Premiums are everything as far as medigap plan is concerned. Premiums are those payments that you normally contribute towards the plan each month or even in a yearly basis. How do we contribute premiums to Medicare supplement plans? Depending on your location, premiums can be contributed through a direct deduction from our salary account. If you are employed, then you will need to give a standing order so that the bank can deduct the specified amount and then remit it to the Medicare supplement insurance firm. On the other hand, if you are not employed or retired, your premiums can be deducted from your accrued retirement benefits.
Premiums can also be contributed directly by depositing the amount towards that insurance plan. This is basically for those individuals who are unemployed but have source of money. A business person can enroll in a Medicare supplement plan and contribute yearly or monthly depending on how he/she wants it. This brings us back to the question; “how or what methodology does the Medicare supplement insurance company use while setting our premiums?”
There are a number of factors which determined the rates of premiums for individuals. One of these factors is the age-rating method. Age rating is basically a method where a person will benefit more if he/she has attained the age of 65 and above. You can find AARP Medigap plans at https://www.medisupps.com/. The premiums are low and the benefits are attractive. For instance a person who has attained the age of 65 will have contributed more to the Medicare supplement plan he/she is enrolled in. With that idea at hand, you will find that the people or customers within that cohort will benefit from an extensive health care coverage.
The second factor which determines the rate of premiums one has to pay is the geographical location. Premiums depends on where you are located. For instance people enrolled in Medicare supplement plans may pay different premiums depending on the states they are. For example, a person living in Ohio will pay a different monthly premium from people in New Jersey simply because of their location.
The third factor that determined the rate of premiums you will be contributing is if someone is a smoker or not. In the event that someone has been determined as a smoker, he/she will pay a slightly higher rate of premium basically because they are rated as individual whose health risks are inevitable.