Page 3 - Cover Letter and Evaluation for Russell Wild

CSG Actuarial’s premiums also show each company’s premium increases for the last four years
and its financial ratings from AM Best and Standard & Poor’s (S&P).

The benefit designs of the eight Medigap plans available to you are on pages 6-7 of the
evaluation. Here are summaries of the three plans compared in your evaluation:

1) Medigap Plan G. This is the most comprehensive Medigap plan available to people who
turn 65 this year or later. It covers all of Medicare’s gaps except for the Part B
deductible, which this year is $198. So, after you’ve paid this annual deductible you
won’t have any co-payments for Medicare-covered medical services during the year.
You should be able to get Plan G for about $2,050 a year ($170 a month) or less.

2) Medigap Plan N. This plan is somewhat less comprehensive than Plan G but still
provides solid coverage. Its gaps include the $198 Part B deductible, co-pays of up to
$20 for doctor’s office visits, and a $50 co-pay for emergency room visits. Annual
premiums are roughly 25% lower than Plan F’s, and if you do not go to the doctor
frequently you would probably save money in this plan compared to Plan G. Annual
premiums for Plan N are in the $130 a month range ($1,560 a year) or less.

3) Medigap Plan L. This is the least comprehensive of the three Medigap plans compared
in your evaluation, and it has co-insurance payments for most Medicare-covered
services. Its best feature is its $2,940 out-of-pocket limit, although that limit does not
include the plan’s premiums or the costs of services that the plan doesn’t cover, e.g.,
the Part B deductible. Annual premiums are about the same of those of Plan N. Not
many insurers sell Plan L in Pennsylvania.

Medigap Pricing and Discounts

Insurance companies that sell Medigap policies often offer discounts. As an example, some
companies offer small discounts for automatic debit payments or for paying a year’s premiums
in advance. And some companies offer household discounts when both spouses get a policy.

In Pennsylvania, the UnitedHealthcare endorsed by AARP offer an early enrollment discount of
3% a year for each year that the policyholder is younger than 77. In your case, this discount is
36%. One thing to be aware of with this discount is that you will likely have two premium
increases a year – the first a 3% increase as the discount gradually vanishes, the other an
increase for health care inflation. With an UHC/AARP policy, then, your premiums may go up
more quickly until you turn 77. After that, they may increase more slowly than those of other
insurers since they are based on a modified community rating that favors older retirees.

Rx Drug Plan Coverage

The names, dosages, and monthly quantities of your Rx drugs are listed on the first page of
Appendix C1. Please check to make sure that this information is correct. Sildenafil is not listed

3