Your choice of a Medicare Supplemental Policy depends on two things: which one provides closest to your needs and how much you’re willing to pay for it. The latter point depends on several factors:
- What type of policy you buy: Policy A has the fewest benefits, whereas policy G has the most. As with most things in life, you get what you pay for.
- When you buy the policy: Buying during a time frame when you get important consumer protections can make a huge difference in your premiums.
- Where you live: Medicare Supplement premiums vary according to geographical area. Premiums tend to be lower in metropolitan areas as opposed to rural areas.
- Whether there are policy discounts: Some insurers give lower rates to certain groups of people, such as nonsmokers and household discounts.
- How the insurer prices your policy: There are three rating methods that can greatly affect the price of the premium:
- Community Rating: You pay the same premium as everyone else in your area who bought the same policy, regardless of age, and the premium cannot increase each year as you get older. This pricing is rare.
- Issue-age Rating: Your premium is based on the age you have reached when you buy your policy, and it cannot increase each year as you get older. Again, rare.
- Attained-age Rating: Your premium increases each year with your birthday as long as you keep the policy. This is the most common pricing model.
I recommend purchasing the supplemental policy with the most comprehensive set of benefits that you can afford at the time of purchase. Upgrading to another supplemental policy a few years down the road is vastly more difficult (if not impossible) and costly.
Farnum Health Insurance 