The following interview between Robert Powell, senior retirement editor and certified financial planner (CFP), and Jae Oh, CFP, and author of Maximize Your Medicare, has been edited for clarity. Two retirement experts discuss what’s driving Medigap premium increases and how retirees can make informed choices during Medicare’s annual election period, which runs from October 15 to December 7 each year.

The conversation is critical for the 14.6 million Medigap enrollees in 2025, as changing premiums could impact retiree healthcare costs in 2026.

Rising Medigap Premiums and What’s Driving Them

Robert Powell: We’re in the middle of Medicare’s annual election period, and many people are asking whether they should get a Medigap insurance plan with Original Medicare or switch from Medicare Advantage to Original Medicare with a Medigap plan. Here to talk with us about that is Jae Oh, author of Maximize Your Medicare. Jae, welcome.

Jae Oh: Thanks for having me, Bob.

Robert Powell: One of my favorite topics — Medigap plans. What are you seeing now that we’re two weeks into Medicare’s annual election period?

Jae Oh: We’re seeing notably higher premiums, Bob. That’s the bottom line. Several factors are driving the increases, with rising healthcare costs at the top of the list. The second is higher usage of healthcare services — a double whammy.

Remember, Medigap carriers must meet something called a medical loss ratio to justify their premium increases. In addition, we’re seeing other dynamics at play. Some states now use a “birthday” or “anniversary” rule that lets people change Medigap plans at certain times of year. That trend is growing and, if anything, accelerating.

These rules and higher utilization together are contributing to higher premiums. Anecdotal evidence supports this trend, with only a few exceptions.

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For retirees living mostly on Social Security, the numbers can be daunting. A married couple might face around $3,500 a year in Medigap premiums — plus the cost of a Part D drug plan, even if some Part D plans charge $0 a month.

We’re seeing rate increases ranging from 10 percent on the low end to 20 percent or more year over year.

How Premium Increases Are Approved

Robert Powell: In all cases, it’s the state insurance departments that regulate and approve these rate increases, right?

Jae Oh: That’s exactly right, Bob. Medigap carriers must submit data to justify their rate increases, and it’s not an easy process.

Even after increases, price differences among carriers remain narrow — sometimes only a dollar or two a month for the same age group. That tells me the market is competitive and that carriers aren’t arbitrarily setting prices.

When I look at the data for clients, if someone can switch to a lower-cost carrier and qualifies for underwriting, we’ll help them do it.

How Age and Pricing Structures Affect Medigap Premiums

Robert Powell: My understanding is that if you enroll in Medicare at 65, your premium stays roughly the same as someone who’s 85 — or is there a difference?

Jae Oh: There’s definitely a difference. Most Medigap plans are priced using what’s called an “attained-age” model, which means premiums rise with age. They also increase based on the claims experience of the entire risk pool, not on your individual healthcare use.

A few carriers use other pricing structures that flatten premiums once you reach a certain age, but those plans typically start out more expensive in the earlier years. The vast majority of plans still use attained-age pricing.

Should You Switch or Downgrade Your Medigap Plan?

Robert Powell: For those seeing premium increases, especially if they’re in one of the higher-tier plans, should they move down to a lower version of Medigap?

Jae Oh: That’s a great question. My first recommendation is to look for the same plan with a different carrier. Even though the pricing is competitive, differences do exist.

If the savings are meaningful — say $20 a month for one person or $500 a year for a couple — switching might make sense. Remember, you can switch Medigap carriers at any time during the year if you qualify for underwriting. You don’t have to wait for open enrollment.

As for moving down to a lower plan, that’s possible too. The most popular Medigap plans today are Plan G and Plan N. But proceed with caution. The policy language and coverage details differ, and some explanations have understated those differences.

That said, the price gap can be significant — often $35 a month per person. For a couple, that’s $70 a month or roughly $840 a year. As long as clients understand the trade-offs, we’re happy to guide them through the decision.

Why Some States Offer More Flexibility

Robert Powell: Here in Massachusetts, I don’t have as many choices. A few other states are the same. Any advice for people in those states?

Jae Oh: Yes, Massachusetts is unique. It has a specific window during which you can switch from Medicare Advantage to one of the state’s limited Medicare Supplement (Medigap) options. These plans are tailored specifically for Massachusetts.

If someone develops a health condition and believes a Medigap plan would be better, they can use that window to make the change. That flexibility can be a real advantage — you might say those residents get to have their cake and eat it too.

Robert Powell: Jae, as always, it’s a pleasure having you share your knowledge. Thanks for helping our listeners navigate the complex world of Medicare, Medigap, and all things healthcare.

Jae Oh: Bob, it’s always my privilege.

Related: ACA Open Enrollment 2026: What You Need to Know Before Choosing a Health Plan