Medigap is also known as Medicare Supplement plans. Medicare Supplement plans help cover the out-of-pocket expenses from Original Medicare, such as deductibles, copayments, and coinsurance. Medicare Supplement plans are not standalone plans but work together with Medicare Part A and Part B.
Like the other Medicare parts, you need to pay premiums for Medigap to stay enrolled in the plan. Since Medigap plans are sold by private insurers, the prices and coverage vary, and plan premiums can be calculated through one of three main methods: Community-rated, Issue-age-rated, and Attained-age-rated.
Community-rated
This is the simplest method of calculating Medigap premiums. In community-rated plans, age is not a factor in calculating premium costs. Instead, the insurance company charges the same premium to everyone who has that specific Medigap plan. The only reason why the premium may change is because of factors outside of age, such as inflation.
Issue-age
Issue-age-rated plans consider the age of the enrollee when calculating premiums. It factors in the age of the enrollee when they enrolled in the plan. This means if you purchase an issue-age-rated plan at age 65, you’ll pay a cheaper premium than if you enrolled in one at age 70. However, your premiums will not increase because of your age, but they can be affected by external factors such as inflation.
Attained-age-rated
In attained-age-rated plans, the premiums are calculated like community-rated policies, meaning they are based on age. However, the insurer will consider your current age when calculating your premium, and your premium will increase as you grow older. There could be other increases as a result of inflation, for example.
Find A Medigap Plan Today!
At Jersey Medicare Solutions, we can help you find the right Medigap policy at a price you can afford. That’s because our overall goal is to make sure you have all the coverage you need that sticks within your budget. To learn more about your Medigap options, give us a call at 1-800-549-6804 or send an email to Info@Jerseymedicaresolutions.com.
Thomas M. Brzezinski is one of the founding partners of WMAG William & Michael Advisor Group LLC and Jersey Insurance Solutions. He has been involved in the insurance industry for over ten years and specializes in developing client relationships that last a lifetime.
