Seniors who subscribe to Medicare supplemental (Medigap) plans are facing higher monthly premiums because of escalating health care costs and other factors, according to insurance agents and other experts.
And while supplemental plan subscribers are reluctantly accepting the higher premiums, some told the Miner that they will try to cut costs elsewhere or seek part-time jobs.
They enroll in the supplemental plans (parts C to J) to cover costs that the traditional fee for service under Medicare parts A (hospitalization) and B (outpatient) plans do not pay for.
"The premiums went up nationwide," said Doug Eubanks, State Health Insurance Assistance Program coordinator with the Western Arizona Council of Governments in Kingman.
"Around here, they go up double whammies.
If you buy if you were 65, you get your normal increase every year.
And then when you turn 70, you get an age increase.
I have seen it as high as 50 percent."
Supplemental premiums also are rising because the federal government has increased the deductible for hospital stays, according to Tammy Schenavar, a Kingman insurance agent who sells supplemental plans.
She said the deductible for hospital stays that have nothing to do with a previous hospital visit rose this year to $840, up from about $704 in 2001 and $812 in 2002.
Medicare also is reducing its reimbursement rates to hospitals, with supplemental plans covering the difference, Schenavar said.
"It's one of those things that I don't look for to go down," Schenavar said.
"I don't know where this is going to end up."
The rate increases are subject to review by the Arizona Department of Insurance and must show a reasonable relationship to the benefits provided, department spokeswoman Erin Klug said.
A total of 46 companies offer Medigap plans in Arizona.
"We review them, and the standard for that is they must be paying out at 65 cents of every premium dollar collected," Klug said.
But while supplemental premiums are rising, both Schenavar and registered health underwriter John Gilbert of Kingman said few customers are canceling their policies.
Two couples contacted by the Miner said they will absorb the higher costs.
Golden Valley couple Ken and Alma Fisk said their premiums rose a combined $72 a month effective Jan.
"You got to pay it, I guess," said Ken Fisk, a 74-year-old retired truck driver.
"Everything goes up but your income."
The Fisks plan to cushion the higher costs by staying at home more.
"You don't have to cut a heck of a lot, but you tighten here and there," Ken Fisk said.
However, Richard Graff of Kingman said he plans to seek a part-time job as a bus driver because his premium rose by about $25 from $98 a month effective Jan.
He said he switched from a Part F plan to Part E last year because the rates rose from $98 to $120 a month.
Both Graff, 70, and his wife, Shirl, 64, indicated that they will be better off once Shirl qualifies for Medicare when she turns 65 in July.
Shirl said she is paying $500 a month for medical insurance.
Asked whether higher premiums for the supplemental plan will affect their personal finances, Shirl said, "On a fixed income, you've got to believe it."
Supplemental plans can range from $60 to $200 per month, but the most popular one is for Part F because it covers 100 percent of deductibles and co-payments, Gilbert said.
The plans range from parts A through J, with benefits and costs increasing as the letters progress.
Both Gilbert, who recently became a certified senior adviser, and Klug urged seniors on Medicare to shop around.
"The benefits (under each part) are identical, but the costs can vary as much as $100 per month per plan for the identical coverage," Gilbert said.
"Be sure they are shopping for the same coverage.
There are some good, ethical agents around."
Gilbert, 81, has expanded his business since the only Medicare health maintenance organization plan in Mohave County fizzled three years ago with the collapse of Premier Healthcare of Arizona.
Healthnet is offering a Medicare preferred provider organization, which offers more choice of doctors than an HMO, beginning this month in Mohave County.
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