Some of the factors that can increase your Medicare Supplement premiums include the type of pricing method your carrier used when you signed up, your age, and location.
Medicare Supplemental insurance, also known as a Medigap insurance, is a private policy that you can purchase to help cover the costs that Medicare Parts A and B do not cover.
Supplemental Medicare insurance might also cover some services that original Medicare does not. It’s important to note that Medigap and Medicare Advantage plans are not the same thing and you must be enrolled in both Medicare Parts A and B before you can enroll in a supplement plan.
Also note that Medigap plans only cover one person. It’s not possible to cover your spouse on your plan, each spouse will need their own plan.
There is no specific agency that sells supplemental Medicare insurance. You can purchase it from most insurance brokers if they are licensed to sell it in your state. These policies do not cover all medical services such as long-term care and most vision and dental services and hearing aids.
Factors that Increase Your Medicare Supplement Premiums
Lets review the three different rated policies that determine your Medicare Supplement premiums.
The three pricing types are:
- Community-rated policies
- Issue-age rated policies
- Attained-age rated policies
If you have a community-rated Medicare Supplement plan, you will pay the same monthly premium amount as everyone else, regardless if you’re older or younger. The pricing is not based on age, however, if can increase due to other factors such as inflation.
Issue-age rated policies are a good choice for those who purchase their Medigap policy at a younger age. The price is based on the age at which you purchase the plan and they will not increase even as you age. However, the premiums can also increase for other reasons such as inflation.
Attained-age rated policies are priced based on the age you’re when you buy the policy. However, unlike issue-age rated policies, attained-age rated policies will increase as you age.
Although they may be cheaper when you first purchase them, keep in mind they will continue to get more expensive as you get older and can also increase due to inflation.
What Factors Determine My Original Medicare Premium
Most people will not pay anything at all for the Medicare Part A insurance because they are entitled to it after working and paying taxes for the appropriate amount of time.
If you do not qualify for premium-free Medicare at all, there is generally a fixed amount that you can pay as a monthly premium. If you worked and paid Medicare taxes for 30-39 quarters, your monthly premium for Medicare Part A will be lower than those who worked for less than 30 quarters or not at all.
Most people have to pay a specified amount for Medicare Part B each month. This typically changes year to year and is something you will want to ask a broker or Medicare directly. In 2016 Medicare Part B premiums were expected to rise over 50% in certain states.
Medicare Part B plans also often have a deductible that you must meet before they will cover your medical services. After the deductible is met, you will still be responsible for paying 20 percent of the costs, while Medicare Part B will pay for the other 80 percent.
Medigap policies can help cover the 20 percent out-of-pocket costs that you owe depending on the plan that you choose.
Medicare Supplement Plans & Prescription Drug Coverage
Before January 1, 2006, some Medigap policies did offer prescription drug coverage. However, any plan sold after that date does not cover any prescription services. If you’re a Medicare recipient and want prescription drug coverage, you should consider purchase a Medicare Part D plan.
Some Medicare Advantage plans also cover prescription drugs. There are several costs associated with these plans. However, the specific cost of individual Medicare Part D plans can vary.
The pricing depends on the drugs that are covered in your plan, the type of plan that you choose, and whether or not you go to a pharmacy that is listed in your plan’s network, as well as several other determining factors.
You will typically be responsible for paying a monthly premium, a yearly deductible that you will have to meet before your coverage will kick in, co-payments and co-insurance charges, and any costs that fall in the Medicare coverage gap.