ALABAMA MEDIGAP POLICIES AVAILABLE IN 2012

by George Jacobs, author of Managing Your Medicare, published by Self-Counsel Press


I have done an extensive analysis of the Medigap (Medicare supplement) policies currently available to Medicare beneficiaries. This is because the structure of new policies available to beneficiaries changed in June 2010, and by now there is enough information to give some guidance on both the availability and prices of the newly structured policies.

There is no need to go into explaining the new structure; this is all spelled out in Managing Your Medicare, on page 157. But what I have available here is information, for those age 65, which is when most beneficiaries get a Medigap policy, on the number of policies available, the lowest priced one available, the highest priced one available, and the average price. Even better, this information is given for each policy type. There is also a quick comparison of the average price of each policy type to type “A”, the “basic” policy, so you can easily determine roughly how much more or less the policy type you are looking at compares to the basic one, or indeed, to any other policy type. I also include some very brief information as to what these will cost for a beneficiary age 70. All this is harder to explain than it is to show.

A word of caution, though. This data was collected from the Alabama Department of Insurance website, www.aldoi.gov/PDF/Consumers/MedSupCompanies.pdf. Unlike many state’s similar websites, this one gives the information in a composite manner, and, for example, does not separate non-smoking (or non-tobacco use) rates from smokers’ rates, or male rates from female rates, or rates in one of the areas in the state from another (although it does separate by age). Rather, it gives only the very lowest price of each company’s policy type. So you will likely pay more, perhaps much more, than the information shows.

Again, remember that for each policy type, the benefits are exactly the same no matter who sells it, and you should aggressively look for the best price. But you will note significant differences in prices for the same policy type; and some of this may be due to restrictions, for example, a policy may not cover a pre-existing condition for a period of time, in other cases because the policies are priced or “rated” with different methodologies. (The “attained-age” policies go up in price as you age, but may be the least costly to begin with. “Issue-age” policies do not go up because you age, but their premiums may increase, as will attained-age policies, for medical technology and inflation. “Community-rated” policies are sold at the same price throughout a given area, and may be the most expensive, but are often available even to those that don’t have a guaranteed issue right. Always check with an insurance company to find out how a policy you are interested in is rated, and be aware of the implications. These terms are more extensively covered in Managing Your Medicare.) But a good deal of the variation appears just to be different prices for the same benefits. And, remember you will almost certainly pay more than the amounts shown; the dollar amounts below are the rounded monthly cost of the policies.

Medigap Policies –– Age 65

(NOTE: The prices for these run about 20% more for a beneficiary age 70.)

Policy A:
The lowest minimum price available is $77, the highest is $126, and the average is $93.
This is the “basic” policy. Some 20 different companies offer these.

Policy B:
The lowest minimum price available is $87, the highest is $152, and the average is $119.
On the whole, these cost about 28% more than Policy A. 11 different companies offer these.

Policy C:
The lowest minimum price available is $108, the highest is $158, and the average is $135.
On the whole, these cost about 45% more than Policy A. 11 different companies offer these.  These are popular.

Policy D:
The lowest minimum price available is $93, the highest is $144, and the average is $117.
On the whole, these cost about 25% more than Policy A. 3 different companies offer these.

Policy F:
The lowest minimum price available is $109, the highest is $165 and the average is $135.
On the whole, these cost about 44% more than Policy A. 17 different companies offer these.  These cover all Medigap benefits and are popular.

Policy F – High Deductible:
The lowest minimum price available is $35 the highest is $53, and the average is $44.
On the whole, these cost about 53% less than Policy A. 7 different companies offer these. Remember that you pay the first $2,070 of your medical expenses in 2012 before it kicks in.

Policy G:
The lowest minimum price available is $94, the highest is $145, and the average is $108.
On the whole, these cost about 16% more than Policy A. 9 different companies offer these.

Policy K:
The lowest minimum price available is $56, the highest is $80, and the average is $63.
On the whole, these cost about 32% less than Policy A. 7 different companies offer these.  This is the 50% catastrophic policy. The catastrophic level for this policy in 2012 is $4,660

Policy L:
The lowest minimum price available is $84, the highest is $112, and the average is $93.
On the whole, these cost about the same as Policy A. 5 different companies offer these.  This is the 75% catastrophic policy. The catastrophic level for this policy in 2012 is $2,330.

Policy M:
The lowest minimum price available is $89, the highest is $112, and the average is $101.
On the whole, these cost about 8% more than Policy A. 3 different companies offer these.  This policy is very new.

Policy N:
The lowest minimum price available is $77, the highest is $130, and the average is $98.
On the whole, these cost about 5% more than Policy A. 11 different companies offer these.  This policy is very new.

If you email me at gjacobs23@windstream.net I will send you an Excel file which provides more information.