Medicare Supplement Rate Increases
How much do Medicare Supplement Rates go Up? For most health insurers, once a policy has been issued, any rate changes are generally event-driven.
Medicare Supplement policyholders should not be surprised when their rates go up, in fact, they should expect a rate increase every year. If you just got another Medicare supplement rate increase, enter your information in the quote tool on this page or call 844-528-8688 to discuss your options. Keep reading to understand how Medicare supplement prices increase.
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Comparing Medigap Insurance Companies by Rate Increases
It is tough to compare companies just from rate increases. They have all had their turn as the “bad guy”. We have seen rate increases range from 0% on up to over 20% and they have all had bad years. I go through some basic steps to limit the high rate increases below.
How Much Do Medicare Supplement Rates Go Up Each Year
Although Medicare controls the minimum coverage that each plan must contain, how much you pay for coverage depends on the company you select. There are ways to limit your exposure and how much your Medicare supplement prices go up.
Choose a large A rated company, that has the financial strength to overcome any blips in the market
Use an Independent Medicare supplement agency like Medicare Solutions Team, we can show you every carriers rate history in your area. Instead of stuffing you into just one carrier, we search the entire market for your Medicare supplement plan 844-528-8688 and can give you the most up to date Medicare supplement company information.
Considering a Medicare Plan?
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Although not everyone selects their Medicare Supplement plan based on the premium, a large part of seniors do and therefore they will typically shop their policy during the annual open enrollment period.
Most policyholders change companies because of rates but there are also many who do so because of service or the lack of it. In today’s economy, consumers do not have relationships with their vendors like they did back in the 50s, 60s, and even 70s.
Since most services like health insurance are purchased online, there is little to no loyalty established in the transaction or subsequent service requests.
Let’s face it, you don’t get a free toaster when you buy health insurance (remember those days?) and you’ll rarely get a birthday card. Instead, you’ll get a notice of an impending rate increase.
No matter what Medicare supplement company you go with you are going to get rate increases. There are two types of rate increases, age increase, and an inflation increase. The inflation increase has many variables such as the cost of business, claims, and other internal company issues.
If someone tells you that your Medicare supplement will not go up, they are flat out lying to you.
Why do My Medicare Supplement rates Go Up?
Your Medicare Supplement (Medigap) pricing will typically be based on one of three pricing methods.
This simply means that there are three pricing methods your company can use to establish your rates: Attained Age rates, Issue-Age rates, and Community rates. The average Medicare supplement rate increase that we have seen is between 5 and 8%, yearly, depending on the plan, state, and age.
What’s even more confusing is that these three rating methods can look the same unless you drill down into each pricing method over time. Here’s how each rating method works, you can see our full report on Medicare supplement plan rating methods HERE.
Medicare Supplement Rating Methods
Attained Age Rating
When using the attained-age rating method, the insurance company sets your rate based on your age when you originate your Medicare Supplement plan.
On each anniversary of your policy, your rate will begin to creep up because you are a year older. It may not be substantial at first but over time your rate increases may become alarming.
To make things even more difficult for your budget, your carrier can also increase rates based on claims experience, inflation, and a few other reasons.
Issue Age Rating
With the issue-age rating method, the insurance company will rate your policy based on your age at the time of issue and your premiums will not increase based on your age.
The company can, however, increase your rates based on other factors like inflation, rising health care costs, and claims experience.
On its face, the issue-age rating method appears to be the most economical way of purchasing a Medicare Supplement plan, but only if you buy it when you are 65.
For example, Mr. Brown purchases an issue-age Medicare Supplement plan when he’s 65 and the rates are set at $150 per month. His close friend, Mr. Black wants to purchase the same plan in the same state but he is 70 years old and his rate is $182.
Although both men in this example have locked in their rates because the company uses issue-age rating, they will likely experience rate increases over time due to the factors mentioned above
With the community rating method, the insurer will set your rates the same as every other applicant who is purchasing that particular Medicare Supplement Plan.
Although community-rated policy premiums do not increase because of the policyholder’s age, they will likely go up each year because of inflation, rising healthcare costs, and other factors.
The good news is that even though community-rated policies can increase because of the factors mentioned above, these policies will likely be the cheapest over time because the rates aren’t based on the age of the policyholder.
Considering a Medicare Plan?
Get online quotes for affordable Medigap insurance
What are My Options if Medigap Rates become too expensive?
Certainly, policyholders understand that Medicare Supplement rates are likely to increase over time. We do not live in a vacuum.
The good news is when your rates are getting out of hand and making it difficult to keep up with increased premiums, you can simply go shopping!
Remember, since the government requires all Medicare Supplement plans to have the same benefits from one company to the next, you’ll find it easy to compare rates of the plan you like against all the insurance carriers that offer it.
Plan G from Aetna is the same as Plan G from Humana or UnitedHealthcare; the only thing that differentiates one company from another is pricing and service.
It’s important, however, to only go shopping during certain enrollment periods. You can’t start calling around because you’ve received a rate increase and you’re angry with your insurance company.
When Can I Change My Medicare Supplement Company or Plan?
When you can change your Medicare Supplement provider depends primarily on your health status or what state you are in.
If you are a Medicare Supplement plan that you purchased during your open enrollment, your insurer did not take your health status into consideration because you had a guaranteed issue right.
If you are disappointed with rate increases or claim service and decide to shop around for a better deal or better service, the insurance company will use medical underwriting which means that if your health status is poor, the company could charge you higher rates or even deny you coverage if your health underwriting results are unsatisfactory.
Fortunately, there are some occasions when the guarantee issue rule can still apply. You can still have guaranteed issue rights outside your Open Enrollment Period under any of the following circumstances:
Instead of buying a Medigap Plan, you have a Medicare Advantage Plan (Part C) and the insurance company is leaving your service area.
You have a Medicare Advantage Plan but the company is leaving Medicare or discontinuing your plan.
You decide to move to an area where your Medicare Advantage Plan does not offer service.
You lose your Medigap coverage because the insurance company is filing for bankruptcy.
You want to change your Medicare Supplement company because your current company has misled you or is not complying with Medicare rules and regulations.
Learn about Options from a Professional
Trying to navigate Medicare on your own can be confusing and stressful. There just seems to be no way to make complicated health insurance rules and regulations easy for consumers to understand.
Seniors who are looking to purchase a new Medicare Supplement (Medigap) plan or Medicare Advantage or want to replace the one they have should speak with a Medicare Professional who will advocate for them. Independent insurance brokers The Medicare Solutions Team has experienced and reputable insurance professionals available to help you shop with all of the highly rated carriers and help you find a solution that will best meet your needs and budget. Call us at 844-528-8688 during normal business hours or contact us through our website at your convenience. We do not work for any insurance company, we only work for our clients,
Frequently Asked Questions
Although age is certainly a factor if your policy was rated using the “attained age” rating method, most companies will have rate creases each year resulting from inflation and other factors. Moreover, rarely will the cost of health care ever go down.
Your Medicare supplement plan will automatically renew each year by making your renewal premium payment. If you prefer not to renew it, simply notify the company or your agent at least 30 days before the anniversary (renewal) date.
Actually, Medicare Part B premiums may go down in 2023. CMS has been tasked with reassessing the Part B premium rate increase that took place for 2022 to determine if Medicare Part B premiums can be reduced in 2023.
The historical data for Medicare Supplement annual rate increases is not available since each company prices its Medigap plans differently and plans can be rated under three different rating methods: Attained-age rating, Issue age rating, and community rating.
All Medigap plans are subject to rate increases that result from inflation, increased healthcare costs, and other factors. Additionally, if your Medigap plan is an “issue-age” rated plan, your rates will go up each year you get older.