By Julie Appleby
April 22, 2026 / 5:00 AM EDT / KFF Health News
After nearly five decades in the business, Illinois broker John Jaggi said he had never seen what happened last August: more than 80 clients in the same Chubb Medicare supplemental plan received an immediate 45% premium increase.
“In my 49 years of doing biz as a broker, I’ve never seen a premium increase be effective immediately on everyone, instead of on their policy anniversary,” Jaggi said. His agency scrambled to find cheaper options. Medigap policies pick up deductibles and other costs not covered by traditional Medicare; without a supplement, beneficiaries face unlimited potential out-of-pocket liability.
While a 45% hike is extreme, Jaggi and other agents say double-digit increases are increasingly common. In early 2026 state filings, several large insurers — Aetna, Blue Cross Blue Shield, Cigna, Humana, Mutual of Omaha, and UnitedHealthcare — sought rate increases for Plan G, the most widely purchased Medigap option, that ranged from just over 12% to more than 26% in some states, according to Telos Actuarial.
More than 12 million people — about 43% of those in traditional Medicare — buy Medigap coverage. Another share rely on retiree employer plans or Medicaid; roughly 13% of people in traditional Medicare have no supplemental coverage and could face large bills if they become seriously ill. In 2023 the average monthly premium for Plan G was about $164, though that varies widely by state and has likely risen since.
Why premiums are rising
Agents and policy experts point to several drivers:
– Higher use of medical services by beneficiaries, increasing claims costs.
– An aging enrollee population with more complex health needs.
– Rising labor and medical supply costs.
– State rules that limit insurers’ flexibility, or that require guaranteed issue or annual switching opportunities.
– Movement of people between Medicare Advantage and traditional Medicare, which can alter the risk pool.
“While this is a small dataset across a select number of states, it’s an indication that carriers are looking to correct their premium rates in light of upward pressure on their claims experience,” said Brett Mushett, an actuary at Telos.
“Five years ago, it was exceedingly uncommon to have a carrier with a rate increase of more than 10%. Now it’s very uncommon to see a rate increase below 10%, and it’s not uncommon to see it over 20%,” said Chalen Jackson of Integrity, a company that sells life and health insurance.
Insurers say rising claims and higher utilization are part of the explanation. Premera Blue Cross, which raised Plan G premiums nearly 12% in Alaska this year, noted that Medicare’s annual changes to deductibles and copayments affect supplemental plans and that it saw higher medical service use among members.
Pressure on agents and buyers
Some agents say finding alternatives for clients hit by big increases can be difficult. Jaggi said he eventually found options for many affected clients but that the process was challenging. Other brokers report seeing hikes exceeding 15% across multiple carriers this year.
Policy experts have suggested remedies, such as giving Medicare an out-of-pocket maximum or subsidizing Medigap purchases. Sen. Ron Wyden (D-Ore.) has argued that traditional Medicare needs updating to protect beneficiaries, noting it is the only federal program without an out-of-pocket cap. But adding a cap would raise federal costs, and major legislative changes are unlikely in the current Congress.
When and how people can switch
Most people qualify for Medicare at 65. New enrollees have a six-month Medigap open enrollment window during which insurers must sell coverage at standard rates without health questions. After that, switching or buying Medigap is usually restricted.
At least 16 states have a “birthday rule” allowing enrollees once a year to change Medigap plans without medical underwriting, typically around their birthday, which can help people with health problems switch to a different carrier. Four states — Connecticut, Massachusetts, Maine, and New York — require insurers to offer at least one Medigap policy year-round or during an annual period regardless of health, allowing changes without medical screening.
Many beneficiaries consider Medicare Advantage instead because those plans have out-of-pocket caps. But Medicare Advantage often limits beneficiaries to in-network providers, and if someone who tries Advantage later wants to return to traditional Medicare, they generally have only a 12-month window to buy Medigap without health underwriting. After that, preexisting conditions can lead to denials or very high premiums, effectively trapping some people in Advantage plans.
“A lot of people don’t know that if they are in Medicare Advantage for a year, they can get turned down by a Medigap plan or charged really high premiums because of a preexisting condition, which for many people effectively traps them in MA plans,” said Brian Keyser of the Center for American Progress.
There are exceptions. If a Medicare Advantage plan withdraws from a market or leaves the Medicare program, affected enrollees can qualify for a Medigap policy without medical underwriting or higher charges for preexisting conditions. In recent years, millions lost Medicare Advantage coverage when insurers exited markets; some switched to other MA plans and roughly 440,000 moved to Medicare supplement policies in one recent year when no other MA option was available.
Insurers’ risk and market effects
Experts warn that when insurers are required to accept applicants without considering health status — because of birthday rules or special exceptions — it can expose plans to higher-than-expected claims. That risk may prompt carriers to raise premiums across the board to compensate.
For beneficiaries seeking lower monthly costs, some Medigap plans include an annual deductible (about $3,000 currently) and thus charge much lower premiums. But a sizable deductible is unattractive to many seniors.
What beneficiaries can do
– Shop around when possible; premiums vary by state, plan type, age, and carrier.
– If newly eligible, buy during the six-month Medigap open enrollment to guarantee access without health questions.
– In states with birthday rules or guaranteed-issue protections, use those opportunities to switch plans without underwriting.
– Consider Medicare Advantage if an out-of-pocket cap and lower monthly premiums are priorities, but weigh network limits and the potential difficulty of returning to Medigap later.
– Discuss deductible Medigap options if monthly costs are unaffordable, recognizing the trade-off of higher potential annual out-of-pocket spending.
KFF Health News is a national newsroom producing in-depth journalism on health issues and is part of KFF, an independent source for health policy research, polling, and news.