Premiums for Medicare Supplement Based on Present Age
Anyone on the threshold of 65 or older is aware of the Medicare program for health insurance. Apart from the main Medicare plans there is a supplementary plan which helps to mitigate the additional expenses of Original Medicare and broaden the coverage. These are known as the Medicare Supplement Plans or Medigap.
The private insurance companies who issue Medigap plans follow any one of the three types of pricing policy for these plans. They are:
- Community - age rated
- Issue - age rated
- Attained - age rated
The last two of these take the age of the person to be insured under consideration but in different ways. For issue-age rated policies the monthly premium is based on the age of the policyholder when he is buying the insurance plan. Once the premium is fixed at that rate it does not change. For attained ľage rated policies, the insurance company fixes the premium of the plan according to the current age of the policyholder. So the premium keeps increasing every year as the policyholder gets older. If a person buys the plan at a lower age he will start with a low premium but he will end up paying a high premium as he gets older. Hence even though the attained-age pricing policy may look attractive initially due to the lower premiums, ultimately it charges the highest premiums among all the pricing policies.
While shopping for Medigap people should have the knowledge about the policy followed by the insurance company for determining the monthly premiums. Premiums for Medigap are also subject to change in accordance with the rates of rising prices over the years.