When you are choosing a Medigap policy, it is best to look at policies from a range of insurance companies, especially if you’ve already decided on a particular standardized policy. Policies with the same letter name offer the same benefits, but premiums can vary from company to company. For example: Policy A bought from company 1 has the same benefits as Policy A bought from company 2, but company 1 and company 2 can charge different rates.

When choosing a Medigap, ask what factors the Medigap insurance company uses to set your premium. The following factors may affect the cost of your Medigap:

• Where you live
• Your age
• Your health status
• Your gender
• If you smoke
• If you are married

It is smart to buy your Medigap policy during your open enrollment period or when you have the guaranteed issue right because your premium cannot vary based on your health status at those times.

Be aware of how Medigap companies use age when setting premiums. In some states, companies are only allowed to use age to set premiums in certain ways. Depending on your state, premiums may be:

• No-age-rated (also known as community-rated): Premiums are the same for everyone living in a specific area, regardless of age. These are generally the least expensive over your lifetime.
• Issue-age-rated: Premiums are based on the age you were when you first bought the policy. The younger you are when you purchase a Medigap, the cheaper your premium. (Note: Premiums will still increase over time due to inflation, but not due to age).
• Attained-age-rated: Premiums are initially based on your age when you purchase a policy, and they increase as you get older (meaning you pay a different price at age 65 than you do at age 70). These premiums may be the lowest when you first buy them, but they are generally the most expensive over your lifetime.