A major concern for many of those seeking supplementary health care in addition to Medicare is “What is the premium on Medigap?”
Finding the exact coverage provided by each Medigap policy is easy as it is standardized according to law to be the same regardless of the state or company offering the policy. However, the premium of Medigap is a bit more difficult to obtain and companies generally do not publish this in the interest of customer retention and, more importantly, for business reasons.
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The reason why there are no easily available sources of Medigap’s costs is because different companies apply different methods to calculate the premium they charge a particular person. Likewise, premiums may change rapidly depending on the circumstances of the policy. For example, a 65-year-old professional man with no historical record of lifestyle illnesses can be charged $ 280 for a Plan J package when he’s in California and $ 230 when he’s in Maine.
In the same way Company A can charge the same person $ 260 in Florida, while Company B can charge the policy for $ 200. These situations are common occurrences and help to underline the need to properly inquire about the prevailing premiums from a variety of companies so that policyholders can choose the lowest prices for the same coverage. In other words, shop around. The government guarantees you the same coverage for the package you choose, regardless of what you pay for.
Factors which companies use to determine the premium on Medigap policies include age, location, gender, health status, marriage, and smoking as an aggravating factor. These factors allegedly take into account susceptibility to illness and hospitalization. A supposedly healthy 65-year-old woman, who does not smoke and lives in a rural area, pays significantly lower premium prices than a woman of the same age who smokes and lives in Los Angeles. These lifestyle and risk factors play a big role in calculating premiums, especially if you smoke over a long period of time, as it carries many risk factors for lifestyle illnesses. As mentioned above, if you choose a plan shop for the best price, because you get the same coverage regardless of the price.
Depending on the age, which is a primary indicator of Medigap’s costs, companies typically use three methods to determine the price of policies. Issue-age-rated plan, price premiums irrespective of age and calculate to a lower number over a longer period of time. By comparison, policies paid under the age of issue have premiums calculated on the basis of the age of the policyholder on the first acquisition of the plan.
Any increase in premium in the future is modified for inflation, however, age does not determine the calculation. Finally, the premiums for reaching the age reached vary each year with increasing age. These policies have the highest cost of Medigap rewards over the term of the policy and are generally beneficial for policyholders who buy late in their lives.
Knowing these details can save you thousands of dollars over the life of your Medigap policy. To find out more about Medigap’s costs, search the services of a local healthcare representative or a trusted health insurance agent.