What Determines Your Medigap Premium and Why It Changes

Your age, health history, and location set your Medigap cost from the start

Medigap premiums — the monthly payments for supplemental insurance that covers what Original Medicare leaves you responsible for — depend on three main factors that insurance companies can legally consider: your age when you first buy the plan, your state and county, and whether the insurer uses medical underwriting (reviewing your health history before accepting you). Unlike Original Medicare, Medigap is sold by private insurers, and each company sets its own prices within state rules. That means two identical plans from different companies in the same county can cost $50 apart per month, and the same plan can cost twice as much in one state as another.

The single biggest cost driver for most people is age at enrollment. If you buy Medigap at 65, your premium locks in at the 65-year-old rate for that plan and company. If you wait until 72, you pay the 72-year-old rate — which is typically 40 to 60 percent higher. Some states allow insurers to raise your premium every year as you age; others cap how much they can increase it annually. A few states use "community rating," meaning everyone in your county pays the same premium regardless of age, but this is rare and becoming rarer.

Key Takeaways

• Your age when you first buy Medigap is locked in and affects your premium for as long as you keep that plan and company.
• Where you live — your state and county — determines both the base price and the rules about how much premiums can rise each year.
• Medical underwriting (a health review before you buy) can raise your premium or disqualify you, but only if you enroll outside the open enrollment window.
• Switching plans or companies can lower your cost, but you may face medical underwriting unless you switch during your birthday month or within 63 days of losing other coverage.
• The same Medigap plan (like Plan G) costs different amounts from different insurers, so comparing quotes from at least three companies is worth doing annually.

How location affects what you pay each month

Your state and county determine the baseline price for any Medigap plan, and this variation is substantial. Plan G might cost $120 a month in rural Kansas and $280 a month in San Francisco, even though the coverage is identical. States set the rules about how insurers can price plans — some allow age-based pricing that increases sharply with each year of age, others use "attained age" (your current age) or "issue age" (your age when you bought it), and a handful use community rating where everyone pays the same.

Within your state, your specific county or ZIP code can also matter. Urban areas typically have higher premiums than rural ones because the cost of medical care is higher there. If you move to a different state or county after buying Medigap, you do not automatically pay the new area's rates — you keep your current premium unless you switch plans or companies. However, if you do switch, the new company will price you based on your current age and your new location, which could mean a significant increase.

Medical underwriting and when your health history matters

When you first turn 65 and enroll in Medigap during your open enrollment period (the six months starting the month you turn 65 and are enrolled in Medicare Part B), insurers cannot deny you coverage or charge you more based on your health history. This is called may provide issue rights, and it is one of the most valuable protections in Medicare law. You can have diabetes, heart disease, cancer, or any other condition, and the insurer must accept you at the standard rate for your age and location.

If you miss this window and try to buy Medigap later, insurers can use medical underwriting — they will ask about your health conditions, medications, and medical history, and they can charge you more or refuse to sell you a plan. Some states limit how much they can increase your premium for health reasons; others do not. You also have may provide issue rights if you lose employer coverage, lose Medicaid, or switch from a Medicare Advantage plan to Original Medicare within 63 days, but the rules vary by state and situation. If you are outside any may provide issue window, getting quotes from multiple companies is especially important, because some will underwrite you more strictly than others.

Why premiums rise over time and what you can control

Even if your age and location stay the same, your Medigap premium will likely increase every year. Insurers raise rates to account for medical inflation, claims experience (how much they paid out), and profit margins. Some states require insurers to file their rate increases for approval; others do not. The annual increase varies widely — it might be 3 percent one year and 8 percent the next, depending on the company and the state. You will receive a notice before your premium increases, usually 30 to 60 days in advance.

You can control whether you stay with that increase. Every year during your birthday month, you have the right to switch to a different Medigap plan from the same company or a different company without medical underwriting in most states. This is called your birthday rule or annual open enrollment, and it is your chance to shop around. If a competitor is offering Plan G for $30 less per month, you can switch without any health questions asked. Outside your birthday month, switching plans or companies usually triggers medical underwriting, which can result in a higher premium or denial.

Comparing plans and companies to find lower costs

Because each insurer sets its own price for the same plan, the difference between the cheapest and most expensive option in your area can be $100 or more per month. Plan G from Company A might cost $150, while Plan G from Company B costs $220 — identical coverage, different price. The only way to know is to get quotes. You can call insurers directly, use Medicare's Plan Finder tool (which shows some but not all Medigap plans), or work with a licensed insurance agent who represents multiple companies.

When comparing, make sure you are looking at the same plan letter (Plan A, Plan B, Plan G, Plan N, etc.) from different companies, because the coverage varies by letter. Also check whether the company has a history of large rate increases — some insurers raise premiums more aggressively than others year to year. If you find a plan that costs significantly less, switching during your birthday month means you avoid medical underwriting. If you are outside your birthday month and want to switch, you will need to answer health questions, and the new company might charge you more or decline you.

Special circumstances that affect your premium

If you are still working and have employer health coverage, you may be able to delay buying Medigap without penalty, but once you do buy it, your age at that point determines your rate. Some employers offer retiree health plans that coordinate with Medicare; if you lose that coverage, you have 63 days to buy Medigap with may provide issue rights. If you are on Medicaid and lose it, you also have may provide issue rights for 63 days. Military retirees and their spouses have their own enrollment windows and sometimes different pricing rules.

If you are currently on a Medicare Advantage plan and want to switch to Original Medicare plus Medigap, you have may provide issue rights for 63 days after your Advantage plan ends. However, if you switch back to Advantage later and then want Medigap again, you lose those may provide issue rights — you will face medical underwriting. This is why the decision to switch from Advantage to Original Medicare should account for the long-term cost and your health outlook, not just the current year's premium.

Frequently Asked Questions

Can I lower my Medigap premium by switching plans?

Yes, but only during your birthday month or within 63 days of losing other coverage. Outside those windows, switching plans or companies triggers medical underwriting, which can raise your premium or result in denial. During your birthday month, you can switch to any plan from any company without health questions.

What happens to my Medigap premium if I move to a different state?

Your current premium stays the same unless you switch plans or companies. If you do switch, the new insurer will price you based on your current age and your new state's rates, which could be higher or lower. Some states have higher baseline premiums than others, so moving can significantly affect your cost.

Why is my Medigap premium higher than my friend's, even though we have the same plan?

The most common reasons are age at enrollment (if you bought your plan later, you pay a higher rate), location (different counties and states have different baseline prices), and company (each insurer prices plans differently). You may also be on a different version of the plan if you switched companies, because some companies offer their own variations.

Do I have to accept my Medigap premium increase every year?

No. You can shop for a lower-cost plan during your birthday month without medical underwriting. If you find a cheaper option from another company, you can switch. Outside your birthday month, you can still switch, but the new company can review your health and charge you more or deny you.

What if I was denied Medigap coverage or charged a very high premium?

Some states have high-risk pools or may provide issue provisions for people denied coverage. Contact your state insurance commissioner's office or your State Health Insurance Assistance Program (SHIP) — both can tell you what options exist in your state and help you understand why you were denied or charged more.