How do Insurance companies set pricing for Florida Medigap Plans? Here is an explanation of the three types of pricing:
1. Issue-Age: Medigap premiums are based on the age that you purchase the policy. For example, Mrs. Williams purchases a Florida Medigap plan N at age 66 for $152/month. At age 68 her monthly premium is still shceduled to be $152 as will it be for age 70 and so on. If Mrs. Williams buys a medigap plan N at age 70 her price may be $166/month but not sheduled to change in price each year.
2. Community-rated: Medigap premiums are generally the same price for everyone who has the medigap plan regardless of age. For example, Mrs. Williams buys a Florida Medigap plan G at age 65 and pays $164/month. Mr. Jones buys the same Florida Medigap plan G at his age of 72 and also pays $164/month.
3. Attained-Age: Medicare Supplement (Medigap) premiums are based on your current age and are scheduled to go up each year with your age (Happy Birthday!). Attained-Age plans may start out as the lowest cost when comparing but could end up the highest monthly cost as you get older. For example, Mrs. Williams buys a Florida Medigap plan N at age 66 for $145/month. At age 67 the plan is scheduled to rise to $149/month and at age 68 to $156. Prices are going up each year you have the policy as scheduled.
These different types of pricing Insurance companies use to set prices can be a factor in your decision in choosing a medigap provider. As always consult an expert in the different plans, options and prices. See link below for further information on How insurance companies set prices for Medigap plans.
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