Medigap Pricing Overview
Medicare Supplement Insurance (Medigap) policies are regulated by the states and don’t follow Medicare enrollment time frames. You may change your Medigap policy at any time by applying with another insurance carrier. Most carriers evaluate your risk factors and issue you a rate based on that evaluation through a process called underwriting. Different states have different rules, and some carriers may not require the evaluation depending on your situation.
Each insurance carrier decides how it sets the price, or premium, for its Medigap policies. It’s important to consider how a carrier prices its policies. The way it sets the price affects how much you pay now and in the future.
Medigap policies can be priced, or “rated,” in three ways:
Community rated (also called “no-age rated”)
Issue-age rated (also called “entry-age rated”)
Attained-age rated
Medigap policy carriers usually increase their rates annually, but they can increase rates at any time with the approval of state regulators. These rate increases may happen at different times of the year for different insurance carriers.
All insurance carriers raise their rates to adjust for inflation and health care costs. Some carriers also raise rates as you age in to higher age brackets. Other carriers offer discounts to new enrollees, and these discounts gradually expire over time, resulting in a rate increase that may be larger than you anticipated. All of these factors make deciding to change plans due to a rate increase more challenging.
Via Benefits Insurance Services recommends the following:
Use trusted, established insurance carriers
Choose the level of coverage that matches the level of heath services you actually use
If your rate increase is more than 12%, call and speak with one of our licensed benefit advisors* about your options. We can review the current rates for other insurance carriers and their enrollment criteria
*Our licensed benefit advisors specialize in health insurance for retirees. They go through annual training and certification to ensure they can help you make an informed and confident decision.