How We Fight Medigap Premium Increases
- Ken Connolly
- May 23
- 6 min read
Last Updated: May 15, 2025 | Published: May 10, 2025 | 7 min read
What if staying loyal to your Medicare Supplement carrier is now the most expensive retirement mistake you can make?
For years, the conventional wisdom about Medicare Supplement plans (Medigap) has been straightforward: find a reputable insurance carrier with reasonable rates and stick with them for several years to avoid the hassle of paperwork and medical underwriting.
But that advice is now dangerously outdated.
"We used to say every three to five years, we'll consider switching you. We are now telling everybody they should consider switching whenever they have a lower cost alternative, if possible."
These are the words of John O’Hara, President of NJ Life and Health. The dramatic shift he's referring to could mean your Medicare supplement loyalty is quietly draining your retirement savings.
The Medicare Supplement Market Has Fundamentally Changed
In the past, we categorized supplement carriers into two distinct groups: those with predictable 3-5% annual increases and those with more aggressive 8-12% increases. Clients could most likely comfortably remain with stable carriers for 3-5 years without financial penalty.
"Back in 2018 when we got started, and really up until about a year ago, we had a guideline we would do with most Medicare Supplement clients” says Ken Connolly, broker at NJ Life and Health and host of the Talking Retirement podcast. “We would say we want to give you a policy you could stay with for a few years. We had a lot of internal data covering which companies were going to increase their premiums year over year at the lowest rate. And we would move people into those carriers as much as possible.”
This stability has vanished. According to a June 2024 report from the American Association for Medicare Supplement Insurance (AAMSI), nearly half of all Medigap carriers implemented double-digit rate increases in 2024-2025, with some premiums spiking by as much as 20% (AAMSI, 2024).
The Undeniable Truth About Medicare Supplements
Medicare supplement plans are standardized by the federal government. This is not industry marketing—it's federal law.
This means a Plan G from Company A provides exactly the same medical benefits as a Plan G from Company B. The only meaningful difference? Price.
Medicare.gov confirms this standardization: "The benefits in each lettered plan are the same, no matter which insurance company sells it. Cost is usually the only difference between Medigap policies with the same letter sold by different insurance companies" (Medicare.gov, 2025).
Yet thousands of seniors stay with the same carrier year after year, even as their premiums skyrocket.
Understanding the "Premium Spiral" (And How to Avoid Getting Caught in It)
Ken explains what industry insiders call a "premium spiral" - a cycle that can accelerate year after year:
"When one insurance carrier increases their rates 10%, 15%, or even 20% and everybody says, “my premiums are going up”, a bunch of healthy people are going to move from that insurance carrier to a lower cost insurance carrier. This creates a spiral effect because the only people left with the original Medicare supplement carrier are the people who weren't healthy enough to switch, and these people most likely have massive claims."
What seemed like a one off 10%, 15% or 20% increase could become a yearly occurrence. This means it's important to consider switching, when possible, because you never know when you won’t be able to in the future.
Your 3-Step System for Managing Medicare Supplements in Today's Market
Step 1: Look out for rate increases around the anniversary of your enrollment date
Medicare Supplement increases tend to happen around the anniversary of your original enrollment date. Example: If you signed up for your Medigap on 7/1/24, your increase will most likely happen on 7/1/25.
“Most people incorrectly assume that they can only switch their Medicare Supplements during the Medicare Annual Enrollment Period at the end of the year,” says Will O’Hara, Managing Partner at NJ Life and Health. “If you can pass the health questions, you can switch year-round in New Jersey and many other states! We have many new and current clients switch outside of AEP to keep their costs low.”
Check all available carriers 30 days before your renewal date. Be especially vigilant if your increase exceeds 8-10%. You don’t have to switch every year, but it’s important to assess your options.
Step 2: Pre-Qualification Assessment
Before any paperwork, determine if you'll pass underwriting with a new carrier. Health conditions require different strategies.
John O’Hara explains, "It's usually more serious things like... have you had cancer the past two years? Have you had a heart attack in the past two years? It's not things like slightly high cholesterol or slightly high blood pressure in most cases." Says John O’Hara.
Step 3: Transition Management
The timing of application, approval, and cancellation matters. Avoid coverage gaps while preventing overlap in premiums.
Many carriers give on the spot approvals, and some take a few days. Be sure to try to switch early in the month if possible so you’re not cutting it close to the end of the month.
How Much Could You Save?
“It’s not uncommon for people to be overpaying on their Medicare Supplements by several hundred, it not several thousand dollars” says Ken.
Ken recently had a husband and wife come in, paying $550/month for their Plan G’s. He successfully switched them into Plan G’s with a new carrier that only cost them $374/month. This is a savings of $2,112 a year. A significant savings.
“One of the biggest topics coming up on Nextdoor in the Ocean County area is how much people’s Medigap premiums are increasing,” says Jo Gallo, another broker at NJ Life and Health. “I have to tell people constantly; if you can switch, you won’t lose your doctors. A Plan G is a Plan G”.
Calculate Your Potential Savings
Wondering if you could benefit from a Medicare supplement review?
NJ Life and Health has created a free Medigap Switch Calculator that shows your potential savings. No personal information required!
You also are welcome to call our team of Medicare brokers specialists directly at 848-226-6897 for a personalized, no-charge review, or visit our website at www.njlifeandhealth.com.
The Bottom Line
In today's Medicare environment, what you don't know really can cost you hundreds – possibly thousands - of dollars each year. Reviewing your Medicare supplement options around the anniversary of your enrollment date takes a minimal amount of time but could return significant savings for identical coverage.
Frequently Asked Questions
Q: Will I have to answer health questions to switch Medicare Supplement plans?
A: Yes, in most states you'll need to pass medical underwriting to switch plans outside of your initial enrollment period. However, these questions typically focus on major conditions from the past two years, not minor issues like well-controlled cholesterol or blood pressure.
Q: How often do Medicare Supplement rates typically increase?
A: According to the internal data of NJ Life and Health, the historical average was 3-8% annually, but recent years have seen increases of 10-20% from many carriers.
Q: Can I switch Medicare Supplement plans at any time?
A: Depending on your state, yes. In states like New Jersey and Pennsylvania, you can switch year-round if you can pass the health questions.
Q: Are some Medicare Supplement companies better than others at maintaining stable rates?
A: Historically yes, but recent market changes have made even previously stable carriers unpredictable.
About the Author & Contributors to this Article
Ken Connolly is a Medicare specialist with NJ Life and Health. He is a licensed life and health insurance broker in several states, host of the Talking Retirement podcast, and known as “Professor Retirement” online.
John O’Hara is President of NJ Life and Health, an independent insurance agency specializing in Medicare solutions. Since 2018, the agency has helped thousands of seniors across 24 states optimize their healthcare coverage while minimizing costs.
Jo Gallo is a broker at NJ Life and Health. She is one of Ocean County’s best Medicare brokers, and a contributing writer in several local senior publications.
Will O’Hara is Managing Partner at NJ Life and Health.
Sources
American Association for Medicare Supplement Insurance (AAMSI). (2024). Medicare Supplement Rate Increase Report, June 2024.
Medicare.gov. (2025). Medicare Supplement Insurance (Medigap) plans. https://www.medicare.gov/supplements-other-insurance/whats-medicare-supplement-insurance-medigap
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