Page 4 - Cover Letter and Mediicae Evaluation for Mr. Bruno V. Manno

The benefit designs of the ten Medigap plans available to you are shown on pages 6-7 of the
evaluation. Here are summaries of the three plans compared in your evaluation:

1) Medigap Plan F. This plan covers all of Medicare’s gaps. With Plan F, then, the only cost
for your Medicare-covered medical services will be your premiums (Part B + Medigap
premiums). Some people choose Plan F for the convenience of never having a co-
payment for a Medicare-covered service.

People who turn 65 in 2020 or later can no longer get Plan F or Plan C. But that does not
affect you. Estimates for your Plan F premiums are $2,400 a year or less. In the CSG
Actuarial listings, you will see several companies that have monthly premiums lower
than $200, but it’s possible that some of these do not include commissions.

2) Medigap Plan G. This plan is identical to Plan F except that it does not cover the Part B
deductible, which this year is $198. Plan G’s annual premiums are usually $200-$225
lower than those of Plan F, although this may vary quite a bit from one company to the
next (as you can see in the appendices). For Plan G, you should be able to get a policy
for about $2,200 a year or slightly less.

3) Medigap Plan L. This plan is less comprehensive than the other two, but it still provides
good coverage. Its gaps include the $198 Part B deductible as well co-payments for most
medical services. It also has an out-of-pocket (OOP) limit of $2,490. As you may know,
premiums do not apply to the OOP limit nor do services that the plan does not cover. As
an example, Plan L does not cover the $198 Part B deductible, and so any money you
spend toward the Part B deductible will not count toward the OOP limit. Annual
premiums for Plan L are in the $1,750 range for the lower premium insurers.

People in good health will often save money in a less comprehensive plan like Plan L, but
if they use a number of medical services or even one or two expensive medical services,
they may not save money in this plan. Still, they are protected by a fairly low out-of-
pocket limit. One thing to keep in mind is that if you decide to get Plan L and then later
want to upgrade to Plan G or Plan F, you will have to answer questions about your
health and might not be able to upgrade at an affordable premium.

Medigap Pricing and Discounts

In Maryland, insurers can use one of three pricing methods when they set premiums. In
Appendix B4 you’ll see which companies use which methods. Here are brief descriptions of
each method:

Attained-age: Premiums are about three percent higher for each additional year
of age. That means that the premiums for a 75-year-old are about 30% higher than those of a
65-year-old. Most Medigap insurers in Maryland use this ratings approach.

4