Receiving a Medicare Supplement rate-increase notice can be frustrating—especially when your coverage has not changed. However, a higher premium does not necessarily mean the insurance company reduced your benefits or singled you out because you used your policy.
Medicare Supplement insurance, also called Medigap, is sold by private insurance companies. Although the medical benefits of each standardized plan letter are generally the same from one company to another, premiums and future rate increases can differ considerably.
Understanding what caused an increase can help you decide whether your current policy remains competitive or whether it makes sense to compare other options.
I’m Joe DeAngelis of The DeAngelis Agency. I’ve helped Medicare beneficiaries understand and compare Medicare Supplement coverage since 1985.
Get Help Reviewing a Medicare Supplement Rate Increase
If your Medicare Supplement premium increased, I can help you review your current coverage and compare available rates from other insurance companies represented by the agency.
Call or text The DeAngelis Agency at 215-967-8828, or contact us online. There is no charge or obligation.
Why Do Medicare Supplement Rates Increase?
Medicare Supplement premiums typically increase over time. The amount and timing of an increase can depend on several factors, including:
- Rising healthcare expenses
- Claims experience within the policy’s rating class
- Inflation
- The insurance company’s original pricing assumptions
- Changes in the number and health of policyholders
- Your policy’s pricing method
- Your age, if the policy uses attained-age pricing
- Changes to discounts or payment arrangements
More than one factor may affect the same premium increase. For example, an attained-age policy could have an age-related adjustment and a broader company rate adjustment during the same year.
Rising Healthcare Costs Affect Medicare Supplement Premiums
Medicare Supplement policies help pay certain deductibles, coinsurance and copayments left by Original Medicare.
When the underlying cost and use of Medicare-covered healthcare increase, the amount paid through Medicare Supplement claims can also rise. Insurance companies may adjust premiums to account for higher expected costs.
Healthcare cost increases can involve:
- Hospital services
- Physician and specialist care
- Outpatient procedures
- Medical technology
- Increased use of healthcare services
- General inflation affecting healthcare delivery
These trends can affect many insurance companies, but not every company experiences identical costs or implements identical premium increases.
Claims Experience and the Policy’s Risk Pool
Insurance companies evaluate the claims experience of groups of policyholders when determining whether current premiums are sufficient.
If claims within a particular block of Medicare Supplement policies are higher than expected, the company may seek a rate adjustment. This does not mean your individual premium increased because you personally went to the doctor, had surgery or submitted a large claim.
Medicare Supplement premiums are not ordinarily recalculated based on one person’s individual claims. Instead, insurers examine the broader rating class or policy block according to the applicable rules.
The condition of a policy’s risk pool can change over time. As policyholders age, claims may increase. If healthier members leave for less expensive coverage while people with greater healthcare needs remain, the policy block can become more expensive to insure.
How Medicare Supplement Pricing Methods Affect Rate Increases
Medicare Supplement policies can generally be priced in three ways. The pricing method can affect how age influences your premium.
Community-Rated Policies
With community-rated or no-age-rated pricing, the company generally charges the same premium to policyholders within the applicable rating class regardless of age.
Your premium does not increase simply because you had a birthday. It can still increase because of inflation, claims experience and other permitted factors.
Issue-Age-Rated Policies
With issue-age-rated pricing, your premium is based partly on your age when you purchase the policy.
The premium does not increase because you get older. However, it can still rise because of healthcare inflation, claims experience and other factors affecting the policy.
Attained-Age-Rated Policies
With attained-age pricing, your premium is based partly on your current age.
That means your premium can increase as you get older. It can also increase because of inflation, claims experience and broader company rate adjustments.
Do not assume that a policy described as community-rated or issue-age-rated will never increase. Those pricing methods remove age as a direct reason for future increases, but they do not prevent other rate adjustments.
Why Some Insurance Companies Raise Rates More Than Others
Medicare Supplement benefits are standardized by plan letter in most states, but insurance companies do not all charge the same premium or experience the same rate increases.
Company differences may include:
- The premium charged when the policy was introduced
- The number of policyholders in the rating class
- Claims experience
- Administrative expenses
- Pricing assumptions
- Available household discounts
- The policy’s pricing method
- Whether the company continues attracting new policyholders
A company may initially offer an especially competitive premium and later need larger adjustments if its claims or original pricing assumptions differ from expectations.
Another company may begin with a higher premium but experience a different pattern of future increases. However, past rate stability cannot guarantee future results.
This is why the cheapest premium today is not automatically the best long-term choice—and why the most expensive company is not automatically more stable.
Does Your Medicare Supplement Coverage Change After a Rate Increase?
A premium increase does not ordinarily change the standardized medical benefits of your Medicare Supplement plan.
For example, the standardized benefits of Plan G remain the same after a rate increase. You are paying more for the same standardized plan benefits unless you separately change policies or plans.
That does not mean you should automatically switch. It means the new premium should be evaluated against:
- Current rates from other companies
- Your eligibility to pass medical underwriting
- Available discounts
- The size of the potential savings
- The company’s rate history
- Your comfort with making a change
Should You Change Companies After a Rate Increase?
Not necessarily.
A Medicare Supplement rate increase is a reason to review your coverage, but it is not proof that switching companies is the right decision.
In some cases, another insurance company may offer the same standardized plan letter for a meaningfully lower premium. In other cases, the available savings may be small, or keeping the existing policy may be the better choice.
You should also consider whether medical underwriting will be required. Outside your Medigap Open Enrollment Period or a guaranteed-issue situation, an insurance company may review your health history before approving a new policy.
Never cancel your existing Medicare Supplement policy until the replacement policy has been approved and you have confirmed its premium and effective date.
For a step-by-step explanation of the available choices, see My Medicare Supplement Rate Went Up. What Can I Do?.
Can You Reduce Your Medicare Supplement Premium?
Possibly. Depending on your circumstances, potential options may include:
- Comparing the same plan letter with other insurance companies
- Comparing Plan G with Plan N
- Reviewing household-discount eligibility
- Checking whether a payment-method discount is available
- Reviewing optional benefits or riders
- Applying for a different policy if you can meet its underwriting requirements
Changing from one insurance company to another is not the only possible approach. Some people compare a different standardized plan letter, but that changes the benefits and potential out-of-pocket costs.
Plan N often has a lower premium than Plan G, but Plan N can require certain office and emergency-room copayments. Plan N also does not cover Medicare Part B excess charges. Pennsylvania prohibits healthcare providers from charging Medicare Part B excess charges, which can make that particular difference less concerning for Pennsylvania residents.
The right choice depends on the actual premiums, potential savings, healthcare use and underwriting eligibility—not merely which plan has the lowest advertised price.
Are Medicare Supplement Rate Increases Normal?
Yes. Medicare explains that Medigap premium amounts typically increase each year.
The fact that increases are normal does not mean every increase should be ignored. The important questions are:
- How large was the increase?
- How does your new premium compare with current alternatives?
- Has the company’s premium remained competitive?
- Can you qualify for another policy?
- Would changing companies provide worthwhile savings?
- Would changing plan letters expose you to additional costs?
Reviewing these questions can help you make a reasoned decision instead of reacting to the rate notice alone.
Frequently Asked Questions
Why did my Medicare Supplement premium increase?
Your premium may increase because of healthcare inflation, claims experience, changes within the policy’s risk pool, company pricing adjustments or age under an attained-age-rated policy.
Did my rate increase because I used my policy?
Medicare Supplement premiums are not ordinarily increased based solely on one policyholder’s personal claims. Companies generally evaluate the claims experience of a broader rating class or policy block.
Do Medicare Supplement rates increase every year?
Premiums commonly increase over time, but the timing and amount can vary by insurance company, policy, pricing method and location.
Can a community-rated Medicare Supplement premium increase?
Yes. Community-rated premiums do not increase because you become older, but they can increase because of inflation, claims experience and other permitted factors.
Can an issue-age-rated policy increase?
Yes. An issue-age-rated premium does not rise simply because you get older, but the company may still implement broader rate adjustments.
Can I switch Medicare Supplement companies after a rate increase?
You can apply for another Medicare Supplement policy, but medical underwriting may be required unless you have an applicable guaranteed-issue right or another enrollment protection.
Will another company provide different Plan G benefits?
The standardized medical benefits of Plan G are generally the same regardless of which insurance company issues the policy. Premiums, discounts, underwriting requirements and company service can differ.
Should I automatically choose the company with the lowest premium?
No. The lowest current premium may be attractive, but price is not the only consideration. Rate history, discounts, financial strength, underwriting and the amount of potential savings should also be considered.
Related Medicare Topics
- My Medicare Supplement Rate Went Up. What Can I Do?
- Why Are Medicare Supplement Rates Different Between Companies?
- Best Medicare Supplement Companies for Rate Stability
- Can I Switch Medicare Supplement Companies?
- Plan G vs Plan N
Related Local Pages
- Doylestown Medicare Broker
- Bucks County Medicare Broker
- Montgomery County Medicare Broker
- Philadelphia Medicare Broker
- New Hope Medicare Broker
- Warminster Medicare Broker
Schedule Your Medicare Consultation Today
Medicare can be confusing, but getting answers shouldn’t be.
Whether you’re enrolling for the first time, reviewing your current coverage, considering a plan change, or simply looking for a second opinion, I’m happy to help you understand your options and answer your questions.
I’ve been helping Medicare beneficiaries since 1985, and I’ve built my practice on straightforward advice, long-term relationships, and treating people the way I’d want my own family treated.
If you’d like to discuss your Medicare options, call or text The DeAngelis Agency at 215-967-8828, or contact us online.
There’s no pressure and no obligation—just honest guidance to help you make a confident decision.
Joe DeAngelis| MyMedicareQuotes.com
Serving Bucks County, Montgomery County, Philadelphia County, Chester County, Delaware County, seniors throughout Pennsylvania since 1985
Licensed Independent Medicare Broker Serving Pennsylvania and New Jersey Seniors
We do not offer every plan in your area. Any information we provide is limited to those plans we do offer in your area. Please contact “Medicare.Gov”, “1-800-Medicare”, or your local State Health Insurance Program (SHIP) to get information on all your options.