Medigap Premiums Surge: Why Seniors Face Skyrocketing Costs and Limited Options

Illinois-based insurance broker John Jaggi had never encountered a premium increase like the one that hit over 80 of his clients last August. All were enrolled in the same Medicare supplemental plan offered by insurer Chubb, and each faced a 45% surge in their monthly premiums.

“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’s brokerage scrambled to find more affordable alternatives for affected clients. Medigap policies cover deductibles and other costs not included in traditional Medicare, and without such coverage, there is no cap on annual out-of-pocket expenses for seniors.

While a 45% increase is extreme, brokers say double-digit hikes for Medigap policies are becoming increasingly common. A Chubb spokesperson did not respond to requests for comment regarding the increase.

Who Relies on Medigap Coverage?

More than 12 million people—about 43% of those enrolled in traditional Medicare—purchase a Medigap policy to limit financial exposure. Others rely on retiree employer coverage or alternative supplemental plans. However, approximately 13% of traditional Medicare beneficiaries lack any supplemental coverage, according to KFF, leaving them vulnerable to substantial medical bills in the event of serious illness.

Rate Increases Expected to Continue in 2026

Following significant hikes in 2025, premiums for Medigap policies appear poised to rise again. Early 2026 filings with state insurance commissioners from major insurers—including Aetna, Blue Cross Blue Shield, Cigna, Humana, Mutual of Omaha, and UnitedHealthcare—reveal projected rate increases for Plan G policies, the most popular Medigap option. According to Nebraska-based consulting firm Telos Actuarial, these increases range from just over 12% to more than 26% in the first quarter.

“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.”

Brett Mushett, consulting actuary with Telos

Premiums Vary by State, Age, and Coverage Type

Medigap premiums depend on factors such as coverage type, location, and age. In 2023, beneficiaries paid an average monthly premium of $164 for Plan G coverage, according to KFF. That figure has likely climbed since.

Amanda Brewton, owner of Medicare Answers Now—a marketing organization serving sales agents—notes a sharp shift in rate trends. “In some states, like Ohio, Medicare supplements for years would have a 3% to 5% year-over-year increase. Now it’s 10% to 15%,” she said.

Case Study: Alaska’s Rising Costs

In Alaska, Premera Blue Cross implemented a nearly 12% increase on its Plan G policies for 2025, according to rate sheets provided to KFF Health News by insurance agent Patricia Mack. Mack, who owns Alaska Insurance Benefits in Wasilla, noted that another insurer raised rates by nearly 13%. For example, a 65-year-old woman who paid $172 per month for Plan G coverage in 2024 now faces a monthly premium of $192.

Premera spokesperson Courtney Wallace acknowledged in an email that annual changes to Medicare deductibles and copayments impact supplemental plan costs.