Medigap premiums leap, leaving consumers with few alternatives

After decades of selling insurance, John Jaggi, a central Illinois broker, had never seen anything like it.More than 80 of his customers who were enrolled in the same Medicare supplemental plan from the insurer Chubb were hit last August with a 45% increase.“In my 49 years of doing biz as a broker, I’ve never seen a premium increase be effective immediately on everyone instead of on their policy anniversary,” says Jaggi, whose brokerage scrambled to find more affordable options for clients.The policies pick up deductibles and other costs not covered in traditional Medicare. Without one, there’s no upper limit on how much a consumer might owe each year.While 45% was an unusually big jump, Jaggi and other brokers say double-digit premium increases for Medicare supplemental, or Medigap, policies are becoming the norm.A Chubb spokesperson didn’t respond to requests for comment on the increase.More than 12 million people — about 43% of those in traditional Medicare — also buy a Medigap policy. Others rely on some sort of retiree employer coverage or a different backup. About 13% of people in traditional Medicare don’t have supplemental coverage, meaning they could be vulnerable to large costs if they have a serious illness.After big increases in the supplemental market last year, rates appear to be rising again. In early 2026 filings with state insurance commissioners from Aetna, Blue Cross Blue Shield, Cigna, Humana, Mutual of Omaha and UnitedHealthcare, rate increases for Plan G policies — the most commonly purchased supplement type — ranged from just over 12% to more than 26% in the first quarter, according to Telos Actuarial, a Nebraska consulting firm.“While this is a small d7ataset across a select number of states, it’s an indication that carriers are looking to correct their premium rates in light of upward pressure on their claims experience,” says Brett Mushett, a consulting actuary with Telos.Rising premiumsPremium rates vary based on the type of coverage chosen, where a beneficiary lives and their age. For Plan G coverage, beneficiaries paid an average monthly premium of $164 in 2023. That amount has likely risen since.“In some states, like Ohio, Medicare supplements for years would have a 3% to 5% year-over-year increase,” says Amanda Brewton, owner of Medicare Answers Now, a marketing organization whose clients are sales agents. “Now, it’s 10% to 15%.”In Alaska, Premera Blue Cross raised the premiums on its Plan G policies by nearly 12% for this year, according to rate sheets provided to KFF Health News by insurance agent Patricia Mack, who says another insurer raised rates by nearly 13%. For example, a 65-year-old woman who last year would have been charged $172 a month for a Plan G policy would now face a monthly rate of $192, says Mack, who owns Alaska Insurance Benefits in Wasilla.Premera spokesperson Courtney Wallace says the changes that Medicare makes to deductible and copayment rates each year affect supplemental plans that cover those increasing amounts.Wallace also noted that the insurer saw higher medical service use among its members, “which further drove claims costs and ultimately impacted premiums.”Agents and policy experts blame a variety of factors for rising premiums: an increase in the use of medical services by beneficiaries, the aging of the population, increases in labor and medical costs, rules in some states governing Medigap plans and people’s enrolling in — or getting out of — private Medicare Advantage plans.“Five years ago, it was exceedingly uncommon to have a carrier with a rate increase of more than 10%. Now, it’s very uncommon to see a rate increase below 10%, and it’s not uncommon to see it over 20%,” says Chalen Jackson, vice president for government affairs at Integrity, a Dallas company that sells life and health insurance.Jaggi, who with his daughter co-owns Jaggi Petry Insurance & Investments in Forsyth, a city in central Illinois, says he eventually found other options for many of those 80-plus clients with the large increase, which came from an insurer that had previously been the lowest-cost option. But it wasn’t easy — and continuing increases are expected.“These are unbelievable increases,” says Jaggi, who is seeing premium hikes exceeding 15% this year across a range of insurers.Policy experts have outlined possible solutions, including for Congress to cap out-of-pocket costs for Medicare beneficiaries or subsidize the purchase of Medigap coverage.“Traditional Medicare is the only federal health insurance program without an out-of-pocket cap,” says U.S. Sen. Ron Wyden, D-Ore., who says the program “needs to be updated and strengthened to protect the Medicare guarantee for American seniors.”But making changes to Medicare that require congressional approval is unlikely in the current legislative environment, especially because adding an out-of-pocket cap would add costs to the federal budget.How this plays outPeople generally qualify for Medicare when they turn 65. Beneficiaries have six months after they initially enroll in the traditional fee-for-service program to buy a Medigap plan at standard rates without having to answer health-related questions.Strict rules then kick in around when beneficiaries can enroll in or switch Medigap coverage and options become much more limited, with each one generally involving trade-offs or tough choices.At least 16 states have what’s known as a “birthday rule,” which requires insurers once a year to allow people enrolled in a Medigap plan to change to different supplemental coverage — usually around their birthdays — without being medically underwritten. Those rules can help people, including those with health conditions, switch.Four more states — Connecticut, Massachusetts, Maine and New York — require insurers to offer at least one Medigap policy to all applicants year-round or during an annual enrollment period, depending on the state. Changes are allowed no matter the person’s health.Another option for those facing high Medigap costs is to leave traditional Medicare and enroll in private-sector Medicare Advantage plans, which have out-of-pocket caps. But joining one means beneficiaries generally must rely on a set of in-network doctors and hospitals. If they change their mind and want to go back to traditional Medicare, they have only a 12-month window in which to purchase a Medigap plan without passing health questions. After that, it can be more difficult.“A lot of people don’t know that, if they are in Medicare Advantage for a year, they can get turned down by a Medigap plan or charged really high premiums because of a preexisting condition, which for many people effectively traps them in MA plans,” says Brian Keyser, a research associate at the liberal Center for American Progress and co-author of a recent report on the issue.There are exceptions. For example, if a Medicare Advantage plan withdraws from a market or leaves the Medicare program, its enrollees can qualify for a supplemental plan without being asked health questions or charged more for having preexisting conditions.For this year alone, about 2.6 million people lost Medicare Advantage coverage when their insurer pulled out of their markets, according to KFF, and more than a million lost coverage for 2025. Many switched to other MA plans, but “somewhere around 440,000 of those people did go to a Medicare supplement policy,” sometimes because there was no other MA plan in their area, according to George Dippel, president of Deft Research, a Minneapolis market research organization focused on insurance for older people. Deft is part of Integrity, the Dallas company.Medicare experts note that anytime insurers enroll people whose health status they can’t consider — whether because of birthday rules or because their Medicare Advantage plan left the market and thus qualified them for an exemption from medical underwriting — it potentially exposes them to more health care utilization and higher costs, making them more likely to increase premiums across the board to offset the possible financial hit.Another option mentioned by brokers for people looking to lower their costs is to consider one of the two types of Medigap plans that come with a deductible, which is currently just under $3,000 for a year. Those plans charge far lower monthly premiums than Medigap plans that pick up a much larger portion of annual amounts people must pay toward their Medicare services.But, Mack says, “A lot of people are not comfortable with a $3,000 deductible.” is a national newsroom that produces in-depth journalism on health issues.