Page 2 - Cover Letter and Medicare evaluation for Mr. Rod Fallow

How Medigap policies work

During the first six months that you have Part B, you can get a Medigap policy without
answering questions about your health or disclosing pre-existing conditions. After this six-
month guaranteed-issue period is past, you will likely have to answer questions about your
health status and could be charged higher premiums or denied coverage.

Some people, of course, wait until they are in their 70s to get the first Medigap policy, but they
run the risk of paying high premiums or of not being able to get a policy. Because your Part B
enrollment began August 1, your six-month guaranteed issue period goes through January.

Perhaps the most desirable attribute of Medigap policies is the flexibility they offer. There are
no networks, and you do not need referrals to see specialists. You will be covered when you see
any provider who accepts Medicare (as more than 99% of doctors and public hospitals do).

When you have a Medigap policy and go to a doctor or other medical provider, he or she will
send the bill for your visit to Medicare. Then Medicare pays the doctor what it owes – usually
80% -- and forwards the 20% balance to the Medigap insurance company that issued your
policy. After the Medigap insurer pays the doctor some or all of the 20% balance, the doctor
will then send you a bill for any remaining amount that was not paid either by Medicare or the
Medigap insurance company.

One nice feature of this kind of coverage is that Medicare makes the coverage decisions, and
not an insurance company. When Medicare pays for a medical service or treatment, the
Medigap insurer is also required to pay. That’s different from an Advantage plan, where the
insurance company can in some cases decide whether a service will be covered.

Moreover, if you plan to travel to other countries, the two Medigap plans in your evaluation
both include some coverage for medical emergencies when you’re traveling abroad. This
coverage has a $250 deductible, after which the Medigap policy will pay 80% of the cost, with a
$50,000 lifetime limit. Unlike most Medicare Advantage plans, Medigap policies do not cover
routine dental and vision care or hearing aida. But Medicare does cover treatments for diseases
of the eye (glaucoma, cataracts, etc.).

The downside of Medigap policies is that they are expensive. People who acquire a
comprehensive Medigap plan like Plan G or Plan N may spend more than $80,000 on their
Medigap premiums over a 25-year period, not including Part B premiums and drug costs.

Comparing the 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. You are also eligible to get Plan F, which is the most
comprehensive Medigap plan and covers all of Medicare’s gaps. But Plan F can no longer be

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