When choosing a Medigap (Medicare supplement) plan, it’s important to know that there are three different pricing methods for Medigap plans. So be wise, and choose accordingly!
What is Medigap?
As its name suggests, Medigap covers the “gaps” in insurance that Original Medicare does not cover, such as copayments, coinsurance, and deductibles, and is handled through a private insurance company. You can purchase a Medigap plan by choosing from plans available in your state that fit your needs.
You will pay a monthly premium for your Medigap policy, in addition to the monthly premium you pay for Part B. You are eligible for a Medigap plan if you have Medicare Parts A and B already. Take note, however, that you can’t have Medigap plan and a Medicare Advantage plan at the same time.
The rules for Medigap’s offerings and benefits vary by insurance company and by state, however there are similarities across Medigap Plans A through N that you can compare here.
3 Pricing Methods
Here are the three types of Medigap pricing methods:
- Community rated – Everyone pays the same amount in premiums regardless of age. Premiums do not go up as you age, but may go up due to inflation or other factors.
- Issue-Age rated – Your premium is based on the age you are when you purchase the policy. The older you are, the more you will pay. However, premiums will not increase over time, except as a result of inflation or other factors.
- Attained-Age rated – Your premium is based on your current age. Premiums go up each year as you age.
Other Factors to Consider
Other factors such as discounts, high deductibles, and guaranteed issue rights can affect the price of your policy. Do some research and look at the fine print before choosing your Medigap plan.