There a few different types of medicare supplement rating types that are used to calculate monthly premiums. We would like to go over some pricing options for medigap carriers.
Community Rated - "No Age" Pricing. Community-rated pricing also known as "no-age-rated" pricing of Medicare Supplement plans means that the same monthly premium, or price, is charged to everyone who has the Medicare Supplement policy, regardless of your age. Premiums will not increase due to your age. However, prices may go up due to other factors, including inflation.
Not all insurance companies price Medicare Supplement Insurance plans based on Community rated pricing so it is important to ask how an insurance company prices its policies before applying.
Issue Age Pricing for Medigap Plans means that the premium is based on the age you are when you buy, or "issued", the Medicare Supplement policy for a private insurance company. Premiums are lower for individuals who purchase at a younger age and like community rated pricing, premiums will not go up to your age. However, prices may go up due to other factors, including inflation.
Under attained age pricing for medicare supplement policies is based on your current age. Unlike plans based on community rated pricing or issue age pricing, your premium goes up as you get older. Although medicare supplement plans based on attained age may be the least expensive initially, they can be the most expensive of the 3 pricing models. Also, prices of the Medicare Supplement plan may also go up due to other factors including inflation.
Medigap plans fill the "gaps" left over Medicare pays deductibles, coinsurance, copayments and offer coverage for medical care received outside the US. Mus follow federal and state laws and state jurisdiction may offer additional protections. These plans must be clearly identified as "Medicare Supplement Insurance" and are identified in most states by letters A-N.
Be aware that companies may charge different premiums for exactly the same Medigap coverage or Medicare Advantage, but you can see any medicare provider without referrals or prior authorization. Premium increases can occur any time of the year.
Medicare Select is a medigap policy that requires the beneficiary to use a network of providers (cost saving mesasure to keep the premium lower). The best time to buy a medigap policy is during the first six months you are enrolled in Part B.
Get familiar with Choosing a Medigap Policy: A guide to Health Insurance for People with Medicare.
We hope this information makes it easier to understand how medigap costs are calculated. Please contact our office for additional medigap coverage explanations for each of the available plans from A through N and how they coordinate with Parts A & B of original medicare.
