Selecting the right Medigap or Medicare supplement program is an imperative task for many seniors. However, there is something that makes the process difficult and that is choosing the right insurer to purchase the plan from. There are 12 - from A through L - standardized Medigap plans with different features but are same, irrespective of which insurance provider is offering it. All it differs in the price. Two different insurers may charge different premium amount for the same plan.
Therefore, it is very important that you choose the right insurance company and here are some effective strategies that may help you rate the insurance providers and choose the right one accordingly.
Narrow down your search - At the outset, you need to narrow down your options to consider only a few plans. Now figure out which insurers offer those particular plans and at what price. You may find that same supplement plan is priced differently by different insurance companies. In fact, price is the only factor that you consider while comparing amongst different private insurance providers that offer Medigap.
1) Find out how the companies price - As the next step, you need to find out how different insurers price the plans. They usually price Medigap plans in 3 ways and those are -
Issue age rated - This way of pricing entirely depends on the age of the applicant when he invests in the plan for the first time. The premium may start off high, but it would not get changed as the individual gets older. The age wont have any effect on the premium rate.
2) Attained age rated - With this method of pricing the insurance providers consider the age of the applicant as the only criterion to determine the rate of premium. As the individual gets older, the premium price will rise. Therefore, an applicant may start off paying a particular amount as premium for a specific plan when he turns 65, but by the time he will attain the age of 75, the premium will rise remarkably.
3) Community rated - This method of pricing doesn't depend on age of the applicant. According to this method, an 85 years old individual has to pay same amount as a 65 years old for the same supplement plan, provided they belong to the same community.
2) Attained age rated - With this method of pricing the insurance providers consider the age of the applicant as the only criterion to determine the rate of premium. As the individual gets older, the premium price will rise. Therefore, an applicant may start off paying a particular amount as premium for a specific plan when he turns 65, but by the time he will attain the age of 75, the premium will rise remarkably.
3) Community rated - This method of pricing doesn't depend on age of the applicant. According to this method, an 85 years old individual has to pay same amount as a 65 years old for the same supplement plan, provided they belong to the same community.
4) Get the feel - Try to get a better feel for how you can rate an insurer depending on these methods of pricing. If you are over 75 years, you may consider finding a company which sells your chosen plan based on the community rated method. However, if you are at late 60s, then issue age rated plan would be a better option for you, in terms of the premium amount. With these methods, you dont need to pay higher as you get older.
Irrespective of which insurer you choose, you can find the same Medicare supplemental insurance plans. So just ask them which method they use for pricing the plans. Choose a company that gives you the best and inexpensive deal depending on your specific attributes.
Irrespective of which insurer you choose, you can find the same Medicare supplemental insurance plans. So just ask them which method they use for pricing the plans. Choose a company that gives you the best and inexpensive deal depending on your specific attributes.
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