Ever wondered how Medicare Supplements rate their policies? The Centers for Medicare and Medicaid Services (CMS) said that insurance companies can set their Medicare ratings one of three ways: Issue Age, Attained Age or Community Age Rated. Each of these handles rating methods are handled a different way and each of them have pros and cons.
The most popular Medicare rating, in states where it is allowed, is the Attained Age Ratings. We will cover this a little further in the article, but it is important to understand that an Insurance Company has to abide by state and federal laws when dealing with Medicare Supplement Insurance.
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As mentioned above there are three Medicare Ratings for Medigap policies. Certain states like New York, Connecticut and Washington require their state to offer Community Age Ratings; however, most states do not require this rating method but allow them to choose from Issue Age and Attained Age.
- Issue Age Rating (Entry-Age Rated) - this premium is based on the age you are when you purchase (are issued) the Medigap Policy. This means that premiums are lower for people who buy at a younger age and won't change as you get older. Premiums may go up because of inflation and other factors but not because of your age.
- Attained Age Rating - the premium is based on your current age (the age you have attained), so your premium goes up as you get older. Premiums are low for younger buyers but go up as you get older. They may be the least expensive at first, but they can eventually become the most expensive. premiums may also go up because of inflation and other factors.
- Community-Rated (No-Age-Rated) - generally the same monthly premium is charged to everyone who has the Medigap policy, regardless of age. Your premium isn't based on your age. Premiums may go up because of inflation and other factors but not because of your age.
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