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Medigap Price and Benefit Transparency Can Provide Seniors with Peace of Mind – Opinion


Approximately 11,000 Americans turn 65 every day. That means around four million people each year become eligible for Medicare health coverage.

You don’t have to remind seniors of this milestone. By the time they reach their 65th birthday, they’ve already been inundated with an onslaught of promotions to purchase Medigap health insurance, which supplements what traditional Medicare covers. These countless emails, brochures, and phone calls add complexity and stress to the already complicated Medigap application process.

Medigap price and benefits transparency can help simplify coverage decisions and protect the finances of seniors during this period of historic inflation threatening their fixed incomes. Unfortunately, the nation’s largest senior advocacy group, AARP, has a significant financial conflict of interest that may prevent it from pushing for more consumer-friendly plans.

Over 14 million Americans have Medigap plans, also known as Medicare Supplemental Insurance. Each Medigap plan provides a complex array of benefits at costs that are difficult to determine. According to healthcare policy specialist Bonnie Burns, “These plans claim innovative benefits, but the actual details are often vague, convoluted, or not explicitly mentioned in marketing materials. Seniors generally cannot acquire premium information until after giving personal data to insurance brokers who are paid by commission and may not have their best interests at heart.”

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This lack of price and benefits transparency makes it difficult for seniors to identify the best plan for them. Consider the wide variations in Medigap costs for the same plans. According to a study by the American Association for Medicare Supplemental Insurance, Medigap premiums can vary by five times for the same coverage. A 65-year-old male can pay $109 per month in Dallas versus $509 in Philadelphia. Even in the same cities, Medigap price variation can be significant. As a result, some unlucky seniors pay thousands of dollars more per year than their neighbors for the same coverage.

If seniors could shop for plans on simple websites as they currently shop for auto and home insurance, they could avoid overpaying. Seniors are much more technologically savvy these days and wish these options were available for their health coverage.

Strong advocacy is needed to drag Medigap plans into the tech revolution. It may surprise you that AARP — one of the strongest advocacy groups in the nation – is also an insurance vendor for major health insurers. In fact, AARP receives most of its money from large insurers, more than $1 billion in 2020, to sell AARP-branded Medigap coverage.

So, the organization and insurers may be more inclined to worry about profits over the well-being of seniors. State insurance commissioners can help by requiring Medigap plans to provide easily understood cost and benefit information and disclose financial conflicts of interest such as royalty schemes.

You can bet Seniors Across America will help advocate for these changes and will always look out for older folks across our great nation. We’ll know we’re making progress when our inboxes are no longer spammed by insurers and their brokers looking to profiteer off the complexity.

John Grant

Author Bio: John Grant, former State Representative, and State Senator, an estate planning attorney, and a member of the National Senior Citizen Hall of Fame, has spent much of his career working on behalf of seniors.  John is continuing the advocacy work by heading a new venture called Seniors Across America to continue speaking up for our elderly population.

Website: Seniors Across America

You can reach John at: john@seniorsacrossamerica.net