Medicare Supplement (Medigap)
Understanding Community Rated Supplement Plans
Dear AMAC,
I’ve had a Medigap policy with another senior organization since I turned 65, but in the last few years, the premium has gotten higher and higher. I was told that my policy was “Community-Rated,” and this was supposed to save me a lot of money. I feel like I was misled, plus the company supports causes that I DO NOT align with. Had I known about AMAC then, I would have gone with you instead.
-Gary (Riverside, CA)
Hello Gary,
In the state of California, Medigap plans are traditionally “Community-Rated,” which means that policies will not increase due to your age. Therefore, with a Community-Rated policy, someone who is 65 will pay the same premium as someone who is 75. Over time, it could save you more in the long run because your rate is less likely to fluctuate significantly as you get older.
I understand that you feel you may have been misled about your Medigap policy, but unfortunately, rates are subject to increase regardless of whether the policy is Community-Rated or not. This can be due to inflation and other factors. So, while they will not raise your premium due to age, this does not mean that they will never increase it.
Some carriers may offer substantial discounts when you first sign up that reduce over time. The discount reduction, in addition to the periodic rate increases, could be the culprit in your case. If you are dissatisfied with the rate, you can change your plan at any time, but you will usually have to pass Medical Underwriting, which is an investigation into your health history.
Luckily, in the state of California, you do have a Birthday Rule that grants you Guaranteed Issue Rights; This will allow you to change carriers and go into another plan of equal or lesser coverage without going through Medical Underwriting. The window surrounds your birthday each year and starts 30 days before and up to 60 days after your birthday. So, if you want to shop around for something more affordable, you do have options.
Thank you for your willingness to support our organization; it truly makes a difference!
Sincerely,
Your Medicare Advisor
If you would like to review specific plan options, our licensed agents here at AMAC would be happy to assist you. They are licensed with top-rated insurers throughout the country.
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