Medicare Supplement Rates are very competitive these days. Many Medicare Supplement Insurance companies are vying for business, and will do almost anything go have the lowest Medigap insurance rates. One thing you must watch out for, however, is that many insurance companies can have "fake" low rates. What we mean by this, is that some companies start out by offering very low Medicare Supplement Rates, then increase their rates very often, and by a high percentage, quickly becoming very expensive.
Some Medigap insurance companies will include all sorts of special discounts initially, however they will remove those discounts over time. One company in particular will start out by giving you a 30% discount when turning 65, then reduce that discount by 3% every year until it is completely removed (after 10 years total). This is in addition to your annual / semi-annual rate increase due to medical inflation. If you do not do your research before purchasing a Medicare Supplement Plan, you could have extremely high Medicare supplement rates after a very short period of time.
One of the best things to do to ensure that your Medicare Supplement Rate will stay stable for a long period of time is to contact an insurance broker who represents multiple companies, and can give you unbiased advise on which companies tend to remain more stable in your area, and a broker who con compare all prices for you. Many times, individuals will speak with a direct representative of only a specific company who will obviously be biased and may not tell the complete truth about their pricing strategy.
Initial sign-up discounts is one form of marketing that some large companies will use. We believe these to be an unrealistic measure of what the true rate will really be. Selecting a company that does not offer any special discounts, and have a strong financial rating by A.M. Best will help you to determine the long-term stability of your Medicare Supplement Insurance company.
There are also three pricing methods used by Medicare Supplement Insurance companies today, and those are Attained Age, Issue Age, and Community Rates. Attained Age simply means that your insurance policy will be primarily based on the age you are every year (your attained age). The second pricing method is Issue Age, and this simply means that your insurance policy will be primarily based on the age you were when you first signed up for the policy. The third pricing strategy is Community Rating--this will mean that the same rate is given to an entire community. There will be no difference as to gender, health, or tobacco usage--everyone gets the same rate. It is extremely important to understand, however, that in ANY pricing strategy, they all will receive rate increases due to Medical Inflation, claims experience, etc. There is no pricing strategy deployed by Medigap companies that will guarantee your rate forever--all companies take price increases.
Generally, regardless of the pricing strategy used by Medicare Medigap companies in your area, we usually recommend that you go with the company with a combination of strong financial rating and low prices--regardless of pricing method used. This will ensure that you have one of the lowest Medigap supplement rates in your area.
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