shown in Appendix B2, you can reduce your Medigap
premiums by approximately $500 a year if you switch from Plan F to Plan N. Whether
you come out ahead overall will depend on how many doctors’ office visits you have,
but since you’re in good health, you’ll probably save money.

If changing to a lower-premium plan is an option you want to explore, you might call
UnitedHealthcare (or the insurance agent who sold you your Plan F policy) to get a current
quote for Plan G or Plan N and to verify that you can switch without going through medical
underwriting. If you do need to be medically underwritten, you’ll likely have no problems in

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