Medicare Supplement Cost

So, if you're planning on purchasing Medicare supplemental insurance you're likely wondering how it is that insurers calculate their costs for each policy.

As we've mentioned before, Medicare supplemental insurance plans are required to offer the same benefits from one company to the next. But as you'll find, prices can vary from provider to provider.

So why do some insurance agencies charge more than others for similar plans?

Each insurance company decides how it will set the prices, or premiums, for its supplemental policies based on three main criteria:

1. Community-related supplemental insurance - This is also known as "no age related" Medigap or Medicare supplemental insurance: everyone under this type of insurance pays the same monthly premiums regardless of their age. Your costs may go up due to inflation, but they will never go up because of your age.
2. Issue-age-related supplemental insurance - This is also known as "entry age related Medigap or Medicare supplemental insurance": These premiums are based on your age when you buy the policy. It's lower for younger people, but your costs won't change as you grow older. Inflation might cause your costs to rise, but your age will not be a factor.
3. Attained-age-related supplemental insurance: These premiums are based on your current age, and prices will go up as you grow older. Be sure to understand how much these policies will cost as you age, since less expensive plans that you purchase now can become very expensive later on.

Other factors include geographical ratings, medical underwriting, and other discounts. For example in some cases women and/or non-smokers may pay less. And those with pre-existing conditions who don't enroll during the open enrollment period could pay more.

Always shop around for your supplemental insurance, and always ask how each insurance company sets its policies, so you know whether or not you should shop there. The way they set their prices will affect how much Medicare cost to you, and how much you'll pay in the future.

Purchasing Supplemental Insurance