Medicare Supplement Plans are policies offered by insurance companies to fill in the gaps left by the Original Medicare. These companies charge premium based on certain parameters and based on the kind of policy you opt for.
There are 10 different plans starting from Plan A till Plan N. Some of the benefits are common to all policies while there are some extra benefits as you go from A to N. The policies of each Plan will be the same for all the companies, but the premiums may differ.
WHAT ARE THE BASIS OF PREMIUM CHARGES
As the Medicare Supplement Plans are sold by private insurance companies they can set their premiums differently but based on the following three systems of rating.
Community Rated Premiums – All beneficiaries are charged the same premium regardless of age. Which means that the premiums won’t increase with age. But it may increase due to inflation.
Issue-Age Rated Premiums – This premium is charged based on your age when you purchase the first Medigap policy but will not increase with your age. This premium will also be revised based on the inflation. The premium is obviously lower when the policy is taken at a young age.
Attained-Age Rated Premium – This premium is also charge as per your age when you take the policy, but this will keep increasing as you age. This premium is also lower for younger people.
It is worth remembering that even if we have purchased Medicare Supplement Plans we should continue to pay the premium for the Original Medicare.
People who have put in 10 years of service while paying Medicare taxes need not pay premium for Medicare Part A. But all beneficiaries pay for Part B.
WHEN TO BUY MEDIGAP
The best time to buy Medicare Supplement Plans is the Medigap Open Enrolment Period. This is the time when you have enrolled in Medicare Part B and you have completed 65 years of age. During this period, you get certain benefits while buying Medicare Supplement Plans. You need not pay for any health condition. You can buy a Medigap policy without undergoing a medical underwriting.
If you miss the Medigap Open Enrolment Period, you will pay more premium for the policy. Whatever the premiums, it is wise to check all the different plans and check what is best suited for you and then go for that. Some companies offer a chance to migrate from one policy to other later on also.