I am doing 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 of 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 regular (or fee-for-service) policies available, the lowest priced one available, the highest priced one available, and the average price. This information is given first for females, and then for males, as the prices usually differ. Even better, this information is given for each policy type. Also, there is 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. In addition, I repeat similar information for SELECT or network Medigap policies. Recall that these Medigap policies require you to go to physicians and providers which are in the Medigap insurance company’s network of providers for complete payment; on the other hand, they may be a little cheaper than regular policies. (With a regular or fee-for-service policy, you can go to any doctor, hospital or provider who will accept it, and almost all do.)
You should understand that I have drawn information for the prices in Hillsboro County as this is somewhat representative of the state of Florida as a whole. Prices are substantially higher if you live in the Miami area; if you live in Walton County they are the same or a bit less. All this information, which was up-to-date in January of 2012, comes from the Florida Office of Insurance Regulation website, www.floir.com, which has more detailed information on these policies.
It is interesting to note that the prices for males tend to be just a little more expensive than those for females, but many companies sell their policies for the same price, and, almost without exception, the lowest price available for each policy type for a female is also available to a male. And, in general, if you are above age 65, note that the prices for policies will be about 15% higher at age 70, and about 33% higher at age 75.
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 remember that the prices may vary 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.) It is interesting to note, that for beneficiaries age 65, there are not huge differences in Florida in the prices of Medigap policies as there are in many other states, but prices do vary substantially. Please understand that the prices shown here and what you are quoted will vary somewhat because of how and how often you pay your premium, whether you smoke, where you live in Florida, etc., etc., so use these as guides rather than exact “matches.” The dollar amounts shown below are the annual cost of the policies. And note that in some cases a policy is available only to members of a particular group.
Florida Medigap Policies Females, Age 65
Policy A:
The lowest price available is $1,331, the highest is $1,956, and the average is $1,699.
This is the “basic” policy. 27 different policies are available. No SELECT “A” policies are available.
Policy B:
The lowest price available is $1,764, the highest is $2,604, and the average is $2,072.
On the whole, these cost about 22% more than Policy A. 19 different policies are available.
One SELECT policy ($1,517) is also available.
Policy C:
The lowest price available is $2,046, the highest is $2,717, and the average is $2,375.
On the whole, these cost about 40% more than Policy A. 19 different policies are available.
Four SELECT policies are also available; the lowest price is $1,635, the highest is $2,451.
These are popular.
Policy D:
The lowest price available is $1,917, the highest is $2,484, and the average is $2,178.
On the whole, these cost about 28% more than Policy A. 14 different policies are available.
Three SELECT policies are also available; the lowest price is $1,634, the highest is $2,188.
Policy F:
The lowest price available is $2,058, the highest is $2,896, and the average is $2,414.
On the whole, these cost about 42% more than Policy A. 27 different policies are available.
Five SELECT policies are also available; the lowest price is $1,647, the highest is $2,458.
These cover all Medigap benefits and are popular.
Policy F – High Deductible:
The lowest price available is $624, the highest is $1,082, and the average is $865.
On the whole, these cost about 49% less than Policy A. 10 different policies are available. Remember that you pay the first $2,070 of your medical expenses in 2012 before it kicks in.
No SELECT “F – High Deductible” policies are available.
Policy G:
The lowest price available is $1,929, the highest is $2,493, and the average is $2,190.
On the whole, these cost about 29% more than Policy A. 16 different policies are available.
Two SELECT policies are also available; the lower price is $1,767, the higher is $2,105.
Policy K:
The lowest price available is $816, the highest is $1,303, and the average is $1,103.
On the whole, these cost about 35% less than Policy A. 4 different policies are available. This is the 50% catastrophic policy. The catastrophic level for this policy in 2012 is $4,660.
No SELECT “K” policies are available.
Policy L:
The lowest price available is $1,227, the highest is $1,923, and the average is $1,627.
the whole, these cost about 4% less than Policy A. 6 different policies are available. This is the 75% catastrophic policy. The catastrophic level for this policy in 2012 is $2,330.
No SELECT “L” policies are available.
Policy M:
The lowest price available is $1,823, the highest is $2, 216, and the average is $2,021.
On the whole, these cost about 19% more than Policy A. 7 different policies are available.
One SELECT policy ($1,624) is also available.
This policy is very new.
Policy N:
The lowest price available is $1,485, the highest is $2,325, and the average is $1,895.
On the whole, these cost 12% more than Policy A. 15 different policies are available.
No SELECT “N” policies are available.
This policy is very new.
Florida Medigap Policies Males, Age 65
Policy A:
The lowest price available is $1,331, the highest is $2,213, and the average is $1,827.
This is the “basic” policy. 27 different policies are available.
No SELECT “A” policies are available.
Policy B:
The lowest price available is $1,764, the highest is $2,996, and the average is $2,214.
On the whole, these cost about 21% more than Policy A. 19 different policies are available.
One SELECT policy ($1,517) is also available.
Policy C:
The lowest price available is $2,046, the highest is $3,124, and the average is $2,515.
On the whole, these cost about 38% more than Policy A. 19 different policies are available.
Four SELECT policies are also available; the lowest price is $1,635, the highest is $2,640.
These are popular.
Policy D:
The lowest price available is $1,917, the highest is $2,858, and the average is $2,323.
On the whole, these cost about 27% more than Policy A. 14 different policies are available.
Three SELECT policies are also available; the lowest price is $1,634, the highest is $2,357.
Policy F:
The lowest price available is $2,058, the highest is $3,333, and the average is $2,590.
On the whole, these cost about 42% more than Policy A. 27 different policies are available.
Five SELECT policies are also available; the lowest price is $1,647, the highest is $2,647.
These cover all Medigap benefits and are popular.
Policy F – High Deductible:
The lowest price available is $717, the highest is $1,244, and the average is $975.
On the whole, these cost about 47% less than Policy A. 10 different policies are available. Remember that you pay the first $2,070 of your medical expenses in 2012 before it kicks in.
No SELECT “F – High Deductible” policies are available.
Policy G:
The lowest price available is $1,929, the highest is $2,869, and the average is $2,378.
On the whole, these cost about 30% more than Policy A. 16 different policies are available.
Two SELECT policies are also available; the lower price is $2,031, the higher is $2,392.
Policy K:
The lowest price available is $816, the highest is $1,499, and the average is $1,173.
On the whole, these cost about 36% less than Policy A. 4 different policies are available. This is the 50% catastrophic policy. The catastrophic level for this policy in 2012 is $4,660.
No SELECT “K” policies are available.
Policy L:
The lowest price available is $1,227, the highest is $1,211, and the average is $1,721.
On the whole, these cost about 6% less than Policy A. 6 different policies are available. This is the 75% catastrophic policy. The catastrophic level for this policy in 2012 is $2,330.
No SELECT “L” policies are available.
Policy M:
The lowest price available is $1,823, the highest is $2, 548, and the average is $2,239.
On the whole, these cost about 23% more than Policy A. 7 different policies are available.
One SELECT policy is available; it costs $1,624.
This policy is very new.
Policy N:
The lowest price available is $1,485, the highest is $2,676, and the average is $2,089.
On the whole, these cost 14% more than Policy A. 15 different policies are available.
No SELECT “N” policies are available.
This policy is very new.
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