Page 2 - Cover letter and evaluation for Jack Hosier

Perhaps the most desirable attribute of Medigap policies is the flexibility they offer. You do not
need referrals to see specialists and will be covered when you see any provider who accepts
Medicare (as more than 98% of doctors and public hospitals do). Because Medigap policies are
nationally standardized, your benefits and coverage are the same in every state.

Medigap policies do not include prescription drug benefits, and so you will need to enroll in a
Part D stand-alone drug plan, discussed later. Also, Medigap policies do not cover routine
dental and vision care or hearing aids. Plans F, G, and N include some benefits for medical
emergencies while traveling outside the United States. The benefit designs for all 10 Medigap
plans are shown on pages 6-7.

Here are summaries of the four Medigap plans that are compared in your evaluation.

1) Medigap Plan F. This is the most comprehensive any Medigap plan and it covers all of
Medicare’s gaps. That means you will not have any cost-sharing for Medicare-covered
services and that your entire cost for these services will be in your premiums. Beginning
in 2020, Plan F (and Plan C) will no longer be sold, although people who already own this
plan at that time may keep it. In Los Angeles County you can likely purchase a Plan F
policy for $2,400 a year or perhaps less.

2) Medigap Plan G. This plan’s benefits are identical to Plan F’s except that it does not
cover the Part B deductible ($183 this year). In many instances, people will save money
by choosing Plan G instead of Plan F because their premium savings are greater than the
Part B deductible. Beginning in 2020 when Plans F and C will no longer be sold, Plan G
will be the most comprehensive Medigap plan. Your annual premiums in this plan will
likely be about $2,200.

3) Medigap Plan N. This is slightly less comprehensive than Plans F and G and it has some
small gaps. In this plan, people in relatively good health who don’t go to their doctors
frequently will likely save $200-$300 a year vs. the higher-premium Plan F. But you will
have co-payments from time to time. Estimated annual premiums are $1,625.

4) Medicare Plan L. This is the least comprehensive of the Medigap plans in your
evaluation. One nice feature of this plan is its low $2,560 out-of-pocket limit – it is the
only Medigap plan in your evaluation that has an OOP limit. But the limit does not
include premiums and applies only to the services the plan covers. As an example, the
Part B deductible ($183 in 2017) is not covered by this plan and so any money you spend
toward the deductible will not apply to the out-of-pocket limit. Annual premiums for
Plan L are about $1,340, although in California few insurers sell this plan.

The pricing of Medigap policies

It’s good to give some thought as to the company that you will buy your policy from as well as
to make a few calls to get current quotes. While it’s important to go with a company that has

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