Issue Age Rating
Issue Age-rated states are those in which you are “locked” in at the age at which you get your policy. For instance, if you get your policy at age 65, you will always be charged 65-year-old rates. The premium can still go up every year, not because of your age, but because of several other factors including companies’ claims loss ratio, inflation, and many other factors. We find that issue-age states tend to have higher nationally averaged premiums, but are much more stable over time. Issue age states are the most important in which to make an informed decision on which plan and company you choose. This is because if you decide to switch plans or companies at a later age, you will then pay the premiums to reflect that age and lose your previous issue age.
What States are Medicare Issue Age rated? They include Florida, Arizona, Georgia, and Missouri.
Attained Age Rating
Attained age-rated states are those in which the premium always reflects your age. As you age, your risk is greater, and your premiums reflect that risk. In these states, you will find that premiums start out low at age 65, but tend to go up 4% or more every year with the chance of having 2 rate increases in the same year. One increase for age and another increase for reasons outlined above. Attained age states make shopping around every year worth your while as you were never locked into an age-like issue age state. Some companies still vow to only give one rate increase per year. Be sure to ask your agent which companies those are.
Community Age Rating
Community age states are those that charge the same premium no matter your age or gender. A male at age 80 will pay the same premium as a female at age 65 for the same plan and company. Premiums tend to be higher than the national average in these states since the premium is weighted between all ages and genders.
What states offer a community age rating for Medicare supplement plans? They include Arkansas, Connecticut, Maine, Massachusetts, Minnesota, New York, Vermont, Washington, and Idaho.
What is a Birthday Rule for Medicare Supplement Plans?
It means you can change your Medicare supplement plan without being asked to go through underwriting health questions near the time of your birthday month on an annual basis. It is an example of a Guaranteed Issue application.
For a clear breakdown of birthday states and how the birthday rule works in Medicare Supplement enrollment, check out this article: State-specific enrollment rules. It explains which states offer birthday window switching and what conditions apply for changing Medigap plans without underwriting.
This appointment is meant to alleviate any concerns and there is no-cost or obligation to make a change.
What is a Medicare Guaranteed Issued Policy?
It is a policy that a Medicare supplement carrier can approve without needing to approve the applicant’s health through an underwriting process.
Difference between an Open Enrollment Policy and a Guaranteed Issue Policy
Open Enrollment is a qualified time to enroll for newly eligible Medicare recipients, without being subjected to pre-existing conditions. Guaranteed Issue policies are granted outside of the initial enrollment period for those eligible to submit an application without needing to be underwritten.
What states have a Guaranteed Issue Policy that exceeds the Federal Minimum Standard?
The Medicare Birthday Rule application can be considered in some respects both an Open Enrollment and a Guaranteed Issue policy. Since it’s during an eligible time to switch each year, but at the same time, not the initial enrollment period when first enrolling in Medicare Part B. However, we will consider it strictly Open Enrollment.
Other examples of being eligible for Medicare Guaranteed Issue: There are many other Guaranteed Issue periods that are outside of the Birthday Rule. They include being involuntarily (sometimes voluntarily) disenrolled from creditable coverage through an employer or union plan. Your Medicare Advantage or Medicare Select plan stops providing you coverage or you leave your service area. You are within your first year of a Medicare Advantage plan and 65 years old and have a trial right to return to Medicare. Among other examples you can read on Medicare’s government website here: Guaranteed Issue Rights.
Conclusion
The rating class your state operates in has a major impact on the premiums of your policy and will give you great insight as to what to expect going forward with your Medicare Supplement. There are even rare occasions where a company could be community age-rated in an attained age state and vice versa.