Now that you’re 65, enrolled in Medicare, and decided on a Medigap policy, you’ll want to know how your insurer chooses to charge for the policy. There are three ways that a Medicare Supplement plan charges: Attained-Age rated, Issue-Age rated, and Community rated. However, these may not actually be any different. We’ll explain.
This article was updated on 2/3/2020
Attained-Age Rated Medigap Plan
Enrolling in this type of plan means your rate is based on your current age and will continue to increase as you get older. If you enroll in a Medigap policy at 65 with a rate of $120, your premium may increase to $132 when you turn 69, and $165 at 72. The plan’s rate may also increase due to inflation and other factors.
Issue-Age Rated Medigap Plan
With this plan your rate is based on the age you are first issued coverage. If at 65 your plan’s premium is $120, it may stay at $120 at 72. But if you were to enroll at 72 your plan’s premium might start at $165, and would not be increased by your age. Premiums may go up due to inflation, but it will never go up because of your age.
Community Rated Medigap Plan
With this plan the community will all be charged the same rate if enrolled in the same plan. If you enroll in a plan at 65 or 72 you would be charged the same rate. Premiums can go up, but age will not be a factor in an increased Medigap premium.
Which Medigap Premium Rated Plan is Best?
While we think that understanding the difference between Medigap pricing options is good to know, the point is somewhat moot because all plans currently on the market increase as you age. Almost every insurance company only sells Age-Attained plans. The few Community Rated plans available often offer discounted rates for younger members so the price increases as you age since the discount is less each year. Therefore the recommended route is to choose the plan that offers the best rate when you first enroll and has a history of smaller rate increases for older members.
Remember when choosing a Medigap plan you want to choose based on the comprehensiveness of the plan, the reputation of the insurer and the price.
For further questions about Medigap rates call the number above.