HEARING - U.S. Senate Special Committee on Aging

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exceeding 100 percent. Thus, we believe that Medigap products offered by Blue Cross
and Blue Shield Plans provide good value to elderly consumers.
A major advantage of the private market is that it allows beneficiaries to select among
hundreds of products to obtain a policy tailored to their needs. Consumers can choose
policies that meet or exceed the Baucus requirements, plus benefits such as prescription
drugs, vision and hearing care, and convalescent assistance at home - benefits that
neither the Medicare program nor the proposed federal catastrophic program for the
elderly would cover.
Blue Cross and Blue Shield Plan Medigap products offer substantial choices for coverage
of expenses that are neither covered by Medicare nor required under the Baucus
Medigap standards. In 1985, for non-group products we estimate that 88 percent of
Plan products covered Part B expenses beyond the $5,000 minimum required under the
Baucus Amendment, 34 percent of products covered each hospital deductible, 86
percent covered Skilled Nursing Facility copayments and 63 percent covered the $75
Part B deductible. In addition, 43 percent of Plan products offered coverage for
prescription drugs, 36 percent covered Skilled Nursing Facility days after expiration of
Medicare benefits, and 29 percent offered vision care coverage. Several products also
provide benefits such as wellness education, psychiatric benefits beyond Medicare, and
convalescent homemaker services.
While such comprehensive coverage is preferred by most Medigap buyers, many Blue
Cross and Blue Shield Plans also offer less extensive and less costly coverage. This
variety of coverage options is reflected in Plans' Medigap premiums, which ranged from
$18.13 to $130.00 per month for non-group products In 1985. Ten percent of all
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