Medigap plans, also known as Medicare Supplement Plans, are policies sold by private insurance companies that help fill the gaps in Original Medicare coverage. These policies help cover costs not covered by Original Medicare like copayments, coinsurance, and deductibles.
Depending on where you live, there may be up to 10 different Medigap policies on offer. These plans include Plans A, B, C, D, F, G, K, L, M, and N.
Every Medigap policy offers the same basic benefits: Part A coinsurance/hospital costs, Part B coinsurance/hospital costs, the first three pints of blood used in a procedure, and your Part A hospice care coinsurance or copayment.
Some Medigap policies offer varying amounts of additional coverage for costs such as skilled nursing facility care coinsurance, the Part A deductible, the Part B deductible, or the Part B excess charge.
How Much Do Medigap Policies Cost?
Every insurance company decides how it will set the premium for its Medigap policies. Medigap policy premiums vary widely and may depend on some or all of the following factors:
- The way the policy is rated
- Age
- Location
- Gender
- Tobacco usage
How Are Medigap Policies Rated?
Each policy has a rating or a way the insurance company sets the price. The way they set the price affects your costs now and in the future, so it’s important to ask how policies are rated when deciding what policy to enroll in.
Medigap policies are “rated” or priced in three different ways:
- Community or no-age rated
- Issue-age-rated or entry age-rated
- Attained-age-rated
Community Rated Policies
Community-rated policies usually charge the same monthly premium to everyone with the policy, regardless of age. Premiums may still increase over the years due to inflation and other factors, but they won’t go up due to your age.
Issue-Age-Rated Policies
Issue-age-rated policies charge different premiums based on the age you are when you buy the policy. This means that premiums are lower for people who buy at a younger age and premiums don’t change as you get older. Premiums may still go up due to inflation and other factors, but they won’t go up due to your age.
Attained-Age-Rated Policies
Attained-age-rated policies base premiums on your current age, so your premium increases as you get older. This means premiums are lower the younger you buy, but go up as you age. They usually start out as some of the least expensive policies and go on to become some of the most expensive policies. Like the other types of policies, attained-age-rated premiums may also increase because of inflation and other factors.
Get The Right Medigap Policy For Your Needs
At Simple Retirement Benefits, we specialize in helping you get the Medicare coverage you need. Our experienced agents can offer you the education you need to make an informed choice about the Medigap policy that will work best for you, so you can get peace of mind knowing your health is taken care of. Contact us today at 512-432-5414 for your free quote.
