Variation and Trends in Medigap Premiums. Factors Affecting Premium Growth

12/16/2011

Using all Medigap plans that had usable data in each of the four years from 2007 and 2010, we estimated a model to predict annual changes in premiums within plans. Important findings are:

  • Medicare per capita spending trend within states was a significant and positive predictor of increases in Medigap premiums.
  • Both the level and change in Medicare Advantage penetration within a state were associated with lower rates of growth of Medigap premiums during the 2007‐2010 period.
  • Older and individual policies experienced larger increases in Medigap premiums than newer and group policies, respectively.
  • In general, plans with the largest number of covered lives had smaller premium increases
  • Plans in states with issue‐age rating requirements had smaller rates of premium increase than plans states with attained‐age rating.

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