Medicare Supplement

Same Medigap Coverage, Rising Bill? Here's Why

BOX ELDER, S.D. — If you've had a Medigap policy for a few years, you may have noticed something puzzling: the benefits on your plan haven't changed, but the premium keeps creeping up. You're not imagining it, and it isn't a mistake. The way your Medigap policy was priced on day one shapes how the premium behaves for the rest of the time you own it.

Medigap plans — the letter-labeled supplements like Plan G or Plan N that help pay what Original Medicare doesn't — are standardized. That means Plan G from one company covers the same things as Plan G from another. What isn't standardized is how insurers set the price. There are three common methods, and knowing which one applies to your policy explains a lot about your bill.

The three ways Medigap premiums are built

Community-rated (also called no-age-rated). Everyone who buys the same policy from the same insurer pays roughly the same premium, regardless of age. A 68-year-old and an 80-year-old signing up today would be quoted the same base rate.

Issue-age-rated. Your premium is based on the age you were when you first bought the policy. Buy in at 65, and your rate is tied to that starting age. It won't go up just because you turn 75 — though it can still rise for other reasons (more on that below).

Attained-age-rated. Your premium is based on your current age and goes up as you get older. These policies often look inexpensive at 65 but climb at set intervals — sometimes every year, sometimes every few years — as you "attain" each new age.

None of these methods is automatically better or worse. Which one is offered depends on the insurer and the state's rules. Some states require one method; others allow all three. That's why two neighbors in Box Elder could own the exact same lettered plan and have very different price trajectories.

Why the premium rises even when benefits can't

Here's the part that confuses many people. By federal law, the benefits inside a standardized Medigap plan can't be quietly changed. But the premium is a different story. Three forces push it upward over time:

• Inflation and rising medical costs. Doctors, hospitals, and labs charge more each year. Medigap fills the gaps in Original Medicare, so when those underlying costs go up, so does what the insurer expects to pay out.
• Claims experience. Insurers watch how much the whole pool of policyholders is using care. If claims run higher than expected, rates for the pool can be adjusted at renewal.
• Age (for attained-age policies only). If your policy is attained-age-rated, you'll also see a bump tied to your birthday on top of any inflation increase.

So a community-rated or issue-age-rated policy can still get more expensive — just not because you got older.

What this means for shoppers in Box Elder

Box Elder is in Pennington County, and Medigap availability in South Dakota is regulated at the state level. Before you sign an application, ask the insurance company or agent one direct question: "How is this policy priced — community-rated, issue-age-rated, or attained-age-rated?" The answer should be in the policy's outline of coverage.

Also ask for the insurer's rate history if you can get it. A low starting premium on an attained-age plan may or may not stay low; a slightly higher starting premium on an issue-age plan may hold steadier. There's no single right answer — it depends on your budget today and your expectations for the future.

One important reminder: your best pricing and your right to buy any Medigap plan without medical underwriting generally happens during your six-month Medigap Open Enrollment Period, which begins when you're 65 or older and first enrolled in Part B. Outside that window, insurers in most states can consider your health.

Medigap is separate from Part D and Advantage

Medigap works alongside Original Medicare, not with Medicare Advantage. And Medigap does not include prescription drug coverage — that's Part D. A quick 2026 refresher on the drug side, since it affects the overall budget:

• Part D out-of-pocket cap: $2,100 in 2026.
• Part D maximum deductible: $615.
• The coverage gap ("donut hole") is gone; Part D now has three phases.
• The Medicare Prescription Payment Plan lets you spread drug costs across monthly installments.
• IRMAA surcharges start above $109,000 in income for a single filer in 2026.
• Annual Enrollment Period: Oct. 15 – Dec. 7. Medicare Advantage Open Enrollment: Jan. 1 – March 31.

Where to get personal help

Medigap decisions are individual — health, budget, and how long you plan to keep the policy all matter. For unbiased help in Box Elder, reach out to South Dakota SHIINE, the state's State Health Insurance Assistance Program, which offers free one-on-one counseling. You can also call 1-800-MEDICARE (1-800-633-4227) or use the plan finder at medicare.gov.