WEISS RATINGS, INC.

FOR IMMEDIATE RELEASE

Contact:

Ellen Yui at 301-585-0298

Elizabeth Kelley Grace at 561-989-9855

Many Insurers Consistently Overcharge Consumers

for Standard Medigap Policies

United Healthcare/AARP the Most Expensive Most Often

PALM BEACH GARDENS, Fla., May 18, 1998 -- Many insurers are overcharging consumers for Medicare supplement insurance policies (Medigap), with prices varying widely for identical coverage in markets across the U.S., according to a recent study by Weiss Ratings, Inc., a leading rater of insurance company solvency.

Congress created 10 standardized plans -- from the no-frills "A" plan to the top-of-the-line "J" plan -- nearly six years ago. Despite the standardization, however, the Weiss study, based on 28,421 quotes by 97 companies, concludes that many insurers are still charging far more than their competitors.

A 65-year-old male living in Springfield, Ill., for example, would be charged $3,171 per year by National States Insurance Company (domiciled in Missouri) for its Plan J. But he could get the same exact coverage from Country Life Insurance Company (Ill.) for only $1,699. If he lived in Bakersfield, Cal., Harvest Life Insurance Company (Ohio) would charge him only $493 for Plan A, but Bankers Life & Casualty Company (Ill.) would charge him $1,061 for the same coverage with the same benefits.

"Considering that these insurers are selling virtually identical products to the same individual in the same market, many of these high premiums are outrageous," commented Martin Weiss, chairman of Weiss Ratings, Inc. "Bottom line: shopping around can pay off handsomely for consumers."

Among the companies that offer Medigap insurance in at least 10 states, United Healthcare Insurance Company (Conn.) ranks as the most expensive in all markets for five of the ten plans, based on the premiums quoted for a 65-year-old male. For a 75-year-old male, United’s premium rates are somewhat more competitive, but still relatively high.

United Healthcare is also the company that was awarded an exclusive contract with the American Association of Retired Persons (AARP) and began administering Medigap policies for AARP members on January 1, 1998.

"By choosing one of the nation’s most expensive Medigap insurers, I think AARP has done a disservice to its members," commented Martin Weiss. "The only advantage United provides is a promise not to raise rates as you get older, unless the company raises rates for everyone. But our data indicate that they may be charging too much for that advantage."

Other companies that are high in most markets for certain Medigap plans include Union Bankers Insurance Company (Tex.), United Teacher Associates Insurance Company (Tex.), and National States Insurance Company (Missouri). Companies that consistently charge the least in most markets include National Foundation Life Insurance Company (Del.) and Pioneer Life Insurance Company (Ill.).

Senior citizens shopping for the least expensive and safest Medigap policies can obtain a $49 Health Insurance Report for Seniors by writing to Weiss Ratings, 4176 Burns Road, Palm Beach Gardens, Fla., 33410, or by calling 800-289-9222. Callers will be asked to provide age, gender, zip code, and county of residence. Weiss will provide customized lists -- based on the consumer’s individual circumstances -- of the actual premium rates offered in his/her county of residence for each of the 10 Medigap plans, along with the Weiss Safety Rating for each carrier.

The only independent rater of insurance companies, Weiss issues ratings on over 16,000 financial institutions, including life and health insurers, Blue Cross/Blue Shield plans, HMOs, property and casualty insurers, banks and brokers.

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(Attached are tables showing the companies with the most and least expensive Medigap policies nationwide, along with tables showing the most and least expensive companies in your metropolitan area or state.)

4176 Burns Road, Palm Beach Gardens, FL 33410 (561) 627-3300

Insurers Offering the Most Expensive

Medigap Policies in the Most U.S. Markets

Note: The sample quotes shown here are actual premium rates. For all companies that offer Medigap insurance in 10 or more states, a percentile ranking of premium rates within each state or metropolitan statistical area was calculated. The average percentile ranking across the United States was then used as the basis for determining the most and least expensive companies.

Insurers Offering the Least Expensive

Medigap Policies in the Most U.S. Markets

Note: The sample quotes shown here are actual premium rates. For all companies that offer Medigap insurance in 10 or more states, a percentile ranking of premium rates within each state or metropolitan statistical area was calculated. The average percentile ranking across the United States was then used as the basis for determining the most and least expensive companies.

4176 Burns Road, Palm Beach Gardens, FL 33410 (561) 627-3300

Reprinted with permission.

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