How To Avoid Medicare Supplement Insurance Pricing Pitfalls

Generally speaking, your gender, age, life style, and your zip code, affect what you pay for a Medigap plan. This is just a part of the whole picture when it comes to pricing for Medicare supplements. In fact, some people have paid hundreds of dollars more than others for the same coverage.

Do not rely on the integrity of a salesperson. Instead, find out how the industry works to help you find the best possible value.

Medigap Insurance can have the same coverage for significantly different prices.

Because Medicare Supplemental Insurance or Medigap plans are standardized to provide the same benefits, it is logical to expect prices to be standardized as well. This is not true at all.

The Medigap insurance is divided into ten different service packages with letters from A to N. The Medigap Plan A has the least coverage, however, Plan N doesn’t have the most all-inclusive coverage. Such a plan would be Plan F and Plan C is the next.

Standardization implies that for each Plan A, the benefits are the same, regardless of whether it is provided by a well-known insurer or an unpopular insurance company. If you pay higher premiums, you will not receive any additional coverage. You need to switch to a plan with a different letter to change your benefits.

Nevertheless, insurers inexplicably charge different prices for Plan A, Plan B, etc. The only way to know you will get the best price for the plan you choose is to get estimates from many different companies. This is where the internet comes in. Some sites offer quotes on plans from different companies and often provide personal assistance in comparing plans.

Medigap plan pricing is not all the same. The pricing model that increases the premiums based on age is referred to as “Attained Age Rated”. This model can be tempting as it offers really low prices for seniors who are 65 years of age. It is risky because your premiums will increase not just because of inflation, but also because you inevitably get older. By the time your premiums are higher than other plans based on different pricing models, your state of health may prevent you from switching to more favorable plans. This means that you either have to pay higher installments, or do without complementary Medicare and spend plenty on health out of pocket.

Yet another pricing model is referred to as the Issue Age Rated, but it is unpopular. Prices are based on your age when you apply for a plan, and prices do not go up just because you are getting older. However, prices are rising with inflation. These plans usually cost less if you apply at a younger age.

A third pricing model can be the most popular as it is not based on age. Prices remain constant for everybody within a given area, regardless of gender, age or their life style. Prices usually start higher than other pricing models, but that will be different in later years. These plans will not be the most exorbitant as their premiums will not be increased to reflect your increasing age.

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