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Issue Age vs Attained Age vs Community Age
The state in which you reside determines if your Medicare supplement will be labeled Issue Age, Attained Age, or Community Age. Knowing the difference between these rating classes can help you make a more informed decision in deciding a supplement and whether or not it’s best to re-shop your supplement in the future. We outline the difference in these rating classes below.
Issue Age Rating
Issue Age rated states are those in which you are “locked” in at the age in 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.
Attained Age Rating
Attained age rated states are those in which 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 states. 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.
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. For more details on how your state operates and to look more closely at particular carriers in your area, please feel free to reach out to us!