Page 4 - Evaluation for Tom Tappan

assumed that the two generic drugs you take would be priced at the generic tier level, although
some drug plans will take a more expensive generic and place it in the “preferred brand” tier
(ignoring the fact that it is not a brand-name drug).

Using these assumptions, I estimated that your annual costs in the Silverscript plan will be
$1,200 a year if you get monthly refills at a network pharmacy. That doesn’t include Rx drug
premiums, which are included in the medical plan’s premiums. It is unlikely that Walgreens is a
network pharmacy, and to get the lowest retail prices you would likely have to get your refills at
CVS or Long’s Pharmacy. But you can verify that with the plan.

You can trim your annual Rx drug costs by one-third ($400 or so) if you switch to mail-order
refills. If you decide to switch, you will need new prescriptions from your physicians.

Other Considerations

If at some point in future years you decide to switch to a Medigap policy, there are a couple of
things to keep in mind. First, if you are still living in the Chicago area when you decide to switch
(perhaps because the BofA plan has added restrictions and costs), you will probably not have a
guaranteed right to acquire a Medigap policy.

States have different rules about who can buy a Medigap policy and when. In Illinois, individuals
who qualify for Medicare (regardless of whether they are under 65 or 65 and older) have a six-
month period when they can buy a Medigap policy without answering questions about their
health or disclosing pre-existing conditions. But after that six-month “guaranteed-issue” period
has passed, insurers may decline coverage. This doesn’t necessarily mean that you couldn’t buy
a Medigap policy, but it’s something to be aware of. In any case, you would not want to drop
the BofA coverage until you had a written confirmation that you will be sold a policy.

You may be entitled to a new guaranteed issue period if you move out of the BofA plan’s
service area (it’s possible, though, that the service area is nationwide). And you eventually will
get a new guaranteed issue period when you turn 65. Another thing to keep in mind is that it’s
unlikely you could switch your Part D coverage except during open enrollment.

Finally, if at some point you decide to leave the BofA framework, you should ask whether you
could re-enter the plan later or keep some parts of your coverage, e.g., Rx drug benefits. Each
employer plan has flexibility in designing its rules.

Sincerely,

David Armes, CFP®
Attachments
WDA:1097

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