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Medicare Supplemental Insurance Rates

Medicare supplemental insurance rates can depend on many factors, including the plan you choose, your age, and even your zip code. Knowing which factors you can control and how to secure the best rates can sometimes be difficult to discern, but researching and taking time to compare Medicare supplemental plans and local providers online can help you find insurance at the best value. Understanding how Medicare supplemental insurance, also called Medigap, can help cover your health expenses can also help you better understand what plan you need to get the right amount of coverage without paying more than you need to in monthly premiums.

Factors that Determine Rates

One of the biggest factors that can determine Medicare supplemental insurance rates are benefits of individual plans. Seniors can choose from 10 standardized Medigap policies, labeled Plan A through Plan N. The lowest premiums are available with Medigap Plan A, which offers the most basic coverage. Medicare supplemental insurance rates are typically highest with the comprehensive Plan F. Seniors can secure lower monthly premiums by choosing high deductible options. The trade-off with those options, of course, is higher out-of-pocket costs. Since Medigap plans are standardized, Medicare supplemental insurance rates cannot determine the quality of a plan. Therefore, if you see Plan A offered at different premiums by two different companies, you will not receive more benefits from the more expensive plan. Plan A is the same no matter where you buy it. Benefits you might potentially receive from higher premiums include convenience and greater customer service.

Another important factor in determining Medicare supplemental insurance is timing. The best time to purchase supplemental Medicare insurance is within the first six months of enrolling in Medicare Part B. During this period, called Open Enrollment, you can purchase any plan available to you without having to go through medical underwriting. This means you are guaranteed a supplemental plan without having to take a physical. A supplemental insurance company also cannot charge you a higher premium because of your lifestyle or medical history during Open Enrollment. To get the best Medicare supplemental insurance rates, it is crucial to apply during this period.

If you miss your Open Enrollment period, you still have a right to purchase Medicare supplemental coverage. However, your options may be limited, particularly when it comes to securing low monthly premiums. If you must go through medical underwriting, several lifestyle factors can affect your premium, including tobacco use, preexisting conditions and even your gender. Medicare supplemental insurance rates are typically lower for women versus men. Another little-known factor is your zip code. Companies can charge different rates to different zip codes, making comparisons of local companies an important part of finding the best rate.

How Companies Determine Your Rate

Medicare supplemental insurance rates are determined by one of three methods. The "community rated" method applies the same monthly rates to everyone in a given plan, regardless of age. For example, a 65-year-old and a 75-year-old buy the same policy. If they both enroll during Open Enrollment, they will pay the same monthly rate. In the "community rated" method, your monthly premium can increase annually for inflation, but never for your age, making this a good option for seniors who either retired much later than age 65 or delayed enrolling in Medicare by keeping private insurance.

The second method for determining Medicare supplemental insurance rates is called "issue age related," or "entry age related." This method is a good option for people who plan to retired early. With an "issue age related" policy, you secure the rate that you receive when you enroll. So if you enroll at age 65 and qualify for a rate of $255 a month for a given policy, you will keep that rate, adjusted for inflation, as long as you keep your plan. If you enroll in that same policy at age 70, you will have a higher monthly premium to start, but you'll be able to keep that monthly rate as you get older.

The final method that Medigap companies use to determine premiums is also one of the most common. The "attained age related" method adjusts your policy premium for your age, so you will enjoy lower rates when you first enroll and will see your premium rise by a set percentage, along with adjustments for inflation, as you get older. Since rates for young seniors are often the lowest available, the "attained age related" method is a good option for seniors who retire early. This option is also good for seniors with strong retirement investments, who can easily adjust to the moderate increases for age each year. Since Medicare supplemental insurance rates can depend on many factors, it is crucial to research your options so you can purchase the right plan at the right time with the structure that best suits your unique needs.


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Beatrice D
Modesto CA

Medicare Supplemental Insurance Testimonial

This site made it easy to get the Medicare supplemental policy that was right for me. I saved a lot of my money and time. Medicare Supplemental Insurance Testimonial