Page 3 - Cover Letter and Medicare Evaluation for Jamie Marshall

you see any provider who accepts Medicare (according to a study by the Kaiser Family
Foundation, more than 99% of doctors and public hospitals do).

When you have a Medigap policy and go to a doctor or other medical provider who accepts
Medicare, 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 the 20% balance,
the doctor will then send you a bill for any remaining amount that was not paid by either
Medicare or the Medigap insurance company.

One nice feature of this type of insurance is that Medicare makes the coverage decisions, not
an insurance company. When Medicare pays for a medical service or treatment, the Medigap
insurer is also required to pay. That’s different than an Advantage plan, where the insurance
company can in some instances decide whether a service is medically necessary or requires
prior authorization.

Also, Medigap policies may cover some services that Medicare does not cover. As an example,
Medigap Plans G and N in your evaluation include coverage for medical emergencies when
you’re traveling to other countries This coverage has a $250 deductible, after which the
Medigap policy will pay 80% of the cost, with a $50,000 lifetime limit.

Medigap policies do not cover prescription drugs, and so you will need to enroll in a Part D
stand-alone plan. Neither do Medicare and Medigap policies cover hearing aids or routine
dental and vision care – but they do cover treatments for diseases of the eye including
glaucoma, cataracts, and macular degeneration.

The downside of Medigap policies is that they are expensive, especially in the state of New
York. People who acquire a comprehensive Medigap plan like Plan G or Plan N may spend more
than $100,000 on their Medigap premiums over a 25-year period, not including Part B
premiums and drug costs.

In New York, insurance companies are required to sell Medigap policies to anyone who has
Medicare. And the insurance company must charge the same premiums to all its policyholders,
regardless of their ages or pre-existing conditions. But premiums may vary widely among
insurance companies.

Since insurers cannot decline coverage or charge people more because of their age or health,
New York’s Medigap premiums are among the nation’s highest. This is partly offset by giving
people virtually unlimited latitude – they can switch from one Medigap plan to another or from
one insurer to a different insurer. And from one year to the next, they can switch back and
forth between an Advantage plan and a Medigap policy (although to switch to/from an
Advantage plan, they will need to wait until annual open enrollment (October 15-December 7
each year).

3