With a community-rated Medigap plan, you’ll pay the same premium as all other enrollees in your area, regardless of your age or sex. But your cost may still change each year.
Medigap plans help you pay out-of-pocket expenses that Original Medicare doesn’t cover. There are different types of Medigap plans, including community-rated Medigap plans. These are also called no-age-rated Medigap plans.
Read on to learn about community-rated Medigap plans, including what they are and why they matter.
Medigap policies are offered by private insurance companies, which can decide how to set the price or premium. This decision has a direct impact on your current and future payments.
For community-rated Medigap plans (also called no-age-rated plans), insurers set a flat premium for all beneficiaries, regardless of age or sex. This means everyone pays the same amount.
These plans differ from issue-age-rated plans (also called entry-age-rated plans), in which your premium depends on how old you are when you purchase the plan, and attained-age-rated plans, in which your premium depends on how old you are now.
With a community-rated Medigap plan, everyone pays the same premium regardless of age or sex. However, you must be enrolled in the same plan from the same provider and live in the same geographic area as all the other enrollees.
This means people who are enrolled in Medigap plans from a different provider can pay a different premium, and people who enroll in other states may have to choose from entirely different Medigap plans.
In addition, even if you’re enrolled in a community-rated plan, your plan premium can increase from year to year. Possible reasons for an increase include inflation and the number of claims the insurer had to pay out in the previous year.
Only nine states require Medigap insurance providers to offer community-rated plans to Medicare beneficiaries. This means these plans tend to be harder to get.
In states without this requirement, you could be denied a Medigap policy unless you register during your initial enrollment period or experience certain qualifying events.
If you try out a private Medicare Advantage plan first and then switch to Original Medicare after a year and want to get Medigap coverage, you may also face this barrier.
According to the Journal of Aging Law & Policy, older and sicker Medicare enrollees, who tend to switch from Medicare Advantage to Original Medicare more often than younger and healthier enrollees, are more at risk of being denied coverage.
Who is the best Medigap provider?
While insurers’ determination of what to charge for a Medigap plan may vary from state to state, the plan benefits themselves are standardized across the United States, and you have 10 options to choose from.
Which option might work best for you depends on your specific situation. However, in a recent comparison, Healthline editors selected Humana as the best overall Medigap provider.
Which Medigap plan do most people choose?
According to the American Association for Medicare Supplement Insurance, the most popular Medigap option is currently Plan G.
If you’re part of a community-rated Medigap plan, you’ll pay the same premium as everyone else in your area, regardless of age or sx.
However, not many states offer this type of Medigap plan, and your premium may still increase each year due to inflation or the amount the insurance company spent on claims in the previous year.