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Why do your Medicare Supplement premiums go up?
Your premiums can go up for a number of reasons including attained age, financial
strength of your insurance company, increases in health care costs, and region where
you live. Many insurance companies divide Texas into 4 different "areas" and
your rates can vary based on whether you live in Houston, San Antonio, Dallas, or
The Rio Grande Valley.
Another one of the main reasons your Medicare Supplement premiums go up is because
of claims against the group of policy holders in your plan. Often when a plan
is new the health care costs are spread across a large group of relatively healthy
policy holders. This is often referred to as a "new block of business".
In the example below you have a large group with fewer claims
and stable premiums.
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In the example below the same group will have more claims over a period of time.
This is due to the group getting older as a whole. When this happens you see
larger premium increases. Policy holders begin leaving the plan because of
the increases in premium. The remaining smaller group of policy holders must
now pay for the additional claims. |
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In the next example the same group will have more claims over a period of time
as the group gets older as a whole. When this happens you see larger premium
increases. More policy holders begin leaving the plan because of the increases
in premium. The remaining smaller group of policy holders must now pay for
the additional claims. |
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This illustrates the importance of selecting the right Texas Medicare Supplement
Plan, and selecting a financially stable and well rated company for your Medigap
Policy. As a part of my practice it is important for my clients that the
carriers that I represent have "new blocks of business". |
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