Why Medigap Premiums Rise With Age, and What You Can Do About It

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Your Health Magazine Contributor

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Why Medigap Premiums Rise With Age, and What You Can Do About It

The first Medigap bill rarely worries anyone. The one that shows up eight or ten years later usually does. People who bought supplemental coverage at 65 often find the same policy costing far more at 75, with identical benefits, no claims history to blame, and no obvious explanation on the invoice.

Roughly 12.5 million people, or 42% of everyone in traditional Medicare, carried a Medigap policy in 2022, according to KFF’s analysis of federal survey and insurance filing data. KFF put the average monthly premium across all policyholders at $217 in 2023, which comes to $2,604 for the year. Those averages hide a lot of movement, because what any one person pays at 80 depends largely on a pricing decision the insurer made long before they enrolled.

The rating method on your policy decides most of it

Medigap plans are standardized by letter. Plan G from one carrier covers exactly what Plan G from another covers. Carriers compete on price, and the mechanism they use to set that price is the rating method.

Three methods exist. Community rating charges everyone in an area the same premium regardless of age. Issue-age rating locks your premium to your age at purchase, so buying at 65 means paying a 65-year-old’s rate for as long as you keep the policy. Attained-age rating ties your premium to your current age, which means it climbs on a schedule whether you file a claim or not.

Which methods a carrier can offer comes down to state law governing Medigap rating systems, and the split is lopsided. KFF counts nine states that require community rating for policyholders 65 and older, four more that permit issue-age rating but prohibit attained-age, and 37 states plus the District of Columbia that allow any of the three. Maryland, Virginia, and DC all sit in that last group, so buyers across this region can run into all three methods while shopping the same lettered plan.

Attained-age pricing looks cheapest at 65

Attained-age plans quote the lowest opening number, which is why they sell so well. The annual increase gets written into the pricing at the outset, so it arrives on schedule rather than as a response to anything the policyholder did. A comparison of Medigap pricing methods puts the arc in plain numbers: a policy running about $110 a month at 65 can reach roughly $175 by 75, a 59% jump across ten years before any inflation adjustment gets layered on top.

The effect compounds quietly. Someone weighing two quotes at 65 sees a $20 monthly difference and takes the cheaper one. By 78, the ranking has reversed, and by then getting out of the expensive plan is a much harder move than it would have been at the start.

Community rating runs the opposite way. It usually quotes higher at 65 because younger buyers subsidize older ones inside the same pool, and it stays flatter afterward. Issue-age rating sits between the two, freezing your age factor at purchase while leaving the door open for inflation-driven increases. All three can raise rates. Only one raises them because of a birthday.

Medicare’s own cost sharing keeps climbing

Community-rated and issue-age policies get more expensive too, because the thing Medigap pays for gets more expensive every year.

Medigap exists to absorb Medicare’s deductibles and coinsurance. When those amounts go up, so does the insurer’s obligation on every claim. CMS set 2026 Medicare cost-sharing amounts at a Part A inpatient deductible of $1,736, up $60 from 2025, and a Part B deductible of $283, up $26. Hospital coinsurance for days 61 through 90 runs $434 a day in 2026, and skilled nursing coinsurance for days 21 through 100 runs $217 a day.

Depending on the plan, Medigap coverage may pay some or all of these Medicare cost-sharing amounts. Carriers file for rate increases to cover the gap, and state insurance regulators approve, modify, or reject those filings. None of it has anything to do with your age or your health.

The risk pool ages around you

The third driver is the block of business itself. Insurers price Medigap against a pool of policyholders, and as that pool ages, average claims cost per member rises. Healthier members who shop around and pass underwriting can leave for cheaper coverage. The ones who stay are often the ones who can’t pass underwriting, which pushes average claims cost higher for everyone remaining and shows up in the next rate filing.

Closed policy series feel this hardest. A plan that stopped accepting new enrollees years ago gets no influx of younger, healthier members to dilute the effect. Plan F still covered 36% of Medigap policyholders in 2023 according to KFF, and it hasn’t been available to anyone newly eligible for Medicare since January 2020, so that pool only gets older and more expensive to insure.

Switching later is harder than most people expect

Federal law gives you one clean shot. The Medigap open enrollment period starts the month you turn 65 and enroll in Part B and runs six months, and during it carriers can’t deny you a policy or price it against your health. That makes the timing of Medicare enrollment at 65 consequential well beyond the Part B late penalty, because the same window controls your one guaranteed shot at supplemental coverage.

Once it closes, most states let carriers require medical underwriting on new applications. Apply at 76 with a cardiac history and the carrier can decline you outright or quote a rate that defeats the point of switching. The person facing the steepest attained-age increases is frequently the same person least able to escape them.

Underwriting questions typically cover the last two to five years and focus on hospitalizations, cancer treatment, insulin use, oxygen therapy, and pending diagnostic testing. A condition that’s well managed and costs Medicare almost nothing can still trigger a decline, because the carrier is underwriting future risk rather than current expense.

A handful of states blunt this. KFF identifies Connecticut, Massachusetts, Maine, and New York as requiring carriers to sell either continuously or once a year without regard to medical condition. Maryland, Virginia, and DC don’t offer that protection, which raises the stakes on the initial choice for readers in this area.

What to ask before you sign

Ask the agent which rating method the specific policy form uses, and get the answer in writing. Plenty of buyers never learn this until the increases start.

Then ask for the rate increase history on that exact policy form over the past five years. Carriers file those numbers with state insurance departments, and agents can pull them. A plan with a record of 4% annual increases and a plan with a record of 12% look identical on a quote sheet at 65 and nothing alike at 80.

Finally, price the same letter plan across several carriers rather than accepting the first quote. The spread on identical standardized benefits is wide, and cost differences across Aetna’s Medigap plans show how much region, discount structure, and carrier pricing strategy can move the number for coverage that’s legally the same. KFF pegged the 2023 national average for Plan G at $164 a month, ranging from about $140 in DC to $236 in New York, and that’s before you account for differences between carriers in the same market.

Medigap premiums rise for reasons that stack: the rating method, Medicare’s own cost sharing, and the aging of the pool you were placed in. You can’t control the last two. You can control which rating method you sign up for, and that decision at 65 does more to shape the bill at 85 than almost anything else you’ll do afterward.