Page 2 - Cover Letter & Evaluation for Carol Evans

1) Medigap Plan F. This is the most comprehensive Medigap plan, covering all of
Medicare’s gaps. If you get Plan F, then, you will have no cost-sharing for Medicare-
covered services. In Pima County, you can likely purchase a Plan F policy for $1,700 a
year or less. Beginning in 2020, Plan F and Plan C will no longer be sold, although
policyholders who already have either of these plans at that time may keep them.

2) Medigap Plan G. This plan’s benefits are identical to those of Plan F except that it does
not cover the Part B deductible, which in 2018 is $183. Frequently people will come out
ahead by choosing Plan G instead of Plan F because they will save more in premiums
than they pay for the Part B deductible. Estimated annual premiums are $1,500.

3) Medigap Plan N. This is slightly less comprehensive than Plans F and G and it has some
small gaps (pages 6-7 show where these gaps are). People in relatively good health who
don’t go to their doctors often will likely save $200-$300 a year in this plan compared to
the higher-premium Plan F. Estimated annual premiums are $1,300 a year.

4) High-deductible Plan F. This plan’s benefits are the same as those of Plan F after you
have met the plan’s $2,240 annual deductible. This plan’s annual premiums are about
$600, and so the most you could pay for Medicare-covered services, not including
prescription drug costs, is $2,840 (premiums + deductible). People in good health who
use relatively few medical services can save money in this plan compared to the
premiums they will pay in a comprehensive Medigap plan like Plan F or Plan G.

Because Medigap policies are supplemental coverage, it’s unlikely that most people who
have this plan ever pay the full deductible amount. Medicare pays 80% for most medical
services while the Medigap policy pays some or all the remaining 20% balance. If
someone covered by Plan HDF has a series of medical tests that cost $2,000, Medicare
will typically pay $1,600 of that amount and the policyholder will pay the other $400 if
the plan’s deductible has not been met.

There are a couple of things to be aware of before choosing this plan. Insurance
companies medically underwrite you if later you want to upgrade to a more
comprehensive Medigap plan. As an example, if 10 years from now you decide to
upgrade to Plan G, you will have to answer questions about your health. In most cases,
it is not a problem for people to purchase or upgrade a Medigap policy in later
retirement, but there is some risk that they will be unable to do so.

Another consideration is that the one drug you take – Prolia – is often covered under
Part B and not Part D. In your questionnaire you indicated that you receive Prolia
injections every six months, and I’ve assumed these are administered by a medical
professional and are therefore covered by Part B. Also, I’ve assumed that the full cost of
these injections, including the cost of administering the drug, is $3,000 a year for
someone who has no insurance. If Part B pays 80% of that $3,000 amount, there is a
$600 balance that you and/or your insurance will pay.

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