Variation and Trends in Medigap Premiums. Variation in Premiums across States and Plan Types


Using data from all Medigap policies in 2008, we estimated models to explain variation in Medigap premiums.  The key results are:

  1. Medicare spending per beneficiary at the state level is an important factor: a 10 percent increase in Medicare spending per capita at the state level was associated with a 6 percent higher Medigap premium.
  2. Older and individual policies were on average more expensive than newer and group policies, respectively.
  3. Policies with a greater number of covered lives were on average less expensive.
  4. Our measure of insurance market concentration was not a significant predictor in general, but was positively associated with premiums for C plans. That is, C plan premiums were higher in more concentrated markets.
  5. Premiums for plans in states where the majority of policies were issue‐age rated were about 7 percent lower than plans in states where the majority of plans were attained‐age rated.

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