Prescription drug costs dramatically increase Medigap plan premiums

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The soaring cost of prescription drugs dramatically boosted premiums for Medicare supplement insurance (Medigap) policies from 1998 to 2000, according to a news release from Weiss Ratings Inc. |ret||ret||tab|

The average increase in premiums for the three Medigap plans covering prescription drugs was more than double the average increase for plans that do not cover drugs. |ret||ret||tab|

Across the board, dollar increases over the three-year period were significant, ranging from $105 for Plan G to $775 for Plan H.|ret||ret||tab|

Percentage increases for Missouri Medigap premiums are: Plan A, 34.37 percent; Plan B, 31.19 percent; Plan C, 30.40 percent; Plan D, 33.26 percent; Plan E, 23.19 percent; Plan F, 27.76 percent; Plan G, 23.02 percent; Plan H, 48.68 percent; Plan I, 44.29 percent; and Plan J, 20.61 percent. |ret||ret||tab|

"The conclusion that rising prescription drug prices have directly impacted premiums offered to the 39 million eligible seniors is both obvious and incontrovertible," said Martin D. Weiss, PhD, chairman of Weiss Ratings, Inc. "The escalating cost of Medigap insurance, particularly for the premier plans, is becoming prohibitively expensive for seniors on a fixed income."|ret||ret||tab|

The Weiss study is based on 52,000 premium quotes from 171 companies across the nation. |ret||ret||tab|

While other benefits could contribute to premium increases, the study shows a definite pattern revealing a marked contrast in premium rate increases between plans offering prescription drug coverage and those that do not.|ret||ret||tab|

The premium increase on the seven Medigap plans that do not cover prescription drugs averaged only 15.5 percent for the three-year period. In contrast, among the three plans that cover prescription drugs, the premium increases averaged 37.2 percent, or 2.4 times more.|ret||ret||tab|

The impact of the rising cost of prescription drugs is further evidenced by a comparison of the three Medigap plans that offer drug coverage. |ret||ret||tab|

For Plan H, in which the drug benefit represents a significant component of the total benefit package, the average premium increase was also the largest, at 49.8 percent. |ret||ret||tab|

For Plan 1, in which two other non-drug benefits are added, the premium increase was 34.4 percent. For Plan J, in which additional non-drug benefits are included, the increase was 27.3 percent.|ret||ret||tab|

The premiums increases vary greatly by location throughout the nation. States with the largest average increases among the three plans offering drug benefits were Alaska (141.5 percent for Plan H and 60 percent for Plan J) and Arizona (64.4 percent for Plan I). |ret||ret||tab|

Weiss Ratings Inc. is the only source of comprehensive Medigap pricing data and independent insurance company ratings.[[In-content Ad]]