Medigap policies, also known as supplements, are among the most popular Medicare plans Philadelphia has to offer. If you're a senior in the Delaware Valley looking for savings on premiums, it's essential to understand how the rating systems for different plans may benefit you. There are three ways Medigap policies can be rated – each one distinct.
Community-rated plans are the ones where an insurance company determines the ratings by figuring in every person who purchases coverage. Everyone is charged at the same rate regardless of their age. The premiums will cost the same as you age, but it may still increase due to inflation and other factors. For example, every senior from Philadelphia who buys a Plan F policy from Company XYZ will pay $168 per month, regardless of age.
Another Medicare supplement rating system is known as issue-age-rated. Policies under this system are priced based on the age you were when first enrolling in that plan letter, and your premium will not change as you age. For example, Jon from Nashville, age 65, purchases a Plan G policy from Company XYZ with a monthly premium of $150. Maryanne from Nashville, 72, also purchases a Plan G policy from Company XYZ, but she has a monthly premium of $180. Maryanne's premium is higher because she joined the plan at a higher age. Premiums may also go up because of inflation and other factors.
A third system is known as attained-age-rated. Its premiums are based on age and go up as you become older. It may also be affected by inflation and other factors. Using the example of Jon and Maryanne again: Jon from Nashville, 65, buys a Plan G policy from Company XYZ with a premium of
$150. If he waits until he turns 66, his monthly premium will go up to $164, and so on. Maryanne from Nashville, 72, will pay $181 for her Plan G policy premium from Company XYZ, and if she waits until she turns 73, her monthly premium will go up to $198.
Essential questions to ask yourself before deciding which rating system is best for you, include:
● How much will premiums increase as you get older?
● How much did premiums go up the previous year because of inflation?
● Are there any discounts for women, non-tobacco users, married people, paying yearly, or paying through electronic funds transfer?
