Medigap Premium Increases: Attained-Age vs Issue-Age vs Community Rating

Most people pick a Medigap plan by comparing today's monthly premium. That's a mistake. How your state allows insurers to price Medigap determines whether your premium grows with inflation alone, with your age on top of inflation, or with both compounding together — and the difference over 20 years can exceed $50,000. In 2026, with Plan G rates jumping 10–45% in some states, this question is more urgent than ever.

The three ways Medigap premiums are priced

Federal law requires Medigap insurers to use one of three pricing methodologies. The method determines how your premium changes each year as you get older — and states can restrict which methods insurers are permitted to use.

Community rating: age doesn't affect your premium

In community-rated states, every policyholder on the same plan pays the same base premium — a 65-year-old and a 79-year-old enrolled in Plan G with the same carrier pay the same monthly rate. Premiums can still rise due to inflation, claims experience, and utilization trends, but they cannot increase because you personally got older.

Nine states currently require community rating for Medigap policyholders age 65 and older: Arkansas, Connecticut, Idaho, Maine, Massachusetts, Minnesota, New York, Vermont, and Washington.²

Community rating most benefits older enrollees and those with chronic health conditions — your rate stays anchored to the pool, not your personal age trajectory. The tradeoff is that younger, healthier enrollees sometimes pay more than they would in an attained-age plan at 65, because they're cross-subsidizing older members of the pool.

Issue-age rating: your rate is locked to your enrollment age

Issue-age rating sets your base premium based on your age when you first buy the policy and anchors it there permanently. Enroll at 65 and your base reflects a 65-year-old's risk profile for the life of the policy — it won't be re-priced upward because you turn 70 or 75. Premiums can still increase due to market-wide inflation and claims trends, but not because of your personal aging.

Four states permit issue-age pricing and prohibit attained-age pricing: Arizona, Florida, Georgia, and Missouri.² In these states, enrolling early in your Medigap Open Enrollment Period is especially valuable — the younger you are at purchase, the lower your permanent base rate.

Attained-age rating: your premium increases every year you get older

In the remaining 37 states plus Washington D.C., insurers may use attained-age rating — the most common approach nationally.² With attained-age pricing, your premium is based on your current age and is adjusted upward each year as you age, on top of any general market increase.

In practice, attained-age Medigap premiums compound two separate increases each renewal period:

• Age-based increase: roughly 2–5% per year in your 60s and 70s, often accelerating as you approach 80+
• Market-wide increase: the insurer's general rate adjustment for inflation and claims experience — typically 3–7% in normal years, 10–26%+ in 2026

Combined, this can mean 6–12% annual increases in a normal year — and far higher in a spike year like 2026.

The 2026 Medigap rate spike: what changed

Medigap premiums historically increased 3–5% per year on average. The 2026 cycle broke from that pattern significantly. Some states saw Plan G rates rise 25–45% for renewal policyholders from major carriers in a single year.¹

Several factors drove the spike:

• Post-pandemic utilization rebound: people who deferred procedures during COVID returned in volume, driving claims sharply higher across Medigap risk pools
• Rising outpatient and specialty costs: physician and facility fees increased faster than insurers had modeled
• Pricing corrections: some carriers had deliberately low-priced to gain market share in 2023–2024 and are now correcting toward actuarially sound rates
• Part B cost pass-through: Part B deductible and premium increases raise what Medigap must cover, adding to plan costs

In attained-age states, the 2026 increases stack on top of age-based adjustments — meaning some 74-year-old Plan G policyholders received renewal notices with combined rate changes of $60–$100/month in a single year.

20-year Medigap premium projection calculator

This tool projects how a monthly Medigap premium grows under attained-age pricing vs community or issue-age pricing. Enter your current plan premium and two growth rate assumptions to see the 20-year cost difference.

At the default assumptions ($200/month, 8% attained-age growth vs 5% community-rated growth), the attained-age policyholder pays roughly $35,000 more in cumulative premiums over 20 years — before accounting for any spike years. If the 2026 rate spike (15–20%+) repeats even once over that horizon, the gap widens substantially.

State-by-state Medigap rating type reference

Source: KFF, "Medigap Enrollment and Consumer Protections Vary Across States."² Even in community-rated states, premiums may vary by tobacco use, gender (where permitted by state law), and geographic area. Individual carriers within a state may offer either of the permitted pricing types.

How rating type changes the Medicare Advantage vs Medigap decision

The conventional framing — Medigap is predictable but expensive, Medicare Advantage is cheap but risky — is incomplete without factoring in how premiums grow over time:

• Attained-age states at age 65: Medigap often starts cheaper or competitive with MA when you're young and healthy. By 75–80, attained-age premiums may have doubled. Meanwhile, anyone who develops a serious health condition may find they can't switch to MA on favorable terms or switch Medigap carriers without underwriting. The exit options narrow precisely when costs peak.
• Community-rated states: The long-term Medigap cost is more predictable — everyone in the pool bears the same market-wide increases. This significantly reduces the argument for MA on cost grounds, since you're not individually re-priced for aging.
• Issue-age states (AZ, FL, GA, MO): Enrolling at 65 is especially valuable — you lock in a 65-year-old's base rate that inflates only with market trends for the rest of your life. Waiting until 70 sets a materially higher base.

The analysis most people skip: run the 20-year cost comparison on your actual state's pricing type, not the national average. In community-rated New York, Medigap often wins on total lifetime cost. In an attained-age state like Texas or Illinois, MA can become genuinely competitive on premium by the mid-70s — but requires comparing that against MA's OOP exposure as healthcare utilization increases with age.

Four questions to ask before enrolling

1. Is this policy attained-age, issue-age, or community-rated in my state? Rate sheets don't always specify. Ask the carrier or broker explicitly — this single answer changes the long-term cost math significantly.
2. What was this plan's rate increase history over the past 5 years? Insurers must disclose rate history on request. A carrier with a pattern of 10–15% annual hikes in a normal-rate environment is a warning signal about future behavior.
3. How many lives are in this plan's risk pool in my state? Small risk pools amplify volatility — one bad year of claims can force a large spike. Larger, more stable pools smooth the variance.
4. What are the underwriting rules if I want to switch plans later? In most states, switching outside your guaranteed issue window requires medical underwriting. Know the exit rules before you choose the entry.

IRMAA: Medigap premiums don't reduce your surcharges

Medigap premiums are not deductible for IRMAA purposes — they don't reduce your MAGI and won't help you avoid an IRMAA bracket cliff. You can include them in Schedule A medical expense itemized deductions (above the 7.5% of AGI threshold), but that's a different lever from IRMAA management.

One exception: self-employed individuals and qualifying S-corp owners may deduct Medicare premiums — including Medigap — above-the-line under IRC §162(l), which reduces AGI and MAGI. See Medicare for Self-Employed for the mechanics.

The income strategies that actually reduce IRMAA (QCDs, Roth conversion timing, capital gain sequencing) are separate from your Medigap plan selection — but should be modeled together with your Medigap cost trajectory. A rate spike year is also a year where IRMAA management matters more, since higher Medigap premiums and higher surcharges both hit at the same time for high-income retirees.

Related resources

• Medicare Advantage vs. Medigap — the upstream decision: which path to take and the enrollment window you can't miss
• Medigap Plan G vs. Plan N vs. High-Deductible G — which supplement plan to choose once you've decided on Original Medicare
• Medigap Guaranteed Issue Rights — when you can switch plans without underwriting, and when you're stuck
• IRMAA Bracket Calculator — see which Medicare surcharge tier your retirement income lands in
• How to Reduce IRMAA Surcharges: 7 Strategies — the Medigap premium is not the only Medicare cost lever