Medicare Supplements: What is the Deal with Rate Increases?

Those considering enrolling with a Medicare supplement and those already enrolled worry about rate increase. Rate increases can seem consuming, confounding, and confusing. If you are looking for a guide to explain the who, what, when, where, and why of Medigap rate increases, then you have come to the right place! Read on….

Most Medicare supplement providers have a twelve-month rate lock-in period in which their new clients will not experience a rate increase. However, once that period is up and rate increases start occurring, many are perplexed as to why. In most cases, the why of rate increases can be attributed to one or more of the below causes:

The Post 12-month administrative rule: If a rate increases during the initial 12-month period the client owns a policy, the rate increase will occur for that client at the first premium payment date after the end of the twelve-month period is completed.

Consecutive annual rate adjustments: This is when there are consecutive rate increases during the first two years an individual is covered by a given policy. In this case, both rate increases happen at once.

Attained age: This occurs when the premium payment amount increases each year on the first policy payment date. However, if an attained age increase and an annual rate adjustment take place two months in a row, the later rate increase will take place three months after the first.

Please know that insurance premiums rise due to increasing health care costs (due to inflation) as well as increases in Medicare’s deductibles and copayments (which increase each year.) No single enrollee of a Medicare supplement policy is singled out for a rate increase.

For more information on Medicare supplements, Medicare, and all other associated plans, you should be sure to do your research. You want to be completely comfortable with the plan you purchase and be prepared for its processes.

Want to find out more about Medigap, then visit Richard Cantu’s site on how to choose the best plan for your needs.

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• Time is of the Essence when Purchasing a Medigap Plan
• Medicare Supplemental Insurance: The Choices and the Consequent Confusion
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