How Maryland Supplement pricing works

How Maryland Supplement pricing works

Why two Plan G premiums can drift apart

If you have priced a Medicare Supplement plan, you may have noticed that two carriers quote very different numbers for the same plan letter. The benefits are identical, so where does the gap come from? Mostly from how each carrier decides to price. Maryland's insurance regulator, the Maryland Insurance Administration, explains that a carrier may write a policy based on issue age, attained age or community rating. Each one changes what you pay over the years, and choosing between them matters as much as choosing the plan letter.

Issue age

With issue age pricing, your premium is based on how old you were when you bought the policy. It can still rise over time because of benefit changes, inflation or higher medical costs, but it does not go up simply because you got older. Someone who buys at 65 locks in that age band for pricing purposes. The starting premium is often higher than an attained age plan, and the trade is steadier growth later.

Attained age

With attained age pricing, your premium is based on your age at your most recent policy anniversary, and it is scheduled to go up at set intervals, such as every year or every five years. Those increases come in addition to any increases for benefit changes, inflation or rising costs. A starting premium at 65 can look attractive, which is the reason we always look a few years ahead before recommending one. It may be a good fit if you expect to keep a plan only for a short time, and a harder one to live with at 80.

Community rating

With community rating, your premium does not depend on your age, either when you buy the policy or when it renews. The rate can still change because of benefit changes or overall premium adjustments for everyone in the group. For people who plan to keep a plan for decades, community rating can level out the path of a premium over time.

What else can change a quote

Age is not the only variable. Depending on the carrier, quotes can vary with gender, tobacco use and whether you applied during a guaranteed enrollment window. Some carriers also offer a household discount when two Medicare-eligible adults enroll at the same time. The Maryland Insurance Administration publishes a rate guide each January and July, listing monthly premiums by plan and age, but it only shows what carriers have filed. Actual quotes can differ, which is where a broker earns the title. Rates can change without notice.

A simple way to compare quotes

1. Fix the plan letter first. Compare Plan G with Plan G and Plan N with Plan N. Our plan comparison helps you pick the letter.
2. Ask how the carrier prices. Issue age, attained age or community rated. The answer changes the next ten years.
3. Look at a ten year picture, not only this month's number. Ask what the premium may look like at 70, 75 and 80.
4. Ask about discounts. A household discount may apply if your partner is also enrolling.
5. Check the carrier's service, because you will deal with them at claim time and when rates change.

Two Bethesda examples, without the numbers

A retired couple in the Edgemoor area both turn 65 in the same year. One is healthy and sees a doctor twice a year. The other has a long-term condition. They may well land on different plan letters, and they may qualify for a household discount if they enroll together with the same carrier. Neither choice is wrong. It depends on how each person uses care, and we help them see that before they sign.

Another example: someone buying at 66 who plans to keep their plan for twenty years may care much more about long-run pricing than about next month's premium. Someone who expects to move out of Maryland in a few years may prefer a lower starting price.

To see how pricing interacts with timing, read about your enrollment windows. When you are ready for real numbers, call (410) 896-1212 or request quotes by email on our home page.