âMost people buy Medicare Supplement coverage at age 65,â shares Jesse Slome, director of the industry organization. “The vast majority choose Medigap Plan G where premiums can vary depending on where you live and which insurance company you choose.”
According to the organization’s 2021 Medicare Supplements Price Index, a 65-year-old man can purchase Plan G coverage for as low as $ 109 per month in Dallas. “The same Dallas man could pay up to $ 242 a month for virtually identical coverage. If he lived in New York, the monthly premium price range is $ 268 to $ 476.”
Insurance costs generally increase each year as the policy is renewed and as the person ages. âWhile each insurance company determines its specific rates, in general, the underwriting professionals we interviewed expected an increase of 3-7% per year over the next three years. The average annual increase expected by most was 4.5 percent, with larger increases for older people.
Rate increases are generally based on policy usage, but may also take into account significant changes in medical and health care. âCOVID-related spending will definitely play a role,â says Slome. “The same is true of how insurers anticipate things like the impact of a newly approved Alzheimer’s drug.”
National health spending is expected to increase at an average annual rate of 5.4% for the period 2019 to 2028 according to forecasts by the CMS (Centers for Medicare and Medicaid). Total health spending is expected to reach $ 6.2 trillion by 2028.
“The fastest growth is expected to be spending on health insurance,” Slome said. “An annual increase of 7.6% per year is expected, but this is mainly due to the growth in the number of Medicare beneficiaries.”
The American Association for Medicare Supplement Insurance advocates the importance of planning. The organization provides a free online directory listing local Medicare insurance agents who can help consumers compare options for local Medicare Advantage and Medigap plans. To access the directory and other information, visit their website at www.medicaresupp.org.