Medigap Rating Methods and Premiums

Insurance companies set prices for Medicare Supplement policies applying one of three Medigap rating methods:

Community-rated: Premiums do not depend on age. Premiums may increase due to inflation and other factors, but not because of age.

Issue-age-rated: The premium is based on your age when you buy the policy. The premium is the least expensive for younger buyers and does not change as you get older. It may increase due to inflation and other factors, but not because of age.

Attained-age-rated: The premium is based on your current age. Therefore, the premium is lower for younger buyers but goes up as you get older. This type of premium is the least expensive at first, but can eventually become the most expensive. In addition, the premium may increase due to inflation and other factors.

Most of the carriers use an attained-age rating method. On comparison between issue-age and attained-age rating methods, there are two things to consider:

  • People voting for the issue-age method emphasize the fact that they will NOT have automatic age increases as they grow older.
  • However, for younger individuals the premium is higher for issue-age method than in attained-age method. Those who prefer the attained-age method assert that it takes 10 to 15 years before the issue-age plan become cheaper than the attained-age plan.

Overall, all Medigap plans will increase their premiums over time. Companies with extended medical underwriting rules (more and in-depth health questions) typically have a smaller premium increase.

Also notice:

  • Many companies provide a discount factor for married couples. The typical number is 7 percent.
  • Some companies provide the same premium for men and women. This practice results in a more competitive rate for men and a less competitive rate for woman.

Let Liberty Medicare Help you

If you are looking for Medicare Supplement coverage, Liberty Medicare is here to assist you. We’ll help in all stages of comparing, selecting and enrolling you into the best and most suitable Medicare Supplement Plan for your needs. Our services are offered at no cost to you!

Give us a call at 877-657-7477, or Contact us with your Medicare Questions.