Page 3 - Cover Letter and Medicare Evaluation for Barbara Pender

The downside of Medigap policies is their high premiums. During a long retirement, someone
who has a Medigap policy may spend $80,000 or more for Medigap premiums. And that does
not include Part B premiums or costs for prescription drugs.

Perhaps the most important thing to be aware of is that during the first six months that you
have Part B, you can get a Medigap policy without having to answer health-related questions.
But after that six-month period is past, in California and most other states you will have to
answer questions about your health before you can get a Medigap policy. And individuals with
serious pre-existing conditions may not be able to get a Medigap policy after the initial six-
month guaranteed-issue period is past.

Medigap policies typically do not cover dental, vision, and hearing care, none of which are
covered by Medicare (in California there may be one or two “innovative” Medigap plans that
include some dental and vision coverage). Because Medigap policies do not cover prescription
drugs, people who get a Medigap policy will also need to enroll in a Medicare prescription drug
plan (PDP), known as a stand-alone drug plan, even if they do not currently take any Rx drugs.

Comparing two Medigap plans

The two Medigap plans compared in your evaluation – Plan G and Plan N – are similar, and they
are two of the most popular plans. The benefit designs of these two plans (as well as other
Medigap plans) are shown on pages 6-7 of the evaluation. Here are summaries:

1) Medigap Plan G. This is the most comprehensive Medigap plan available to people who
turned 65 in 2020 or later. It covers all of Medicare’s gaps except for the annual Part B
deductible, which is $203 this year. That means that once you’ve paid the Part B
deductible, you will not have any further cost-sharing for Medicare-covered services.
You can likely purchase a Plan G policy for about $1,750 a year (or roughly $140 a
month) or possibly less. Appendices A1 and A2 show insurance companies’ Plan G
premiums – those in Appendix A1 are from the California Dept. of Insurance and include
the companies’ phone numbers; those in Appendix A2 are from CSG Actuarial. Some of
the premiums shown in Appendix A1 may be out of date, and a few of the premiums
shown in Appendix 2 may not include agents’ commissions.

2) Medigap Plan N. This plan is slightly less comprehensive than Plan G, but it still provides
excellent coverage. The only differences between this plan and Plan G are that you will
have co-payments of up to $20 for doctors’ office visits and $50 if you go to the
emergency room. You should be able to get Plan N for about $1,600 a year or less.
Appendices A1 and A3 show the insurers’ Plan N premiums.

The pricing of Medigap policies and California’s Birthday Rule

If you decide to get a Medigap policy, it’s good to give some thought as to the company that
you will buy your policy from and to make a few calls to get current quotes. While it’s important

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