Medigap Insurance Rates

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2014 Medicare and Medigap Updates

Medigap Insurance Rates

As we grow older, health issues are likely to take up more and more of our income. As the body ages, it is more prone to disease and ill health, thus requiring medication and or hospitalization. Health insurance at this point is very useful as it can help pay at least part of the medical bills. But sometimes even with Medicare insurance, paying for medication or hospital bills can still be a challenge and this is where Medigap comes in. Medigap insurance can be defined as an additional insurance to the regular Medicare policy. It covers medical expenses that are not included in the Medicare policy. It is also normally referred to as a Medicare supplemental insurance plan. Before taking a policy, it is good to understand the Medigap insurance rates, to help you choose the plan that best suits your needs.

Though Medigap insurance policies are offered by private agencies, they are strictly controlled by state laws. Before you take up a Medigap insurance policy, it is vital to understand the different ratings, their advantages and drawbacks. You can then make an informed choice on the rating most applicable to your situation. There are three categories of Medigap insurance rates:

Attained age rated. In this type of plan, the premiums are determined by the age at which one enrolls for the policy. The lower the age, the lower the premium. However, the premium increases every three to five years. This rating is an advantage if you enroll at an early age as the premiums are likely to be fairly low. However as they increase over the years, the amount paid can be quite high.

Issue age rated. Like in the attained age rating, this policy is determined by the age at which you purchase the policy. The difference is that in this case, the rates do not increase as you age but remain constant. This policy is of great advantage to anyone who enrolls at a fairly young age. However for senior citizens, the rates you pay for this policy may be more that the Medigap insurance rates of the other ratings.

Community rated. With this policy the insurance company sets the same charges for everyone in a certain area or region, irrespective of age. This plan can be an advantage for those living in areas with low rating. Also the monthly premiums are constant over the years, making budgeting much easier. It is disadvantageous if you live in an area where the insurance companies have set a high community rate.

It is important to realize that even for the policies that are rated as constant, an insurance company is bound to adjust its premiums yearly to cater for factors such as inflation, competition and the dynamism of the market. Medigap insurance mainly targets older citizens, to provide them with a back up to their regular medical insurance schemes. But it is also applicable to others. Once you understand the Medigap insurance rates, you can pick the policy most relevant to your circumstances.

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