Your Medigap Rate Just Went Up. Here’s What to Do Next

It happens every year. You open the letter from your insurance company, see the new premium, and think: is there anything I can do about this?

The answer is yes, sometimes. But it depends on a few things worth understanding before you make any moves.

First, know your state’s rules

A handful of states have what is called a birthday rule. In those states, you have a window each year around your birthday to switch to an equal or lesser Medigap plan without having to answer health questions. California, Oregon, Idaho, Illinois, Louisiana, Maryland, Missouri, Nevada and a few others have some version of this protection.

If you live in one of those states, your annual rate increase letter is also your annual reminder to shop. You may be able to move to a lower-cost plan of equal or lesser benefits without anyone asking about your health history.

If you do not live in a birthday rule state, the picture is different but not hopeless.

Medical underwriting is the hurdle

Outside of a birthday rule state, switching Medigap plans outside of your initial enrollment window typically means going through medical underwriting. That is not a physical exam. It is a set of health questions on an application. The insurance company reviews your answers and decides whether to approve you, decline you, or possibly charge you a higher rate.

If you are in good health, this is often easier than people expect. Many people who assume they cannot pass underwriting actually can. The questions vary by carrier and state, but common disqualifiers tend to be serious conditions like heart failure, recent cancer treatment, COPD requiring ongoing medication, or kidney disease. A recent hospitalization or surgery within a certain window can also be a flag.

The only way to know for certain is to apply. And working with an independent agent who knows which carriers are more lenient in their underwriting can make a real difference in your outcome.

What plans are worth looking at

If you are currently on Plan G and the rate has climbed to a point where it is bothering you, two plans are worth putting on paper next to your current premium.

Plan N covers almost everything Plan G covers, with three differences. You pay a small copay at the doctor, up to $20, and up to $50 in the emergency room if you are not admitted, and you could incur and excess charge (infrequent, but it could happen). For most people in good health who are not seeing doctors constantly, that trade-off can result in monthly savings.

High Deductible Plan G is the other one to understand. The premium is significantly lower than standard Plan G. You carry a higher annual deductible before the supplement kicks in, but the money you save on premiums can be redirected toward targeted coverage like cancer insurance, hospital indemnity, or heart attack and stroke coverage. That combination, what we call the HDG Combo, can give you strong overall protection at a lower total monthly cost than staying on a standard Plan G with a rising premium. Read more about the HDGCombo here.

A few things to think through before you switch

How much is the rate actually going up? A $10 increase is annoying. A $40 increase is worth acting on. Know the number before you decide it is worth the effort.

How is your health? Be honest with yourself here. If you have had significant health issues in the past two years, underwriting may be difficult. If you are generally healthy and managing things well, you may have more options than you think.

How long have you been on your current plan? Longer tenure on a plan sometimes means your rate class is aging into higher increases. That can actually be a reason to look at a newer policy with a younger risk pool.

Are you in a birthday rule state? If yes, this whole conversation is easier. If not, underwriting is the gatekeeper and your health drives what is possible.

The bottom line

A Medigap rate increase does not have to be something you just absorb. It is worth a conversation. Pull your current premium, understand what a new Plan G, Plan N and HDG would cost you with a few different carriers, and have someone walk through the underwriting questions with you honestly.

That is exactly the kind of conversation we have every day. If your rate went up this year and you want to know what your options actually look like, reach out to our team. We are licensed in 24 states and we will give you a straight answer.