Medicare Supplement Insurance Rates: How Insurers Set Them and Why They Climb

Every Medigap price starts with a rating method. It controls whether birthdays matter to your premium. Inflation and claims trends can raise rates under any method; the method only governs the age piece.

Definitions follow Medicare.gov and KFF. Any method can still see increases for medical inflation and claims.

Federal law leaves the rating method to the states. KFF’s October 2026 review of state Medigap rules sorts them into three groups.

Source: KFF, Key Facts About Medigap Enrollment and Premiums (October 2026). Rules change; check your state insurance department before buying.

Massachusetts, Minnesota and Wisconsin also use their own standardized plan designs instead of the lettered plans sold elsewhere, so their rate comparisons do not line up neatly with other states.

Once the method is set, an insurer applies its own factors. Each company files these with the state, so the same applicant can see a wide spread of quotes for one letter.

Insurers cannot raise one policyholder’s rate because that person filed claims. Increases apply to a whole plan and rating class in a state, and the paperwork runs through the state regulator.

Federal law sets a minimum loss ratio for Medigap: individual policies are expected to return at least 65% of premiums as benefits, and group policies 75%. Fast-rising claims are therefore the main driver behind large filings. KFF Health News reported in April 2026 that first-quarter 2026 Plan G increases tracked by Telos Actuarial ran from just over 12% to more than 26%, across several national insurers.

Because policies sold since 1992 are guaranteed renewable, the insurer cannot cancel you for health reasons while you pay, as covered in are Medicare supplement plans guaranteed renewable.

KFF’s analysis of NAIC data puts the 2025 national average Plan G premium at $194 a month. Starting from that figure, the table shows how three steady yearly increase rates compound. These are illustrations of the arithmetic, not forecasts for any insurer.

Our calculations. Start: $194 a month (KFF, 2025 average Plan G premium). Year 1 is the starting rate; each later year rises by the stated percentage.

For reference, the same KFF data show the average Plan G premium rising from $140 in 2020 to $194 in 2025, which works out to roughly 6.7% a year. The spread between the 4% and 10% rows, more than $9,000 over a decade, is why an insurer’s increase pattern deserves as much attention as its entry price.

A rate history lists the percentage change for a plan form in a given state year by year. Some insurers publish one; agents and state regulators can often supply it.

Timing details are on our Medicare supplement open enrollment page. For a plan-letter view of current pricing, see typical Medigap premiums.