Millions of older Americans face escalating healthcare costs as premiums for Medicare supplemental, or Medigap, policies climb sharply across the United States. Many beneficiaries are now seeing increases between 12% and 26% for common plans, according to actuarial data compiled by Telos Actuarial. Some policyholders have reported even more dramatic jumps, with one Illinois broker citing a 45% immediate increase for his clients, a situation he called unprecedented in his nearly five decades in the industry.
John Jaggi, an insurance broker based in Illinois with 49 years in the business, found himself navigating uncharted territory last August. More than 80 of his clients, all enrolled in the same Medicare supplemental plan from Chubb, received notices of a 45% premium increase. The hike took effect immediately for everyone, not on their individual policy anniversaries.
This was a departure from standard practice. Jaggi's brokerage, Jaggi Petry Insurance & Investments, scrambled to locate more affordable options. Many found new coverage.
The situation highlighted a growing trend. Double-digit premium increases for Medigap policies are becoming a consistent feature of the market, according to Jaggi and other brokers. These plans cover deductibles and other out-of-pocket costs not absorbed by traditional Medicare.
Without such a policy, beneficiaries face unlimited annual expenses. The impact on seniors is direct. Telos Actuarial, a Nebraska-based consulting firm, reported significant rate increases in early 2026 filings with state insurance commissioners.
For Plan G policies, the most frequently purchased supplemental type, major carriers like Aetna, Blue Cross Blue Shield, Cigna, Humana, Mutual of Omaha, and UnitedHealthcare sought increases ranging from just over 12% to more than 26% in the first quarter. Brett Mushett, a consulting actuary with Telos, observed that this dataset, while representing a selection of states, indicates insurers are adjusting rates. They are responding to upward pressure on their claims experience.
The math does not add up for many policyholders. Premium rates show variability based on the specific coverage chosen, the beneficiary's geographic location, and their age. In 2023, KFF reported an average monthly premium of $164 for Plan G coverage.
That figure has undoubtedly risen since then. Amanda Brewton, who owns Medicare Answers Now, a marketing organization for sales agents, noted a stark shift in regional trends. She explained that in Ohio, Medicare supplements historically saw annual increases of 3% to 5%.
Now, those increases typically range from 10% to 15%. This acceleration is significant. In Alaska, policyholders also experienced substantial jumps.
Patricia Mack, an insurance agent with Alaska Insurance Benefits in Wasilla, provided rate sheets to KFF Health News showing Premera Blue Cross raised its Plan G premiums by nearly 12% this year. Another insurer increased rates by almost 13%. For example, a 65-year-old woman who paid $172 monthly for a Plan G policy last year now faces a $192 monthly rate, Mack detailed.
These are not minor adjustments. Courtney Wallace, a spokesperson for Premera, attributed the premium increases to several factors. She cited annual changes Medicare makes to deductible and copayment rates, which directly influence supplemental plans designed to cover these rising amounts.
Wallace also noted that Premera observed higher medical service utilization among its members. This increased claims costs. Ultimately, it impacted premiums.
Brokers and policy experts point to a combination of elements driving these higher premiums. These include an overall increase in medical service usage by beneficiaries and the general aging of the population. Rising labor costs and medical expenses also play a role.
State-specific regulations governing Medigap plans and shifts in enrollment between traditional Medicare and private Medicare Advantage plans further complicate the landscape. Chalen Jackson, Vice President for Government Affairs at Integrity, a Dallas-based life and health insurance company, summarized the market shift. He stated that five years ago, a rate increase exceeding 10% was rare.
Now, increases below 10% are uncommon. Rates over 20% are not unusual. More than 12 million people, roughly 43% of those enrolled in traditional Medicare, purchase a Medigap policy, according to KFF.
Others rely on employer-sponsored retiree coverage or alternative backup plans. However, KFF also reports that approximately 13% of individuals in traditional Medicare lack any supplemental coverage. These individuals remain vulnerable.
They face potentially large costs if a serious illness strikes. Here is what they are not telling you: the system is designed to pass costs. Medicare beneficiaries generally become eligible for the program at age 65.
Upon their initial enrollment in the traditional fee-for-service program, they have a six-month window. During this period, they can purchase a Medigap plan at standard rates without undergoing medical underwriting, meaning they do not have to answer health-related questions. Strict rules then apply regarding when beneficiaries can enroll in or switch Medigap coverage.
Options become significantly more limited. Each choice often involves trade-offs or difficult decisions. This is where leverage shifts.
Some states offer additional protections. At least 16 states have what is known as a “birthday rule.” This rule mandates that insurers allow individuals enrolled in a Medigap plan to change to different supplemental coverage once a year, typically around their birthday, without medical underwriting. Such rules assist consumers, particularly those with existing health conditions, in switching plans.
Furthermore, four states—Connecticut, Massachusetts, Maine, and New York—require insurers to offer at least one Medigap policy to all applicants, either year-round or during a specific annual enrollment period, depending on the state. Changes are permitted irrespective of the person's health status. Another option for individuals confronting high Medigap costs involves leaving traditional Medicare.
They can enroll in a private-sector Medicare Advantage plan instead. These plans feature out-of-pocket caps, a key distinction from traditional Medicare without supplemental coverage. However, joining a Medicare Advantage plan generally requires beneficiaries to use a specific network of doctors and hospitals.
If individuals decide to switch back to traditional Medicare, they face a limited 12-month window. After that, securing a Medigap policy becomes considerably more challenging. Brian Keyser, a research associate at the Center for American Progress and co-author of a recent report on this issue, highlighted a critical point.
He noted that many people do not realize that if they spend a year in Medicare Advantage, a Medigap plan might reject them or charge exorbitant premiums due to a preexisting condition. This effectively traps many individuals in MA plans. There are some exceptions to these strict rules.
If a Medicare Advantage plan withdraws from a market or discontinues its participation in the Medicare program, its enrollees gain eligibility for a supplemental plan. They will not be asked health questions or charged more for preexisting conditions. This year alone, KFF reported that approximately 2.6 million people lost Medicare Advantage coverage as their insurers exited various markets.
More than a million lost coverage for 2025. While many switched to other MA plans, George Dippel, president of Deft Research, a Minneapolis-based market research organization focused on insurance for older people, noted that around 440,000 of those individuals transitioned to a Medicare supplement policy. This often occurred because no other MA plan was available in their area.
Some Medicare experts suggest that whenever insurers enroll individuals whose health status they cannot consider – whether due to birthday rules or exemptions from medical underwriting because their Medicare Advantage plan left the market – it potentially increases their exposure to higher healthcare utilization and costs. This dynamic makes insurers more likely to raise premiums across the board to offset the potential financial impact. The system balances risk.
For those seeking to reduce their costs, brokers suggest considering one of the two types of Medigap plans that include a deductible. The current deductible sits just under $3,000 for a year. These plans typically charge significantly lower monthly premiums compared to Medigap plans that cover a much larger portion of the annual amounts beneficiaries must pay toward their Medicare services.
However, Patricia Mack indicated that many people find a $3,000 deductible uncomfortable. This is a tough choice for many. Why It Matters: Rising Medigap premiums directly impact the financial stability and healthcare access of millions of American seniors.
For individuals on fixed incomes, a 10% or 20% increase in monthly insurance costs can force difficult decisions between essential medications, food, or housing. The lack of an out-of-pocket cap in traditional Medicare, a point emphasized by Senator Ron Wyden (D-Ore.), leaves beneficiaries exposed to unlimited costs, making supplemental coverage a necessity, not a luxury. The current trends indicate a growing burden shifted from insurers to the elderly, challenging the promise of affordable healthcare in retirement.
Follow the leverage, not the rhetoric. Key Takeaways: - Medigap premiums are seeing double-digit increases, with some reaching 45%, affecting millions of seniors. - Insurers attribute hikes to increased medical service use and rising healthcare costs, while policy experts cite population aging and state regulations. - Traditional Medicare lacks an out-of-pocket cap, making supplemental coverage crucial but increasingly expensive. - Beneficiaries face complex choices between Medigap, Medicare Advantage, and navigating state-specific enrollment rules. What Comes Next: The trajectory of Medigap premiums remains upward.
Congress has considered solutions, such as capping out-of-pocket costs for Medicare beneficiaries or subsidizing Medigap purchases. However, Senator Wyden noted that making changes to Medicare requiring congressional approval is improbable in the current legislative climate, primarily due to the added costs to the federal budget. This suggests little immediate federal relief.
Individuals will continue to weigh their options, including high-deductible Medigap plans or transitioning to Medicare Advantage, each with its own set of compromises. Watch for continued pressure on state insurance regulators. Insurers will file for more increases.
The market will adapt, but seniors will bear the brunt. The debate over who pays for healthcare will intensify.
Key Takeaways
— - Medigap premiums are seeing double-digit increases, with some reaching 45%, affecting millions of seniors.
— - Insurers attribute hikes to increased medical service use and rising healthcare costs, while policy experts cite population aging and state regulations.
— - Traditional Medicare lacks an out-of-pocket cap, making supplemental coverage crucial but increasingly expensive.
— - Beneficiaries face complex choices between Medigap, Medicare Advantage, and navigating state-specific enrollment rules.
Source: KFF Health News
