by George Jacobs, author of Managing Your Medicare, published by Self-Counsel Press, Inc.
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, and who live in Cook, Kane, McHenry, DuPage, Lake and Will counties, 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. 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.
And if you do not live in one of those counties, it will help point you to the insurance companies in Ilinois that have the best Medigap prices.
All this information, which is completely up-to-date as of March 2012, comes from the excellent Illinois Department of Insurance website www.insurance.iIllinois.gov which has more detailed information on these policies.
Most Medigap policies are “Attained-Age-Rated” policies, and the premiums you pay for these will tend to increase as you get older. On the other hand, you may be able to find an “Issue-Age-Rated” or a “Community –Rated” policy, and these won’t increase because you get older, but will increase because of new technology and medical inflation (as will Attained-Age-Rated policies). Therefore, if you buy an Issue-Age policy or a Community-Rated policy, you will perhaps pay a higher premium at first, but you will protect yourself against some future price increases as you age. Be certain that you ask any insurer exactly how they rate their policies, and whether they sell policies with different rating methods. With this general exception in mind, 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. You will note significant differences in prices for the same policy type. A few policies may have a waiting period before it will pay for treatment of your pre-existing conditions. The prices shown are the rounded dollar amounts for monthly premiums, as this is how most beneficiaries pay. And after I detail the regular, or fee-for-service, Medigap policies, I give some details on the SELECT or network policies. Remember that for these policies, you must generally use your insurance company’s network of physicians and providers for their full reimbursement.
Regular Medigap Policies – Chicago Area, Illinois – Age 65
Policy A:
The lowest price available is $73, the highest is $241, and the average is $119.
This is the “basic” policy. Some 42 different policies are available.
Policy B:
The lowest price available is $101, the highest is $199, and the average is $144.
On the whole, these cost about 21% more than Policy A. 16 different policies are available.
Policy C:
The lowest price available is $121, the highest is $312, and the average is $162.
On the whole, these cost about 36% more than Policy A. 21 different policies are available.
Policy D:
The lowest price available is $100, the highest is $195, and the average is $135.
On the whole, these cost about 14% more than Policy A. 13 different policies are available.
Policy F:
The lowest price available is $108, the highest is $340, and the average is $169.
On the whole, these cost about 42% more than Policy A. 42 different policies are available. These cover all Medigap benefits and are popular.
Policy F – High Deductible:
The lowest price available is $37 the highest is $89, and the average is $57.
On the whole, these cost about 52% less than Policy A. 13 different policies are available. The deductible in 2012 is $2,070.
Policy G:
The lowest price available is $102, the highest is $196, and the average is $139.
On the whole, these cost about 17% more than Policy A. 26 different policies are available.
Policy K:
The lowest price available is $57, the highest is $110, and the average is $82.
On the whole, these cost about 31% less than Policy A. 6 different policies are available. This is the 50% catastrophic policy. The catastrophic level for this policy in 2012 is $4,660.
Policy L:
The lowest price available is $82, the highest is $151, and the average is $120.
On the whole, these cost about the same as Policy A. 5 different policies are available. This is the 75% catastrophic policy. The catastrophic level for this policy in 2012 is $2,330.
Policy M:
The lowest price available is $108, the highest is $136, and the average is $117.
On the whole, these cost about the same as Policy A. 6 different policies are available. This policy is very new.
Policy N:
The lowest price available is $96, the highest is $320, and the average is $132.
On the whole, these cost about 11% less than Policy A. 25 different policies are available. This policy is very new.
SELECT Medigap Policies – Chicago Area, Illinois – Age 65
Policy A:
Only one is available - $128.
Policy B:
Three are available - the lowest price is $98, the highest is $134, and the average is $114.
Policy C:
Four are available - the lowest price is $113, the highest is $154, and the average is $129.
Policy D:
Only one is available - $106.
Policy F:
Seven are available - the lowest price is $114, the highest is $136, and the average is $125. These cover all Medigap benefits and are popular.
Policy F – High Deductible:
None are available.
Policy G:
Four are available - the lowest price is $101, the highest is $123, and the average is $113.
Policy K:
Only one is available - $57.
This is the 50% catastrophic policy. The catastrophic level for this policy in 2012 is $4,660.
Policy L:
None are available.
Policy M
None are available.
Policy N:
Three are available - the lowest price is $85, the highest is $101, and the average is $92. This policy is very new.
If you email me at gjacobs23@windstream.net I can send you a small Excel spreadsheet that gives more detail.
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