Medicare Supplemental Insurance Rates

Medigap rates vary widely across plans and across the various insurance companies that offer them. It's important to shop around so that you can get the best policy for your needs at the best rate. One of the ways that companies determine their rates is whether or not they factor age into their formulas. Some plans use age factors and you should ask how the company rates their plans to get a clearer comparison between plans and companies.

Community Rated or No-Age Rated Policies

In these types of plans age is not used as a factor in determining the plan's premiums. In other words it doesn't matter how old you are, the premium for the plan will be exactly the same. The premiums may go up over time due to inflation and other costs but you will not see large rises in premiums as you age.

Issue-Age Rated Policies

In these policies the premiums are based upon the age you are when you first purchase the policy. The younger you are the lower the premiums. The premiums also won't continue to increase based upon your age, as you get older. However, the premiums may go up over time to accommodate inflation and the rising costs of health care.

Attained-Age Rated Policies

These policies are the least favorable for recipients because they go up yearly as you attain an older and older age. No matter how long you have the policy every year it will be adjusted to reflect your increased age. In addition, the policy will also include yearly increases for inflation like Issue-age rated and community-rated plans.

As you can see from the description above a community-rated plan is much more valuable to you over the long term than an attained-age rated plan. If you join Medicare when you are fairly young the difference between an Attained-age rated plan and a Community rated plan can accumulate significantly over the lifetime of the policy. Rates may also be influenced by discounts that are given to couples and non-smokers. When comparing policies ask if the company offers any discounts on their plans.