Skip to content
If you are tired of paying all of your out-of-pocket costs by yourself, a Medigap plan can help you. These plans lower your financial obligation if you are a Medicare beneficiary. Though, you do have to pay for Medigap coverage. This is how Medigap premiums are determined.
What Is Medigap?
Medigap is a type of supplemental insurance that can be used to fill the “gaps” that exist in Medicare coverage. The plans help pay out-of-pocket costs, like coinsurance, copayments, and deductibles. Other expenses, like excess charges, can also be paid.
How Are Medigap Prices Determined?
Medigap plans are sold by private insurance companies that set the price of coverage. These prices are determined in three different ways. They are:
Community-rated
Community-rated Medigap plans have their monthly premiums determined based on inflation and other factors, but not age. The same monthly premiums are charged to everyone who has the Medigap policy, regardless of age.
Issue-age-rated
These plans are priced based on the age you are when you buy the Medigap policy. Premiums tend to be lower for people who buy at a younger age. The prices don’t change as you get older, but they will fluctuate based on inflation and other factors.
Attained-age-rated
Premiums for attained-age-rated plans are decided based on your current age. Your premium will go up as you get older if you have one of these plans. With this type of Medigap coverage, premiums tend to be quite low for younger buyers. Yet, they increase gradually as you get older. Attained-age-rated plans are generally the cheapest option when you are young, but they can eventually become the most expensive. Keep in mind that premiums can also go up due to inflation and other factors.
Find Affordable Medigap Coverage
Now that you know how Medigap plans are priced, you can make an informed decision about which plan to choose. If you need more help, don’t worry, Insured For Life can help. Just give us a call at 888-989-0079 to get started with a free consultation.
