Why are rates going up?

Question from Anna: I just got notice that my Supplement is going up almost 25% in 2026 after a 15% rate increase last year. That seems excessive. Why are rates going up so much? Are all companies doing this? Lastly, what are my options when I can no longer afford my current policy?

Answer: It is not just your company Anna, although the 24.5% increase on the AARP branded Supplement you have is the highest announced so far in 2026. HealthSpring (formerly Cigna) had a 19% increase that went into effect in February after a 12% increase in 2025. Aetna, who raised premiums 18% last year, just announced a 16% increase for 2026.

Rate increases are regulated

It's important people understand that Supplement companies can't raise premiums because the CEO wants more compensation or stock prices to go up. They must be approved by state insurance commissions, and only when companies are paying out 86 cents or more in claims for every dollar they collect in premiums will rate hikes be approved. Companies with higher claim payments versus total premiums received are awarded larger increases. When you see 15% or more, it means the Supplement company actually lost money over the past year.

Causes of historic rate increases

In my view, there are three driving factors: 1) People are utilizing more care than ever before. This is a phenomenon that began as COVID ended when a mass of people got surgeries that had been cancelled or postponed during the pandemic. It was thought that after this rush of procedures ended, the number of claims would slow down. However, that wasn't the case. 2) The cost of care has increased. When people are utilizing more services than ever, and they're more expensive than ever, premium increases are going to occur. 3) Because Medicare Advantage Plans pay so much more commission than Supplements, that's where 90% of agents have been placing virtually all their clients. People who are new to Medicare often aren't even given the Supplement option by brokers or they're dismissed as "only for sick people." The result is far fewer healthy individuals are enrolling in Supplements than five and ten years ago, creating a pool of insureds that has disproportionate number of people who are high utilizers of health care. This is very bad recipe for keeping claims and rates down and I believe the biggest factor in the largest premium increases I've seen in the 18 years since The Health Insurance Store opened.

Options for those who can no longer afford their Supplement premiums

I'm getting emails from people all over the country, like Anna, whose monthly premiums are eclipsing $200, $300, and even $400 per month, wondering what their options are.

When we have clients in this situation, our #1 goal is to keep them on a Supplement by moving to a less expensive letter plan or company. However, in most states, the only way that change can be made is by passing "medical underwriting." This consists of answering a series of about 20 medical questions and a review of a Medical Information Bureau which includes codes from every medical or prescription claim ever made to any health insurance company on your behalf. Based on what medical conditions or prescriptions those codes correlate to, and how the medical questions are answered, Supplement companies choose to accept or deny an application. People who have been diagnosed with certain medical conditions that need ongoing care or present the risk of expensive claims in the future are generally denied.

Those who can pass underwriting are saving hundreds, if not thousands of dollars per year by moving from their current plans that are no longer competitive. Bonnie Bloom, an agent at our Forest Hills location, just this past week saved a married couple $224/month ($2,688 annually) by enrolling them in a new letter plan and company. This kind of savings is very typical for people who have been on Plans F or G for five years or longer.

A good option for many people who can't pass underwriting and can no longer afford, or don't want to pay, high Supplement premiums is to move to an Advantage Plan HMO or PPO. This is something we evaluate and do for clients on a daily basis. Please keep in mind this isn't the best option for everyone. Careful consideration needs to be taken before finalizing that change. Although they're much less expensive and can provide valuable "ancillary benefits" such as dental and vision coverage, Advantage Plans work completely differently from Supplements in regard to the potential for thousands of dollars more in out of pocket medical costs in each year, how claims are approved and paid, and what and how doctors and hospitals can be accessed. It's absolutely vital to have the differences, pros and cons, risks and rewards of both Advantage Plans and Supplements disclosed and explained properly.

Important facts and considerations when considering a change

Here are some things I want those who are getting large Supplement rate increases to know and consider:

DO NOT FEAR MOVING from Plans F or G to Plan N. It poses no risk at all! There is almost no difference between them, and what little exists is more than made up for in the thousands of dollars per year in immediate savings, and the tens of thousands less that will be spent on Plan N premiums versus F or G over the next 5 to 10 years. Please reference my March 16th, 2026 column on our Facebook Group titled "Ask the Medicare Specialist," or on our website, www.GetYourBestPlan.com where I get in depth on Plans F and G versus N.

DO NOT FEAR MOVING TO A NEW COMPANY, even to one you've never heard of! All Supplements are regulated so there's no difference between companies when it comes to what's covered, how claims are approved and paid, as well as what doctors and hospitals can be used! Here is a quote from and official Medicare publication: "Medigap policies must follow federal and state laws designed to protect you, and they must be clearly identified as "Medicare Supplement Insurance." Insurance companies can only sell you "standardized" plans, which are labeled in most states by letters A through N. All plans with the same letter offer the same basic benefits, no matter where you live or which insurance company you buy the policy from. Price is the only difference between policies with the same letter sold by different companies."

Don't assume you won't pass underwriting because you or a spouse had a heart attack or even cancer a few years ago. Those conditions and many others don't eliminate people from being approved. Reach out to us and we can provide pre-screening.

Switching to an Advantage Plan outside of the Medicare Annual Election Period (AEP is limited to a select few options and generally they have much higher out of pocket costs than those that are available during AEP. It's often best, if possible, to try and wait until October to make the change from a Supplement to Advantage Plan. There are some exceptions for year-round enrollment into any plan, however.

Do not call an 800# you see on TV or advertised on a piece of mail. Do not engage with anyone who calls you unsolicited! Those ads are purposely deceiving and the people on the other end of the phone are predators who will tell you anything to get you to change plans! Never give your Medicare number out over the phone. Once someone has that, they can change your plan without your consent or knowledge. We meet people all the time to whom this has happened.

Before you change any plan, reach out to The Health Insurance Store. You will always get unbiased information and advice with only your best interest in mind.

Contact information

With questions or to make a no cost appointment for a consultation to go over details on a new Supplement and get quotes, give us a call, 724-603-3403 or email me personally [email protected].

I'd also like to remind our readers that we're licensed in states all over the country. Thanks to technology, we can advise people who live anywhere in the United States.