Is AARP the lowest priced Medi Gap plan as they have Community Rating?
AARP for Individuals is NOT community rated. The problem is that the tool on Medicare.gov while it shows that AARP is Community rated, that’s only their GROUP Employer plan. See the excerpt of AARP’s rate manual showing attained Age. I’d post it, but AARP doesn’t allow agents to do that! We can send you AARP MAPD information upon request. Email us.
Please note in that our one year of law school, we learned that you have to read something three times and then when you think you understand it, read it again. The closest citation I have is Justice Felix Frankfurter.
Costs of Medigap Policies
From Medicare.Gov & Medi Gap Guide
The cost of Medigap policies can vary widely. There can be big differences in premiums that insurance companies charge for exactly the same coverage. As you shop for a Medigap policy, be sure you are comparing the same Medigap policy (for example, compare a Plan A from one company with Plan A from another company).
Each insurance company sets its own premiums. It is important to ask how an insurance company prices Medigap policies. How they set the price affects how much you pay now and in the future. Medigap policies can be priced or “rated” in three ways.
|Type of pricing||How it’s priced||What pricing may mean for you||Examples|
|Community-rated (also called No-Age-Rated)||The same monthly premium is charged to everyone who has the Medigap policy, regardless of age.||Premiums are the same no matter how old you are. Premiums may go up because of inflation and other factors.||
Mr. Smith is 65. He buys a Medigap policy and pays a $165 monthly premium.
Mrs. Perez is 72. She buys the same Medigap policy as Mr. Smith. She also pays a $165 monthly premium because with this type of policy, everyone pays the same price, regardless of age.
|Issue-Age-Rated Policies||The premium is based on the age you are when you buy (are “issued”) the Medigap policy.||Premiums are lower for younger buyers and won’t change as you get older. Premiums may go up because of inflation and other factors.||
Mr. Han is 65. He buys a Medigap policy and pays a $145 monthly premium.
Mrs. Wright is 72. She buys the same Medigap policy as Mr. Han. Since she is older at the time she buys it, her monthly premium is $175.
|Attained-Age-Rated Policies||The premium is based on your current age (the age you have “attained”) so your premium goes up as you get older.||Premiums are low for younger buyers, but go up as you get older and can eventually become the most expensive. Premiums may also go up because of inflation and other factors.||
Mrs. Anderson is age 65. She pays a $120 monthly premium. Her premium will go up every year.
Mr. Dodd is age 72. He buys the same Medigap policy as Mrs. Anderson. He pays a $165 monthly premium. His premium is higher than Mrs. Anderson’s because it is based on his current age. Mr. Dodd’s premium will go up every year.