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 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. I also include some very brief information as to what these will cost for a beneficiary age 70 and 75. All this is harder to explain than it is to show.
A word of caution, though. This data was collected from the Texas Department of Insurance website, www.tdi.texas.gov, in February, 2012. It gives, for each company, and for each policy type, the lowest and highest price, and you will be quoted a price within that bracket. Some of the factors which vary the price include where you live in Texas, your sex, whether or not you use tobacco, whether the policy is “guaranteed issue,” etc. And you may get a discount, for example, if you use auto-pay to pay your premiums.
Some Medigap policies are “attained-age rated,” some are “issue-age rated” and some are “community rated.” The attained-age policies go up in price as you age, but may be the least costly to begin with, and it appears that this type policy is common in Texas. 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.
With this in mind, remember that each type policy sold had the exact same benefits 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 almost all cases by a factor of 3, and in some cases, even more! The dollar amounts shown below are the annual cost of the policies. First we show all the information on standard or fee-for-service policies, and then, the information on SELECT or network policies.
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.
Standard or “Fee-for-Service” Medigap Policies – Age 65 – Texas
Policy A:
The lowest price available is $817, the highest is $2,932, and the average is $1,445.
This is the “basic” policy. Some 48 different policies are available.
Policy B:
The lowest price available is $1,017, the highest is $3,339, and the average is $1,765.
On the whole, these cost about 22% more than Policy A. 22 different policies are available.
Policy C:
The lowest price available is $1,200, the highest is $3,796, and the average is $1,951.
On the whole, these cost about 35% more than Policy A. 26 different policies are available. These are popular.
Policy D:
The lowest price available is $1,029, the highest is $2,948, and the average is $1,706.
On the whole, these cost about 18% more than Policy A. 13 different policies are available.
Policy F:
The lowest price available is $1,011, the highest is $3,629, and the average is $1,919.
On the whole, these cost about 33% more than Policy A. 41 different policies are available. These cover all Medigap benefits and are popular.
Policy F – High Deductible:
The lowest price available is $278, the highest is $1,263, and the average is $657.
On the whole, these cost about 55% less than Policy A. 17 different policies are available. The deductible in 2012 is $2,070.
Policy G:
The lowest price available is $1,045, the highest is $2,962, and the average is $1,664.
On the whole, these cost about 15% more than Policy A. 29 different policies are available.
Policy K:
The lowest price available is $574, the highest is $1,706, and the average is $961.
On the whole, these cost about 33% less than Policy A. 12 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 $922, the highest is $2,400, and the average is $1,436.
On the whole, these cost about the same as Policy A. 9 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 $962, the highest is $2,430, and the average is $1,458.
On the whole, these cost about the same as Policy A. 9 different policies are available. This policy is very new.
Policy N:
The lowest price available is $828, the highest is $2,885, and the average is $1,338.
On the whole, these cost about 7% less than Policy A. 32 different policies are available. This policy is very new.
SELECT or Network Medigap Policies – Age 65 – Texas
These policies require you to go to physicians and providers which are in your Medigap insurer’s network for your insurer’s full payment. (As only one basic policy is offered, we don’t do price comparisons to it here.)
Policy A:
The lowest price available is $1,487, the highest is $1,693, and the average is $1,590.
This is the “basic” policy. Only 1 policy is available.
Policy B:
The lowest price available is $951, the highest is $1,723, and the average is $1,382.
4 different policies are available.
Policy C:
The lowest price available is $1,022, the highest is $2,230, and the average is $1,564.
6 different policies are available.
Policy D:
The lowest price available is $840, the highest is $1,745, and the average is $1,277.
6 different policies are available.
Policy F:
The lowest price available is $1,047, the highest is $3,368, and the average is $1,638.
12 different policies are available. These cover all Medigap benefits and are popular.
Policy F – High Deductible:
The lowest price available is $480, the highest is $797, and the average is $632.
2 different policies are available. The deductible in 2012 is $2,070.
Policy G:
The lowest price available is $856, the highest is $1,780, and the average is $1,366.
8 different policies are available.
Policy K:
The lowest price available is $612, the highest is $960, and the average is $799.
2 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 $1,104, the highest is $1,356, and the average is $1,230.
Only 1 policy is 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 $923, the highest is $1,534, and the average is $1,216.
2 different policies are available. This policy is very new.
Policy N:
The lowest price available is $722, the highest is $1,459, and the average is $1,089.
7 different policies are available. This policy is very new.
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