Medicare Supplement Insurance Premiums
Medicare Supplement Rates are determined by several factors that each have several components. The first thing to understand is that Medigap plans are regulated on a Federal and State level. The Federal guidelines state that there can only be Medicare Supplement Plans A – N, which means that there cannot be a plan Z. Each of these Medigap policies must provide the same basic benefits and the difference between carriers comes down to the Medigap insurance rates. There are three states that do not follow these federal guidelines: Minnesota, Massachusetts, and Wisconsin.
Federal & State Medicare Supplemental Rate Factors
Demographic Rate Factors Cost of Medigap Insurance
Another item that should be mentioned — regarding Medicare Supplemental rate increases — is the fact that a loss ratio for a Medigap Provider, usually determines the rate increase percentage allowed by the State Insurance Department. A high loss ratio means that they can get approved for a high rate increase. This week I saw a Texas Medicare Supplement Company give a 40% rate increase on a Plan N. This carrier offered this plan with no health questions a few years earlier, which means their loss ratio went through the roof; however, this goes to show you that low claims equal stable rates.
Medicare Insurance Premium and Medicare Supplemental Insurance Cost are two totally different factors. Medicare premiums are set by the federal government, while individual insurance companies with the help of actuaries help determine Medicare Supplement Cost. This can sometimes be a common misunderstanding.
Please know this list of rate factors is not all-inclusive. There are other factors that can affect your Medicare Supplement rates, but these are the main ones you should know when shopping for a Medicare Supplement policy at Medicare Insurance Finders. We appreciate your business and for stopping in. Please feel free to like us on Facebook (MWG Senior Services).