Facing Medigap Rate Hikes: 3 Ways to Cut Your Medicare Costs: The 2026 Medigap Landscape: Higher Costs and Increased Usage
Rising Premiums Create Challenges for Medigap Policyholders
The Medicare Annual Election Period is revealing a challenging environment for Medigap (Medicare Supplement Insurance) policyholders: significantly higher premiums.
According to Medicare expert Jae Oh, premium increases are notably high, with anecdotal evidence showing hikes between 10% at the low end and 20% or more year over year.
These dramatic increases stem from a “double whammy” of rising healthcare costs and higher usage of services by the insured pool. Insurance carriers must justify these increases to state insurance departments based on their medical loss ratio — proving that the money is being spent on claims and care, not just overhead.
This competitive, state-regulated environment, Oh explains, often results in prices being very close between competing carriers for the same plan type.
The Growing Cost Burden for Retirees
The cumulative cost of Medigap plans is becoming a substantial burden, especially for those on fixed incomes.
For example, a married couple relying solely on Social Security could be looking at approximately $3,500 a year just for Medigap premiums — not including the cost of a Part D drug plan.
Actionable Strategy: Seeking the Same Coverage for Less
For consumers facing steep rate hikes, the most important financial advice is not to immediately downgrade coverage, but instead to shop the same plan aggressively across carriers.
1. Shop the Market for the Same Plan
Because state regulators ensure fair competition, the price difference for the exact same plan (e.g., Plan G) can still vary slightly by carrier.
Oh notes that even after rate increases, he can often find Medigap premiums within $1–$2 a month difference for people in the same age group.
While that may seem small, a $20 or more monthly difference for a couple adds up to hundreds of dollars per year — enough to justify switching carriers.
2. Leverage Flexibility for Carrier Switching
Unlike the Annual Election Period for Medicare Advantage or Part D, the ability to switch Medigap carriers (and potentially save money) is not tied to a specific time of year.
Underwriting Is Key
Outside of the initial six-month Medigap open enrollment period (when turning 65) or specific guaranteed issue rights, switching carriers generally requires medical underwriting.
If you are in good health and can pass underwriting, you can switch Medigap carriers at any time — not just during the annual election period — to secure a lower premium for the same coverage.
Birthday Rule States
A growing number of states have implemented a “Birthday Rule” or “Anniversary Rule”, which gives policyholders a limited annual window to switch Medigap carriers without medical underwriting, provided they move to a plan of equal or lesser benefits.
If you live in one of these states, take full advantage of this opportunity to reduce your premium costs.
3. Strategic Downgrading: Understanding the Differences
If shopping across carriers still results in unaffordable premiums, the next option is moving to a plan with fewer benefits — such as switching from Plan G to Plan N.
Plan G vs. Plan N
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Plan G covers nearly all Original Medicare cost-sharing except the Part B deductible.
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Plan N is generally less expensive (Oh estimates around $35 less per month, or $840 annually for a couple) but requires policyholders to pay:
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The Part B deductible
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Co-pays up to $20 for some doctor visits
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Up to $50 for emergency room visits that don’t result in admission
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While downgrading saves money, Oh cautions that “these contracts are not precisely the same,” urging clients to fully understand the trade-offs and out-of-pocket costs.
Understanding Medigap Pricing and State Nuances
Medigap premiums are typically priced using “attained age”, meaning premiums increase as the policyholder ages and uses more healthcare services.
These price increases are based on the usage of the entire risk pool, not an individual’s personal claims history.
Some carriers offer a “flattened out” premium structure, where the price starts higher but rises more slowly over time. However, this structure is less common and usually costs more in the early years of coverage.
The Massachusetts Exception
Some states — including Massachusetts — operate under unique Medigap rules that limit available plans.
For example, Massachusetts offers specific, state-tailored Medigap options and has a special window allowing policyholders to switch from Medicare Advantage to one of its limited Medigap plans.
Key Takeaways
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Expect Higher Costs: Premium increases of 10–20% are becoming common.
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Shop Smart: Compare identical plans across carriers to find lower premiums.
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Understand Underwriting Rules: Switching carriers outside open enrollment may require health approval.
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Use Birthday Rules Where Available: Some states allow plan changes without underwriting.
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Evaluate Downgrades Carefully: Know what you’re giving up when switching from Plan G to Plan N.
To learn more, watch this video “Facing Medigap Rate Hikes: 3 Ways to Cut Your Medicare Costs” and find more videos about Medicare on finStream.TV featuring Jae Oh at this link: https://www.finstream.tv/featured/jae-oh/