With only a few months before Medicare’s Open Enrollment it would appear that many retirees are in for a big surprise come October as premiums for Medigap Plan G policies have increased by 6.10% over the last 7 months.
Please keep in mind that today’s premiums may not be October’s premium rates or even January 2021’s premium rates, but historically what is being experienced in June/July is what transpires in Open Enrollment come October.
On average women should expect to see an increase of about 5.88% while men should expect a slightly higher inflation rate of 6.31% if premium rates continue to increase at this pace.
This increase in premiums is, thankfully, not felt throughout the entire country as states like California, Florida, Louisiana, Michigan, New York, Pennsylvania, Ohio, and Texas have seen decreases in premiums on average of about 3.30%. Florida realizing the biggest drop of premiums rates with a more than 10.50% decrease in statewide average Medigap Plan G premiums.
For the remaining states, though, there are 15 states that are experiencing an increase of more than 10% in premiums from this past January with New Hampshire seeing the largest increase of over 14.80%.
How Medigap Plan G premium rates have inflated since January by state:
Unfortunately, this trend of inflating premiums may be even worse for those who are already retired and enrolled in a Plan G Medigap Plan.
For those already enrolled into a Medigap Plan G policy and are expecting a premium rate change due to an increase in age should expect to see premium rates have increasing by 8.10%.
An example: Person A is 71 years old and enrolled into a Medigap Plan G policy. Currently, they are paying $198.83 a month in premiums (national avg). Since January that plan, on average, has already increased to $213.88 a month by July.
Granted, they are locked in at $198.83 a month but, come 2021 if their plan is scheduled for a premium rate increase due to age then a higher premium may occur.
How Medigap Plan G premiums rates have inflated due to age per state this year so far:
For another consecutive year in a row the premiums related to Medicare, on average, are projected to be increasing at a rate much higher than Social Security Cost of Living Adjustments or even inflation.
The expense of healthcare is truly becoming one of the largest expenses retirees will face.
- The rate of inflation for Medigap Plans are not necessarily reflective of the other parts of Medicare, Parts B and D, but they are an indicator of how health costs and the insurance companies that provide them are reacting within the market.
- These premium rates are based on a blended average for all Medigap Plan G policies available in each state as well as for tobacco use.
- It is extremely suggested that anyone looking to purchase or change their Medigap Plan in 2021 meet with a certified health insurance professional as rates vary considerably. Again these are just averages.