Medicare Supplements - Attained Age vs. Issue Age

What is the difference between attained age and issue age in regards to Medicare Supplements? Before I get into that topic, I want to give you some other basic information first.

  • Medicare Supplements are also known as Medigap Policies. (The terms can be used interchangeably.)
  • All Medicare Supplements policies will have increases in rates over time.
  • There are two types of rate increases:

1. Medicare Supplement Rate Increases That Are Due to Age
As we get older, our health can and usually does deteriorate. In regards to Medicare Supplements, the insurance carrier may raise the rate a little bit each year upon your birthday due the increased likelihood of higher claim amounts as we age.  Generally this is just a couple of percentage points, but can vary depending on your specific policy.  You will find this type of rate increase in the attained age Medicare Supplements policies, which are the most common type of Medicare Supplement policies.

2. Medicare Supplement Rate Increases That Are Due to Inflation
The cost of medical care in the United States keeps increasing. As the cost of health goes up, the cost of your Medicare Supplement claims will also increase. Insurance companies will have statewide rate increases nearly every year on every kind of Medicare Supplement policy to keep up with the increasing cost of claims. The insurance carrier must first file its proposed rate increase with the state Department of Insurance for approval. Then they’ll notify you by mail of the effective date of the increase.

Note: You should also understand that Original Medicare itself usually increases the amount of your Part A and Part B deductibles ever year. Medicare Supplement policies often cover these deductibles for you, depending on which plan you chose to enroll in. So if your Medicare Supplement plan is covering a higher deductible for you the next year versus what it did this current year, then your Medicare Supplement rates must also increase over time.

Issue Age Medicare Supplement Policies
An Issue Age rated Medicare Supplement policy means that you buy your policy based on your age at the time of application. Example: Somebody who is 75 will pay a higher premium when they purchase, then say their neighbor who is 65. However, once the policy is issued, it will never increase specifically based on your age. (Unless you terminate your policy, then later decide to reapply down the road. In that case, when you reapply, premiums will be based on your current age at the time of application.) Note: The premiums can still increase due to inflation and rising costs of healthcare, but just not due specifically to your age

Attained Age Medicare Supplement Policies
Attained age policies increase in price as you get older. Generally the insurance company has only a small increase for your attained age though. Most of the time these policies are expensive when you purchase them compared to what an issue age policy might cost you. They are certainly worth comparing so that you get the policy that you feel offers the best financial outlook.

Each state has different regulations.
Note: Florida has only allows issue age Medicare Supplement policies.