What are Medigap insurance ratings?



Seniors looking for additional medical coverage supplementing Medicare should opt for Medigap insurance as it is structured to meet their needs. To find the best plan for yourself, you first have to understand about MediGap insurance ratings.
While MediGap insurance plans are provided by private insurance agencies, they quote uniform conditions regulated by state and federal laws. Its premiums however differ from one MediGap insurance agency to another. Premiums can be calculated using MediGap insurance ratings calculated using these three methods:

Attained-age-rated policy

These policies are rated based on your age on enrollment, which is usually at the age of 65. The premium starts low and increases as you age. The advantage of this rating is that you pay a very low monthly premium in the first few years.
The rate however increases as you age where you may end up paying more every month than you’d have paid if you’d chosen another plan. You have to decide if the money you save in the first few years is worth the higher rates at the end of the plan.

Community-rated policy

In this case, insurance companies set fixed rates for a certain place and charge everyone here a fixed rate, regardless of their age. So if you live in a vicinity with a relatively low community-rated policy, you stand to benefit with this plan.
Moreover, you can budget early as your monthly premium does not waver with time. However if you live in an area with a high rate set by insurance companies, this policy can prove disadvantageous to you as you end up paying more here than plans centered on you.

Issue-age-rated policy

The premium amount for these policies is calculated based on your age when you buy the policy, which does not increase as you age. The benefit with this policy is that you have a set rate to follow, which does not change every year.
So if you buy this policy at a young age, you get a lower rate than you would if you buy the policy a few years later. However if you are rather old when you buy this policy, you may end up paying more than you require than compared with other plans.
Remember that insurance premiums tend to vary with time as companies adjust their rates to keep up with the competitive market. It is only if you study and understand these MediGap insurance ratings you will be able to save money by choosing the best policy for you.




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