ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, October 25, 1996 TAG: 9610250082
SECTION: NATIONAL/INTERNATIONAL PAGE: A-5 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
The price of insurance covering health care costs that Medicare won't pay has skyrocketed in the past year, with increases ranging from 20 percent to 40 percent, a consumer group said Thursday.
As a result, the report contends, many elderly people may have to cancel their supplemental Medigap policies at a time of possible cutbacks in Medicare coverage.
``The sharp increases in Medigap insurance premiums are a threatening prospect for many Americans,'' said Families USA executive director Ron Pollack. ``When premiums increase 20, 30 and 40 percent in one year, many of our nation's elderly are going to be squeezed out of the Medigap market.''
About three-quarters of senior citizens have a Medigap policy to cover items Medicare does not, such as deductibles or prescription drugs.
Families USA - a liberal advocacy group on health care issues - analyzed premium increases between 1995 and 1996 for Medigap in 35 states for Prudential and Blue Cross Blue Shield, the two companies that underwrite more than 50 percent of the $12billion Medigap market.
Prudential's program cooperates with the 30-million member American Association of Retired Persons, and has the largest Medigap sales. Its premiums in the states surveyed rose an average of 23 percent, or nine times faster than Social Security benefits.
Last month, AARP said it would replace Prudential as the provider of its health care insurance contract at the end of 1997 to offer its members a better range of coverage with three other companies.
In California, with 10 percent of the nation's elderly population, the annual premium for Prudential's basic plan rose 37 percent to $774 in 1996, up from $552 in 1995.
But its most popular plan, with more benefits, increased premiums in California 39 percent, to $1,614 from $1,161. With the average Social Security benefit for a single person at $724, the new premium costs more than two months of Social Security checks.
Elsewhere, Prudential's increases ranged from 40 percent in Hawaii to 26 percent in South Carolina. Plans in some states were more expensive in urban areas than rural areas.
Premiums for Blue Cross Blue Shield increased less than Prudential's but still outpaced Medicare inflation or Social Security cost-of-living adjustments in many states.
The report's purpose was not ``to criticize Prudential or AARP or Blue Cross Blue Shield,'' Pollack said. ``But [the companies] are the two largest and cover 50 percent of the market, so it gives you an idea of what senior citizens are confronting.''
LENGTH: Medium: 56 linesby CNB