Page 4 - Cover Letter and Medicare Evaluation for Mrs. Jane Miller

While not all companies offer“household discounts,” the ones that do often have substantially
reduced premiums. You can see the amounts of these “HH discounts” in the listings from CSG
Actuarial, but they are not reflected in the premiums shown. If you get a Medigap policy and
your husband later gets one, you might keep these discounts in mind (although you will not be
able to switch insurers without first answering questions about your health).

In addition, the UnitedHealthcare/AARP Medigap policies sold in Delaware have an early
enrollment discount that in your case is 33% below AARP’s standard rate. The discount is
calculated by multiplying 3% by the number of years that you are younger than 77. In your case,
the discount equals 11 years x 3%, or 33%, and that discount will be reduced by 3% each year
until you turn 77.

If you acquire an AARP policy, then, you will likely have two premium increases a year – one a
3% increase associated with the reduced discount (until you turn 77) and the other an increase
for health care inflation. AARP policies can be good choices if they are attractively priced, but
you should be aware that because of the gradually vanishing discount each year until you turn
77, your premiums may rise more quickly than with many other insurers. After you turn 77, the
AARP premiums may increase more slowly.

In addition to discounts, some Medigap insurers include health club memberships in their
benefit packages.

Medicare Advantage plans

Your evaluation compares two Advantage plans. There are only 16 Advantage plans in New
Castle County, which are fewer than one-half the national average of 33 plans per county.
These 16 plans are listed in Appendix C1.

Advantage plans are managed-care plans – primarily HMO’s and PPO’s. Because Dr. Chen
practices in Pennsylvania, I considered only the PPO plans since most HMO plans are restricted
to a single state. As you know, in a PPO plan you will have some coverage when you see an out-
of-network provider, but the costs are likely to be higher.

Moreover, some PPO plans may consider referrals made by an out-of-network doctor as out-of-
network costs. As an example, if a non-network doctor refers you for a lab test, then the test
may be considered as an out-of-network cost even if it’s provided by a laboratory that’s in the
network. While that’s not the case with most PPO plans, it’s something you may want to check
before enrolling.

Below are summaries of the two Advantage PPO plans compared in your evaluation. Both plans
have above-average four-star quality ratings from Medicare, which among other things
indicates a high level of customer satisfaction. Also, both plans have zero premiums for medical
as well as Rx drug coverage, but the Aetna plan has a $1,000 medical deductible. And both

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