Medigap Premiums Pricing Policy - No Age Method
Medicare approves private insurance companies to sell Medicare Supplement Plans to Medicare enrollees. When it comes to fixing the monthly premiums for the various plans, the insurance companies may follow different pricing policies.
They can choose from any of the three methods for determining the monthly premium to be paid for the plan. One of the methods is based on the type of the policy that a person is buying and not his age. This is called community-based rating policy. A particular policy will cost the same for every person who is buying that type of plan regardless of his age. Hence this method is also referred to as ‘no-age’ pricing policy. A person buying a Medicare Supplement Plan at age 72 will pay the same monthly premium as a person who is buying the same plan at age 65.
In this case inflation does affect the monthly premiums and they may change in accordance to the rising costs.