Do Medicare Supplement Premiums Increase with Age?

Medicare supplement plans, or “Medigap plans,” come in various offerings to suit your healthcare requirements.

Private insurance companies offer Medigap policies, and while all plans have standardized benefits regulated by the CMS, the provider has the flexibility of setting the monthly premiums.

As a result, Medigap providers use a risk-based assessment to determine the cost of your monthly premium for Medigap plans.

The primary factors involved with the risk assessment include your gender, smoking status, location in the United States – and age.

Do Medicare Supplement premiums increase with age?

Age is a significant risk component, with older seniors usually requiring more annual healthcare services than younger seniors.

So, the older you are, the more you can expect to pay in premiums – but that’s not always the case.

This post covers how Medigap providers use age when assessing the risk you present to their Medigap scheme and how they use age to set your monthly premiums.

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Medigap benefits are different across each plan, with each providing a different level of coverage. Some are fully or near comprehensive, while others implement copayments or cost-sharing models. The plan you choose depends on your healthcare requirements for the year and the budget you can afford for your premiums.

All Medigap plans offer the following benefits.

• Part A coinsurance and hospital costs for up to 365 days after using up Medicare benefits.
• Part A hospice care coinsurance or copayment.
• Part B coinsurance or copayment.
• Blood transfusion costs for the first three pints of blood.

Plans F, G, and N offer additional Medicare Parts A & B benefits.

• Part A deductible.
• Part B excess charges (Plan N doesn’t cover these charges).
• Skilled nursing facility care coinsurance.
• 80% of emergency healthcare costs when traveling outside the US for 60 days. ($250 deductible and $50,000 maximum apply).

Medigap plans don’t cover the cost of hearing, vision, or dental services. However, some providers include these benefits as perks when joining their plans. Or they may offer you an add-on plan covering these services for an additional monthly premium.

Medigap plans also don’t cover the costs of private-duty nursing or a stay at long-term unskilled nursing facilities. You don’t get coverage for prescriptions or preventative treatments like chiropractic or podiatry.

Yes, in some cases, your Medigap premiums will increase as you get older. Insurers use one of three models when assessing your age.

Attained-age premiums increase as you get older and due to economic reasons like inflation.

  Issue-age-rated premiums charge higher premiums if you join the Medigap scheme when you’re older. They’re more affordable if you join when you’re younger, but your premiums may be higher than attained-age premiums for younger seniors. These premiums also increase due to economic factors like inflation.

  Community-rated premium models aren’t based on your current age when joining a Medigap plan. The premiums increase depending on where you live in the United States and whether you live in a city or a rural area. These premiums also increase due to economic factors like inflation.

  Attained-age-rated premium models have rates based on the age you are when you first enroll, and typically raise each year based on age and inflation factors.

Let’s look at the difference between these three age models used by insurers to set your premium. It’s important to note that while age is a significant component of the risk model used by insurers when setting premiums, it’s not the only factor.

This is the most frequently used model by Medigap insurers. This system uses your age when signing up for your plan to calculate your premiums. The older you are, the more expensive your premium. Your premiums will increase as you get older.

For instance, if you receive a monthly premium of $130 for Plan G when you sign up at age 60, it may increase by 10% to 20% a year as you age. As a result, you’ll pay $150 when your 66, $170 when you’re 67, and so on (these are example rates and may differ depending on the insurer and plan you choose).

The state health insurance agency approves the increases in your premiums to prevent the insurer from implementing predatory increases.

The insurer bases your premium on your age when joining their Medigap scheme. So, your premiums will be more affordable if you join at 65 than if you join when you’re 70. The premiums generally increase annually, but increases aren’t dependent on your future age, as with an attained-age model.

Not all states offer issue-age-rated plans. Some of the states offering this cost model include Arizona, Idaho, Georgia, and Florida.

This model is less expensive than the attained-age plan, but only if you sign up when you’re younger. Essentially, you get locked in at this price and only experience increases in premiums due to economic factors like inflation.

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Insurers use a community-rated premium model to set your premium based on where you live in the United States. With this model, beneficiaries in a certain geographic area pay the same premiums for the same plan regardless of age.

So, if you’re 65 and your neighbor is 70, and you both sign up with United Healthcare for a Plan G policy, you’ll both pay the same premium, regardless of the difference in your age. Only a few states offer the community-rated model for setting premiums.

The states using this model include Arkansas, Massachusetts, Maine, Connecticut, New York, Minnesota, Washington, and Vermont. In those states that don’t require insurers to use the community-rated model, the insurer can charge higher premiums based on the beneficiary’s age.

However, it depends on whether they offer issue-age-rated or attained-age plans and your age when you enroll with their Medigap scheme. Usually, community-rated plans offer the lowest premiums as you age. However, premiums may differ depending on other factors, such as whether you live in a rural area or a city.

Our fully licensed Medigap agents are available at 1-888-891-0229 for free advice and consultations on Medigap plans.

We’ll help you find the right Medigap plan to suit your healthcare requirements and budget. We work with all the leading healthcare providers in every state, and our team will get you a free quote at the best rate available.

Call us today for help.