There are many health insurance options for seniors which include standard Medicare and standardized Medicare Supplemental insurance plans. These Medicare Supplemental insurances are also called Medigap policies of which there are twelve.
Every Medicare Supplemental insurance plan, labeled A through L, offers the same coverage with varying benefit combinations and premiums. Not all Medicare Supplemental insurance plans are offered in statewide. Some states will have their own plans that offer coverage that is comparable to the countrywide plans.
Given that these are standardized Medicare Supplemental plans, the coverage is identical for all twelve plans. The difference is only in the cost of the plan. While all plans cover the same items in different combinations, there will be a difference in premium between companies.
Here are a few things that everyone should know about Medicare Supplemental coverage plan premiums. The most important is that choosing a plan with a high premium does not mean that there is a higher level of coverage. First, Standardized means that these plans are uniform right down to how claims are filed. Many companies will imply that their coverage is better than another company, however this is not true. Remember that these are standardized plans which means that they are identical plans, so they all have the same coverage.
Next, it is important to keep in mind that Medicare benefits are amended the first of every January to stay in step with cost of living increases. The Medicare Supplemental coverage plans, or Medigap benefits, correspond with Medicare coverage so the Medigap premiums will also increase annually.
Last, Medicare Supplemental insurance plan premiums are determined by using three different methods. These methods are attained age, issue age, and community rated. With attained age, premiums increase as the policy holder ages. This increase is in addition to the annual increase that occurs due to the amended Medicare benefits. Unfortunately this means that premiums will continue to increase and will be at their highest when the policy holder is in his or her eighties and nineties.
The Issue age method to set costs of policies, uses the age the person is at the time that they purchase the policy to figure their premium. This premium does not increase as the policy holder ages. However, the premiums will increase annually when Medicare makes its adjustments. Finally, the community rate method does not take age into consideration, this method sets the premiums identical for everyone living in the same geographic area.
After you have decided on the combination of benefits that will meet your needs, you will want to buy the Medigap plan with the lowest premium that is either issue age rated or community rated. The reason for choosing issue age or community rate plans is that even though you may pay a slightly higher premium it will not increase other than the annual change due to Medicare adjustments. Although there are many health insurance options for seniors, many may need assistance in understanding just how they work. There are state agencies that help the individual to understand how to choose a plan.
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