How Do Companies Price Medigap Plans?

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Are you asking yourself, “How Do Companies Price Medigap Plans?” It’s a common question and we’re going to educate you on the various pricing methods used by the Medicare Supplement companies.

How Do Companies Price Medigap Plans

If you already have a Medigap plan or you are researching options, you may want to know how carriers price their plans. Then, you can have a good grasp about how future rate adjustments work.

Medigap plans are priced by three methods:

  • Attained-Age
  • Issue-Age (aka Entry age)
  • Community Rated

Attained Age Medigap Plans

The first Pricing Method is called Attained Age. This is by far the most common way Medigap plans are priced. By definition, Attained-Age Rated premiums are based on your current age (the age you’ve attained), so your premium goes up as you get older.


  • Generally, low premiums at age 65.
  • Most companies don’t begin offering age increases until age 68.


  • Receive increases based on age
  • Can also receive periodic inflation based increases

In your research, you may have come across information about Attained Age plans explaining how this type of plan gets expensive as you get older. With the possibility of two types of rate increases, it seems like this is true.

But, there are times when an insurance carrier won’t increase rates based on inflation. In fact, they may decrease rates. It does happen from time to time.

Issue Age Medigap Plans

The second pricing method is called Issue Age or Entry Age. By definition, premiums are lower for people who buy at a younger age and won’t change as you get older. Premiums may go up because of inflation and other factors but not because of your age.


  • Your premium doesn’t increase due to age.


  • Your premium increases due to inflation.
  • Premiums start out higher compared to Attained Age.

It’s hard to find insurance carriers who offer Issue Age plans. But, there are certain states where all plans are Issue Age.

Issue Age States: Florida, Georgia, Idaho, Arizona, Missouri, and New Hampshire where the majority, if not all, Medigap plans are Issue Age.

Most states have Attained Age plans, so if you come across an Issue Age Medigap plan the premium will be high compared to an Attained Age plan.

Community Rated Medigap Plans

The final pricing method is Community Rated. By definition, Community Rated Medigap policies generally charge the same premium to everyone who has the Medigap policy, regardless of age or gender.


  • As you get older, your premium is the same as someone new to Medicare.


  • When new to Medicare, your premium is the same as someone older than you.

Like Issue Age, it’s a challenge to find Community Rated plans. States that offer Community Rating are Connecticut, Arkansas, Maine, Massachusetts, Minnesota, New York, Vermont and Washington.

Community Rated Plans with Enrollment Discounts

Hearing the word “discount” sounds great. And, it very well can be. But, this type of discount is related to age. Which makes the Community Rating a bit distorted.

How it works…

If an insurance company gives you an enrollment discount based on age, a little bit of that discount goes away each year as you get older. So, in other words, you receive an age based increase and an inflation based increase.

Sound familiar? It’s basically an Attained Age plan with a Community Rated label.

Bottom line…if you come across a Community Rated plan, find out if it includes an enrollment discount based on your age. Then you can properly compare plans.

What’s the best Medigap pricing method?

There are definitely different opinions about which is the best way to price a Medigap plan. And, certainly it’s something to be aware of when you’re buying a plan.

But, you shouldn’t rely solely on the pricing method when choosing a Medigap plan that’s right for you.

Regardless of the Medigap pricing method, the reality is you’re going to receive rate increases. And, there’s no guarantee that an Attained Age policy will be more expensive than an Issue Age or Community Rated policy 10 years down the road.

There are other factors to take into consideration. We like to look at an insurance carrier’s financial stability, rate increase history and what projected age increases.

So, how do you get all this information?

By contacting the insurance carrier directly?


The customer service representative doesn’t have this information ready to share.

By doing your own online research?


You’ll spend a lot of time looking for information that isn’t available to the public to view. We’ll help you avoid Medigap buying mistakes. We’ll save you time and money by doing all of the research for you.

Shop for the Best Medigap Rate

Shopping for the best rate can be completely overwhelming for consumers. The best course of action is to work with an independent broker who has the tools available to share pricing methods, financial stability and increase history.

At REMEDIGAP, you’re working directly with independent agents who have access to top rated companies in order to find the ones that will provide you the best plan at the lowest rate. As independent insurance professionals, that’s what we do here everyday. And, we’ve learned the tendencies and trends from various companies. If you believe we’re a good fit for you, we’re happy to guide you through the process.

Call us today at 888-411-1329 and let’s see how we can help you.

Thank you for reading our post,  How Do Companies Price Medigap Plans. Please leave a comment or question below.

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