By Julie Appleby
April 22, 2026 / KFF Health News
Across nearly five decades as an Illinois broker, John Jaggi said he had never seen insurers apply a dramatic premium increase to everyone in a group at once — until last August. More than 80 clients on the same Chubb Medicare supplemental plan were hit with an immediate 45 percent jump in their monthly bills.
Jaggi and other agents scrambled to find less costly policies. For many older Americans, that urgency matters: Medigap, or Medicare supplemental insurance, covers deductibles and other out-of-pocket costs that Original Medicare does not. Without a supplement, beneficiaries can face unlimited potential medical bills.
While a 45 percent surge is extreme, brokers and industry analysts say double-digit hikes are becoming increasingly common. In filings submitted in early 2026, major insurers including Aetna, Blue Cross Blue Shield plans, Cigna, Humana, Mutual of Omaha, and UnitedHealthcare requested rate increases for Plan G — the most popular Medigap product — ranging from a bit over 12 percent up to more than 26 percent in some states, according to Telos Actuarial.
About 12 million people, roughly 43 percent of those in traditional Medicare, buy Medigap. Others rely on employer retiree coverage or Medicaid; about 13 percent of traditional Medicare beneficiaries have no supplemental coverage and are at financial risk if they face serious illness. The average monthly premium for Plan G was around $164 in 2023, with wide variation by state and an expectation that costs have risen since then.
Why premiums are rising
Analysts point to several interacting causes behind the increases:
– Higher use of medical services by Medicare enrollees, pushing up claims costs.
– An aging enrollee population with more complex health needs.
– Rising labor and medical supply costs.
– State regulations that limit how insurers set rates or that require guaranteed-issue periods or annual switching opportunities.
– Movement between Medicare Advantage and traditional Medicare that can alter the risk profile of those remaining in Medigap pools.
Brett Mushett, an actuary at Telos, said the recent filings suggest carriers are adjusting premiums after experiencing upward pressure on claims. Chalen Jackson of Integrity, which sells life and health insurance, noted that rate increases of more than 10 percent were rare five years ago but are now common, and increases above 20 percent are not unusual.
Insurers themselves cite similar explanations. Premera Blue Cross, which raised Plan G rates nearly 12 percent in Alaska this year, pointed to Medicare s annual changes to deductibles and copayments and to greater medical service use among its members.
Pressure on agents and consumers
Brokers say it can be difficult to find affordable alternatives when carriers raise rates sharply. Jaggi eventually located cheaper options for many clients, but the work was time-consuming and stressful. Other agents report seeing hikes over 15 percent across multiple carriers this year.
Policy analysts and some lawmakers have proposed remedies such as adding a federal out-of-pocket cap to Original Medicare or offering subsidies to help people buy Medigap. Sen. Ron Wyden (D-Ore.) has argued that traditional Medicare needs an update to protect beneficiaries, noting it remains the only federal health program without an annual out-of-pocket limit. But putting a cap in place would increase federal spending, and large legislative changes appear unlikely in the current Congress.
When and how people can change plans
Most people become eligible for Medicare at 65 and have a six-month Medigap open enrollment window when insurers must sell standard policies without asking health questions. After that period, buying or switching Medigap usually becomes more limited and may involve medical underwriting.
At least 16 states have a ‘‘birthday rule’’ that allows enrollees to change Medigap plans once a year without underwriting, typically near their birthday. 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, letting people switch without medical screening.
Many beneficiaries consider Medicare Advantage because those plans include annual out-of-pocket maximums and often lower premiums. But Medicare Advantage typically restricts care to in-network providers, and returning to traditional Medicare can be difficult. Generally, someone who switches into Medicare Advantage and later wants to go back to Original Medicare has a limited window — often about 12 months — to buy Medigap without facing underwriting. After that, preexisting conditions can result in denials or much higher premiums, effectively trapping some people in Medicare Advantage.
Brian Keyser of the Center for American Progress warned that many consumers do not realize a move into Medicare Advantage can make it hard or costly to obtain a Medigap policy later.
There are exceptions. If a Medicare Advantage plan withdraws from a market or exits the Medicare program, affected members may be eligible for a Medigap policy without medical underwriting or higher charges for preexisting conditions. When insurers have left markets in recent years, millions of beneficiaries were displaced; some switched to other Medicare Advantage plans and roughly 440,000 moved to supplement policies in one recent year when no other Advantage option was available.
Insurers face risk when protections ease access
Experts caution that state rules and special exceptions that force insurers to accept applicants regardless of health can expose plans to unexpectedly high claims. That possibility can prompt companies to raise premiums across the board to cover the increased risk.
For beneficiaries trying to lower monthly payments, some Medigap plans include an annual deductible — currently around $3,000 — and charge much lower premiums. But many seniors find a large deductible unattractive, since it leaves them exposed to significant costs once they need care.
What beneficiaries can do now
– Shop around: premiums vary widely by state, plan type, age, and carrier. Comparing available options can reveal big differences.
– Buy during initial enrollment: if newly eligible, use the six-month Medigap open enrollment to lock in coverage without health questions.
– Use state protections: take advantage of birthday-rule windows or guaranteed-issue opportunities where they exist to switch without underwriting.
– Weigh Medicare Advantage carefully: it offers an out-of-pocket cap and lower monthly premiums but can limit provider choice and make later return to Medigap difficult.
– Consider deductible Medigap plans if monthly costs are unaffordable, while recognizing the risk of higher annual out-of-pocket spending.
KFF Health News is a national newsroom that produces in-depth reporting on health issues and is part of KFF, an independent source for health policy research, polling, and news.