What characteristic defines the premium rates for Medigap policies?

• A. They always increase with age
• B. They are primarily based on "Attained Age"
• C. They are based on "Issue Age"
• D. They are fixed and unchangeable

Answer: (C)

The correct choice highlights that premiums for Medigap policies are based on "Issue Age." This means that the premium rate is determined by the age of the insured at the time the policy is purchased. Generally, the initial premium is lower for those who enroll at a younger age because the insurer expects to collect premiums over a longer period before potentially having to pay out benefits.

Once the policy is in force, the premiums can still increase over time due to overall increases in healthcare costs or insurer rate adjustments, but they are not directly tied to the age of the insured as they get older, which differs from a model based on "Attained Age," where premiums increase as the insured ages.

In contrast, "Attained Age" pricing would mean that premiums increase as the insured grows older, which is not the case for Issue Age pricing. Thus, while premiums may rise due to factors like inflation or rising healthcare costs, the foundational principle of how the premium is initially set is based on the age at which someone secures their policy, making "Issue Age" the defining characteristic.