Medigap Rate Increases In 2026

Medigap Rate Increases In 2026

Medigap rate increases in 2026 are running larger than usual, with many Plan G policyholders seeing increases of 10% to 20% or more. Rising healthcare utilization and claims costs are the primary drivers. Insurers that priced aggressively in prior years are adjusting rates upward to align with actual claims experience. Rate increases vary significantly between carriers.

Medigap beneficiaries are facing larger-than-usual rate increases in the first quarter of 2026, with premiums in some states increasing by as much as 45%. With more than 12 million Americans enrolled in a Medicare Supplement policy, these changes are set to impact as many as 43% of all Traditional Medicare beneficiaries.

While the Centers for Medicare and Medicaid Services (CMS) sets the capitation rate increases for Medicare Advantage plans — 2.48% going into 2027 — Medigap premiums are set by insurance companies, and vary widely based on location, plan type, and insurer. 

How Much Premiums Are Increasing

According to Telos Actuarial, average rates for Plan G — the most popular plan type — have increased by anywhere from 12% to 26% among six large insurers. This is a much steeper increase than in previous years, in which average rates increased by no more than 22% (in 2025) and 13% (in 2026). In 2022, rate hikes were as low as 5% among the same six insurers.

What accounts for these changes, and what do beneficiaries need to consider when looking for a Medigap policy? That depends on where they live. According to KFF, the states with the highest premiums tend to have a community rating system, in which premiums are based exclusively on geographic area, not on age or gender.

In 2023, New York had the highest average premiums ($267 per month), while Alaska had the lowest ($191). The national average was somewhere in the middle at $217. 

What Beneficiaries Should Consider

When choosing a Medicare Supplement policy, beneficiaries need to factor in the ease of switching policies and the chances of future rate increases.

While rate increases each year are unavoidable, some insurers have a track record of larger rate increases than others, and Medicare agents should consider an insurer’s history of rate increases when recommending policies. 

Choosing the cheapest insurer isn’t always the best option if future high-rate increases are likely. Some insurers advertise extremely low rates for seniors turning 65, but rate increases year-over-year can offset those initial savings.

In some states, insurers must charge the same rate for people under age 65 (eligible due to disability or ESRD) as for people who enroll at age 65, or within certain limits.

Insurers may also offer issue-age rated plans, in which premiums don’t increase with age, vs. attained-age rated plans in which they do.

While seniors can switch Medigap policies after a rate increase, there’s no guarantee that they’ll find a comparable policy at a lower rate.

“One of the most important considerations when first enrolling in a Medicare Supplement policy is both the company history of past rate increases and ‘closing’ plans from future sales, as well as possible future flexibility to change carriers based on specific state regulation and future health status,” said Ken Clark, President of KLC Actuarial, LLC.

The best way for seniors to choose the right Medigap policy is to shop around for the best policy up-front. By understanding average premiums, and benefits, for each plan type and the insurer’s history of rate increases, beneficiaries can make an informed decision to protect themselves against future rate increases.

The American Association for Medicare Supplement Insurance advocates for the importance of consumer awareness and supports insurance and financial professionals who market Medicare insurance solutions. The organization provides a national free online directory listing local Medigap agents by Zip Code.

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