Page 3 - Evaluation for Jerri Zerlaut

The UnitedHealthcare (or UHC) policies endorsed by AARP use a modified community rating in
setting their premiums, which means that that these policies would usually be more expensive
for younger retirees and less expensive for older ones. But to price its policies competitively for
younger retirees, UHC offers an early enrollment discount of 3% a year for each year that you
are younger than 75. Since you will be 65 when your Medigap policy goes into effect on January
1, 2018, you should receive a 30% discount (10 years x 3% a year). And that discount will slowly
go away by 3% a year until you are 75.

The reason for pointing this out is that, if you choose a UHC policy, you may have two increases
a year – one that’s 3% a year until you turn 75, and the other that’s an increase for health care
inflation. UHC/AARP policies can be good choices if they are attractively priced, but you should
be aware that because of the slowly vanishing discount, until you are 75 your premiums could
go up more quickly in a UHC policy than with many other insurers. Then after you are 75, the
UHC premiums will likely go up somewhat more slowly than those of other insurers.

Most of the other insurers in Maryland that sell Medigap policies in Maryland use what’s called
an “attained-age” rating, which means they adjust premiums each year for age as well as for
health care cost inflation. These policies are typically less expensive for younger retirees but can
be more expensive for older ones. You might be able to change insurance companies from time
to time in order to get a lower premium, but after your first six months in Medicare you will
have to answers questions about your health and any pre-existing conditions before you
receive a quote.

Before choosing an insurance company to buy your Medigap policy from, it’s a good idea to get
at least three quotes and in most cases to go with a large company whose premiums are among
the lowest.

Appendices B1 through B4 show the most recent premium comparisons from CSG Actuarial,
with the lowest premium companies listed first. Early enrollment discounts are already
reflected in these premiums. You can use the comparisons as a starting point to identify the
companies that have lower premiums and then call those companies to get a current quote.
Appendix B5 lists the toll-free phone numbers of the insurers that sell Medigap policies in
Maryland. All of the companies sell Plan F, but not all companies sell the other plans.

Which of Your Doctors Accepts Medicare Assignment?

In deciding which Medigap plan you want, one factor to consider is whether your doctors
accept Medicare assignment. Providers who accept assignment have agreed to accept
Medicare-approved rates. And if they do not accept assignment, they can charge up to 15%
more. Plans F and G cover this additional 15% surcharge, but Plans N and L do not. Usually the
amounts of these additional charges are small -- in the $10-$20 range. But occasionally there
can be a larger charge for a more expensive treatment.

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