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Choosing a Medigap Plan: Attained Age vs. Issue Age

As you approach retirement and become eligible for Medicare, understanding your healthcare options becomes crucial. Many Medicare beneficiaries add a Medicare Supplement Insurance plan, also known as a Medigap plan, to ensure they have enough coverage. 

You’ll encounter different pricing methods when looking for a Medicare Supplement plan, such as Attained Age and Issue Age. In this article, we’ll break down the differences between these two pricing structures. This information will help you make an informed decision that suits your needs.

Attained Age vs. Issue Age: What’s the Difference?

Medigap plans help fill the gaps in Original Medicare (Part A and Part B) coverage. They help cover costs like deductibles, co-payments, and co-insurance that can add up over time.

One of the critical factors to consider when choosing a Medigap plan is how the insurance provider calculates premiums. There are three Medigap pricing methods: attained age, issued age, and community-rated plans. Attained age and issued age plans are the most common. 

What are Attained Age Plans?

Attained Age rating is the most common pricing method for Medigap plans. With this approach, your provider bases your premium on your age when you initially sign up for the plan.

The younger you are when you enroll, the lower your starting premium will be. However, your premium will increase as you age, usually by 2-3% per year. For example, you enroll at 65 with a standard monthly premium of $100. At 70, your standard monthly premium for the same plan may have increased to $112 and $130 by age 75. 

The increases are usually gradual and approved by state health insurance agencies. Even with increasing rates, Attained Age premiums are typically the least costly option and are a favorite of Medigap insurance companies. 

What are Issue Age Plans?

Attained Age vs. Issue Age - Issue Age Plans

With Issue Age plans, your premium is based on your age when you apply for the plan. The advantage of this approach is that your premium won’t increase because you get older. Instead, the rate may increase modestly over time due to inflation and other factors.

For example, if you enroll at 65, you will pay the premium for your plan for a 65-year-old. At 75, you will still be paying the rate a 65-year-old would pay for that plan. The rate may have increased because of inflation and other factors, but it will still be less than a 75-year-old joining that plan. 

Increases to Issue Age plans are typically infrequent. Fewer increases make Issue Age plans a good choice for those looking for stability in terms of premiums. You may prefer this option if you want consistency in your healthcare costs.

What are Community-Rated Plans?

Very few states (at the time of writing: Arkansas, Connecticut, Massachusetts, Maine, Minnesota, New York, Vermont, and Washington) offer Community-Rated Medigap plans.  

In a community-rated pricing model, the premium for a Medigap plan is the same for everyone, regardless of age or gender, within a specific area. Everyone who purchases the same Medigap plan in that area pays the same monthly premium, regardless of whether they are 65 or 85 years old.

A community-rated plan can provide predictability and stability in premium costs, as everyone in the same community pays the same amount. The premiums can increase, however, based on inflation and other factors. 

Comparing Attained Age Plans vs. Issued Age Plans vs. Community-Rated Plans

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When choosing your Medigap plan, there are several factors to consider.

Your Health and Age

Consider your current health status and age when making a decision. If you’re in excellent health and plan to enroll at a younger age, an Attained Age plan might provide lower initial costs. On the other hand, if you’re looking for stability and anticipate staying with the same plan for years, an Issue Age plan could be more suitable.

State-Specific Considerations 

Some states have specific rules regarding Medigap plans and pricing methods. For instance, Massachusetts, Minnesota, and Wisconsin have standardized plans and coverage guidelines. Check with your State Health Insurance Assistance Program (SHIP) or Medigap plan provider if you’re in one of these states.

Future Rate Increases

Attained Age plans tie premium increases to your age and other factors. In Issue Age plans, increases depend on inflation and other health cost factors. Evaluate how each plan’s rate increases may impact your budget.

Choosing the Right Medigap Plan for Your Needs

Choosing the right Medigap plan is a significant decision that can impact your healthcare costs and coverage for years. The choice between Attained Age and Issue Age plans comes down to your circumstances, health needs, and long-term goals. 

Before making a decision, take the time to evaluate your overall health, age, and budget. Consider the potential for rate increases and how they might impact your family’s budget. 

You can also speak to experts in the industry, like our team at The Medicare Family. We’re here to help you navigate the complexities of Medigap plans and find the option that best fits your needs and budget. Schedule your appointment today and get the guidance to ensure adequate health coverage. 

Sylvia Gordon, aka Medicare Mama®, is an expert on all things Medicare and Social Security. She is the 2nd Generation here at The Medicare Family and has served on the advisory boards of major insurance companies like UnitedHealthcare®, Cigna, and Anthem. In her free time, she can be found taking care of her animals (dogs, goats, peacocks, chickens), and reading a good book. Learn More.
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