IOWA MEDIGAP POLICIES AVAILABLE IN 2012

IOWA 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, for fee-for-service or standard policies, 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 easier to show than explain. Information on SELECT or network policies is also given; usually you have to go to a doctor, hospital or provider in the insurer’s network to get full reimbursement for these types of Medigap policies, but the premiums are usually less.

A word of caution, though. The rates shown are “sample” rates only, and what you will be quoted by the insurance company will differ from these rates for a variety of reasons, including your gender, where you live in Iowa, how and how often you pay your premiums, your past medical claims, whether you use tobacco, and so forth. But the charts will give you an excellent idea of what the different policy types (“letters”) cost compared to each other, so you can decide which of these most interest you, and also as to which companies have low premiums.

Most policies in Iowa are “Attained-Age-Rated” policies, and the premiums you pay for these will tend to increase as you get older. On the other hand, a few policies are “Issue-Age-Rated” policies, and one is “Not-Age-Rated,” 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 Not-Age-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 Medigap 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; in some cases by a factor of 2 or even 3!

This data was derived from the Iowa Division of Insurance website www.insurance.iid.state.ia.us in June 2012. The dollar amounts shown below are the annual cost of the policies.


Medigap Policies – Age 65 – Iowa

Policy A: The lowest price for a policy is $788, the highest is $2,145, and the average is $1,216. Some 44 different policies are available. Three SELECT policies, the lowest for $759, the highest for $1,448, are available. This “A” policy is the “basic” policy.

Policy B: The lowest price for a policy is $1,186, the highest is $2,443 and the average is $1,535. Some 21 different policies are available. On the whole, these cost 26% more than a basic policy. Two SELECT policies, one for $1,167, and one for $1,509, are available.

Policy C: The lowest price for a policy is $1,395, the highest is $2,778, and the average is $1,733. Some 24 different policies are available. On the whole, these cost 43% more than a basic policy. Two SELECT policies, one for $1,562, and one for $1,740, are available. These “C” policies are popular.

Policy D: The lowest price for a policy is $1,228, the highest is $2,116, and the average is $1,537. Some 15 different policies are available. On the whole, these cost 26% more than a basic policy. One SELECT policy, for $1,303, is available.

Policy F: The lowest price for a policy is $1,388, the highest is $2,420, and the average is $1,718. Some 43 different policies are available. On the whole, these cost 41% more than a basic policy. Three SELECT policies, the lowest for $982, the highest for $1,545, are available. These “F” policies cover all Medigap benefits and are popular.

Policy F – High Deductible: The lowest price for a policy is $332, the highest is $1,035, and the average is $615. Some 20 different policies are available. On the whole, these cost 49% less than a basic policy. One SELECT policy is available for $660. The deductible in 2012 is $2,070.

Policy G: The lowest price for a policy is $1,232, the highest is $2,126, and the average is $1,487. Some 24 different policies are available. On the whole, these cost about 22% more than a basic policy. Two SELECT policies, one for $1,308, and one for $1,372, are available.

Policy K: The lowest price for a policy is $560, the highest is $1,114, and the average is $799. Some 14 different policies are available. On the whole, these cost 34% less than a basic policy. Two SELECT policies, one for $581, and one for $705, are available. This “K” policy is the 50% catastrophic policy. The catastrophic level for this policy in 2012 is $4,660.

Policy L: The lowest price for a policy is $810, the highest is $1,589, and the average is $1,134. Some 12 different policies are available. On the whole, these cost 7% less than a basic policy. One SELECT policy is available for $999. This “L” policy is the 75% catastrophic policy. The catastrophic level for this policy in 2012 is $2,330.

Policy M: The lowest price for a policy is $1,186, the highest is $1,894, and the average is $1,377. Some 9 different policies are available. On the whole, these cost about 13% more than a basic policy. One SELECT policy is available for $1,297. This “M” policy is very new.

Policy N: The lowest price for a policy is $930, the highest is $1,851, and the average is $1,228. Some 29 different policies are available. On the whole, these cost about the same as a basic policy. Two SELECT policies, for $1,097 and one for $1,131, are available. This “N” policy is very new.

If you email me at gjacobs23@windstream.net I can send you a one-page Excel spreadsheet with more specific information.