Why Medicare Supplement Premiums Increase
Many people come to us after receiving a letter about a Medicare Supplement rate increase. In 2025, these increases typically range from 3% to 10% per year, and in some cases, they may even happen twice in the same year. Over time, these changes can become a financial burden. While rate hikes are unavoidable, there are ways to manage your costs.
At MAC Insurance, we recommend reviewing your Medicare Supplement (Medigap) plan regularly with a trusted broker. We can help you compare options and find a more affordable premium.
Why Do Medigap Premiums Vary?
Medicare Supplement plans are standardized, meaning the benefits of each plan are the same regardless of the insurance company. However, premiums vary between insurers.
Our brokers use specialized software to compare 2025 rates across multiple insurance companies, helping you find the best deal. We also track which companies tend to raise premiums more often, so you can make an informed choice.
How Are Medigap Premiums Set in 2025?
Insurance companies use three pricing methods to determine your Medicare Supplement premium:
1. Attained-Age Pricing (Most Common in 2025)
Your premium is based on your current age and increases each year as you get older.
Example:
● Mrs. Rodriguez buys Plan G at age 65 for $110/month.
● By age 66, with a 6% increase, her premium rises to $116.60/month.
● By age 70, it reaches $145.67/month.
● At age 85, she pays $168/month for the same plan.
2. Issue-Age Pricing
Your premium is based on your age when you first enroll and does not increase just because you get older. However, rates can rise due to inflation and claims.
Example:
● Mr. Smith buys Plan F at age 65 for $168/month.
● Mr. Robertson, buying the same plan at age 72, pays $192/month.
● Even as Mr. Smith ages, his rate doesn’t increase due to age alone.
3. Community Pricing
Everyone in the same community or region pays the same premium, regardless of age. Rates can increase due to inflation, claims usage, or tobacco use.
Example:
● Mr. Liu (72 years old) and Mrs. O'Doyle (86 years old) both pay $170/month for Plan N.
Understanding these pricing methods can help you make more informed decisions about managing your Medigap premiums.
It’s important to note that not all pricing plans are available in every state.
For example, Arizona has a law that prevents Medicare supplement insurance companies from increasing rates based on age, so attained-age pricing plans are not available there. In contrast, most Medigap policies in Mississippi are attained-age, and the same applies in Georgia, North Carolina, Texas, and Indiana. We can help you identify which pricing methods are available in your state and which one is the best fit for you.
Feel free to reach out to us at (352) 652-4100.
Besides these pricing methods, other factors influence your monthly premium and how it increases over time.
Inflation and the rising cost of healthcare supplements :
As healthcare costs go up, insurance companies raise premiums to cover the higher cost of medical care. Over time, this adds up—premiums can double in six to ten years due to a mix of rising healthcare expenses, inflation, and the number of claims people file.
Medicare Supplement Underwriting – What You Need to Know
Most people applying for a Medicare Supplement (Medigap) plan must go through medical underwriting, unless they are just turning 65 and enrolling in Medicare for the first time.
What is Medical Underwriting?
Medical underwriting means answering health-related questions on your application. The insurance company checks your health history to decide if they will approve your application, offer you a lower (preferred) rate or a higher (standard) rate, or even decline your application.
Medicare Supplement plans are not guaranteed under the Affordable Care Act, so approval depends on your health, except in certain situations.
Who Can Get a Medigap Plan Without Underwriting?
Some people qualify for a guaranteed issue Medigap plan, meaning they can skip medical underwriting. This applies if you lose other coverage, such as a group insurance plan from an employer, a Medicare Advantage plan that is ending, or another qualifying type of coverage. However, not all Medigap plans qualify for guaranteed issue. Plan F is one that does.
Why is Plan F Popular?
Plan F is in high demand because it offers first-dollar coverage, meaning no copays or deductibles—the insurance company pays all Medicare-approved costs upfront. For example, when AT&T ended retiree group insurance, affected retirees had guaranteed acceptance into Medigap Plan F.
How Do Rate Increases Work?
If many high-cost medical claims are filed within a Medigap plan, premiums may increase for everyone in that plan. Insurance companies cannot raise rates for just one person based on their health, so the cost is spread out across all members of the plan.
This is why choosing the right Medigap plan is important. If you’re unsure about your options, we can help you find the best plan for your needs and budget.
Flexible underwriting for a Medicare Supplement
One reason premiums go up is when insurance companies make it easier to qualify for a policy. Some companies lower their health requirements to attract more customers, which leads to more claims and higher costs for everyone in that plan.
Now that you understand what affects your Medicare Supplement premiums, you can see why rates increase over time. That’s why it’s important to work with a trusted Medigap agency like MAC Insurance.
With over 50 years of combined Medicare experience, we use specialized software to compare plans and find the best rates. No matter where you live, we can help you explore multiple options that may save you money.
Medicare Explained
Want more help understanding
WHY MEDICARE SUPPLEMENT PREMIUMS INCREASE
Medicare Supplement (Medigap) premiums can go up for several reasons, including your age, rising healthcare costs, and how insurance companies set their rates. Understanding these factors can help you better manage your costs and explore your options.
At MAC Insurance, we specialize in comparing Medigap plans and tracking rate increases to help you find the best coverage at the lowest cost.
Call us at (352)-652-4100 or email [email protected] for expert guidance. You can also visit our website or fill out our online form to get started. We’re here to help—at no cost to you!
ADDITIONAL QUESTIONS TO BE ADVISED ON:
How does my age affect my Medicare Supplement premium?
Your Medicare Supplement premium may increase with age, depending on how your plan is priced:
Attained-Age Pricing – Starts low but goes up as you get older.
Issue-Age Pricing – Based on the age you first enrolled; it won't increase due to age. Community Pricing – Everyone pays the same, no matter their age.
Why do some states have different pricing methods for Medigap plans?
Each state sets its own rules for how Medigap plans are priced, which affects whether premiums increase with age or stay the same. Some states ban age-based increases, while others allow different pricing methods.
What role does inflation play in premium increases?
Inflation increases healthcare costs, which leads insurance companies to raise premiums to cover higher medical expenses. Even if your age stays the same, your Medigap premium may go up due to rising costs in the healthcare industry.
Do all insurance companies raise premiums at the same rate?
No, insurance companies increase premiums at different rates based on factors like claims, pricing methods, and state regulations. Some companies raise rates more often than others.
How does the number of claims filed in my plan impact my rates?
When more people in your Medigap plan file claims, the insurance company pays out more in benefits, leading to higher premiums for everyone in that plan.
Can I switch to a different Medigap plan if my premium increases?
Yes, you can switch to a different Medigap plan if your premium increases, but you may need to go through medical underwriting unless you qualify for a guaranteed issue right (like losing other coverage).
Will my premium increase even if I never use my coverage?
Yes, your Medigap premium can increase even if you never use your coverage because rates are affected by inflation, healthcare costs, and claims from others in your plan.
Are some Medicare Supplement plans more stable in pricing than others?
Yes, some Medicare Supplement plans have more stable pricing based on the insurance company, state rules, and how the plan is priced (attained-age, issue-age, or community-rated).
What can I do to avoid large premium increases in the future?
To avoid large premium increases, consider choosing a company with a history of stable rates, enrolling in a community-rated or issue-age plan, and shopping around for better options if your premium rises.
How can MAC Insurance help me find a lower-cost Medigap plan?
MAC Insurance compares rates from multiple providers to find a Medigap plan with lower premiums and stable pricing. We also check for discounts and plans with fewer rate increases. Call us at (352)-652-4100 to start saving today!
Why was Medicare established?
Medicare was created to offer healthcare benefits to retirees. Before its introduction, retirees who lost employer-sponsored coverage had few health insurance options.
How can I check if I'm enrolled in Original Medicare?
To see if you're enrolled in Original Medicare, check your Social Security check deductions. If you're receiving Social Security benefits, you're automatically enrolled at 65, and Medicare premiums are deducted from your benefits. You can also verify your enrollment online at MyMedicare.gov or by calling the Social Security Administration.
At what age can I get Medicare?
People receiving disability benefits for 24 months qualify for Medicare at any age, as do those with ESRD or ALS. Otherwise, Medicare eligibility begins at 65.
Who does not qualify for Medicare?
To qualify for Medicare, individuals must be U.S. citizens or have lived in the U.S. for at least five years. Those under 65 without disabilities, ESRD, or ALS are not eligible.
What documents are required for a Medicare application?
You must provide proof of U.S. citizenship or legal residency, along with your birth certificate and driver's license.
Do I need a primary care physician for Medicare?
No, you don't need to select a primary care physician with Original Medicare. However, choosing providers who accept Medicare assignment can help minimize your out-of-pocket costs.
Do I have to get a referral to see a specialist if I’m on Medicare?
No, you don’t need a referral to see a specialist. However, your out-of-pocket costs will be lower if you choose a specialist that accepts Medicare assignment.
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We are not connected with or endorsed by the United States government or the federal Medicare program. We do not offer every plan available in your area, and any information we provide is limited to those plans we do offer in your area. Please get in touch with Medicare.gov or 1-800-MEDICARE to get information on all your options.
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