Medicare Supplement

Locked-in Medigap benefits, moving premium? Three pricing rules explain it

MANCHESTER TOWNSHIP, N.J. — If you own a Medigap policy — or you're shopping for one — you may have noticed something that feels contradictory: the benefits on a standardized Medigap plan can't change, but the premium you pay for it can. That isn't a loophole. It's built into the way insurers are allowed to price these policies, and the method your insurer uses makes a real difference over time.

There are three pricing methods for Medigap policies: community-rated, issue-age-rated, and attained-age-rated. Which one an insurer uses depends on the company and the state, according to the federal Medicare program. Understanding the difference is one of the more useful things a Medigap shopper can do before signing up.

Why the benefits are fixed but the price isn't

Medigap plans sold today are standardized. A Plan G sold by one insurer covers the same gaps in Original Medicare as a Plan G sold by another. That's a federal rule, and it's why shopping Medigap is largely a price and service comparison rather than a benefit comparison.

Premiums, however, are not standardized. Each insurer sets its own price, files it with the state, and can raise it later. So two neighbors here in Manchester Township could hold the very same lettered plan and pay very different amounts — and see very different increases year to year.

The three pricing methods, in plain language

Community-rated (also called "no-age-rated"). Everyone who has the policy pays the same base premium regardless of age. A 66-year-old and an 82-year-old with the same policy from the same insurer pay the same starting rate. The premium can still go up because of inflation or the insurer's overall claims, but it doesn't rise simply because you had a birthday.

Issue-age-rated (also called "entry-age-rated"). The premium is based on your age when you first buy the policy. Buy in earlier, and your starting premium is generally lower and stays tied to that entry age. It can still increase over time due to inflation and claims, but not because you're getting older.

Attained-age-rated. The premium is based on your current age and goes up as you get older. It may look inexpensive at 65 and cost significantly more at 75 or 85 — on top of any increases for inflation and claims.

The important point: no matter which method your insurer uses, your premium can change. The method just determines whether age itself is one of the reasons.

Why premiums rise even when nothing about your plan changes

Three forces usually drive Medigap rate increases:

• Age, if you have an attained-age-rated policy.
• Inflation, because the cost of the medical care Medigap helps pay for keeps climbing.
• Claims experience, meaning the total amount the insurer paid out for everyone in that policy pool. If claims run high, rates for that pool can rise.

None of those forces changes what your policy covers. The lettered benefits stay locked in.

What Manchester Township residents should check

Manchester Township is in Ocean County, and the Medigap policies available to you are regulated at the state and federal level. New Jersey shoppers should ask an insurer, plainly:

• Which pricing method does this policy use?
• What has the rate history looked like over the past several years?
• Are there household or other discounts I might qualify for?

The answers won't tell you exactly what you'll pay a decade from now — no one can promise that — but they will tell you how the price is structured, which is often more useful than the first-year quote.

A quick word on the rest of Medicare in 2026

Medigap sits alongside Original Medicare, and a few other 2026 program figures are worth keeping in mind while you plan:

• Part D now has a $2,100 out-of-pocket cap on covered prescriptions.
• The Part D maximum deductible is $615.
• The old coverage gap ("donut hole") was eliminated in 2025; Part D now has three phases.
• The Medicare Prescription Payment Plan lets you spread drug costs across the year in monthly installments.
• IRMAA surcharges for higher earners begin above $109,000 in income for a single filer in 2026.
• Annual Enrollment runs Oct. 15 – Dec. 7, and Medicare Advantage Open Enrollment runs Jan. 1 – March 31.

Medigap itself has its own enrollment rules — the strongest protections apply during your six-month Medigap Open Enrollment Period, which starts when you're 65 or older and first enrolled in Part B.