How to Handle Medicare Supplement Rate Increases
What’s a typical Medicare Supplement rate increase? If you’ve been in the business for awhile you understand rate and flow increases and that they are pretty standard with a few big shockers every once in a while. Medicare rate increases are unfortunately inevitable. Typically there is at least one rate increase per year, and it’s very common for a premium to double over the course of 7 to 10 years. The rate increase may be taking effect on a certain date for example, say July 1st, or it may be taking effect on the clients renewal date. It’s more common for a rate increase to take effect on the same date for everyone.
There are three pricing structures companies can use including community rated, issue-age rated, and attained- age rated.
Attained-Age Pricing: Rates are based on your current age and will increase every year as you age. This is the most common pricing plan.
Issue-Age Pricing: Rates are based on your age at the time of purchase rates can increase for the collective claims in the policy, but not your age.
Community Pricing: Your age doesn’t affect what you pay, however inflation, utilization, and factors such as tobacco use can.