A Medicare Advantage exodus that unfolded across 2025 is still showing up on renewal notices a year later. About 2.6 million people lost their Medicare Advantage coverage when insurers pulled out of their markets, and industry researchers estimate that roughly 440,000 of them bought a Medigap policy for 2026 using a federal right that waived the usual health questions. Those new policyholders, who tend to be older and sicker than the average buyer, landed in the same rate pools as everyone else, and some of those pools are now seeing double-digit premium jumps.
How a Federal Waiver Reshaped Medigap’s Risk Pools
Beneficiaries who lose a Medicare Advantage plan because the insurer exits their market gain a guaranteed-issue right to buy a Medigap policy without being asked health questions or charged more for a preexisting condition. George Dippel, president of the market research firm Deft Research, told KFF Health News that “somewhere around 440,000” of the people forced out of Medicare Advantage for 2026 used that right to buy a supplement, often because no other Advantage plan served their area. Not every forced-out enrollee took that route; KFF has separately found that most people affected by 2025 terminations had solid Medicare Advantage alternatives available and many chose one instead.
Once inside a Medigap block, a guaranteed-issue buyer’s claims are absorbed into the same pool as everyone who bought in through ordinary underwriting. Analysts and brokers say that pattern, layered on top of medical inflation, an aging enrollee base and rising labor and provider costs, is a meaningful driver behind this year’s rate filings.
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The Filings Behind the Headline Number
Illinois broker John Jaggi told KFF Health News that more than 80 of his clients enrolled in the same Chubb Medicare supplement plan were hit with a 45 percent premium increase applied to everyone in the block at once, in August 2025, rather than staggered across individual policy anniversaries. “In my 49 years of doing biz as a broker, I’ve never seen a premium increase be effective immediately on everyone,” Jaggi said. Chubb did not respond to KFF’s request for comment on the increase.
That 45 percent jump was unusually large, but it was not isolated. Early 2026 filings with state insurance commissioners from Aetna, Blue Cross Blue Shield, Cigna, Humana, Mutual of Omaha and UnitedHealthcare showed Plan G rate increases ranging from just over 12 percent to more than 26 percent in the first quarter, according to the Nebraska-based consulting firm Telos Actuarial, with some regional filings running above 40 percent. Brett Mushett, a consulting actuary with Telos, said the pattern “is an indication that carriers are looking to correct their premium rates in light of upward pressure on their claims experience.” Chalen Jackson, a vice president at the insurance distribution company Integrity, said rate increases below 10 percent used to be the norm five years ago and are now the exception.
A Bill That Compounds With the Rest of Medicare’s Costs
The Medigap increase lands on top of separately rising costs inside Medicare itself. The standard Part B premium climbed to $202.90 in 2026 from $185, the Part B deductible rose to $283 from $257, and the Part A inpatient hospital deductible increased to $1,736 from $1,676, all confirmed CMS figures. A Plan G policyholder is paying more for the underlying Medicare coverage and more for the supplement that covers its gaps in the same year. Policy researchers, including Center for American Progress research associate Brian Keyser, have pointed to the absence of an annual out-of-pocket cap in traditional Medicare as the structural reason these supplements carry so much weight for enrollees; Sen. Ron Wyden (D-Ore.) has separately said the program “needs to be updated and strengthened to protect the Medicare guarantee for American seniors.”
Why Shopping Around Isn’t Always an Option
Every insurer’s Plan G covers identical federally standardized benefits, so in theory a rate increase should be simple to shop away. In practice, the six-month window that follows a person’s initial Medicare enrollment is the only period in most states when an insurer cannot ask health questions before selling a new Medigap policy. Once that window closes, a diagnosis such as diabetes with complications or a recent cardiac event can result in a denial or a rated-up premium that erases any savings from switching. A handful of states break from that pattern: at least 16 states have some form of “birthday rule” allowing a policyholder to switch to equal or lesser coverage without underwriting around their birthday, and Connecticut, Massachusetts, Maine and New York require insurers to offer continuous or annual guaranteed-issue protection regardless of health history. Outside those exceptions, Medigap’s guaranteed renewability protects the policy someone already has. It does not travel with them to a cheaper one.
Where the Coverage Gap Actually Bites
More than 12 million people, about 43 percent of everyone in traditional Medicare, carry a Medigap policy specifically because traditional Medicare has no annual limit on what a beneficiary can owe out of pocket. Roughly 13 percent of people in traditional Medicare have no supplemental coverage of any kind, which leaves that group exposed to potentially unlimited costs if a serious illness arrives. For people already holding a policy, a rate increase is unwelcome but survivable; going without one entirely is the scenario Medigap exists to prevent, which is part of why so many buyers stay in an increasingly expensive block rather than dropping coverage altogether.
Brokers point to a narrower set of moves for someone facing a steep renewal who still wants to shop. Quoting five carriers for an identical Plan G policy takes roughly an hour, and someone who can pass medical underwriting, or who happens to live in a birthday-rule state, may find the same coverage available elsewhere for meaningfully less. A second option is switching to Plan N or a high-deductible version of Plan G, which trade a lower monthly premium for a deductible, currently just under $3,000 a year, that a policyholder pays before coverage kicks in; that trade tends to favor a healthy year and work against a year with heavy claims. What brokers consistently warn against is dropping Medigap coverage for a zero-premium Medicare Advantage plan simply because a renewal notice arrived with a bigger number. Leaving traditional Medicare is easy. Coming back, in most states, requires passing the same health questions that made switching Medigap carriers difficult in the first place.
Inside the decision kit
A cost calculator spreadsheet comparing plans on cost, drugs and doctors, a prescription-by-plan comparison, a provider call script and the Open Enrollment calendar.
The 2027 Medicare Open Enrollment Decision Kit includes a 42-page decision kit, a cost calculator spreadsheet that compares plans on cost, drugs and doctors and a prescription-by-plan comparison.
Open The 2027 Medicare Open Enrollment Decision Kit.
This article was assisted by AI tools and reviewed for accuracy before publication.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
