Rx costs driving up US Medigap premiums

Rising costs of US Medigap health care policies, which top uptraditional Medicare coverage, are forcing many elderly and disabled people out of the programs, and it is the prescription drug component that is driving the premium increases, reports the New York Times.

Empire HealthChoice, the largest Medigap drug insurer, says it is raising its premiums 31% on March 1 for policies with drug coverage. The company said it had underestimated rising medical costs, even after 10% premium rises in each of the last two years, and adds that it lost $18 million on Medigap drug policies last year, notes the NYT.

The report adds that the National Association of Insurance Commissioners is considering a revision of Medigap, and one proposal being examined is to make all Medigap plans include prescription drug coverage.