Attained Age vs Issue Age
- Attained Age vs Issue Age
- Background Information: What is a Medicare Supplement?
- Medigap Costs & Pricing Considerations
- Attained Age vs Issue Age vs Community Rated Pricing
- Other Pricing Considerations
- Conclusions and Actions
- Further Reading
Medicare Supplement Insurance Companies all price their plans differently. One of the biggest differences between plan prices is whether or not an insurance company uses attained age vs issue age to price their Medigap plans.
Background Information: What is a Medicare Supplement?
Medicare Supplement plans, also called Medigap Plans since they cover the gaps in Original Medicare coverage, are issued by private insurance companies.
Standard Coverages from Each Medicare Supplement Plan
The government tells each company what should be included/covered in each Medigap Letter Plan. As a result, they are standard in coverage. However, the insurance companies can price each plan differently, and each company does so according to its needs in each market (part of the country) they sell in.
Medigap Costs & Pricing Considerations
The way each private insurance company prices its plans has an effect on what the plan will cost you now, and then again down the road as premiums are re-evaluated each year.
Medigap Plans do tend to increase in price each year (some more than others if new people cannot enroll in them, such as Plan F or C).
Shop Your Plan, While You are Healthy
As a result, it is a good idea to shop your Medigap Plan year to year if you are still healthy enough to get medically underwritten into a new plan. (What this means is, switching Medigap plans, when you are not guaranteed to be issued one, is dependent on you being healthy enough for an insurance company to accept you into the new plan.)
- Call an Independent Insurance Agent to see what options are available to you in your area. (Ask about Plan G.)
- Call Carly, your Medicare Author and Independent Agent if you life in Nebraska or Iowa. Or if you live elsewhere, find an agent here.
Attained Age vs Issue Age vs Community Rated Pricing
Remember, when you are comparing private insurance companies plans, pricing is the only difference between letter plans. The coverage is the same for each letter plan, and set by the government, so pricing is your biggest consideration.
Additionally, you need to consider HOW the plan is priced, not just WHAT each plan costs. The way each plan is priced will affect how the price changes year-to-year.
There are three ways that insurance companies can price their Medigap Plans: Attained Age, Issue Age, and Community Rated Pricing.
Attained Age Pricing of Medigap (Medicare Supplement) Insurance Plans
Attained Age Plans are priced (or rated) based on your current age.
Medigap plans that use this pricing are based on your attained age. Your plan price rises as you get older. Premiums might start lower for younger beneficiaries on these plans, but when they hit certain ages set by the plan, their premiums will increase.
Attained age plans can also go up because of other factors (such as inflation or company actuarial assessments.)
Issue Age Pricing of Medigap Plans
Issue Age Rated Policies (or “entry age-rated”) have premiums based on the age you are when you purchase your plan. Or, as CMS puts it, when you are “issued” the plan. For example, when buying a new plan, a 70-year-old beneficiary will pay more for the same plans as a 65-year-old beneficiary.
This means that the younger you are when you buy this kind of policy, the less you will pay for it. In addition, the policy will not go up in price as you age, because of your age. It may go up for other reasons, but not because of your age.
Community Rated Pricing of Medigap Plans
The CMS (Centers for Medicare and Medicaid Services) and private insurance companies sometimes call Community Rated Plans “no-age-rated” plans, as their pricing has nothing to do with the age of their beneficiaries.
The price of the plan is not dependent on your age. If the plan goes up, it is not because your age went up. The increase in price may have been dependent on other factors (such as inflation).
Other Pricing Considerations
Insurance companies have other ways to raise or lower their Medigap Plan prices. According to CMS, these include:
- Plan discounts like household discounts, smokers ratings, or payment processing discounts.
- Discounts for people that apply through medical underwriting versus being a guarenteed issue.
- Using “Medicare Select” network providers in certain types of plans.
- Choosing “high-deductible” versions of specific Medigap letter plans.
Conclusions and Actions
In conclusion, since each private insurance company can price their plans differently, it is important to ask how your current supplement is priced or supplements you are considering are priced.
The pricing structure affects not only what you are paying now for your Medigap plan, but what you will also be paying in future years.
Again, call Carly, your Medicare Author and Independent Insurance Agent if you life in Nebraska or Iowa. Or if you live elsewhere, find an agent here.
- Read this article, if you need guidance on deciding what Medicare Plan type is right for you.
- Start here, if you need to learn the basics of Medicare, who can get it, and what it covers.
- Need to know how to apply for Original Medicare? Read this.
- Need Part D Coverage Information? Read this article on Prescription Drugs Coverage.
- Finally, start with this article, if you want to read the differences between the two paths of Medicare: Medicare Advantage vs Medigap.