Latest / Smart Coverage. Real Advice.: Medicare / Issue-Age vs. Attained-Age Medigap: How Each Rating Method Affects Your Plan G Premiums Over Time
Transcript
- Tanya: What’s the real difference between issue-age and attained-age Medigap Plan G premiums—and does picking one over the other actually save you money in the long run? You’ll want to hear this before you shop. Tanya: Welcome to Smart Coverage. Real Advice., the insurance podcast from The Jordan Insurance Agency. I'm Tanya, your host, and I'm here with Billy Jordan, a licensed insurance agent and the president of The Jordan Insurance Agency. Billy: Glad to be here, Tanya. A quick disclaimer: we're not affiliated with or endorsed by Medicare or any government agency, and this is general education, not advice for your situation. Now, let’s get into what those rating methods actually mean. Tanya: So let’s start with the basics. What exactly is the difference between issue-age and attained-age Medigap pricing? Billy: Issue-age means your premium is set based on your age when you first buy the policy. It won’t rise just because you get older. Attained-age, on the other hand, bases your premium on your current age—so as you age, your premium goes up. Both types can still increase for other reasons, like inflation or changes in company costs. Tanya: So if I buy an issue-age plan at sixty-five, my premium won’t go up just because I turn seventy? Billy: That’s right—your age at purchase is what matters for issue-age. But, and this is important, your premium can still go up for things like inflation or company-wide adjustments. That’s a common misunderstanding. Some people assume “issue-age” means their price is locked forever, but that’s not the case. Tanya: That’s a big one. So with attained-age, my premium could be lower at first, but it’s going to keep rising as I get older? Billy: Exactly. Attained-age policies often look cheaper when you’re first eligible for Medicare, like at sixty-five. But as you celebrate more birthdays, your premium goes up based on the insurer’s age schedule. Plus, inflation or other changes can push it higher, too. Tanya: Give me a real-world example of how these might play out for someone. Billy: The key thing to remember is that attained-age premiums may start out lower for younger buyers, but they increase as you get older, while issue-age premiums are based on your age at purchase and do not increase just because you age. However, both types can still go up due to inflation or other factors. The actual long-term cost depends on the specific premiums, rate schedules, and other factors from each insurer. Tanya: But you’re saying there’s no magic “break-even” year where one always becomes cheaper than the other? Billy: That’s right. There’s no universal ten- or fifteen-year break-even point. It really depends on actual starting premiums, how often the rates increase, where you live, discounts, and even things like tobacco status. Medicare’s examples are just illustrations—they’re not guarantees. Tanya: So, if someone’s shopping for Plan G, what should they actually compare? Billy: Great question. First, compare the same plan letter—Plan G to Plan G. Next, look at the current monthly premium for your age, ZIP code, gender, and tobacco status. Then check the rating method—community, issue-age, or attained-age. Ask if there are any discounts, like for non-smokers or household members. And make sure you know if the price is an estimate or the official rate. Tanya: Is it a mistake to just go with the lowest monthly premium you see? Billy: That’s a really common mistake. The lowest premium today might not be the lowest over time, especially with attained-age policies that increase as you get older. Also, don’t forget to check if you’d have to go through medical underwriting to switch later. Outside your initial Medigap Open Enrollment Period, you could be turned down or charged more based on your health. Tanya: What about community-rated policies? How do they fit in? Billy: Community-rated is another method where everyone in a certain area pays the same base premium, regardless of age or gender. But just like the others, those premiums can still go up for inflation or company changes. It’s less common in some states, but it’s good to ask if it’s available. Tanya: So, for someone in North Carolina, what factors besides the rating method might change their premium? Billy: In North Carolina, factors like your age, gender, tobacco use, ZIP code, and available discounts all play a role. Medical underwriting can come into play if you apply outside your open enrollment window. Each insurance company can set its own rules and rates, so it’s smart to get multiple official quotes for your specific details. Tanya: And if someone’s rate goes up, can they just switch to another Medigap policy? Billy: You can apply for another policy, but unless you’re still in your Medigap Open Enrollment Period or qualify for a guaranteed-issue situation, the insurer may use medical underwriting. That means they can look at your health and decide whether to accept your application or charge more. Tanya: For someone who’s overwhelmed by all these choices, what’s the first step? Billy: Start by comparing the same Plan G from different companies using official quotes for your age and situation. Don’t just look at the rating method—consider the premium, discounts, and underwriting rules. And if you need help, you can always reach out to an independent advisor or contact the North Carolina Department of Insurance or SHIIP for unbiased guidance. Tanya: Three things to remember. One, issue-age and attained-age rating affect how your Medigap premium changes as you age, but both can still go up for other reasons. Two, there’s no universal rule for which costs less over time—always compare real quotes for your situation. Three, don’t focus on price alone; check discounts, underwriting, and the details behind the numbers. Tanya: For a personalized look at your situation, book a free thirty-minute chat with Billy and his team at thejordaninsuranceagency.com/podcast. Billy: I'm Billy Jordan with The Jordan Insurance Agency. Until next time, take care. Tanya: Thanks for listening to Smart Coverage. Real Advice. from The Jordan Insurance Agency.