There are many things that confuse seniors about Medicare. There is too little opportunity for seniors to learn about the various benefits and plan alternatives before it is decision time. The only thing most seniors know when they visit their state Medicare office is that they think they are eligible for coverage under Medicare.
Most seniors are wholly unprepared to make an informed decision about the intricacies of Medicare, without having even gotten into what the various Medicare supplement rates are. They need all the help they can get but at state and federal Medicare offices they are not allowed to favor one Medigap providing company over any other.
When it is time for seniors to learn about the Medigap plans it is easy for them to become confused. The flood of conflicting offers, often using different terminology, can become a nightmare. Seniors understand why different insurance companies have different policy premium rates. What is confusing, when it comes to Medigap policies, is that seniors think of Medicare as one entity supervised and monitored by the government.
So, what are the factors private insurance companies use to set Medigap Rates? Shouldn’t standardized plans have the same rates? One reason for varying rates is to allow competition. The Medicare plans regulated by states allow competition while sections of Medicare regulated by the federal government use set rates.
If private provider companies feel competitive pressure they might lower premium rates. This is why finding a way to help senior citizens compare rates, from private insurance providers, on each available Medigap policy is so important. Here are the three methods that private insurance companies use to calculate Medigap premium rates.
Community Rated Pricing Method
For Medigap plan insurance rates arrived by using this method, the private insurance company charges each person with the same type Medigap policy the same premium amount. Differences in age or any other condition have no bearing on the premium rate charged. A person sixty-five would pay the same rate as a person eighty-five years old.
A good thing about community rated premiums is that rates can never be increased because of a person’s age. Rate increases can occur but they must be based on inflation or other identifiable factors. From community to community and from state to state the private insurance company is not required to hold rates the same. Senior citizens need to understand that in the same community the premium rates for the same Medigap plan will vary, sometimes greatly.
Issue-Age Rating Method
This method of setting premium rates is based on the age of an individual at the time they purchase the policy. With this method, the lowest premium will be given to those who are sixty-five. If another person switched plans, later in life, the Medicare supplement rates will be higher than if they had chosen the same plan when they started, at sixty-five.
This underscores the importance for seniors to be able to make premium price comparisons, so that informed decisions can be made. For the age at time of issue method, the premium rate can never be increased just because a person ages. Only other factors, such as inflation result in premium prices increasing. Private carriers are not required to charge the same premium to someone living in another state. That means if you live near a state border, you may have friends, the same age as you, paying more, or less for the same Medigap plan premium.
Attained Age Premium Rating Method
The third method of setting premium rates is called the Attained Age method. The starting rate is determined by the age of the person when they first start the policy. The premium rates will go up every year, based on the changing age of the policy holder. This method of setting premium rates typically offers the lowest rates, however you must shop the rates from every company each year to see if changing companies will result in a lower premium. This can be well worth it as the savings can be significant over the years. The insurance provider could use age, inflation and other factors, combined, to raise premium rates.
Get Medicare Supplement Rates Online
We knows you need help to compare Medicare Supplement rates. This website has a solution to this problem. Our company has gathered all the information and put it into an easy format for seniors to use. Any senior can get the best possible premium rate quote quickly. All they need to do is enter the senior’s zip code. Promptly, a report will appear that shows the various Medigap Plans, each distinguished by a letter designator, and the premiums charged by selected top private Medicare Supplement plan providers.
Each year every senior citizen should return to this website, during the open enrollment period, to recheck premium rates for every Medigap plan. This is necessary because each Medigap plan provider is allowed to change their rates once a year. This website is our answer for how to help seniors stay on top of the Medicare Medigap Supplement plan benefits and rates.