2024 Report Medigap Rate Increases
Medigap Rate Increases Can Cost Seniors. Here is important information for seniors purchasing Medicare Supplement (Medigap) insurance coverage. Insurers can and do raise rates every year. Ten (10) FACTS smart Medigap buyers looking to save should know.
- Insurers raised rates on Medigap Plan G (2024 rates versus 2023)
- Rate increases ranged – to as much as 20%
- The ‘largest’ insurers often raised rates more.
- Smaller insurers rate increases were generally smaller.
- Future switching to avoid rate increases MAY be possible.
- Prices for Medigap Plan G at age 65 vary considerably,
- No insurer always has the lowest cost Medigap Plan G.
- Neither is one insurer always the most expensive (at age 65)
- Future switching following rate increases IS NOT ALWAYS POSSIBLE.
- Medicare insurance agents can provide a history of rate increases.
#1 Recommendation To Find Best Medigap Rates
Medicare is a national program. But Medicare insurance options are local. The Association strongly recommends with a local Medicare insurance agent. He or she should know the better (or best) plans available in your immediate area. Use the Association’s free (and 100% private) online directory. Click the link to FIND A MEDICARE AGENT NEAR ME. Or enter your Zip Code in the banner on the right.
Medigap Rate Increases (2024 versus 2023, Medigap Plan G)
June 20, 2024. The American Association for Medicare Supplement Insurance released a report today. The report shared an analysis of Medigap rate increase filings for Medigap Plan G for the period May 2023 through April 2024. Medigap Plan G is the #1 choice of plans for seniors turning age 65 and first purchasing Medigap coverage.
Plans with total membership of 1 million or more — increased rates o.o% to 18.0%
Those plans with between 400,000 and 1 million — increased rates between 7.5% and 20.0%
Insurers with 200,000 to 400,000 members — increased rates between 7.5% and 12.0%
Read more about the Medigap Rate Increase report release.
Smaller Medigap Insurers Reported Smaller Rate Increases
Contrary to what we expected (when undertaking the effort), insurers with smaller numbers of Medicare Medigap members generally filed for lower rate increases that the giant Medicare insurance companies. The names of the larger Medicare insurance companies are generally well known.
That doesn’t mean you should NOT buy coverage from a larger insurer — but it’s worth knowing the following;
- They may NOT be the lowest cost Medigap policy available in your area.
- You may find yourself subject to larger rate increases in future years.
Why Do Medigap Insurers File For Rate Increases
The Association thanks Ken Clark, of KLC Actuarial LLC for working with us on the rate increase data and the following explanations.
- Initial pricing assumptions used by the insurer to set the initial rate (example, at age 65) are too low.
Insurers base their rates on ‘assumptions’ of claims and other costs. If the initial claim cost assumptions are too low, including underwriting selection, then part of the rate increase is to make up for this initial deficiency. They must make many other assumptions and if the projected business doesn’t materialize, costs could end up significantly higher than expected. - Improper “rate relativity alignment”.
The insurance company must make multiple assumptions before it even sells it’s first Medigap policy. It’s virtually impossible to get this perfect. For example, they must project age of applicants, the percentage of men and women applicants. Even where applicants live. The goal is to get as close to as possible – but actual results can differ from those initial assumptions.
How To Find An Insurers History Of Medigap Rate Increases
Simply ask the Medicare insurance agent you are working with for a “history of the company’s rate increase requests”. Professional Medicare agents should be happy to provide this information.
Tips For Seniors Buying Medigap Coverage
The Association does NOT sell insurance. And, no single solution is BEST FOR EVERYONE.
There may be just a few insurers offering Medigap in your area. Or there could be 20 or more.
So, here are a few tips to help you evaluate a company.
- Premium (or Rate) – Is the insurance company rate closer to the lower end of the market or the higher end?
- Customer Service – You want an insurance company that provides great service and responds quickly when you contact them. Ask the agent what they have heard from others purchasing coverage.
- Years in Market – New entrants in a market can be great (they are hungry for new business). But they could be problematic (systems problems, future rate increases). So, it’s important to ask how many years the company being recommended has offered Medigap policies in your State.
- Your Contact – Once you buy coverage, you are going to be dealing directly with the company. They won’t tell you if or when better options from other companies are available. That’s just one more reason the Association recommends working with a local Medicare insurance agent. He or she earns a commission. They should keeps an eye on your coverage and be available for customer service questions.