If you are wondering why you are paying twice as much for the same plan letter as your buddy who lives in another state, there are many factors when it comes to Medicare Supplement (Medigap) plan costs. Insurers can use three different methods to set prices: Community-rated, Issue-Age, and Attained-Age pricing. Some states follow different rules and pricing methods, and cost of living can even play a role.
Below are the top 10 most expensive states in which to buy a Medicare Supplement plan:
- New York
(Source: Lindsay, Malzone “Top 10 Most Expensive States for Medigap Plans.”)
Why is it so expensive to purchase Medicare Supplement insurance in these states? Aside from Florida and California, most of them use Community-Rated pricing. This means that the premium will stay constant regardless of age. Therefore, someone who is 65 years old will be rated the same as someone who is 80 years old.
In Florida, insurers can choose to use Community-Rated pricing or Issue-Age pricing. Issue-Age pricing means that the premium will stay the same rate as when you purchase the policy. California uses Attained-Age Pricing, which means that premiums will increase each year with age. Premiums in every state can also raise each year due to inflation and other factors.
As you can see, there are many factors when it comes to Medicare Supplement pricing. This can make it difficult to find rates online. Luckily, AMAC has licensed advisors who can do the research for you to see if you are paying the most competitive rate for your Medicare Supplement. If you find yourself wondering how your rate compares with what is being offered in your area, give us a call for a complimentary rate evaluation!
Call 1-800-334-9330 and one of AMAC’s trusted, licensed Advisors will be happy to assist you with your needs.