The benefits in each standardized Medicare supplemental insurance plan, or Medigap policy, are identical from one company to another. Premiums, however, vary significantly which makes it difficult to decide which is the best Medigap policy.
The right time to purchase a Medigap policy is during the first six months following enrollment in Medicare Part B. This is the sacred period during which no insurance company can refuse you a policy on grounds of a pre-existing condition.
There are three cardinal thoughts to bear in mind when purchasing a Medigap policy:
- A higher premium for a standardized medical health supplemental insurance plan fetches you nothing more. All benefits from one company to another are identical and so is the procedure and requirements for filing a claim.
Some companies try to get an edge by misleading you into believing their plans are superior because filing a claim involves no forms. The truth of the matter is that this decision rests with the concerned doctor or health-care provider. Some file the forms for you while others prefer that you do it yourself.
- The premium usually increases every year. The reason for this is that Medigap’s benefits are coordinated with Medicare’s, and each January 1, the benefits Medicare gives are adjusted to keep on par with inflation.
- The premium for Medigap policies are governed by three parameters:
- Age attained: The lowest premiums apply to those just turned 65. As you get older, the premium increases. Such increases are apart from the escalations because of the annual Medicare benefit adjustment for inflation.
- Age of issue: Your age at time of purchase is what determines the premium. It will not increase with your age, but the premium will escalate because of the annual inflation adjustment.
- Community rated: This is where the premium is a constant, regardless of age, for everyone resident in the same geographic area.
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