The Medigap Market
If you are shopping for Medicare supplement plans you may have discovered that there are only 10 standardized plans to choose from. The coverage for these 10 plans are required by Medicare to be the same coverage with every insurance company that offers the plans. You may also have discovered that although medigap plan coverages are standardized, the plan prices are can vary greatly. This is because the insurance companies can use several different pricing methods to determine your starting price and also your future price. Listed below are the 3 pricing models Medicare supplement companies will use.
Issue Age Rating
Your premium is based on the age you are when you buy the medigap policy. Generally your premiums are lower for people who purchase a plan at a younger age and your premiums do not increase because you get older. Your premiums may rise due to inflation and other factors but not because of your age.
Attained Age Rating
This premium type is based on your current age, your premiums will go up as you get older. Premiums are lower for younger buyers but go up as you attain another year of age. This type of premium rating may be the least expensive at first but they can eventually become the most expensive. Premiums will rise due to your age increasing, inflation and other factors.
Generally the same monthly premium is charged to everyone who has the medigap plan regardless of age may start higher than Your premium is not based on your age however your premiums may rise due to inflation and other causes.
Some other factors to consider that can affect your plan prices:
multiple policy discounts: non-smoker, family discounts, auto bank withdrawal discounts etc...
medical underwriting discounts if you qualify
medicare select plan discounts(select plans require you to use in network providers)
Each of these medigap pricing methods creates a wide range of prices between companies offering the same exact coverage. As you shop for a plan it is important to compare the same plan type with multiple companies and consider the pricing method used to give you a better idea of which plan and company will suite your needs the best.
Medicare Supplement Pricing
Author: Jesse Bannister
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