Medicare Supplement Plan
2014 Medicare and Medigap Updates
Medicare Supplement Plan
As one ages, their body tends to become less immune to common illness. Moreover, bone and dental structure weakens which leaves the body prone to still other medical problems. While all these diseases can be easily treated, everyone needs a suitable health care plan to cover the costs that arise with these medical conditions. While the most common form of medical health insurance in the United States for the elderly is the Medicare package, one should note that Medicare does not cover a number of essential services. These services include dental and denture costs, as well as long-term care. Thus, the Medicare supplement plan, aptly termed “Medigap” was formulated to help individuals cover these expensive medical services.
Most people may be aware that Medigap plans are offered by private insurance companies. However, most may not be aware of the premium pricing systems used to determine the rates on each plan.
Basically, there are 10 Medicare plans in place in all the States across the country. Some States may even have 12 plans in place. All plans are identified by a specific letter of the alphabet. While each plan has to be approved, standardized, as well as being deemed necessary by Medicare, the benefits and premiums accorded to each plan differs from one insurer to the other. Thus, before choosing any Medicare supplement plan, one has to understand more about the policies which dictate the premium rates on each and every Medicare supplement plan offered. It would also be good to learn about the other factors which may influence the premium rates.
There are three main policies used to determine the premium rates on each Medicare supplement plan: issued-age policy, attained-age policy and community policy. The main difference between all three is the age at which the premiums are set and whether or not the premiums change with one’s age. For instance, with the issued-age policy, the younger one is, the lower the premiums. Moreover, the premiums with this policy do not rise with one’s age. On the other hand, with the attained-age policy, the premiums are low as the individual is over 65. However, the premiums associated with this policy are subject to increase every two years. With the community policy, the premiums do not change regardless of one’s age.
Other factors that may influence the premiums on one’s Medicare supplement plan include discounts offered on the plan, insurance underwriting, as well as inflation. Inflation is perhaps the biggest determining factor when it comes to premium pricing on the different plans.
Every year, Medicare reviews its plans, as well as those offered by Medicare supplement insurers. At this time changes in inflation are amended and may result in the increase or decrease in an individuals current policy premium. Thus, one has to carefully review their own Medicare supplement plan each year, preferably September, to ensure that the plan is still the best suited in terms of benefits and premium cost.
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