Why Are Medigap Plan G Premiums Increasing by 18% in Just 7 Months?

[TimS766530]

A recent announcement from AARP and UnitedHealthcare (UHC) revealed that Medigap Plan G premiums will see a significant increase of 13% starting in July 2024, followed by another 5% hike in January 2025. For many policyholders, this raises critical questions: Why is this happening? What justifies such a substantial increase in such a short period of time? And, perhaps most importantly, is AARP doing enough to protect its members from these types of financial shocks?

Let’s break down the factors behind these steep premium increases and explore why this is occurring now. Additionally, we’ll consider whether AARP and UHC are working effectively to contain costs and how this affects the broader Medigap landscape.

What’s Causing the Increase in Medigap Plan G Premiums?

1. Rising Healthcare Costs

   • One of the most significant drivers of premium increases across the board for Medigap plans is the rising cost of healthcare services. As hospitals, doctors, and other medical providers raise their prices due to inflation, staffing shortages, and increasing costs for supplies and equipment, insurance companies like UHC are forced to adjust their premiums to account for these higher costs. This explains part of the increase, but does it fully justify such a steep 18% rise in premiums within just seven months?

2. Mid-Year Adjustment: Why July?

   • The 13% increase in July 2024 is unusual because mid-year adjustments like this are relatively rare in Medigap plans. Most premium adjustments happen annually. The timing may indicate that UHC is responding to unexpected financial pressures. It could be that UHC’s previous estimates for premium costs in 2023-2024 fell short of covering the actual healthcare costs of their insured population. Essentially, UHC may have underestimated their financial risk, leading to this mid-year correction to offset the gap in expected vs. actual costs.

   • It's also possible that regulatory changes or shifts in Medicare reimbursement rates have impacted Medigap insurers, forcing them to make adjustments more rapidly than usual. Unfortunately, when insurers face unanticipated shortfalls, the burden of these corrections often falls on policyholders through higher premiums.

3. Impact of Community Pricing

   • UHC’s Medigap Plan G is community-rated, which means that premiums are not based on the individual’s age but on the overall cost of insuring the community of people enrolled in the plan. This type of pricing can result in higher premiums when the healthcare needs of the enrolled population increase. For instance, if a higher-than-expected number of people in your community-rated plan had significant healthcare needs in 2023 or 2024, UHC might increase premiums to compensate for the higher claims payouts.

   • While community pricing protects individuals from dramatic increases based on age, it also means that your premiums are subject to larger, less predictable adjustments based on the overall healthcare costs of the insured group.

4. Profit Margins and Shareholders’ Expectations

   • While rising healthcare costs are a major factor, we also have to consider UHC’s obligations to its shareholders. Like any large corporation, UHC must balance providing services with maintaining profitability. If profit targets aren’t met—whether due to rising claims costs or other financial pressures—premium increases may be used to close the gap.

   • There is concern, as expressed by many policyholders, about whether such increases are driven by the need to meet shareholder expectations. Are premium increases like this truly about covering the cost of care, or are they in part about meeting profit goals? This is something that UHC and AARP must address with greater transparency.

5. Minimal Notice and Limited Opportunity to Object

   • One of the most frustrating aspects of this price hike is the short notice given to policyholders. The July 2024 increase provides little time for individuals to plan their budgets or explore alternative coverage options. Additionally, there’s a feeling of helplessness, as beneficiaries are left with no real ability to say “no” to the increase. Unlike employer-sponsored insurance or some private plans, Medigap policies often leave very little room for negotiation or customization. You’re either in or out, and if you opt out, you may face penalties or reduced coverage options in the future.

Is AARP Doing Enough for Its Members?

Given that AARP endorses and partners with UHC for these Medigap policies, many policyholders are questioning whether AARP has done enough to protect its members from steep premium increases. AARP’s mission is to advocate for its members, many of whom are on fixed incomes and cannot afford unexpected costs.

• Transparency and Advocacy: It’s reasonable for members to expect AARP to investigate the causes behind such drastic premium hikes. Are these increases really necessary, or are they disproportionately affecting vulnerable populations? AARP could leverage its influence to demand more transparency from UHC and a thorough review of why these premiums are rising so dramatically in such a short time frame.

• Holding Insurers Accountable: AARP also has the power to push for regulatory changes that protect seniors from such steep and sudden premium increases. If UHC or other insurers are raising rates due to poor financial planning or profit pressures, AARP should be on the front lines advocating for more accountability from these companies. After all, AARP represents millions of seniors who rely on their endorsement of UHC as a trusted partner for healthcare coverage.

What Can You Do as a Policyholder?

Unfortunately, as a policyholder, your options for avoiding these price increases are limited. However, here are a few things you can consider:

1. Reevaluate Your Plan: If you’re concerned about rising premiums, it might be time to explore other Medigap plans or even Medicare Advantage plans. Switching plans can be complicated, especially if you have preexisting conditions, but it’s worth reviewing all your options to ensure you’re getting the best coverage for your budget.

2. Contact AARP and UHC: It’s important to voice your concerns to both AARP and UHC. The more policyholders demand transparency and fairness, the more likely it is that AARP will take action on behalf of its members.

3. Budget for the Increases: As difficult as it may be, start planning for the higher premiums now. Knowing that an 18% increase is coming between July 2024 and January 2025 can help you adjust your budget and prepare for the impact.

Full Disclosure and Future Action

This situation calls for full disclosure from both AARP and UHC. Why did they not foresee this shortfall earlier, and how are they planning to avoid similar situations in the future? A transparent review of the financial and healthcare trends that led to this increase could provide peace of mind to policyholders and prevent a loss of trust.

Moreover, members have the right to ask whether AARP and UHC are doing everything in their power to keep costs under control. How are they working to ensure that premiums don’t continue to rise at unsustainable rates? Are there steps being taken to lower administrative costs, manage claims more effectively, or negotiate better rates with providers?

Conclusion: What Happens Next?

The 18% increase over seven months is a significant financial burden for many Medigap Plan G policyholders. Whether or not these increases are justified, it’s clear that greater transparency and accountability are needed from both UHC and AARP.

As we move forward, AARP should be investigating why this happened and working to ensure that future premium increases are both necessary and manageable. Policyholders deserve full disclosure on how these decisions are being made and what steps are being taken to prevent another large price hike anytime soon.

For now, the best course of action is to stay informed, explore your options, and make sure AARP and UHC hear your concerns. By holding these organizations accountable, you can help ensure a more equitable and transparent healthcare system for all.

[GailL1]

@TRL1111 

Wonder if it would be worse if more people knew about it - as we know, people don’t always use a Medicare broker or SHIP for sign up and then how many of them go back to the beneficiary and say, “hey you can get a do-over pick around your birthday”?

Then we also know, that instead of investigating any options a beneficiary may have they just complain and do nothing else about their rising premiums when they can in these states that have added these switching periods without underwriting stipulations. 

We could test it by UTAH - they just passed their birthday rule so I wonder how many people will take advantage of switching this year and next.  Wonder how long it will take for their premiums to escalate - they will.

I am wondering why AARP/UHC medigap was not shown on the CDI site - could it be because they are community rated?

Is AFLAC community rated?

Also Nerdwallet says that 55% of Medigap beneficiaries in CA have plan F,  24% have Plan G - that is hard to imagine with the Birthday Rule.  Questionable accuracy but who am I.

https://www.nerdwallet.com/insurance/medicare/california-medicare-supplement-plans 

I look at the premiums for Medigap plans in NY and see how their continuous enrollment has affected their premiums - but here again do the majority of beneficiaries know about it or is it only for the ones that ask, question and research?

[CBtoo]

The catch is that many people don't check rates each year and just stick with what they have. That is likely behind the stats you cited for percent of those in F vs G in a birthday rule state. Also some don't do the math and see that the premiums for F can rise to be more than what the premiums for G is plus the B deductible. 

The same holds true for people and their D plan. Over half just keep the same plan and don't check. Oops. They will suffer the consequences as another rplan may save them serious money. I have had 6 different plans in 8 years (my birthday is very near the end of a calendar year so even though I am just 72 I have one "extra" year of D). 

And people using agents and not independently looking to see what their options are often find their agent only mentions plans they sell and not all the plans out there. Some are unethical and only mention the ones with higher commissions for themselves and don't mention the rest of them.

[ScottR193515]

So much more good information from you. I'm amazed (more like astonished) at how complicated this is and how much information one has to know just to navigate through the quagmire of Medicare...let alone the separate, supplemental part G Medigap to pick up the other 20%. There has to be a better way. 

It's easy to see how this government is nearly 38 trillion dollars in debt...a debt that will never be paid off. On the other hand, I'm grateful I have Medicare, and people like you who seem to know every detail and who are willing to give clarity and intelligent options to these questions. Also, thank you for your advice and clarification on the Birthday Rule.

Now it's time for me to get to work. The phone call is already in to meet with the plan broker. The best to you for all your help and for all you do! 

[TRL1111]

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@ScottR193515 wrote:

Unfortunately, I live in one of if not the most expensive state (California) in the union. I may not have too many options here. 

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Actually, since you're in California you have a lot of options.  

You can switch supplements any time you want if you can pass medical underwriting.

If you can't pass medical underwriting, you can use California's "birthday rule" to switch to a supplement with equal or lesser benefits than your current supplement without undergoing medical underwriting, during a period around your birthday, every year.

I'm not sure what medical conditions you would have written on a form when you originally got Medicare, since if you got it when you were first eligible, you had guaranteed-issue rights and they don't even ask about your health status.  Regardless, what they're interested in is your current/recent health and any planned/anticipated procedures.

And even if you've had cancer, for example, a lot of companies will accept you if you haven't been treated for it in X years.  So it's always worth a shot.  But in your case, if you can wait until your birthday, then your health status won't matter at all.

[GailL1]

@TRL1111 

As long as a beneficiary can wait til that Birthday Rule kicks in - there is no underwriting in CA.  The beneficiary just picks another plan that is equal to or less than their current policy - they can switch.

It is always a good idea to get the new policy in hand before cancelling the old one - just so it does not get complicated.

I just read that UTAH just passed their Birthday Rule so the list of states that are offering some type of extended guaranteed issue privileges is getting longer but they still don’t beat NY, CT, MA which have CONTINUOUS guaranteed issue - all day, everyday.  

[ScottR193515]

Thank you for all the great options you mentioned, and with the previous response from GailL1, you both have given me a much better understanding of what to do from this point on. I may have misunderstood and misspoke on the medical conditions part of my comment, as it was long ago that I signed up for Medicare.

Since I do not have SS I pay for Medicare, Medigap, prescription drugs, etc., all out of pocket. That was one of the reasons I brought up the increase from UHC. On a fixed income like many or most retirees, along with the cost of living increases the past 4 years, COLA does not keep up with expenditures. 

Thank you once again for your comments and helpful options...they are very much appreciated!

[ScottS905709]

I would say greater transparency and accountability is in order with an 18% increase between July 2024 and January 2025 AND additional increases in 2025. My wife and I both got on medicare in June and September of 2024 with a supplement plan G which we were recently notified of a 22% increase coming in June and September of 2025. 

[GailL1]

@ScottS905709 

I guess you need to just stop people from using the plan that you and your wife are on - Plan G is probably the most popular plan nowadays since it seems that Medicare beneficiaries want to pay as little as possible for their healthcare.  You are also within the BIGGEST group of seniors now on Medicare and it is growing more everyday - at least until around 2030 and they all want to use their Medicare benefits and in turn, their Medigap insurance.   The more risk you take on - the lower your premiums - it is that way with most all financial protection insurances like auto insurance and homeowners.

There are some good reply post in these community threads you might want to check out.

AARP Community Medicare and Insurance - 04/21/2025 - 22% Premium Increase for AARP UHC Medigap 

AARP Community Medicare and Insurance - 04/19/2025 - Medigap- Can You Change Policies Without Underw... 

[SandraM372095]

Ever since I was 65 I have had Plan J here in Florida--an Issue Age state. Even so, for the reasons you point to, the premium is now $371. Switching to another plan is not possible, since being now 83 years old, even Plan N is over $400.

So I must stay with Plan J and pray the that the premium never rises beyond my means. 

[GailL1]

@SandraM372095 

Actually, for a Plan J, that was D/C in 2010 by CMS, $ 371 isn’t too bad - Once the Cadillac of Medigap plans, until CMS stopped it’s new sales, it gave coverage that other plans did not have at one time.  The Plan J Rx coverage was deemed discontinued when Part D came into being - but what about the in-home recovery coverage - is that still in effect?  

My mom had Plan J - in GA her Plan J was well over $ 300 in 2012 - the year she died.  It would probably be over $ 500 now if she still needed it.

So thank goodness you are in an issue age state.  I also think that the premiums for this plan were modified some since the Rx coverage was deemed null and void so the policy actually was changed in coverage.  But like I said I do not know if that in-home recovery benefit is still in effect - if not, it is pretty much just a Plan F now since it does cover your Part B deductible.  

Wonder if Plan G later down the road will go the way of Plan J and Plan F and others?  

[CBtoo]

The other thing that drives up G (unless you have G without the "extras" i)s, in fact, those extras. In my state G without them and G with them has about a $70 difference at my age. When gym prices go up so do our premiums.

Also as we get older our premiums increase because our discount goes down. 

WIth age attained pricing the risk pool is only people that age so when people are older those prices for people in that risk pool rise faster than in a community rated pool. And, of course, people get discounts through 75 or 80 depending on when you turned 65. Those discounts slowly go away too which makes the increase "larger".

[debrap941874]

We agree to a contract with a medigap insurer for a year. We can't leave the contract without repercussions during the year. Why is the insurer allowed to increase the rates during the contract year if policyholders aren't allowed to make changes? 

[GailL1]

@debrap941874 

You do not understand the difference in Medigap plans and Medicare Advantage plans.  

Medigap plans are private insurance products connected to Traditional Medicare to protect a beneficiary from a major health related financial catastrophe.  It really isn’t even health insurance, it is gap insurnace because it pay what you are obligated to pay for Medicare approved health service.  It is connected to Traditional Medicare because it is only under Traditional Medicare that there is NO limit to the beneficiary’s out of pocket cost.

You can switch Medigap policies anytime and anywhere you want IF you can pass underwriting in your health condition.  I say, anywhere, because in some states you can switch Medigap goverage only at certain times as designated by state law.  And there are even (4) states that let you buy or pick up a medigap policy anytime.

But because these extra considerations add risk to the Medigap program, premiums are higher in these more lenient states.

Medigap plans are optional coverage for a person that uses Trad. Medicare.  A Medigap plan makes NO health decisions - IF Medicare pays for a covered health treatment, your Medigap pays your part of the cost based on which of the Medigap plan you have chosen.  NO Medigap plan offered in the new beneficiary market covers the Part B deductible.

Federal law ONLY defines Medigap plans by what is covered under each of the different alphabet designation.  Past that, your state law governs much of the premium increases, when there is access to buying one or switching them or who is covered that has traditional Medicare - meaning those less than 65 and get Medicare based on disability.

Medigap premiums rise when there is medical inflation, when there is a lot of use in the plan or when there is a lot of risk assigned to them by a state law due to being more lenient in access to them.  Some plans also offer a declining discount off premiums or the way they are rated - community rated, attained age related or issue age related.  

The Medicare plans that you need to switch or evaluate every year because of changes in the plans and in your health condition are MEDICARE ADVANTAGE PLANS with usually a built in Prescription drug coverage.  THis is an alternative way of getting your Medicare benefits with the other way being Traditional Medicare.

If you have traditional Medicare with or without a Medigap plan, you also need to have a free-standing Medicare prescription drug coverage.

[TRL1111]

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@GailL1 wrote:

You can switch Medigap policies anytime and anywhere you want IF you can pass underwriting in your health condition.  I say, anywhere, because in some states you can switch Medigap goverage only at certain times as designated by state law.

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If a person can pass medical underwriting, I thought they can switch Medigap plans any time they want in every state.  But you're saying some states don't allow that?  Which ones?  And what period do they designate when a healthy person can switch Medigap plans?

[GailL1]

I don’t know if those states that allows a beneficiary to switch policies at a certain time (like the birthday rule) even allow the process of underwriting.  

And also, do the states that allow continuous guaranteed issue even allow underwriting ?

Maine, NY, Mass. & Conn - I think.

[TRL1111]

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@GailL1 wrote:

I don’t know if those states that allows a beneficiary to switch policies at a certain time (like the birthday rule) even allow the process of underwriting.  

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The "switching policies at a certain time of the year" you mention applies only to a period during which the supplement is guaranteed issue (i.e., passing medical underwriting is not required).  It doesn't mean people in that state are prohibited from switching at any other time of the year--they can switch whenever they want, but they'll be subject to medical underwriting.

[TRL1111]

@debrap941874 wrote:

We agree to a contract with a medigap insurer for a year.  

No we don't.  

@debrap941874 wrote:

We can't leave the contract without repercussions during the year. 

Yes we can.

@debrap941874 wrote:

Why is the insurer allowed to increase the rates during the contract year if policyholders aren't allowed to make changes? 

Policyholders can make changes to their Medigap plan whenever they want, possibly subject to medical underwriting depending on their state (and this includes the majority of states).   In only one state (Missouri) does anything special happen on the anniversary date of the policy.

If you're unhappy with a price increase, shop around immediately.  You don't have to wait until you've had your policy for a year.  Definitely don't wait until the Fall "open enrollment" period because it has nothing whatsoever to do with Medigap supplements and agents and call center people are super busy at that time with people switching Advantage plans, or switching from Advantage to traditional Medicare or vice versa.  

[TRL1111]

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@CBtoo wrote:

WIth age attained pricing the risk pool is only people that age 

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Are you sure about that?  You're saying that with a plan whose premiums are based on attained age, then there is one risk pool for people who are 65, and a different risk pool for people who are 66, and a different risk pool for people who are 67, etc.?  I don't think that's how it works.

If it is, how does that square with when insurance companies put out rate sheets that say, for example, that their Plan G premiums will increase by 18% and their Plan N premiums will increase by 7%?  If every age has its own risk pool, then it seems to me that not every premium for every risk pool in a given plan would go up by the exact same percentage.

[GailL1]

You are right but it is actually the rise in usage and healthcare cost that actually affects Medigap pricing the most - year after year.  

I think everybody with a Medigap plan should expect an increase this year of around 10% +/- and then added in any declining discount on top of that - probably by June 2025 you will get notice. It may come as one or two separate increases.  

[PeterP309461]

It doesn't matter what the reasons are for these prices increases. They should not be able to change the rates outside the annual enrollment period. Then at least, we can look at alternative plans. Raising our premiums halfway through the year means we are stuck.

[TRL1111]

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@PeterP309461 wrote:

It doesn't matter what the reasons are for these prices increases. They should not be able to change the rates outside the annual enrollment period. Then at least, we can look at alternative plans. Raising our premiums halfway through the year means we are stuck.

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The annual open enrollment period at the end of the year has absolutely nothing to do with supplements.  You can change supplements any time you want, with the caveat that if you're in a state that allows medical underwriting, you have to pass medical underwriting.  But that's the same regardless of whether you apply during the annual open enrollment period or not.

So go ahead and change supplements today.  . 

If you can't pass medical underwriting, then you're stuck with the supplement you have, regardless of any upcoming annual open enrollment period.  However, different carriers have different underwriting standards, so you'd be well advised to talk to an insurance broker, or more than one because they don't all sell policies for every company.

Or if you can't pass medical underwriting, but are in a state that has periods during which people can switch supplements, you can switch then (but each state that offers this has different rules).

If you're unhappy with your supplement and are healthy, change it.  If you're not healthy enough to pass medical underwriting, then see if your state has period a during which you have "guaranteed issue" rights to a supplement without undergoing medical underwriting (usually around your birthday, or the policy anniversary date).

[RyanS917753]

I just got my new bill I calculate from inception which was at age 64 my premiums have increased 38 percent 

In just 4 years 

Does aarp United health use attained age increases why is this possible

Politicians in bed with insurance companies!

[PeterP309461]

Your information is not correct. This Medigap G plan has increased premiums twice a year over that past two years. This is just wrong.  These plans should be no different than regular health plans that we could purchase before being forced into Medicare. AARP needs to lobby for these plans to follow the same rules as traditional health plans where rates can only be adjusted once a year at annual enrollment time. This raising of premiums anytime they want is utter nonsence.