There are several factors that influence your Medicare Supplement premium. Although you may not be able to change any of these factors, knowing what they are can give you a better understanding when you compare rates between companies.
Before we dive in, it’s important to remember that Medicare Supplement plans are standardized. So, regardless of the company that you purchase your plan from or how much you pay for it, the benefits of the plan letter will be the same.
How Do Companies Set Prices for Medicare Supplements?
There are three methods that a company can use to set rates for their Medicare Supplement policies:
• Community-rated: With this pricing policy, every member, regardless of age, pays the same price. Hence, the name “Community.”
• Issue-age-rated: Your age is used for pricing, and is locked in on your policy start date. Issue-aged-rated policies are becoming less common.
• Attained-age-rated: This is, by far, the most common pricing model for Medicare Supplement plans in most areas. Your initial pricing is based on your age at the time the policy is signed or issued.
What Individual Factors Determine My Premium Costs?
1. When You Enroll
The best time to purchase a Medicare Supplement is during your Medicare Supplement Open Enrollment Period, which starts the first six months that you are enrolled in Medicare Part B and are 65 or older. During this period, you have the right to join any Medicare Supplement plan, regardless of pre-existing conditions or disabilities. Insurers cannot deny you coverage if you have health issues, nor can they charge you a higher premium.
After your Open Enrollment Period is over, insurance companies may require medical underwriting (looking into your medical history to determine if they will accept you), deny you coverage, or charge you more for your premiums. Generally, you will have the most options available and the lowest costs if you join a Medicare Supplement plan when you are first eligible.
Some insurance companies offer lower rates on Medicare Supplement plans for women. According to research, women typically live longer, which means they pay more for their coverage over their lifetime. Women also tend to enjoy better health and thus claim less.
Your state and your zip code impact the amount you’ll pay for your premiums. If you move homes it’s important to shop your rates, or you could experience a significant increase in how much you pay.
Tobacco use typically leads to more health complaints, so most carriers will charge users a higher rate. If you smoke, chew, or vape tobacco products, you can expect to spend 10% more on your monthly premium than a non-tobacco user.
Your age may influence how much you’ll pay. As discussed above, whether your age affects your premium continuously depends on how the insurance companies determine their pricing. However, if you purchase a Medicare Supplement when you are first eligible, usually at the age of 65, you’ll pay less than if you had waited until you were 75.
Household discounts are given by insurance companies to encourage couples to both select the same company as their provider. Some companies even offer discounts if you have anyone over the age of 18 living in the house with you. Discount amounts vary depending on the provider, and not all providers offer them.
7. How You Pay the Insurance Company
The method you choose to pay the insurance carrier can also impact your premiums. Some companies will charge more for quarterly, semi-annual, and annual payments, because they prefer that you pay monthly. Furthermore, it is easier and more cost-effective for insurance companies to process payments paid electronically, rather than by check or credit card. Because of this, some insurance providers will discount the premiums if you pay with electronic funds transfer.
How Do I Get the Best Rate on a Medicare Supplement Plan?
We know that finding the best rate for your Medicare Supplement can be difficult. At GoMedigap, we can help you get the right coverage for your needs at the lowest rate available, by comparing plans from over 30 trusted carriers. We guide you through the confusing process so that you can be confident in your healthcare decisions. You can rest assured knowing that you did your due diligence, and found the plan that works for you.
Nothing on this website should ever be used as a substitute for professional medical advice. You should always consult with your medical provider regarding diagnosis or treatment for a health condition, including decisions about the correct medication for your condition, as well as prior to undertaking any specific exercise or dietary routine.