Revised Medigap Policies Helped Consumers Purchase Insurance

Evaluation of the Changes in Health Care Financing and Organization program

From 1991 to 1996, researchers with Washington-based PDF Incorporated examined the market for Medicare supplemental insurance (Medigap) before and after OBRA-90, which simplified comparison shopping for Medigap, to determine whether changes introduced in Medigap insurance policies decreased marketing abuses as well as confusion among elderly Americans.

This project was part of the Robert Wood Johnson Foundation (RWJF) national program Changes in Health Care Financing and Organization (HCFO).

Key Findings

  • Researchers found that consumers reported better understanding of which Medigap policies offer the most value for their money and appear to be spending more on Medigap policies after standardization because they are purchasing coverage with more benefits.

  • Even so, they are less likely to purchase coverage for preventive care, at-home recovery, or prescription drugs.

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