Medigap Premium Increases: Why They Happen and How to Manage Them in Florida

Medigap premium increases are driven by three distinct factors, and understanding each one helps you anticipate and manage future costs.

1. General healthcare inflation: Medicare's underlying costs increase every year due to medical inflation, new treatments, and rising provider costs. Medigap plans pass these cost increases through to premiums. This affects all Medigap plans regardless of rating method.

2. Age-based increases (attained-age rating): If your plan uses attained-age rating, your premium increases each year simply because you are a year older. Older beneficiaries use more healthcare, so insurers charge more. This factor compounds with inflation, producing significant premium growth over a 10-to-20-year period.

3. Adverse selection in the risk pool: When healthier members leave a plan (because they find lower premiums elsewhere), the remaining pool becomes sicker on average. This drives up claims costs, which drives up premiums, which causes more healthy members to leave. This spiral is called adverse selection and is a known problem in Medigap markets.

The rating method your insurer uses is the single most important factor in how much your premium will grow over time.

Attained-age-rated plans start with the lowest premiums but increase as you age. A plan that costs $120 per month at age 65 might cost $200 per month at age 75 and $280 per month at age 85, even before accounting for inflation. This is the most common rating method in Florida.

Issue-age-rated plans set your premium based on your age when you first enroll and do not increase it as you age. Premiums still increase with inflation, but there is no age-based component. A 65-year-old and a 70-year-old enrolling in the same plan on the same day would pay different premiums, but each premium would only increase with inflation going forward.

Community-rated plans charge everyone the same premium regardless of age. A 65-year-old and an 85-year-old pay the same amount. Premiums increase with inflation but not with age. This is the most favorable rating method for older beneficiaries.

The challenge is that community-rated and issue-age-rated plans are less common in Florida than attained-age-rated plans. When comparing plans, always ask the insurer which rating method they use.

For more on how to compare Medigap plans, see our guide on Medicare Supplement Plans Florida 2026.

When you receive a premium increase notice, you have several options depending on your health status and the current market.

Option 1: Stay with your current plan. If your health has declined since you enrolled, staying with your current plan may be your only option. Insurers can deny new applications based on medical underwriting, and your current plan cannot drop you or raise your premium based on your individual health claims.

Option 2: Shop for a lower-premium plan with the same benefits. If you are in good health, you can apply for a different insurer offering the same plan letter at a lower premium. Since benefits are standardized by plan letter, you lose nothing in coverage by switching insurers. You will need to pass medical underwriting.

Option 3: Switch to a lower-coverage plan letter. If you are in good health and willing to accept more cost-sharing, you could switch from Plan G to Plan N, which has lower premiums. Plan N requires copayments for office visits and ER visits and does not cover Part B excess charges.

Option 4: Switch to Medicare Advantage. During the Annual Enrollment Period (October 15 to December 7), you can drop your Medigap plan and enroll in a Medicare Advantage plan. Medicare Advantage plans often have lower or $0 premiums. However, be aware that switching back to Medigap later may require medical underwriting.

For personalized guidance on your options, schedule a free consultation with our licensed specialists.

The best time to think about premium increases is before you enroll, not after your premium has already grown significantly.

Ask about the rating method: Before enrolling, ask the insurer whether the plan is attained-age-rated, issue-age-rated, or community-rated. This is the most important question for long-term cost management.

Ask for historical rate increase data: Insurers are required to file rate increase requests with state insurance regulators. You can ask the insurer for their historical rate increase percentages over the past 5 to 10 years. An insurer with a history of 3% annual increases is very different from one with 8% annual increases.

Compare total 10-year cost, not just the initial premium: A plan with a $120 initial premium and 6% annual increases will cost more over 10 years than a plan with a $140 initial premium and 3% annual increases. Do the math before choosing based on initial premium alone.

Consider insurer financial stability: Larger, financially stable insurers tend to have more stable rate histories. Check the insurer's AM Best rating before enrolling.

For a comparison of current Medigap plans and premiums in Florida, see our guide on Why Are There So Many Medicare Plan Letters.

One of the most common questions beneficiaries face is whether Medigap's predictable coverage is worth the premium compared to Medicare Advantage's lower upfront costs.

Medigap advantages: Predictable out-of-pocket costs, no network restrictions, no prior authorization for most services, and coverage that does not change year to year.

Medigap disadvantages: Higher monthly premiums that increase over time, no extra benefits like dental or vision, and no prescription drug coverage (you need a separate Part D plan).

Medicare Advantage advantages: Lower or $0 premiums, extra benefits (dental, vision, hearing, OTC), and all-in-one coverage including Part D.

Medicare Advantage disadvantages: Network restrictions, prior authorization requirements, benefits that can change each year, and potentially high out-of-pocket costs if you have significant healthcare needs.

The right choice depends on your health status, financial situation, and how you use healthcare. For a full comparison, see our guide on Original Medicare vs. Medicare Advantage in Florida.