August 28, 2018
Medigap Premiums Differ by Thousands
- A 65-year-old woman in Houston can pay $5,300 a year for Medigap’s Plan C policy or she can buy a policy with exactly the same coverage from another insurance company for $1,700 a year.
- A 65-year-old Hartford, Connecticut, man can spend anywhere from $2,900 to $7,400 annually for the most popular and comprehensive Medigap policy – Plan F.
- The price disparity for Plan A for a 75-year-old man in Manchester, New Hampshire, is also large: anywhere from $1,820 to $6,301.
These are fairly typical of the enormous differences in the premiums that consumers across the country are paying for their Medigap policies.
The price disparities are “extraordinary and unable to be justified purely by the coverage that they’re offering,” said Gavin Magor, director of ratings for Weiss Ratings Inc., a consumer-oriented company that assesses insurance companies’ financial stability.
A nationwide analysis by Weiss shows that the premiums vary widely within each group of plans – Medigap Plans A, B, C through N – despite the fact that the coverage in each group is dictated by the federal government and does not change from one insurer to the next. Every company selling a Plan F policy, for example, must offer exactly the same coverage. (The exceptions are Massachusetts, Wisconsin, and Minnesota, where the states regulate their Medigap plans.)
If two people are buying a Chevrolet Camaro in Houston, “you would not expect one person to pay two or three times more than the other one,” Magor said.
Medigap is an added layer of insurance to supplement Medicare for people over 65. The additional coverage helps them with the copayments, deductibles, skilled nursing, and other charges that Medicare does not pay for.
Weiss supplied the data for this article by comparing Medigap premiums sold in each zip code and separately for men and women and for different age groups. The company based the analysis on premiums at more than 170 insurance companies.
There are a few viable explanations for the disparity in premiums. Urban and rural zip codes in the same state may be priced differently, in part because medical costs tend to be higher in the cities. And some insurers might be able to offer lower premiums, either because they are more efficient or are trying to be more price competitive to gain market share.
But Magor said that none of these explanations can fully account for the enormous price differences within zip codes. Many insurers are overcharging for their Medigap policies, he said.
A spokeswoman for America’s Health Insurance Plans, which represents health insurers, said she could not comment on Weiss’ information without the organization doing its own analysis of the data.
Paying too much for a Medigap plan can have a material impact on a retiree’s life. …
June 14, 2018
Health in Old Age: the Great Unknown
This cartoon, by Vancouver Sun cartoonist Graham Harrop, hits on one of retirees’ biggest mysteries: their future health.
The elderly live with the anxiety of getting a grave illness that isn’t easy to fix, such as cancer or a stroke. And despite having Medicare insurance, they also have to worry how much it would cost them and whether they would run through all of their savings.
They’re right to worry. Health care costs increase as people age from their 50s into their 60s and 70s. About one in five baby boomers between 55 and 64 pays extraordinary out-of-pocket medical expenses in any given year. But by 75, the odds increase to one in four, according to a report summarizing the reasons that some seniors’ finances become fragile.
Large, unexpected medical expenses are one of two major financial shocks that threaten their security – widowhood is the other. A small and unlucky share of retirees will find it difficult to absorb a spike in their medical costs, forcing them to cut back on food or medications, the report said.
Harrop’s cartoon is the product of his cousin’s inspired suggestion that he fill a book with cartoons about the humorous accommodations made between couples who’ve lived together for decades. The book – “Living Together after Retirement: or, There’s a Spouse in the House” – reveals his personal knowledge of the subject. Harrop, who is 73, has lived with his partner, Annie, for more than 20 years.Learn More
April 3, 2018
Dependence on Social Security is Striking
A retiree’s sources of money are often described as a three-legged stool: Social Security, pension, and savings.
But many seniors’ financial support looks more like a single, sturdy pillar: Social Security.
This is shown dramatically in new U.S. Social Security Administration (SSA) estimates of just how critical the federal program is to millions of older Americans. The data speak for themselves:
- One in two retired households counts on Social Security for at least 50 percent of their total income.
- One in four gets virtually all income – 90 percent – from the program.
The differences among myriad demographic groups also follow the usual socioeconomic patterns, according to the SSA researchers, Irena Dushi, Howard M. Iams, and Brad Trenkamp. …Learn More
February 27, 2018
Geriatric Help Eases Family Discord
Family harmony and your parent’s desires are the top priorities during their final years of life – not long-simmering sibling arguments or what you may feel is best for him or her.
That’s why it’s critical for the entire family to gather around parents for caring and gentle conversations before a crisis occurs, such as a medical emergency or sudden cognitive decline.
Jennifer B. Warkentin
“These are the kinds of conversations that need to happen while a parent is still able to discuss the options and make their wishes clear,” said Jennifer B. Warkentin, a clinical psychologist specializing in geriatric care.
Numerous conversations will actually be required to sort out myriad potential needs as a parent continues to age. The issues are both simple and complicated, from contacting Meals on Wheels and installing a shower chair to putting parents’ financial affairs in order, finding a suitable home health aide, and preparing legal documents.
Some parents are eager to have this conversation so they can get things squared away. More often, however, the conversations are tricky, because they make parents uncomfortable with a perceived “role reversal,” said Warkentin, who works primarily with elderly people in skilled nursing facilities in Boston’s western suburbs. She also has clients in independent and assisted living facilities. …Learn More