Medicare Supplement Premiums
“How is my Medicare supplement premium determined?”
Noticing that your Medigap plans seem to increase from year to year? There are three different methods for pricing used by companies selling Medigap plans. Each of the three methods is based on different factors such as age, group, and inflation.
Companies selling Medigap plans can use any of three pricing methods to determine Medigap rates.
Community-rated
The prices of these policies have nothing to do with age. Grouping, pricing by zip code area, or state determines policy pricing. This means that everyone in your zip code area or state will pay the same as any other person in that same area regardless of age or medical history. Premiums may increase from year to year, but that will most likely be the result of inflation or other factors. Community-rated Medigap policies are ideal, however, they are rare in all parts of the country.
Issue Age-Rated
The prices of these policies are affected by age only when you initially enroll in the plan. For example, someone who enrolls at age 70 will have a lower premium than someone who enrolls at age 75. The age that you enroll will play a key role in determining premium cost. This means that the sooner you enroll, the better. Your premium will not increase due to your age, however, it can increase due to inflation or other factors. While these plans are slightly more common than community-rated policies, they are still among a small percentage of Medigap policies across the US.
Attained-Age-Rated
The prices of these policies are set by the current age of the policy-holder. In general, Medigap policies setting rates according to current age see more significant increases than community-rated or issue age-rated policies. Attained-Age-Rated policies are by far the most common.
“Why does my Medicare supplement premium go up each year?”
The vast majority of Medigap policies are attained age-rated, and priced according to the policyholder’s current age. Because your age can only go up from year to year, your rates are likely to reflect that. While increases vary from company to company, our years of experience indicate that people purchasing attained age-rated policies at age 65 tend to notice the most significant rate hikes between ages 67 and 69.
“How can I lower my Medicare supplement premium?”
Because you are able to apply for a new Medigap policy at any time, it is advisable to compare your current rates to a competitor’s from time to time. If you have pre-existing conditions, you should be cautious in considering a change. However, you have every right to shop the market for new Medicare supplement policies in order to look for lower rates. You may keep the same plan but switch to a company offering a lower rate, or you may decide to switch from one Medigap plan to another. For example, many people looking for the most comprehensive yet affordable coverage choose to upgrade from their current supplement plan to Medigap Plan F.
Comparing Medigap Plans and Quotes might save you money
Finding the lowest Medicare supplement rates available in your area starts with getting a free Medigap quote. Contact MedicareMall for further assistance in ensuring you have the lowest 2014 Medigap premiums.
2016 Medicare Supplement Premiums © 2011-2016 MedicareMall.com