Why did my Medigap premium go up?

Reason one: you got a year older

Most Medigap policies sold in the United States are attained-age-rated. That means the premium is based on your current age and goes up as you get older, by design, every single year — whether or not your insurer ever files a rate increase.^{[Medicare.gov]}

There are two other pricing methods, and which one you have changes everything about what to expect:

• Attained-age-rated — priced on your age now. Cheapest at 65, and Medicare’s own guidance warns these “may be the least expensive at first, but they can eventually become the most expensive.”^{[Medicare.gov]}
• Issue-age-rated — priced on your age when you bought it, and that part never changes as you age.^{[Medicare.gov]}
• Community-rated — everyone with that policy pays the same regardless of age.^{[Medicare.gov]}

Issue-age and community-rated policies still get rate increases. They just do not have the automatic annual step built in on top. If you do not know which kind you have, it is on your policy schedule, and your state insurance department can tell you. We explain how to work out which one you have here.

Reason two: your carrier raised rates on your whole block

This is the increase people notice, because it arrives in a letter. Your insurer filed a rate change with your state’s insurance department, the state permitted it, and it applied to everyone in that filed group at once.

Two things are worth knowing here, and both are commonly misunderstood.

It is not about you. A Medigap rate increase applies to a class of policyholders, not to a person. You cannot be singled out for a rate increase because you had a hip replaced. Your policy is guaranteed renewable, so the company cannot drop you for using it either.^{[Medicare.gov]} What guaranteed renewability does not do is freeze your price — the model regulation states adopt is explicit that it does not prohibit rate increases otherwise authorised by law.^{[Centers for Medicare & Medicaid Services]}

It is not really about the company either. This is the part that costs people money. A single brand can run one calm block of policies and one brutal one, in the same state, on the same plan letter, at the same time. We can show you this happening: in Ohio, two blocks sold under the same national brand — different legal entities, identified by different NAIC codes — took very different paths through the same three years. One ran roughly 10%, then 20%, then 36%. The other ran roughly 11%, then 14%, then 15%. Same brand. Same state. Same plan letter. Same effective dates.

So “is Carrier X a good company?” is the wrong question, and any site that answers it is guessing. The right question is which filed block is my policy actually in, because that is the thing that has a rate history.

Reason three: your block is closed

This is the one that turns a manageable premium into an unaffordable one, and it is invisible unless you know to look.

When an insurer stops selling a particular policy form to new customers, the group of people holding it stops taking in anyone new. Everybody left in it gets older together and, on average, sicker together. Claims per person climb. Premiums have to climb with them. The healthiest people pass underwriting and leave for something cheaper, which raises the average cost of everyone who remains, which drives the next increase.

Insurance people call this a closed block, and the compounding version of it a death spiral. Neither term is a legal or regulatory category, so treat anyone quoting an official definition with suspicion — but the mechanism is real, and it is visible in filed rate history as increases that accelerate rather than hold steady. We walk through how to spot one in the filings.

How to tell which one is happening to you

Take your renewal letter and answer these in order. You can do all of it yourself.

1. What is the actual percentage? Divide the increase by your old premium. A rise from $180 to $196 is about 9%; from $180 to $245 is about 36%. The dollar figure feels the same in your account either way, but those are completely different stories.
2. How is your policy rated? If it is attained-age, some of that increase is just the annual age step and would have happened regardless.^{[Medicare.gov]}
3. What is on your policy schedule? You want the carrier’s full legal entity name and, if it is shown, the NAIC number. Not the brand on the envelope — brands are shared across several legal entities, and the entity is what files rates.
4. Is this the first big one, or the third? One large increase after years of small ones is a correction. Three escalating increases in three years is a pattern, and patterns continue.
5. Can the company still sell your exact policy to a 66-year-old today? If not, you may be in a closed block, and the arithmetic above is working against you.

What you can actually do about it

Here is the part most sites skip, because it is not the part that sells: switching is not free and it is not always available.

Your Medigap Open Enrollment Period is six months long, starts the first month you are both 65 and enrolled in Part B, and never comes back.^{[Medicare.gov]} During it, no insurer can turn you down or charge you more for your health. After it, unless you have a guaranteed issue right, a company may use medical underwriting and may simply decline you.^{[Medicare.gov]}

So if you are past that window and in imperfect health, the honest answer may be that your best move is to stay where you are and plan around it. Some states give you more room than the federal floor does — a few allow a yearly window to move to an equal or lesser plan without underwriting. The rules that apply to you, and how to check whether you qualify.

If you can pass underwriting, the thing to compare is not this year’s premium. It is the filed rate history of the block you would be moving into. A policy that is $12 cheaper today and sits in a block running 20% a year is a worse deal within two years. Rate history by state and plan.

Common questions

Can my insurance company raise my Medigap premium?

Yes. A Medigap policy issued since 1992 is guaranteed renewable, which means the insurer cannot cancel it while you pay the premium — but guaranteed renewability does not stop rate increases that are otherwise authorised by law. The company files an increase with your state's insurance department, and if the state permits it, it applies to everyone in that filed group.

Did my premium go up because I filed a claim?

No. Medigap rate increases apply to a whole filed class of policyholders, not to an individual because of their claims. If your premium rose and your neighbour's did not, you are almost certainly in a different block — a different company, a different rating class, or a policy sold in a different year.

Is a big increase a sign my company is in trouble?

Not necessarily, but it can be a sign the block is. A block paying out more in claims than it collects in premium has a mathematical problem that usually resolves through rate increases. That is why we publish loss ratios next to rate history rather than on their own.

Will switching companies fix it?

Sometimes. Outside your one-time six-month open enrollment window, and without a guaranteed issue right, an insurer can ask health questions and decline you. So the honest answer depends on your health and your state's rules, not on the rates alone.

One thing we will not tell you

We will not tell you your premium is going to rise by a particular amount next year. Nobody knows that, ourselves included. Past rate increases do not predict future increases — they describe what a block has done, which is useful, and that is all it is. Anyone showing you a projection of your future Medigap premium is selling something.