Page 1 - Cover Letter and Evaluation for Chris Parlin

October 11, 2017

Mr. Chris Parlin
8516 River Rock Terrace
Bethesda, MD 20817

Dear Chris:

Attached is the comparison of your Medicare-related costs in New York and Vermont. As
discussed below, the costs for your prescription drugs are roughly similar in both states as well
as in Maryland. But your Medigap premiums will be about 25% higher in New York than
Vermont.

Medigap costs and coverage rules

Your current Medigap policy is good in every state, as explained in Medicare’s rules on the
inside front cover of your evaluation. But when you move to a different state, your premiums
will be adjusted so that they are consistent with the state’s Medicare costs and its rules for
setting premiums.

Both New York and Vermont require insurance companies to use a community rating in setting
premiums. In an unmodified community rating, everyone pays the same premium regardless of
age, gender, and health status. That means that you and your wife will pay the same Medigap
premiums, assuming you get the same Medigap plan from the same insurance company. Only
eight states require insurers to use unmodified community ratings (the UnitedHealthcare/AARP
Medigap policies use a modified community rating in other states).

New York also has a rule that requires companies to sell Medigap policies at any time during
the year – year-round guaranteed issue. This rule encourages many people to wait until they
begin experiencing health problems to buy a Medigap policy. And that, in turn, drives premiums
up – since many people don’t get a Medigap policy during their healthy years and instead wait
until they need more medical attention.

If you move to New York, you may be able to use the state’s year-round guaranteed issue rule,
which is shown in the attachments, to your advantage. One way you could do this is to buy a
less expensive Medigap policy like Plan L or Plan N. In both of those plans you will have some
co-payments, but unless you use a lot of medical services or undergo expensive treatments,
you’ll probably come out $300 or more ahead each year.