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.

[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. 

[kh1291]

After this 18% increase, I just received a letter about a 24% increase in UHC Plan G premiums for 2026 - based on my age!!!  I just turned 71. This is insane!!!

[GailL1]

@kh1291 - What state do you live in?  

[kh1291]

Oregon. 

[GailL1]

@kh1291 

Oregon does have a “Birthday Rule” which allows for an annual change in a Medigap policy without underwriting.  This does tend to make premiums a bit higher compared to other states that don’t have such an allowance because it does assign more risk to the insurer.

As to the “attained age” increase -  Oregon does not specific how any insurer rates their plans - They can use (1) community rating (2) issue age rating or (3) attained age rating 

The vast majority of Medigap insurers in Oregon use an “Attained Age rating method”  even AARP/UHC for Oregon Medigap plans.

I can only guess the reason for this is because the Oregon law states that only attained age rated policies can have MORE than one rate increase in a 12 month period.  So you could have more than one in a 12-month period based on state law as your post said - you got another within 7-months.

Further, I can only guess the reason for the above rationale is because of the equalization of rules for those who have the ability to get a Medigap plan between those less than 65 and those over 65 who can get Medicare Part B.  Oregon treats them the same even though federal law does not give any rights at all to a Medigap plan for those less than 65.  

So IOW, it seems, because of this equalization, everybody (at least those with your same insurer) in Oregon is helping out each other with the cost of a Medigap plan  - those under 65 (disabled on SSDI who tend to use more healthcare) and those over 65.

BIRTHDAY RULE:  Remember, you DO have the ability to change to another Medigap plan - 30 days before / 30 days after your birthday every year.  The plan, you choose has to be equal to or lesser than the one that you are changing from -  WITHOUT UNDERWRITING.

Edited to add - this is a 2021 version of a booklet on Medicare  plans from the Oregon SHIP office - unless something has changed since 2021 it seems like a good reference - I could not find a more recent version - there could be one - give Oregon SHIP office a call and ask. Contact info is on the 1st few pages of the booklet.

2021 Oregon Guide to Medicare Insurance Plans  

Start on booklet page 32

The Oregon Law on Medicare Supplemental plans  - Office of the Secretary of State.

Reference: 

836-052-0138 -Open Enrollment

836-052-0151
Filing and Approval of Policies and Certificates and Premium Rates

836-052-0143 Annual Opportunity to Select Another Medicare Supplement Policy or Certificate

(BIRTHDAY RULE)  ⬅️

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1) For the purposes of this rule, for 1990, 2010, and 2020 Medicare Supplement Plans, “same or lesser benefits” means a policy or certificate of the same or lower benefit level as indicated on a chart available on the website of the Division of Financial Regulation of the Department of Consumer and Business Services.

(2) Beginning 30 days prior to a person’s birthday and for 30 days after the person’s birthday, a person enrolled in a Medicare supplement policy may cancel the person’s existing Medicare supplement policy or certificate and purchase or select another Medicare supplement policy or certificate with the same or lesser benefits to replace the existing Medicare supplement policy or certificate. An issuer may not deny or condition the issuance or effectiveness, nor discriminate in the pricing of the replacement policy or certificate on the basis of health status, claims experience, receipt of health care or medical condition of the applicant.

(3) This rule does not apply to Medicare supplement policies or certificates issued or delivered before January 1, 1990.

[Prentice3]

The cost increase is one thing.  I'm more aggravated by UHC's comment on my new statement, "The reason is because of multiple adjustments to your account."  Whoever it was at UHC that thought that one up should be identified, tarred and feathered, and then fired.  Sounds more like something coming from a politician talking to the dumb constituents that put him/her in office.

The reason the price has increased is because these policies aren't generating the profit margin UHC requires.

[PatriciaK887327]

Mine says reduction to my enrollment discount: whatever that means. Doesn't make sense to me.

[GailL1]

It means this:  (look at your contract)

But if it is larger than this, it is one that is based on Plan usage - everybody using it.  

What state are you in?  If NY, it is because of the way your state is changing the insurance concept of Medigap plans.  

[TRL1111]

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@GailL1 wrote:

But if it is larger than this, it is one that is based on Plan usage -

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But be aware that a 3% reduction in the discount does not translate to a 3% increase in the premium.

[GailL1]

True because the % change is based on the initial full premium - right?  I don’t have one but this is the way I understand it to work. 

Also, isn’t this just the last discount arrangement - those who have older AARP UHC plans may have a different discount schedule - so on has to consult their Explantation of Coverage documents to make sure of their plan’s enrollment discount schedule. 

Also, the rise in premiums maybe done separately - with the enrollment discount on your plan anniversary and any other ones on a annual or semi-annual schedule that are due to medical inflation and usage.

[TRL1111]

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@GailL1 wrote:

True because the % change is based on the initial full premium - right?  

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No.  It's because the percent change happens to the discount and not to the premium.  I posted about it a couple of months ago, working through the math.

[GailL1]

@TRL1111 wrote . . . . No.  It's because the percent change happens to the discount and not to the premium.  I posted about it a couple of months ago, working through the math.

————————————-

Is this what you are referring to - 

https://community.aarp.org/t5/Medicare-Insurance/Declining-discount-of-3-on-supplements-actually-equ... 

[GailL1]

@Prentice3 wrote

I'm more aggravated by UHC's comment on my new statement, "The reason is because of multiple adjustments to your account.

===============

Most likely, they are just saying that your increase in premiums contains several adjustments specific to your account/plan that are happening in a narrow window.

1.  your declining discount adjustment 

2.  your increase in premiums for medical inflation, reserve requirements and overall plan usage.

#1 should be shown in your Explanation of Coverage 

#2 was probably approved by your states Dept of Insurance based on information provided by the insurance company on incoming premiums, outgoing expenses and any reserve changes that have to be covered.

[PeterP309461]

Yup, it's called Greedflation! It's the profit margins Wall Street want from UHC. And since most CEOs and other senior corporate executives derive most of their compensation from the company's stock options, it's their own personal greed that also drives them.  Since I just had my birthday, and California allows us to change these plans in a 60 day window without underwriting, I will definitely be looking elsewhere. In the 2+ years I have been on Medicare and this Medi-gap plan, I have had 4 increases going from $125/month to $190 as of this month. That's a 52% increase and is totally unacceptable.

[GailL1]

@PeterP309461 

I wonder how much your ability to change plans without underwriting has to do with your premium increases?  

I mean it is good to have such an expanded guaranteed issue period but it applies to people who are sick or well.  So the risk goes up with no offset of underwriting, so that means that everybody in the plan then takes on some added risk cost in added usage for those higher users. 

In California, I believe that the law still says that a switch in Medigap plan coverage around ones birthday is still reliant on the new policy having the same or lesser benefits as your old policy. That means that those who are still on the now (CMS) closed Plan F with it’s very high premiums can switch to Plan G with no problems - saving themselves premium money but perhaps bringing in new health risk to the new plan since these individual’s would be older and perhaps sicker.

Or everybody that is healthy is doing like you are gonna do - switch plans - leaving those older and perhaps sicker within the plan until they wise up and switch plans around their birthday.  

Too bad if you have Medicare if you are less than 65 years old (on SSDI) because your premiums for a Medigap plan in CA can be uprated based on your status - but then when an SSDI recipient on Medicare turns 65 they get to pick a new plan and start over with lower premiums and then they can switch around their birthday too no matter their health condition.

I hope you can find exactly what you need.  I did find this nice search tool on the California Dept of Ins. site on Medigap plans - I do not know if it is accurate since you have to have some California location info in order to search the database.

California Dept of Insurance - Medicare Supplemental 2025 comparison tool 

Good Luck 

[PeterP309461]

I am really not understanding the point of your reply.  Are you saying that those of us that are looking change away from this plan are changing the risk profile of those remaining in the pool? If so, who cares. All I know is that in two years, my premiums for this plan have gone up 52%, which is not justified. All the questions you raise on how premiums are set just show the total lack of transparency in the whole rate setting process. In my opinion. AARP needs to consider looking for another health insurance partner because UHC is not doing well for it's customers. All you have to do is read the news. Yes, there are many inflationary reasons for these premium increases, but the main cause is that UHC not making as much profit as Wall Street investors demand. Insurance companies never lose money. ever, and there is a reason some of the largest office buildings in this country are owned by insurance companies. 

[GailL1]

@PeterP309461 wrote 

Are you saying that those of us that are looking change away from this plan are changing the risk profile of those remaining in the pool? If so, who cares

===============

Yes, that is how it works in places that have extended their guaranteed issue rights without any underwriting.  For better or worse - if you are healthy, you bring good news to the new plan - opposite if you are not.  

But like you said, who cares.

I assume you are on Medicare due to your age - 65 or over - and that you are not on Medicare due to being on SSDI for 24 months.  Those folks have it rough because Federal law does not protect them since there are no protections of any sort for those less than 65 years old.  Some state laws give them some protection but I didn’t see this for California.  Insurers can still charge them much more for a Medigap plan.  

You should be able to find another insurer in your area.  I cannot speak to AARP’s relationship with UHC but insurance companies do have to justify their rate increases to the state where they are happening.

I will say that your Insurance Commissioner in California has done a very good job of putting together some very helpful info on available California Medicare Supplemental insurers.

CA. Dept of Insurance.gov- List of Medicare Supplement Insurance Companies 

Good Luck

[evrytan]

The answer is to eliminate Medicare, Medicaid and insure all the people from birth to death in one universal plan, like they do in most other countries. But here everything is for profit, not for the people's health.

[evrytan]

My plan G goes up next month from $173 to $210. Big increase. In the meantime, my income remains the same and the annual SSA COLA increase does not get this into account, or other expenses like the real estate taxes and other medical expenses.

[ScottR193515]

That's unfortunate. But consider yourself lucky. My rate just went from $232 in May of 2025 to $276 in July. And the reason? I have no idea. The account statement says this:

"The reason is because of a scheduled reduction to your enrollment discount."

This sentence needs to be diagrammed by an English professor...as I see no "reduction" or "discount" that can be derived or ascertained from this statement. It would be nice if someone in this forum could explain and make any sense out of this statement.

[GailL1]

@ScottR193515 

See your plans prospectus - many, maybe all, AARP UHC Supplemental Plans come with an age related declining premium discount - so your discount gets reduced at certain ages until you reach 80 /81 years old.

You will have to relate to your own plan to know what discount you are currently working under.  They call it the “Enrollment Discount”

Here is a pic of one on a AARP UHC Supplemental Plan Prospectus to give you an example of what you might find on your plan.

If you would like to give the name of the state where you live, I can tell you if there are any state specific guaranteed issue laws that will allow you to switch plans if you want without underwriting.  But if you are healthy, you can switch in any state without the (chosen) insurer underwriting your Medigap plan.   For that, you can talk to a local Medicare plan broker or to your states’ SHIP office.  

[ScottR193515]

Thank you for this invaluable information...very kind of you! I'm sure I'm not alone in facing this same problem with UHC, and your response may help many others.

Unfortunately, I live in one of if not the most expensive state (California) in the union. I may not have too many options here. I will be taking your advice and contacting my plan broker who originally set me up with Medicare...and will be looking at my prospectus and look at the original application to ascertain the medical conditions I originally wrote on the form. Thanks again for your great help! 

[GailL1]

@ScottR193515 

You are lucky and a bit cursed on the same thing -

California has the Birthday Rule like @TRL1111 said.  You can switch to an equal or lesser plan around your Birthday - EVERY YEAR if you want and this is without underwriting.  That’s the lucky part.

Now for the cursed part - because California gives this extended guaranteed issue period (Birthday Rule) like several other states do - you also pay a higher premium for this because even those who are more sick and use the benefit more, can do the same as those who are healthy since there is no underwriting when a beneficiary uses the California birthday rule.  It adds to the risk of the insurer thus higher premium all the way around for everybody.

California Dept of Insurance (CDI) - Guide to Medicare Supplements - Intro page 

CDI.gov - Medicare Supplemental Insurance 

The link below explains the California Birthday Rule - it is important for you to be aware of this benefit.  

MedicareNationwide.com - California Medicare Birthday Rule 

Story:  Not too long ago on another discussion board, a daughter asked how she could help her 92 year old Mom living in CA to save money on her Medigap plan (Medicare Supplemental).  She was within one of the plans which are no longer marketed to new beneficiaries and her premiums had skyrocketed to the tune of $ 800 A MONTH.

States regulate this Medigap coverage so once she gave her state and we told her about the CA Birthday rule,  she waited til that time and then her Mom switched her plan to another one with a SAVINGS of about $ 500 a month.

You have options - yes, get with that Medicare plan broker and see how much you can save.  

[TRL1111]

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@GailL1 wrote:

Now for the cursed part - because California gives this extended guaranteed issue period (Birthday Rule) like several other states do - you also pay a higher premium for this

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It might not be all that bad.  

I went to the California Department of Insurance site to look at supplement prices and was immediately enraged that they list them as an annual premium.  Everybody else gives a monthly premium, including Medicare itself.  Sheeeeeesh.

So I went to medicare.gov to look at supplements, using my data:  a 68-year-old female in Texas with an AARP/UHC supplement that is fixing to go up to $170/month.  I could get a different supplement from a different company for around $100/month, but it doesn't have Renew Active.

Putting my data into medicare.gov's plan finder, with a location in Sacramento, the cheapest Plan G is from AFLAC, for $159/month.  There are a bunch in the $160-ish range.  To compare apples to apples, the AARP/UHC Plan G would be $199 if I were in Sacramento.

That said, the California site doesn't mention the AARP/UHC Plan G, nor does it mention AFLAC, so who knows what's going on.  

Yes, premiums are higher, but not ruinously higher.  And nobody is ever stuck with a plan for more than a year.  And you never have to have anything but the cheapest plan available unless you're like me and want something specific, like a gym membership benefit.

BTW, thanks for thanking us for helping.  Some of us dispense advice here constantly, and almost nobody every comes back and says, "Hey, thanks.  My rant was based on not understanding how it works, but now I do, and can now make more informed decisions."

[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?

[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!