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. All this is harder to explain than it is to show. Finally, you may wish to know that if you first purchase a policy at age 70, the price will run about 20 percent higher than these age 65 policies; and, if at age 75, about 45 percent higher. (Does not apply to community-rated policies.)
A word of caution, though. This data is for Los Angeles County, by far the most populous in the state. If you live in another county, your rates are most likely lower, but in some they are actually higher. But this data will give you an excellent feel for availability and relative pricing of Medigap policies for the entire Golden State. This data was collected from the California Department of Insurance website, www.insurance.ca.gov, in February, 2012. I’ve checked their information against some insurance company websites, and it appears very accurate.
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; in almost all cases by a factor of 2, and in some cases, even more! Some of this may be due to differences in whether a waiting period applies to a pre-existing condition, and if so, how long it is; 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. Remember also that you may be quoted a somewhat different price than I show; for example, it may be more if you smoke, or you may qualify for a discount if you sign up for auto-pay. The dollar amounts shown below are the annual cost of the policies.
Medigap Policies – Age 65 – LA County, California
Policy A:
The lowest price available is $1,042, the highest is $2,301, and the average is $1,484.
This is the “basic” policy. Some 28 different policies are offered.
Policy B:
The lowest price available is $1,430, the highest is $2,618, and the average is $1,832.
On the whole, these cost about 23% more than Policy A. 17 different policies are offered.
Policy C:
The lowest price available is $1,693, the highest is $3,012, and the average is $2,065.
On the whole, these cost about 39% more than Policy A. 16 different policies are offered. These are popular.
Policy D:
The lowest price available is $1,524, the highest is $2,430, and the average is $1,939.
On the whole, these cost about 31% more than Policy A. 9 different policies are offered.
Policy F:
The lowest price available is $1,644, the highest is $3,309, and the average is $2,141.
On the whole, these cost about 44% more than Policy A. 28 different policies are offered. These cover all Medigap benefits and are popular.
Policy F – High Deductible:
The lowest price available is $395, the highest is $1,433, and the average is $776.
On the whole, these cost about 48% less than Policy A. 6 different policies are offered. The deductible in 2012 is $2,070.
Policy G:
The lowest price available is $1,461, the highest is $3,186, and the average is $2,080.
On the whole, these cost about 40% more than Policy A. 15 different policies are offered.
Policy K:
The lowest price available is $611, the highest is $1,203, and the average is $901.
On the whole, these cost about 39% less than Policy A. 6 different policies are offered. This is the 50% catastrophic policy. The catastrophic level for this policy in 2012 is $4,660.
Policy L:
The lowest price available is $987, the highest is $1,750, and the average is $1,371.
On the whole, these cost about 8% less than Policy A. 8 different policies are offered. This is the 75% catastrophic policy. The catastrophic level for this policy in 2012 is $2,330.
Policy M:
The lowest price available is $1,239, the highest is $2,195, and the average is $1,685.
On the whole, these cost about 14% more than Policy A. 7 different policies are offered. This policy is very new.
Policy N:
The lowest price available is $911, the highest is $2,100, and the average is $1,475.
On the whole, these cost about 2% less than Policy A. 15 different policies are offered. This policy is very new.
No comments:
Post a Comment