Drug Costs Cause Medigap Premiums to Rise In Texas, Nationwide

Rising prescription drug costs are "dramatically" increasing premiums for Medicare supplemental insurance policies in Texas, according to a recent nationwide study by Weiss ratings. The Ft. Worth Star Telegram reports that Texas seniors saw premiums for Medigap policies that cover prescription drugs increase by as much as 34% between 1998 and 2000. The trend was also seen nationwide, as Medigap premiums on plans with drug coverage rose more than twice as much as premiums for plans without drug benefits. Study author Martin Weiss noted in the report, "The escalating cost of Medigap insurance, particularly for the premier plans, is becoming prohibitively expensive for seniors on a fixed income." Weiss analyzed 52,000 premium quotes from 171 companies across the country. He found that between 1998 and 2000, average premiums increased by between $105 for the least costly plan and $775 for the most expensive coverage. According to Pete Fredriksen of the AARP, the rise in Medigap premiums demonstrates the need for expanded drug coverage for seniors through Medicare. Of 10 Medigap policies, Texans experienced the largest premium increases for the three plans that cover prescription drugs -- H, I and J. Premiums for plan H rose $556 to $2,181, plan I rose $550 to $2,407 and plan J premiums climbed $741 to $3,246. Medigap policies, which help pay for health care expenses not covered by traditional Medicare, have become "increasingly popular" in Texas, as most Medicare HMOs, which typically provide drug coverage, have exited the market. About 580,000 Texans have Medigap coverage (Banstetter, Ft. Worth Star Telegram, 4/2).