The three Medigap pricing methods are community-rated pricing, issue-age-rated pricing, and attained-age-rated pricing. The insurer’s pricing method will impact how much you pay over time, so if you select a plan type, you should shop multiple insurance providers for the best option. One pricing method is not necessarily best across the board. Work with a licensed agent to find an accurate comparison of the costs for the length of your policy.
When plans say pricing does not change as you age, the costs of your premiums will likely still increase over time, just not as a result of your age. Inflation and other economic factors can make those changes necessary.
Community-Rated Medigap Plans
When you choose a Medigap plan that is community-rated, the cost of your premiums will not be related to your age. A 65-year-old and 80-year-old will pay the same premiums if they choose the same Medigap policy.
Issue-Age-Rated Medigap Plans
A Medigap plan with issue-age-rated pricing will charge you based on how old you are when you purchase the policy. This may benefit people who purchase the plan during their Medigap open enrollment period, which lasts for six months and begins when you are 65 or older and first enroll in Medicare Part B. During that time, you can purchase a policy without being subject to medical underwriting.
Attained-Age-Rated Medigap Plans
Medigap plans with attained-age-rated premium costs will charge you a higher price each year based on the age you currently are—the age you have attained. As you age, your premiums will rise with you.
Variations in Medigap Costs
Beyond the pricing method, you may see differences in the cost of a Medigap plan based on discounts offered by the insurance provider or the use of medical underwriting. You may receive a discount for setting up automatic payments, for having no history of tobacco use, or for being married. If you purchase a plan that uses medical underwriting, you may have to pay more based on your medical history or pre-existing conditions.
You may find cost savings with a Medicare SELECT policy but will be directed to use specific facilities or see certain providers.
Some states offer a high-deductible version of Plan F and G. These plans will help you save on premiums in exchange for the high deductible and separate deductible for foreign travel emergency services.
Choosing a Medigap Policy
When you are eligible to choose a Medigap plan, you should consider the pricing and coverage options that work best for your individual situation. The same policy type from different insurance providers may be priced differently, and while some pricing methods give you a low cost now, they may result in a significantly higher cost later.
For assistance in choosing a Medicare Supplement plan that does not overwhelm your budget, speak with a licensed agent from Magellan Healthcare. Our team will take care of you and see that your needs are met for now and in the future. Give us a call to book your appointment.
