The ABCs of Medicare: Medigap

2007 Medigap Premium Rates
Plan	Average ($)
A	1,303
B	1,602
C	1,945
D	1,612
E	1,482
F	1,932
G	1,589
H	1,538
I	1,648
J	1,684
K	874
L	1,188
*Calculations based on a 65-year-old female nationwide, excluding Minnesota, Wisconsin, and Massachusetts, which do not follow the standard A-L plan description. Calculations include all pricing methods. Averages were calculated using mean.

Insurers adjust rates on the basis of state and the price method used, but even when comparing policies within a state using the same price method, there are still considerable pricing differences among insurers. Consider the following examples for a 65-year-old female:

In Florida, Plan C costs $1,888 with Shenandoah Life Insurance Company, while Blue Cross Blue Shield of Florida issues the same policy for $2,824, representing nearly a 50% difference in cost. If you are a smoker though, the policy with Shenandoah will jump to $3,825 per year. "Select" policies, which limit your use of physicians to an approved network, will cost you less. United Healthcare(UNH Quote) offers such a policy for $1,533.

In North Carolina, the cost of the popular Plan F ranges from $1,157 with Philadelphia American Life to $2,760 with Humana Insurance Company (HUM Quote). In Texas, the same plan costs $1,237 with Sterling Investors Life and $2,782 with Medico Life Insurance.

The other component to consider is the financial strength of the insurer. You can follow this link to the TheStreet.com Ratings screener to find the rating on any insurance company. Ratings are based on a financial analysis covering profitability, capitalization, liquidity, investment safety and stability of the insurer and range from A, excellent, to E, very weak. (Caution: The ratings are assigned to the company, not to an insurance policy.)

LARGEST MEDICARE SUPPLEMENT INSURERS (Based on number of policyholders as of 12/31/06)
COMPANY NAME	Domicile State	TOTAL COVERED LIVES	FINANCIAL STRENGTH RATING
UNITED HEALTHCARE INS CO	CT	2,406,607	B
HEALTH CARE SERVICE CORP*	IL	474,709	A+
MUTUAL OF OMAHA INS CO	NE	399,208	A-
HIGHMARK INC (does business as Pennsylvania Blue Shield)	PA	294,421	B
HEALTH ALLIANCE PLAN OF MICHIGAN	MI	285,963	A+
BANKERS LIFE & CASUALTY CO	IL	285,699	D+
UNITED HEALTHCARE INS CO OF NY	CT	231,543	B-
BLUE CROSS BLUE SHIELD OF MI	MI	214,937	A
BLUE CROSS BLUE SHIELD Of FL	FL	190,106	B+
BLUE CROSS BLUE SHIELD MINNESOTA	MN	187,538	B+
UNITED AMERICAN INS CO	TX	176,875	B-
BLUE CROSS BLUE SHIELD OF MA	MA	176,281	A
WELLMARK INC	IA	163,533	B
EMPIRE HEALTHCHOICE ASSURANCE INC (does business as Empire Blue Cross Blue Shield)	NY	150,267	A
BLUE CROSS BLUE SHIELD OF AL	AL	146,205	A
ANTHEM HEALTH PLANS INC	CT	145,900	B+
STATE FARM MUTUAL AUTO INS CO	IL	139,284	B+
AMERICAN REPUBLIC INS CO	IA	124,690	A-
BLUE CROSS BLUE SHIELD OF KS	KS	122,477	B
BLUE CROSS BLUE SHIELD OF NC	NC	121,725	A-
UNITED WORLD LIFE INS CO	NE	112,381	B
ARKANSAS BLUE CROSS BLUE SHIELD	AR	108,642	A+
ANTHEM HEALTH PLANS OF VA	VA	107,670	A-
HORIZON HEALTHCARE SERVICES IN (does business as Horizon Blue Cross Blue Shield of New Jersey)	NJ	96,547	A+
CONTINENTAL LIFE INS CO BRENTWOOD	TN	95,644	B+
* Does business as Blue Cross Blue Shield of Oklahoma, Blue Cross Blue Shield of Illinois, Blue Cross Blue Shield of Texas and Blue Cross Blue Shield New Mexico Source: TheStreet.com Ratings

Coming up next: Medicare Part D