Weiss: Medigap Price Differences Increase

When the researchers looked at Plan C policies, they found that the cost ratio for the most expensive and least expensive policies has increased to 7.0, from 6.0.

In 2003, the most expensive of all Medigap policies, a Plan H policy in Arkansas that provides $1,250 in prescription coverage, costs 28 times as much as the least expensive Medigap policy, a barebones Plan A policy in Indiana that merely eliminates coinsurance costs and covers the cost of 365 days of hospital care after Medicare coverage ends.

Medigap rates "vary for a number of reasons, including regional differences in the cost of health care, insurers' underwriting and pricing methodologies, the health status of the target population, and state policies regulating premium rates," says Melissa Gannon, a Weiss vice president.

Private insurers sell Medicare supplement policies to fill in the many gaps that exist in basic Medicare coverage.

Thirty-seven percent of Medigap purchasers buy Plan F policies, which eliminate Medicare deductible costs and skilled nursing facility coinsurance costs and also cover what the government says are excessively high physician charges, according to the U.S. General Accounting Office.

Twenty-six percent of purchasers buy Plan F policies, which eliminate deductible costs and skilled nursing facility coinsurance costs without covering excess physician charges.