Cost of Medigap Plans
A key concern among many seeking supplemental health care coverage in addition to what Medicare provides is “How much does Medigap cost?”
Researching the exact coverage provided by each of the Medigap policies is easy, since they are standardized by law to be the same regardless of the state or company offering the policy. However, the cost of Medigap is a bit more difficult to obtain and companies typically do not make it public for the sake of customer retention and, more importantly, for business reasons.
The reason there aren’t readily available sources on the cost of Medigap is because different companies use different methods to calculate the premium they charge a specific person. Similarly, premiums can change rapidly without notice based on the circumstances surrounding the policy. For example, a 65-year-old professional male with no history of lifestyle-related illnesses may be charged $270 for a Plan J package if he’s in California and $220 if he’s in Maine. Similarly, Company A can charge the same rate $250 in Florida, while Company B can price the policy for $210. These situations are common and help emphasize the need to properly inquire about going premiums from a variety of companies so that policyholders can choose the cheapest prices for the same coverage. In other words, shop around. The government guarantees you the same coverage in the package you choose no matter what you pay.
Factors companies use to determine the cost of Medigap policies include location, age, health statistics, gender, aggravating smoking and even marriage. These factors supposedly take into account one’s susceptibility to disease and hospital admission. A supposedly healthy 65-year-old woman who does not smoke and lives in a rural area pays significantly lower premium prices than another woman of the same age who smokes and lives in Los Angeles. These lifestyle and risk factors heavily influence premium calculations, especially when one has been smoking for a long period of time, as it carries many risk factors for lifestyle-related diseases. However, as noted above, when choosing a plan, shop around for the best price, as you’ll get the same coverage regardless of price.
Specific to age, which is a leading indicator in the cost of Medigap, companies typically use three methods to price policies. Policies without an age rating value premiums regardless of age and calculate a lower number over an extended period. By comparison, age-rated policies have premiums calculated based on the age of the policyholder when the plan was first purchased. Subsequent premium increases are adjusted for inflation, but age does not become a determining factor in the calculation. Finally, age-attained premiums vary each year as you get older. These policies have the highest cost of Medigap premiums over the life of the policy and are generally advantageous for policyholders who buy late in life.
Knowing these details can help you save thousands of dollars over the life of your Medigap policy. Seek the services of a local health officer or trusted health insurance agent to learn more about the cost of Medigap. Alternatively, there are dedicated price comparison websites in your area to give you a better idea of the cheapest plans available when you consider buying a Medigap policy. Thanks to today’s technology, great prices can be found on the internet compared to local prices.
Our website has a great selection of information about the cost of Medigap and Medigap in general. We also have information about Medicare and why you need Medicare supplement policies. We try to keep up to date so please bookmark us for occasional visits.