What are the two rating methodologies used for AARP Medicare Supplement Insurance Plans?

The two rating methodologies for AARP Medicare Supplement Insurance Plans are community rating and entry age rating.

Community rating means that premiums are set regardless of the individual's age, health status, or claims history, which can make the insurance more accessible for older adults and those with pre-existing conditions. This approach encourages a diverse pool of insured individuals, as it appeals to healthier members who may not otherwise purchase insurance due to higher premiums based on personal health.

Entry age rating, on the other hand, takes into account the age of the individual when they first enroll in a Medicare Supplement Plan. With this methodology, premiums may increase as the insured individual ages, but the base price is set based on their age at the time of enrollment. This can lead to lower initial premiums for younger enrollees while allowing insurers to stabilize costs over time as the population ages.

Both methodologies have their unique advantages, but together they provide a framework for balancing costs and access to coverage for seniors who need supplemental coverage to Original Medicare.