Attained-Age, Issue-Age, and Community-Rated are the three types of rating systems that are used by insurance companies to determine the premiums for Medigap policies. Let’s take a closer look at each of these rating systems:
1. Attained-Age Rating: Under this rating system, your Medigap premium is based on your current age. This means that your premium will increase as you get older, typically on an annual basis. This is the most common rating system used by insurance companies for Medigap policies.
2. Issue-Age Rating: Under this rating system, your Medigap premium is based on the age you were when you first enrolled in the policy. This means that your premium will not increase as you get older, although it may still increase due to other factors such as inflation or changes in healthcare costs.
3. Community-Rated: Under this rating system, everyone who has the same Medigap plan pays the same premium, regardless of their age or health status. This means that younger beneficiaries may pay more than they would under an attained-age or issue-age rating system, while older beneficiaries may pay less.
It’s important to note that the rating system used by an insurance company can have a significant impact on the cost of your Medigap policy over time. While an attained-age rating system may start with lower premiums when you are younger, your premiums will increase as you get older. In contrast, an issue-age rating system may have higher premiums when you first enroll, but your premiums will not increase as you age. Community-rated policies may be a good option for those who want a more stable premium that does not increase with age.
When choosing a Medigap policy, it’s important to consider not just the rating system used by the insurance company, but also the benefits offered by the plan, the cost of the plan, and any limitations or restrictions on coverage. Working with a licensed insurance agent can help you navigate the complex world of Medigap policies and find the plan that best meets your needs and budget.
For more information about Medicare, Medicare Advantage or Medicare Supplements, please feel free to contact Amy West at (469) 428-2450. We are located in North Texas and are licensed in the states of Texas, Oklahoma and Arkansas.