Medicare Supplement Rate Increases: What to Expect and How to Manage Them

One of the most common concerns I hear from Florida seniors considering Medicare Supplement (Medigap) plans: "Will my premiums go up every year?"

The honest answer is yes -- Medigap premiums do increase over time. But understanding how and why they increase can help you choose the right plan and manage costs effectively over the long term.

Medigap premiums increase for several reasons:

1. Medical inflation -- Healthcare costs rise every year, and insurance carriers pass some of those costs to policyholders
2. Claims experience -- If a carrier's policyholders use more healthcare than expected, premiums rise
3. Aging of the risk pool -- As the average age of policyholders in a plan increases, claims increase
4. State regulatory environment -- Florida's insurance commissioner must approve rate increases, but carriers can and do request them

The single most important factor in how your Medigap premiums will increase over time is the rating method your plan uses. There are three:

Everyone in the same geographic area pays the same premium regardless of age. A 65-year-old and an 85-year-old pay the same amount.

Pros: Premiums don't automatically increase just because you get older. Cons: Initial premiums are often higher because they're averaged across all ages. Rate increases: Driven by medical inflation and claims experience only -- not your age.

Your premium is based on your age when you first enroll and stays at that level (subject only to inflation adjustments). Enrolling at 65 locks in a lower base rate than enrolling at 70.

Pros: Rewards early enrollment; premiums don't increase due to aging. Cons: Initial premiums may be higher than attained-age plans for the same coverage. Rate increases: Driven by medical inflation and claims experience -- not your age.

Your premium increases as you age. You start with a lower premium at 65, but it increases each year as you get older -- in addition to any inflation adjustments.

Pros: Lowest initial premiums. Cons: Premiums can become very expensive in your 70s and 80s. The combination of aging increases plus inflation increases can make these plans unaffordable over time. Rate increases: Both medical inflation AND your age drive increases.

Most Florida Medigap plans are attained-age-rated. This is the most common rating method in Florida, which means premiums will increase both due to inflation and due to your age.

While past performance doesn't guarantee future results, here are typical annual rate increase ranges for Florida Medigap plans:

• Low end: 2-4% per year (well-managed carriers with stable risk pools)
• Average: 5-8% per year
• High end: 10-15%+ per year (carriers with aging risk pools or poor claims experience)

For attained-age plans, add another 2-4% per year for the age component on top of these figures.

Over 10-15 years, these increases compound significantly. A $150/month premium at age 65 could become $250-$350/month by age 80 -- or more with high-increase carriers.

Before choosing a Medigap carrier, ask about their rate increase history:

1. Request the carrier's rate increase history for the past 5-10 years in Florida
2. Compare carriers -- some have much more stable rate histories than others
3. Look at the size of the risk pool -- larger pools tend to have more stable rates
4. Check financial strength ratings -- A.M. Best, Moody's, and S&P rate insurance carriers

As an independent broker, I have access to rate increase histories for all the carriers I represent. This is one of the most valuable pieces of information I can share with clients.

In Florida, you can switch Medigap plans at any time -- but you may be subject to medical underwriting (health questions) unless you have a guaranteed issue right.

The best time to switch is when you're healthy. If you switch to a lower-premium carrier while you're in good health, you can often qualify for a lower rate. Waiting until you have health issues may make you uninsurable for Medigap.

High-Deductible Plan G offers the same coverage as Plan G but with a high deductible ($2,870 in 2026) before benefits kick in. The premium is significantly lower -- often $40-$70/month vs. $150-$200/month for standard Plan G.

If you're healthy and have savings to cover the deductible, this can be an excellent long-term strategy.

If Medigap premiums become unaffordable, you can switch to a Medicare Advantage plan during the Annual Enrollment Period (October 15 - December 7). Many Florida Medicare Advantage plans have $0 premiums.

The tradeoff: Medicare Advantage has network restrictions and cost-sharing, while Medigap provides more predictable costs and nationwide provider access.

This is the most important strategy. Working with an independent broker who can show you rate increase histories for multiple carriers is invaluable. A carrier with a history of 3-5% annual increases is far preferable to one with 8-12% increases, even if the initial premium is slightly higher.

There are specific times when you can switch Medigap plans without medical underwriting:

• Initial Enrollment Period (first 6 months of Part B) -- guaranteed issue for any plan
• Medicare Advantage disenrollment -- if you leave an MA plan within the first year
• Plan discontinuation -- if your current Medigap plan is discontinued
• Moving out of a plan's service area
• Certain other qualifying events

Outside these windows, carriers can decline you or charge higher rates based on health history.

Medigap rate increases are a reality, but they're manageable with the right strategy:

1. Choose a carrier with a stable rate increase history
2. Understand your plan's rating method (attained-age vs. issue-age vs. community-rated)
3. Consider switching carriers while you're healthy if rates become uncompetitive
4. Keep High-Deductible Plan G and Medicare Advantage as backup options

I review rate increase histories for all my clients and help them choose carriers that balance competitive initial premiums with long-term rate stability. Call me at (386) 871-3858 or schedule a free consultation at calendly.com/themedicaredude/75.

William Gray is an independent Medicare specialist licensed in Florida (License #W690237). He represents 60+ carriers and helps Florida seniors find the right coverage for their individual needs.