Medigap premiums generally increase once a year, typically on the policy anniversary date or the member's birthday, with annual hikes often ranging between 3% and 10%. While there is no federal limit on how much or how often rates can increase, they are adjusted based on inflation, rising healthcare costs, and the specific pricing structure (attained-age, issue-age, or community-rated).
The standard monthly premium for Medicare Part B enrollees will be $185.00 for 2025, an increase of $10.30 from $174.70 in 2024. The annual deductible for all Medicare Part B beneficiaries will be $257 in 2025, an increase of $17 from the annual deductible of $240 in 2024.
The standard monthly premium for Medicare Part B will be $202.90 a month for 2026, an increase of $17.90 from $185.00 in 2025. The Medicare Part B deductible, or the amount beneficiaries must pay out of pocket before coverage begins, will be $283 in 2026, an increase of $26 from 2025.
Plan G remains the most popular Medigap plan for new enrollees, offering comprehensive coverage with predictable costs. Other popular plan options include High-Deductible Plan G, Plan N, and Plan F (if eligible).
Monthly premiums vary based on which plan you join. The amount can change each year. You may also have to pay an extra amount each month based on your income.
Medicare doesn't pay the premiums for your Medigap policy. Premium amounts typically increase each year.
Medicare premiums are rising due to overall health care cost inflation, increased demand for services, the shift of care to more expensive outpatient settings, higher prescription drug costs (especially new gene/cell therapies and weight-loss drugs like GLP-1s), and the growing expenses of Medicare Advantage plans, all while needing to fund the program. The Centers for Medicare & Medicaid Services (CMS) adjusts premiums annually to cover projected costs, with recent increases reflecting these escalating medical and pharmaceutical expenses, though some cost-saving measures prevented even higher jumps.
Here are a few common complaints we have heard about Medigap:
Yes, the Medicare Part D "donut hole" (coverage gap) is officially eliminated as of January 1, 2025, thanks to the Inflation Reduction Act, simplifying coverage into three phases: deductible, initial coverage, and catastrophic, with a new $2,000 out-of-pocket spending cap that eliminates the gap where higher costs used to occur.
If you've had a life-changing event that reduced your household income, you can ask to lower the additional amount you'll pay for Medicare Part B and Part D. Life-changing events include marriage, divorce, the death of a spouse, loss of income, and an employer settlement payment.
The best time to buy a Medigap policy is during your Medigap Open Enrollment Period. This is the 6-month period that starts the first day of the month you're 65 or older and signed up for Part B. After this period, your options to buy a Medigap policy may be limited and the policy may cost more.
Your CalPERS health coverage will automatically be canceled the first day of the month after you turn 65. Review Cancellation of CalPERS Health Coverage for information on reinstating your health coverage.
Medigap Premium Increases
Attained-Age plans typically experience premium increases as the policyholder gets older, while Issue-Age plans may experience premium increases due to inflation and other factors. Community-Rated plans may also experience premium increases due to inflation, but not due to age.
There isn't one single "best" Medigap company, as it depends on your needs, but top-rated providers consistently include AARP/UnitedHealthcare, Blue Cross Blue Shield, Humana, Mutual of Omaha, and Cigna, known for strong coverage (especially Plan G), customer satisfaction, and nationwide availability, with AARP/UnitedHealthcare often cited as best overall and BCBS for network strength, while companies like Anthem offer lower costs and Mutual of Omaha provides value and variety.
Each year, the Medicare Part B premium, deductible, and coinsurance rates are determined according to provisions of the Social Security Act. The standard monthly premium for Medicare Part B enrollees will be $202.90 for 2026, an increase of $17.90 from $185.00 in 2025.
The Medicare 2-Midnight Rule is a Centers for Medicare & Medicaid Services(CMS) guideline for hospital admissions, stating that if a doctor expects a patient to need hospital care crossing at least two midnights, the stay generally qualifies for Medicare Part A inpatient payment;
Issue-age-rated: Premiums are based on the age you were when you first bought the policy. The younger you are when you purchase a Medigap, the cheaper your premium. (Note: Premiums will still increase over time due to inflation, but not due to age).
For example: Medicare pays 80 percent of your doctor bill and you are left with 20 percent. Medigap pays the 20 percent and you pay nothing. Medigap is not a replacement for Original Medicare and is only available if you already have both Part A and Part B coverage.
Inflation – Like other types of insurance premiums, Medicare supplement rates can be affected by inflation. If the overall costs for health care increase, you may see a change in your Medicare supplement premium rate.
Here are some of the biggest Medicare mistakes to avoid:
Attained age-rated policies increase in price as you age, because as you get older, you typically require more health care. Certain companies increase the premium each year; others increase the premium every 4 years based on age.