Issue-age rated pricing is a term used to describe Medicare Supplement plans that have a fixed price premium, determined based on the age at which you enroll in your insurance coverage. As a result of this type of pricing, issue-age rated Medigap plans are often much more reasonable for those younger than 75, with the premiums being significantly lower.
Issue-age rated pricing is pretty straightforward. As mentioned before, your premium is issued based on the age at which you purchase it. As far as the normal premium goes, your rate does not change as you grow older, which is the case for the other two payment models available, attained-age rated and community-rated plans. This is why issue-age rated Medigap plans are sometimes also referred to as entry-age plans.
However, it should be noted that this isn't the only way in which your premium will rise with this payment model. A common misconception regarding issue-age rated Medigap plans is that it is done with the purpose of negating any need for a premium increase, but this is admittedly to idyllic. Instead of relying on an age-based increase, these plans will, instead, depend on the natural inflation that happens in the medical market, increasing the cost based on economic inflation. This means that your premium will still get higher every year, but not at a drastic rate as other plans that are explicitly meant to increase with age.
Let’s take a look at the following example to better illustrate how issue-age rated plans work. If John is 65 years old and purchases his Medicare Supplement plan that has a $100 premium, he will retain the same premium on a monthly basis for the rest of his life, outside of the different types of medical inflation that occur each year. However, if Susan purchases the same plan at 75 years old, it's likely that her plan would have a premium of $135 instead of the lower price John got with his plan.
There are many benefits to having an entry-age Medigap plan, but it all depends on your age. For example, it's safe to say that if you're past 75, an issue-age Medigap plan is likely not for you. This is because the rate that you'll pay is already much higher than what you could have gotten at 65, having you pay more for essentially the same service.
Having an issue-age rated Medicare Supplement plan does not necessarily mean that you will always get the best deal on the market, even if can get a good rate due to being 65. In fact, it might be better down the road to have an age-attained rate as there might be more opportunities for you to save money.
The most efficient way of knowing whether or not an issue-age rated Medicare Supplement plan is right for you is to simply crunch the numbers yourself, or better yet, speak to an experienced agent who knows the right direction to point you in. This is because there are too many different options to keep track of that if you gauge them simply based on their payment policy, you might be paying more than you have to.
It should also go without saying that if you're over the age of 75, using an issue-age rated plan might not be the most efficient idea, as you are often paying much more than other plans that you might find on the market that adjust with your age.
Finding the right Medicare Supplemental Plan for you usually involves dedicating a large portion of your time to just doing the math and running the numbers. However, when handling such an important issue, it's important to know that the numbers are being crunched by someone who truly knows what they're doing. This is why it can be incredibly useful to get a quote from a professional, as you can't truly know if you are working efficiently until you work with a professional.
This is where FirstQuote Medicare comes in. With extensive experience in helping people find the entry-age Medigap Plan that is right for them, FirstQuote Medicare is here to make sure that you not only get the plan that is right for you, but save money wherever you can. We understand the importance of taking care of your finances, whether you're managing money in retirement or simply trying to be efficient about your bills.
