Why Have Medicare Supplement Rates Increased So Much?
If you've opened your Medigap renewal notice recently and nearly spilled your coffee, you're not alone. Across Mississippi—and the country—seniors are seeing double-digit hikes on their premiums.
What’s going on? Let’s break it down.
1. The Cost of Healthcare Is Rising—Fast
It’s no secret that healthcare costs keep climbing. Medicare-approved charges are up, and hospitals, doctors, and drug manufacturers continue to raise prices.
Many seniors delayed care during COVID, leading to a surge in claims as they catch up on procedures. According to CMS, Medicare Part B spending jumped 8.4% in 2023, one of the biggest increases in recent history. Outpatient procedures, imaging scans, and specialist visits—all common for Medigap users—have seen steep cost increases. More claims produce higher premiums.
2. Your Medigap Plan’s Risk Pool Is Shrinking
Medigap plans rely on younger, healthier enrollees to balance the cost of older, higher-claim members.
But more people are choosing Medicare Advantage, drawn in by lower premiums and extra perks like dental and vision. This leaves Medigap insurers with an aging risk pool, leading to higher claim costs—and steeper rate hikes.
For Plan F, the problem is worse. Since Plan F closed to new enrollees in 2020, the remaining members are only getting older. Some states have seen Plan F premiums rise by as much as 12-18% per year as a result.
3. Insurers Are Adjusting for Losses—And Some Plans Were Underpriced
Every year, insurers review their claims-to-premium ratio—if claims exceed projections, they raise rates.
But here’s the kicker: Some plans were priced too low to begin with.
Many insurers intentionally underpriced Medigap plans to attract policyholders. While this worked short-term, it led to unsustainable pricing over time. As the average enrollee age increased, insurers were forced to correct rates, leading to sharp hikes.
This is especially true for Plan G, which was aggressively priced to replace Plan F. In some states, Plan G premiums have surged 12-18% per year as insurers adjust for higher-than-expected claims.
If you initially enrolled in a low-cost Medigap plan, you may now be seeing significant increases as insurers realign pricing with actual claims costs.
What Can You Do About It?
If your Medigap premium has spiked, you do not have to simply sit there and take it.
✅ Check your health status for underwriting. Switching supplements does require answering around 20 health questions. We'll be happy to see if you qualify.
✅ Compare rates with other insurers. Even switching from one Plan G to another could save you hundreds per year.
✅ Consider Plan N or High-Deductible Plan G. Switching from Plan G or F to Plan N can save $30 - $150 monthly. Plan N is almost identical to Plan G with the primary difference being a $20 copay for doctor visits. A high-deductible Plan G may also be a good fit if you can cover the nearly $3,000 deductible in a bad year.
✅ Explore Medicare Advantage if it fits your needs. Some prefer lower monthly costs, though it’s important to weigh the trade-offs.
Final Thoughts
Medigap plans have always been a stable choice for those who want predictable out-of-pocket costs, but rising premiums are making them harder to afford.
If your rates have gone up, don’t assume you have to accept it—there are options to explore. A quick plan review could help you save money without sacrificing coverage.
Need help sorting through your choices? Feel free to reach out—I’m always happy to help seniors find the best plan at the best rate.
Next Steps: Want a Personalized Review?
We offer no-cost Medigap reviews to help you compare rates and explore options. Let’s find a plan that fits your budget and needs.
🔹 Schedule a consultation online: www.schopmedicare.com/connectwithus
🔹 Call our office at: 601-572-2220
We’re here to help. Please reach out anytime!