When you are registering for something new, it is always good to know the various elements that go into the pricing structure. It is the same with Medigap or Supplement Plans. Insurance companies adopt one or more parameters to fix the pricing. You can read on to find out the basis on which this is done so that you know why you are being charged a specific amount as premium. Since Medicare supplement plans can be quite diverse, you cannot apply the same rule to all. Prices are fixed based on a wide variety of factors and it is good to know the basis on which you are being charged.

Based On Community Coverage

This is also known as ‘no-age-rate’ policy; in short, the same amount of premium is payable by everyone who registers for this policy. It does not matter what age or gender the person is; the company uses this element to fix its premium rates. You may wonder why a premium, in this case, goes up or down. These changes happen not because of the age of the insured person; it happens because of inflation or any other such external factors and not because of age. You will find that a person who is 65 pays the same premium as a person who is 75 too.

Two More Age-Related Facts

In some cases, the premium that you pay for a particular policy is based on the age that you are, when you actually make the purchase of the policy. In other words, the premium is determined based on the age you are on the date on which the Medigap is issued to you. The other age-related fact is this: the premium could also be based on the age that you are at the present point in time. If this is the criterion that is adopted, the premium could go up as you grow older. Therefore, with every passing year, the premium that is paid keeps going up consistently.

Basically, you need to be aware of the fact that there are certain criteria based on which the amount of premium is fixed. If you can ascertain this before you sign up for a Medigap policy, it would be easier for you to manage not just the payments that you have to do on a regular basis, but a lot of medical expenses as well. You could prioritise your health checks and other expenditures so that you get uninterrupted coverage right through.