The premiums charged for Medicare Supplements can be determined by three different premium types. These would be “attained age”, “issue age”, and “community rated”. Each state in the US has one that’s more popular than the others. As you approach Medicare age or eligibility, please be aware as to how these three rating types differ from one another.
Attained Age
Attained age premiums are always based upon your current age. With this type of rating, you can expect your premiums to increase each year.
Issue Age
Issue age premiums are obviously based upon the age you were at the time of your initial application. The later you wait to enroll, the higher your cost will be. It’s important to note though, that higher health costs and inflation can still increase your rates from year to year.
Community Rated
Community rated policies have the same base rate for a geographic area when enrolling into the same plan. The number of companies that rate this way are few. Most still offer additional discounts for younger enrollees, then the amount of discount shrinks as you grow older.
The most important thing to understand with all three is premium increases over time are almost certain. Next week we will explain how Medicare Supplement rates are calculated from year to year.