Why Does The Cost Of Medicare Supplement Insurance Increase?

Why Does The Cost Of Medicare Supplement Insurance Increase?

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In this article we’ll discuss:

Cost Of Supplemental Medicare Insurance

The insurance premiums for Medicare Supplement insurance varies from company to company, but often times they will increase no matter who you choose as your insurance company.

Are you new to Original Medicare? Are you losing employer or retiree benefits? Are you looking to change Medigap plans?

You may be in the thick of research or just starting out. Either way, there are a few points about the cost of supplemental Medicare insurance that will help in your decision making.

Why Does The Cost Of Medicare Supplement Insurance Increase?

Medicare insurance companies raise rates for many reasons. Inflation and medical pay outs are just a couple reasons why premiums increase. Large insurance companies are popular, but they also have tremendous overhead and big marketing budgets. This can add to your premium costs. Premiums are also priced based on how your Medigap policy is rated.

  • Attained age rated
  • Community rated
  • Issue age rated

Attained age rated Medigap Policies

This is the most common Medigap policy sold by insurance companies. The premium reflects your age at the time you buy the policy. It’s priced low for younger seniors and can increase as you age. Inflation and other factors also cause premiums to rise.

Community rated Medigap Policies

This policy is priced the same for everyone regardless of age. Insurance companies raise premiums due to inflation and other circumstances, but not age. Beware, these plans often start out at a higher premium. Some insurance agents may try to convince you that it’s better to pay more now.

Issue age rated Medigap Policies

The rate you receive for this policy is based on the age you are when you buy it. Premiums are lower for seniors buying at a younger age. Rates won’t increase because you get older. Don’t be misled by Issue age policies. While the insurance company can’t raise your rate because of your age, they’ll still give you an increase and blame it on the rising cost of health care.

Important Medigap protection from CMS:

CMS (Center for Medicare and Medicaid Services) allows Medigap insurance companies to change premiums, but they are not allowed to modify plan benefits. Our job is to help you understand these rules so you can make the best decision when buying Medigap.

Private insurance companies selling Medigap insurance must:

  • Offer Standardized Medigap Plans
  • Pay Medicare approved claims according to the Medigap Plan benefits
  • Provide a 30 Day money back guarantee

Below are excerpts from the CMS Guide to Health Insurance for People with Medicare.

Page 9, CMS Guide to Health Insurance

Page 13, CMS Guide to Health Insurance

Page 32, CMS Guide to Health Insurance


Shopping for Medigap Insurance

Medigap is another name for Medicare Supplement insurance. Medigap is popular because it “fills in the gaps” and pays your claims after Medicare pays its portion. There are a couple popular ways to buy Medigap insurance.

  • Buy direct from the insurance carrier: this option provides you with one product and no other choices.
  • Buy through an independent agent: this option provides you with an advocate and multiple choices.

If you’re turning 65 or losing employer coverage and are new to Medicare Part B, it’s a great time to buy Medigap.

The month you turn 65 and are enrolled in Part B begins your one time Medigap Open Enrollment period. This Medigap enrollment period lasts for six months. Notice, I said “one time” Medigap Open Enrollment period.

CMS law allows you this once in a lifetime opportunity to purchase any Medigap plan you want. Why is this a big deal? If you don’t purchase Medigap insurance during your Medigap Open Enrollment period, you must medically qualify for a Medigap plan later. It may not seem like a big deal if you’re healthy. But if you have a chronic or serious health condition, take advantage of this opportunity.

If you already have Medigap and your premium is increasing, you may be able to lower it. 

 Compare Medigap Plans to Save

It’s very likely that there are several Medigap companies that offer the same exact plan you have but at a lower premium. These savings can be made without losing your current benefits. Since the Medigap Open Enrollment opportunity is not available, you’ll need to answer the health questions on the Medigap application. An independent resource, like REMEDIGAP, can review your health status and determine what insurance companies may be a good fit for you.

It’s that simple to save hundreds of dollars off the cost of supplemental Medicare insurance!

Remember, CMS makes the rules and laws for Medigap insurance companies to follow. The private insurance companies must abide by these rules in order to sell Medigap plans.

  • Offer Standardized Medigap Plans
  • Pay Medicare approved claims according to the Medigap Plan benefits
  • Provide a 30 Day money back guarantee

Still not convinced?  

Contact us today at 888-411-1329 to see how we can help you.

Find affordable Medicare Supplement plans


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Edited by

Paul Lane

Insurance Editor

Paul Lane has been a licensed insurance agent for over a decade. He is also a financial professional and holds a Series 6 securities license. He has experience editing insurance websites and blogs with a focus on auto, homeowners, renters, life insurance, disability and supplemental insurance products.

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