Page 3 - Cover Letter & Evaluation for Helen Dorroh

1) Medigap Plan F. This is the most comprehensive any Medigap plan, covering all of
Medicare’s gaps. That means that you will not have any cost-sharing for Medicare-
covered services and that the entire cost for these services will be your premiums.
Beginning in 2020, Plan F (along with Plan C) will no longer be sold, although people who
already own this plan at that time may keep it. In DeKalb County you can likely purchase
a Plan F policy for $1,950 a year or 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 $1,750 or less.

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 $1,475 or less.

4) Medicare Plan L. This is the least comprehensive of the Medigap plans in your
evaluation. One nice feature is its low $2,620 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) 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 $1,400,
although in Georgia few insurers sell this plan.

The pricing of Medigap policies

Most people who buy Medigap policies will keep those policies with the same insurance
companies throughout their retirement. In a few cases it may be difficult for them to change
companies later since they will have to answer questions about their health before they can get
a policy from a different insurer.

It’s prudent, then, to give some thought as to the company that you buy your policy from.
While it’s important to go with a company that has relatively low premiums, you may also want
to factor in a company’s financial strength and size. As a rule, larger companies have slightly
lower annual premium increases, according to a government study a few years ago.

Premiums for the four Medigap plans in your evaluation are shown in Appendices B1 through
B4. These are from CSG Actuarial, a firm that provides quotes to insurance agents. Some
premiums 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 the premiums, though, should be accurate.

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