Medigap premiums leap, and consumers have few alternatives

Key Points:

• Illinois insurance broker John Jaggi witnessed an unprecedented immediate 45% premium increase last August affecting over 80 clients enrolled in the same Medicare supplemental plan from insurer Chubb, highlighting a trend of steep, often double-digit rate hikes in Medigap policies.
• More than 12 million people with traditional Medicare rely on Medigap plans to cover costs not included in Medicare, but rising premiums—ranging from 12% to over 26% in early 2026 filings by major insurers—are making coverage increasingly expensive.
• Factors driving premium increases include greater medical service use, aging populations, rising labor and medical costs, and state regulations, with some states now seeing annual increases of 10% to 15%, significantly higher than the historical 3% to 5%.
• Policy experts suggest solutions like capping out-of-pocket costs or subsidizing Medigap coverage, but legislative changes are unlikely soon due to budget concerns and political challenges.
• Beneficiaries face limited enrollment periods and complex choices when switching plans, with some turning to Medicare Advantage plans that have out-of-pocket caps but restrict provider networks; switching back to Medigap can be difficult due to health underwriting rules.