Using data from all Medigap policies in 2008, we estimated models to explain variation in Medigap premiums. The key results are:
- 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.
- Older and individual policies were on average more expensive than newer and group policies, respectively.
- Policies with a greater number of covered lives were on average less expensive.
- 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.
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.