Unprecedented Premium Hikes in Medicare Supplemental Plans: What to Expect
John Jaggi, an experienced insurance broker based in Illinois, recently navigated an unprecedented situation involving significant premium hikes for more than 80 clients enrolled in a Medicare supplemental plan with Chubb. The insurer implemented an immediate 45% rate increase last August, which Jaggi noted as highly unusual in his nearly five decades of experience. Typically, such increases occur at policy renewals rather than mid-term.
This substantial hike is indicative of broader trends in the Medigap market, where double-digit rate increases are becoming more common. Despite attempts to obtain feedback, a Chubb representative was unavailable for comments regarding the increase.
The Medigap market serves over 12 million individuals, roughly 43% of those enrolled in traditional Medicare, who purchase these policies to cover gaps left by Medicare, such as deductibles and copayments. Without supplemental coverage, beneficiaries risk significant out-of-pocket expenses in cases of severe illness.
Building on last year’s significant rate adjustments, premium increases continue. Data from early 2026 submissions to state insurance regulators by firms including Aetna, Blue Cross Blue Shield, Cigna, Humana, Mutual of Omaha, and UnitedHealthcare reveal Plan G premium hikes ranging from just over 12% to more than 26% in the first quarter, according to Telos Actuarial. Consultant Brett Mushett commented on these filings, noting insurers are likely adjusting rates to reflect pressures from escalating claims costs.
Impacts of Premium Adjustments
Premiums for Medigap policies differ based on factors such as coverage type, geographic location, and the policyholder’s age. On average, beneficiaries paid around $164 monthly for Plan G coverage in 2023. Current projections suggest these figures have increased.
State-specific rate adjustments also reflect this trend. In Alaska, for instance, Premera Blue Cross raised Plan G premiums by nearly 12% this year. Patricia Mack, an insurance agent in Alaska, shared examples of substantial price changes, like a monthly premium increase from $172 to $192 for a 65-year-old female beneficiary.
Industry experts attribute rising premiums to several factors, including elevated healthcare utilization, demographic aging, labor, and medical expenses, along with state-specific Medigap policy regulations. Concurrently, enrollment decisions between Medigap and Medicare Advantage plans also play a part.
Navigating Regulatory Challenges
Some experts recommend potential solutions, like capping out-of-pocket costs for Medicare enrollees or potentially providing subsidies for Medigap coverage to alleviate financial burdens. Political dynamics, though, render significant legislative adjustments unlikely.
Medicare beneficiaries become eligible for Medigap policies at standard rates upon initial enrollment at the age of 65, excluding health screening requirements. The subsequent regulatory environment restricts enrollment opportunities, often leading to complex decisions for policyholders.
In some states, regulations permit policy changes without medical underwriting based on annual eligibility dates, offering consumers with preexisting health conditions more flexibility. In other states, like Connecticut and New York, year-round policy application without underwriting is mandated.
Organizations such as KFF Health News continue to provide in-depth coverage of health industry developments, contributing to informed discourse on issues impacting beneficiaries and the broader insurance landscape.