Once people turn 65 and qualify for Medicare, they begin to consider Medicare supplement insurance plans or medigap plans, and the services these plans offers, and its cost. Medigap covers and pays for a portion of the total healthcare expenses that the actual Medicare plan doesn’t. Like any other insurance plans and policies, deciding on which plan best suits your needs and situation can be difficult. There are several factors which have an effect on the supplement’s monthly or yearly premium. Based on Weiss ratings, a reliable and independent strength ratings provider for banks and insurance companies, the most common medigap plan for 65 year old individuals and retirees which is Plan F, approximately costs $1,813.00 per year. In North Carolina, rates can be as low as $1,090 per year. That breaks down to about $90 per month. But you may ask what affects the rates for Plan F?
Medigap Insurance Policies: Ratings
Medigap insurance policies are rated in three different ways, issue-age rating, community rating and attained-age rating respectively.
- Issue-age ratingmeans that the Medigap cost is dependent on the age at the start insurance. The rate won’t increase as the policy holder ages but it can possibly go up depending on factors like inflation and the economy.
- Community ratingdoesn’t consider age but the insurance company still holds the right to make any adjustments on the cost due to claims over a period of time.
- Attained-agerating the cost of the policy is based on the age and start date of the senior.
Medigap Insurance Policies – Comparing Prices
Prices may vary depending on the insurance company selling the Medigap policy. When choosing the right policy there’s two important things to consider. First is the coverage included in the quote comparison. The second important factor is rating structure; this is where monthly premiums are based. The medigap policy rate is better in non-smokers compared to smokers. It is also better for females and married individuals (due to partner discounts). In some instances, allowing bank drafts can offer additional savings.
Medigap Insurance Policies – Cost sharing with High Deductible Plan F
Some companies now offer the high deductible plan F. This cost sharing option makes a significant difference in the over-all insurance premium. These plans offer lower premium in exchange for the client taking more risk in potential out of pocket costs (high deductible). With high deductible plans, deductibles reset each year.
Medigap Insurance Policies – Open Enrollment
When applying for a Medigap insurance policy for the first time, it should be done during the open-enrollment period which is the first 3 months before, the month of, and 3 months after your 65th birthday. The open-enrollment period guarantees the enrollment regardless of medical condition and health status. During this period your premium will not be affected by any health issues.