2014 Medicare and Medigap Updates
A Medigap policy works by providing additional coverage for treatment options of diseases not covered by standard Medicare. With the inherent limitations in current Medicare policies, it is important to properly select the Medigap policy and Medigap premiums that best suit your needs.
Before discussing the specifics about Medigap policies and Medigap premiums, here are a few quick notes on Medigap and what buyers need to know. First off, Medigap policies are organized by letter from A to J with Plan A being the least expensive – and with fewer coverage – than Plan J which is the most comprehensive and also the most demanding in terms of Medigap premium payments.
Likewise, all Medigap plans offer exactly the same benefits across the same package name for all states and offering establishments. A Plan C package from Company A will contain exactly the same benefits as with a Plan C from Company B. Only the Medigap premiums differ from company to company so it is important know exactly which Medgap plan suits your need before deciding to purchase as well as conducting a thorough survey of the Medigap landscape for the most competitive Medigap premiums available.
On the degree of coverage, the basic package is contained on all Plans from A to J. From this basic offer, Plan B builds on Plan A benefits including hospital deductibles; Plan C includes the provision of a nursing home co-insurance; Plan J, the most expensive offer, exhaustively contains all facets of Medigap services from the basic service, hospital deduction, nursing home co-insurance, foreign travel at home recovery payments, excess doctor charges, preventative screening and even outpatient prescription drugs.
From here, Medigap premiums pricing plans branch out into three types, the final price of which is determined by the offering company based on several critical factors include age and medical history of the client for which the Medigap policy was bought. These three types of Medigap premiums are issue-age-rated pricing, community-rated pricing, and attained-age rated pricing.
Community-rated pricing for Medigap premiums refers to a uniform pricing scheme for policies. This means that any package sold will remain the same price regardless of age. If someone is 66, they will pay the same price as someone who is 76.
The second type is the attained-age rated pricing which uses the current age to determine the premium price. Typically, younger clients or those for which the policy is bought will pay lower premiums than those with a higher current age. It is very important to remember that while these plans are particularly attractive to those just buying in as the reach medicare age, they do get higher as you age so if you end up having a very long life the medigap premiums could be very high for you in the long term.
The third type is known as issue-age-rated pricing which is based in the “entry-age-rating” rather than the age as one grows old. This is oftentimes a constant priced Medigap premium whose pricing is determined primarily by your age when you purchase the plan.
It must be remembered that your medigap premiums will probably be lower and you will have less problems acquiring in when it is purchased within six months of your medicare eligibility age. Companies participating in the program are required to issue the policy during this period without medical exams or past medical problems.
Location, medical history, and discount offers are the biggest factors, after age, which influences a company’s pricing scheme for Medigap premiums. Since each plan offers the same benefits, it is extremely important to determine the most competitive offers before finally selecting a policy that works for you.
This article on Medigap premiums has just given you some general information. We have many other articles on our website to give you a more in depth look and we add others as they become available.