Q: I turned 65 a few years ago while living in Florida. My wife and I are about to move to Delaware, and the insurer says I can keep my policy. (My wife turns 65 next year.) Do the pricing rules for Medigap policies vary by state? And will the premiums change for the policy I already have?
A: Yes to both questions. Medicare supplemental coverage fills in the gaps in Medicare, such as deductibles and co-payments, and comes in 10 standardized policies (A through F, and K through N). Each policy with the same letter designation provides the same coverage, but the premiums can vary a lot by insurer. In some states, insurers can choose from three pricing methods for Medigap policies: issue-age policies, which base premiums on your age when you purchase the policy; attained-age policies, which can increase premiums each year because of your age; and community-rated policies, which are similar to issue-age policies but generally charge everyone the same rate regardless of age. “Premiums for attained-age policies are likely to go up a lot more than policies that are issue-age or community-rated,” says Bonnie Burns, a Medigap expert and the training and policy specialist for California Health Advocates.
Since you already have an issue-age policy, you’ll be able to keep your policy with that pricing structure, even though you are moving, says Burns. Your premiums may change, however, because of differences in health care costs in your area. When your wife turns 65, she’ll have to choose from the options available in Delaware. Most insurers in that state offer attained-age policies, but she should be able to find a few that offer issue-age or community-rated policies.
Most state insurance departments have lists of Medigap premiums and pricing structures for the policies sold in their state, such as the Delaware Medicare Supplement Insurance Shopper’s Guide. Go to the National Association of Insurance Commissioners’ map to find links to each state’s insurance department. You can get extra help with your Medigap choices by ordering a customized Weiss Ratings Medigap Report ($49 for Kiplinger readers), which lists the premiums and pricing structure of the Medigap plans available in your area, based on your age and location, and provides advice on choosing a policy.