A: Annual premiums of Medigap policies vary dramatically even for persons purchasing identical policies in the same location. There are supplemental policies that cover prescription drugs, but annual premiums are increasing at more than double the average increase for policies that do not cover drugs.

Medicare Health Maintenance Organizations (HMOs) were once popular because most of them offered some additional prescription drug benefits at a more affordable cost than Medigap policies. In the past four years, however, many Medicare HMOs discontinued service. That trend is expected to continue in 2002.

Adding to the complexity, many states have programs in addition to Medicare for which you may be eligible. The following is a checklist of important resources.

• Senior Consumer Information: Complete Guide to Health Services for Seniors, by Trudy Liberman and the Editors of Consumer Reports, paperback, 568 pages, $19.95, (800) 500-9760. This comprehensive new book provides a solid foundation for helping you to understand what the options are and what's best for you.
• Customized Comparison Reports: To find the least expensive and safest Medigap policies you can obtain a customized Health Insurance Report for Seniors ($49) from Weiss Ratings at (800) 289-9222. The report is based on your individual circumstances and provides customized comparisons of the actual premium rates offered in your county of residence for each of the ten Medigap plans, along with the Weiss Safety Rating for each carrier.
• Free Insurance Counseling: Your state may provide free health insurance counseling through the Health Insurance Assistance Program (SHIP). An insurance counselor can provide you with information about Medicare, Medigap supplements, Medicaid, and other programs in your area. The specially trained volunteers can help you wade through the confusing language of government and private insurance and help you resolve questions. For information, contact your Area Agencies on Aging. You can reach your local agency by checking your phone book or calling the Eldercare Locator at (800) 677-1116.  Or go to http://www.eldercare.gov.
  

March 2002