Medigap Premium Rate Increases Slowed in 2002, Survey Finds

The average premium rate increase for Medigap insurance policies "slowed dramatically" this year compared to the two previous years, the Sarasota Herald-Tribune reports. A study conducted by Florida-based Weiss Ratings Inc. found that average Medigap policy premiums increased 2.4% this year, compared to 10.9% last year and 7.2% in 2000 (Miille, Sarasota Herald-Tribune, 8/12). Policy rate increases were highest in Rhode Island (10.6%), New Jersey (9.3%) and Florida (8.1%), while Delaware (3.1%), Nevada (3%) and New Mexico (2.2%) had the biggest decreases. The report concluded that the slower growth rate could be attributed to three factors: some insurers stopped offering Medigap policies, some eliminated certain high-priced Medigap plans and some lowered or maintained their Medigap premiums because of legislative changes that reduced claim costs (Weiss release, 8/7). Nationwide, 146 companies currently offer Medigap policies, compared to 167 companies last year and 181 companies in 2000. Weiss Chair Martin Weiss said, "With the exception of certain regions, consumers are finally getting some relief from the large [Medigap] rate increases they've suffered during the past few years, especially in the plans that cover prescription drugs. However, there is still a huge variation in Medigap costs from company to company, implying that many consumers are being greatly overcharged and could save money simply by shopping around" (Sarasota Herald-Tribune, 8/12).