Page 4 - Cover Letter & Evaluation for Carol Evans

Medigap premiums from CSG Actuarial are shown in Appendices B2 through B5. Some
premiums in the CSG lists may be lower than you can get because the commissions may not be
included (unfortunately, there’s no way to filter these out or for me to know which ones they
are). Most of these premiums, though, should be close to current quotes.

CSG Actuarial’s premiums can be helpful in a couple of ways. First, they can serve as a starting
point to identify the companies that have lower premiums; second, they also show the
insurance companies’ financial ratings by A.M Best and (for the larger companies) Standard &
Poor. The companies’ phone numbers are shown in Appendix B1.

Discounts

Insurance companies that sell Medigap policies often offer discounts of various kinds. As
examples, some companies have discounts for automatic debit payments of monthly premiums
or for paying for a year’s premiums in advance.

Some insurers offer early enrollment discounts to make their initial prices appealing. These
discounts can often be good deals, but it’s wise to keep in mind that this type of discount will
result in two premium increases a year – one for health care inflation and the other for the
reduced early enrollment discount. Blue Cross Blue Shield of Arizona, for instance, has early
enrollment discounts that can be as high as 41% for a 65-year-old, but these discounts are
gradually removed in 3% and 4% increments each year until you are 76 – and that’s on top of
annual increases for health care inflation.

In addition to discounts, some insurers provide extra benefits such as free membership in
wellness centers such as Silver Sneakers, which gives you access to more than 12,000 gyms and
health clubs nationally.

Medicare Select plans

There is a type of Medigap policy known as a Medicare Select plan. In Medicare Select plans,
you will be fully covered if you remain within the plan’s provider network – much like you
would in a PPO if you use only network providers. But in a Select plan if you go outside the
network and it’s not an emergency, you will pay more. In Arizona, the UnitedHealthcare/AARP
policies and the Blue Cross Blue Shield of Arizona policies both offer Select options for certain
plans (see Appendices B6 and B7).

In the AARP Medicare Select plans, for example, you would need to go to a network hospital in
the event of a scheduled hospitalization (in an emergency, you would be fully covered at any
hospital). Appendix B6 lists the hospitals in Pima County that are in the AARP network. In the
Blue Cross Blue Shield of Arizona Medicare Select plans, you will need to see one of this plan’s
18,000 network doctors to be fully covered. Both your physicians are listed the in Blue Cross
Blue Shield network, but before buying a Select plan from BCBS you should verify that.

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