The Future of Medicare Supplements

I had the pleasure of attending a Medicare specific conference last month and after absorbing a lot of information from agents, insurance companies and companies that support our insurance businesses, I have much to share. It’s always energizing to learn new things, find out what changes are anticipated in the upcoming year and what new products and services are available to make our agency smarter and more efficient.

As you may have noticed, the rates have increased dramatically for many of you. As I’ve often said, the prices for all carriers increase in the spring/early summer, so if yours has increased it’s a good bet the others have too which means changing to a different plan doesn’t always make sense. However, some carriers have increased more than others, and with no time restrictions to changing Medigap plans we can help you determine what, if any, action you could take.

Here’s some important information about Medigap rates and how they have increased over the first quarter of 2025.

INCREASES FOR 2025

The Medicare supplement market continues to experience higher claims, and carriers are attempting to mitigate the higher loss ratios by pursuing larger rate increases.  Throughout 2024 rate increases trended up from 2023 levels.  Now, results through the first quarter are in. 

The charts below summarize the average historical rate increases of the most prominent carriers in the Medicare supplement space. This data pertains only to open blocks of business and does not consider instances where companies are implementing large rate decreases as they re-enter the market using old paper. All carriers besides the largest six have been grouped together as “Other”. 

Each group is showing larger rate increases in 2025 than in previous years. The data suggests that Aetna and Mutual of Omaha have been pursuing significantly larger rate increases in 2025. Alternatively, Cigna and Humana rate increases are more aligned with what they have taken historically. It will be interesting to see if some of the higher historical averages will help prevent the need for double digit increases or simply delay them. 

For all plans, we expect the trend of higher rate actions to continue through 2025 as claims come in higher than previous years and push up loss ratios. 

Source:  https://www.telosactuarial.com/blog/medsupprateactions2025q2?utm_source=www.medicaremarketinsights.com&utm_medium=referral&utm_campaign=medigap-market-updates-2025-q2 

EXPANSION OF BIRTHDAY AND ANNIVERSARY RULES

9 States currently offer a Special Enrollment Period around a Medigap policyholder’s birthday; California, Idaho, Illinois, Kentucky, Louisiana, Maryland, Nevada, Oklahoma, and Oregon. Virginia and Utah have also recently enacted the rule with Utah’s effective May 2025 and Virginia July 2025.

Additionally, Missouri has a Medicare Anniversary Rule which allows Medigap policyholders to switch plans around their policy anniversary date.

And there are several states that have year-round enrollment; Connecticut, New York, Vermont and Washington.

No Underwriting: Changes can be made without requiring health questions or medical exams

State Specific Regulations: Each state has its own specific rule regarding the enrollment window, eligibility and plan options.

Birthday Rule States:

California Medicare Birthday Rule

California Annual Open Enrollment lasts 90 days, beginning 30 days before and ending 60 days after the individual’s birthday, during which time a person may replace any Medicare supplement policy with a policy of equal or lesser benefits. Coverage will not be made effective prior to the individual’s birthday or beyond 60 days from the application date. If replacing a pre-standardized plan, a copy of the current policy or policy schedule is required.

Idaho Medicare Birthday Rule

Birthday Window: The Idaho Medicare Birthday Rule allows beneficiaries to switch Medigap plans within 63 days beginning on an individual’s birthday. This two-month window offers individuals the opportunity to reassess their healthcare needs annually and adjust their coverage accordingly. Coverage will not be made effective prior to the individual’s birthday or beyond  60 days from the application date.

No Medical Underwriting: One of the significant advantages of this rule is that individuals can change plans without undergoing medical underwriting. In typical scenarios, insurers may assess an individual’s health and charge higher premiums or deny coverage based on pre-existing conditions. The Idaho Medicare Birthday Rule allows beneficiaries to switch plans without these concerns.

Same or Lesser Benefit Level: Beneficiaries can switch plans during their birthday window, but they are required to choose a plan with an equal or lesser benefit level than their current plan. This ensures that individuals maintain a level of coverage consistent with their healthcare needs.

Coverage Continuity: During the transition period, beneficiaries will not experience a lapse in coverage. The new Medigap plan becomes effective on the first day of the month following the birthday month.

Illinois Medicare Birthday Rule

Illinois Annual Open Enrollment lasting 45 days: beginning on an individual’s birthday, during which time a person may replace a Medicare supplement within the same insurance company to a policy of equal or lesser benefits. An individual must be between the ages of 65 through 75 to be eligible. Coverage will not be made effective prior to the individual’s birthday or beyond 60 days from the application.

No Medical Underwriting: A significant advantage of this rule is that individuals can change plans without undergoing medical underwriting. In standard circumstances, insurers may assess health conditions and charge higher premiums or deny coverage based on pre-existing conditions. The Illinois Medicare Birthday Rule allows beneficiaries to switch plans without these concerns.

Same or Lesser Benefit Level: While beneficiaries can switch plans, they are required to choose a plan with an equal or lesser benefit level than their current plan. This ensures that individuals maintain a level of coverage consistent with their healthcare needs.

Coverage Continuity: During the transition period, beneficiaries will not experience a lapse in coverage. The new Medigap plan becomes effective on the first day of the month following the birthday month.

Kentucky Birthday Rule

Birthday Window: The Kentucky Medicare Birthday Rule permits beneficiaries to switch Medigap plans starting the day after their birthday lasting 60 days. This 2 month-long window provides individuals with an annual opportunity to review and modify their healthcare coverage to better meet their needs.

No Medical Underwriting: A significant advantage of this rule is that individuals can change plans without undergoing medical underwriting. In standard circumstances, insurers may assess health conditions and charge higher premiums or deny coverage based on pre-existing conditions. The Kentucky Medicare Birthday Rule bypasses these concerns.

Same or Lesser Benefit Level: While beneficiaries can switch plans, they are required to choose a plan with an equal or lesser benefit level than their current plan. This ensures that individuals maintain a level of coverage consistent with their healthcare needs.

Coverage Continuity: During the transition period, beneficiaries will not experience a lapse in coverage.

Louisiana Birthday Rule

Birthday Window: The Louisiana Medicare Birthday Rule permits beneficiaries to switch Medigap plans within 63 days beginning on an individual’s birthday. This 2 month-long window provides individuals with an annual opportunity to review and adjust their healthcare coverage to better meet their needs. An individual person may replace any Medicare supplement within the same carrier to one of equal or lesser benefits. Coverage will not be made effective prior to the individual’s birthday or beyond 60 days from the application date.

No Medical Underwriting: A significant advantage of this rule is that individuals can change plans without undergoing medical underwriting. In standard circumstances, insurers may assess health conditions and charge higher premiums or deny coverage based on pre-existing conditions. The Louisiana Medicare Birthday Rule allows beneficiaries to switch plans without these concerns.

Same or Lesser Benefit Level: While beneficiaries can switch plans, they are required to choose a plan with an equal or lesser benefit level than their current plan. This ensures that individuals maintain a level of coverage consistent with their healthcare needs.

Coverage Continuity: During the transition period, beneficiaries will not experience a lapse in coverage. The new Medigap plan becomes effective on the first day of the month following the birthday month.

Maryland Birthday Rule

Birthday Window: The Maryland Medicare Birthday Rule allows beneficiaries to switch Medigap plans within 30 days starting on their birthday. This month-long window offers individuals an annual opportunity to review and modify their healthcare coverage to better suit their needs.

No Medical Underwriting: A significant advantage of this rule is that individuals can change plans without undergoing medical underwriting. In standard circumstances, insurers may assess health conditions and charge higher premiums or deny coverage based on pre-existing conditions. The Maryland Medicare Birthday Rule circumvents these concerns.

Same or Lesser Benefit Level: While beneficiaries can switch plans, they are required to select a plan with an equal or lesser benefit level than their current plan. This ensures that individuals maintain a level of coverage consistent with their healthcare needs.

Coverage Continuity: During the transition period, beneficiaries will not experience a lapse in coverage. The new Medigap plan becomes effective on the first day of the month following the birthday month.

Nevada Birthday Rule

Birthday Window: The Nevada Medicare Birthday Rule allows beneficiaries to switch Medigap plans lasting 60 days starting on their birthday. This 2 month-long window provides individuals with an annual opportunity to review and modify their healthcare coverage to better meet their needs.

No Medical Underwriting: An important aspect of this rule is that individuals can change plans without undergoing medical underwriting. In standard circumstances, insurers may assess health conditions and charge higher premiums or deny coverage based on pre-existing conditions. The Nevada Medicare Birthday Rule bypasses these concerns.

Same or Lesser Benefit Level: While beneficiaries can switch plans, they are required to choose a plan with an equal or lesser benefit level than their current plan. This ensures that individuals maintain a level of coverage consistent with their healthcare needs. Coverage will not be made effective prior to the individual’s birthday or beyond 60 days from the application date.

Coverage Continuity: During the transition period, beneficiaries will not experience a lapse in coverage. The new Medigap plan becomes effective on the first day of the month following the birthday month.

Oklahoma Birthday Rule

Birthday Window: The Oklahoma Medicare Birthday Rule permits beneficiaries to switch Medigap plans within 60 days starting on their birthday. This 2 month-long window provides individuals with an annual opportunity to review and modify their healthcare coverage to better meet their needs.

No Medical Underwriting: A significant advantage of this rule is that individuals can change plans without undergoing medical underwriting. In standard circumstances, insurers may assess health conditions and charge higher premiums or deny coverage based on pre-existing conditions. The Oklahoma Medicare Birthday Rule bypasses these concerns.

Same or Lesser Benefit Level: While beneficiaries can switch plans, they are required to choose a plan with an equal or lesser benefit level than their current plan. This ensures that individuals maintain a level of coverage consistent with their healthcare needs. An individual must stay within the same carrier.

Coverage Continuity: During the transition period, beneficiaries will not experience a lapse in coverage.

Oregon Birthday Rule

Oregon Birthday Window: Annual Open Enrollment lasting 60 days, beginning 30 days before and ending 30 days after the individual’s birthday, during which time a person may replace any standardized Medicare supplement policy with a policy of equal or lesser benefits. Coverage will not be made effective prior to 30 days before the individual’s birthday or beyond 60 days from the application date.

No Medical Underwriting: A significant advantage of this rule is that individuals can change plans without undergoing medical underwriting. In standard circumstances, insurers may assess health conditions and charge higher premiums or deny coverage based on pre-existing conditions. The Oregon Medicare Birthday Rule bypasses these concerns.

Same or Lesser Benefit Level: While beneficiaries can switch plans, they are required to choose a plan with an equal or lesser benefit level than their current plan. This ensures that individuals maintain a level of coverage consistent with their healthcare needs.

Coverage Continuity: During the transition period, beneficiaries will not experience a lapse in coverage. The new Medigap plan becomes effective on the first day of the month following the birthday month.

Year Round Enrollment States:

Connecticut

Year-Round Flexibility: Connecticut’s Medicare year-round enrollment means that beneficiaries are not confined to specific windows for making changes to their plans. This flexibility is particularly advantageous for those who experience life events or changes in healthcare needs outside the AEP.

No Waiting Period: Unlike some states that may have waiting periods or restrictions on plan changes outside of the AEP, Connecticut allows beneficiaries to make immediate changes to their coverage. This means that individuals won’t experience lapses in coverage during the transition period.

New York

Year-Round Flexibility: The New York Year-Round Enrollment Medicare Rule means that beneficiaries are not confined to specific enrollment periods. Unlike the AEP, individuals in New York can make changes to their Medicare supplement plans at any time throughout the year.

No Waiting Period: Beneficiaries can make immediate changes to their coverage without waiting for specific enrollment periods. This ensures that individuals won’t experience lapses in coverage during the transition period.

Vermont

Year-Round Flexibility: Unlike some states that adhere strictly to specific enrollment periods, the Vermont Year-Round Enrollment Medicare Rule allows beneficiaries to make changes to their Medicare supplement plans at any time throughout the year.

No Waiting Period: There is no waiting period for individuals to make changes to their coverage. Beneficiaries can make immediate adjustments to their plans without waiting for specific enrollment periods, ensuring continuous access to healthcare coverage.

Washington

Year-Round Flexibility: The Washington Year-Round Enrollment Medicare Rule sets the state apart by allowing beneficiaries to make changes to their Medicare Supplement plan at any time throughout the year.

If you or someone you know has seen your Medigap rates increase dramatically this year, please reach out and let’s see if you qualify for a less expensive Medigap plan.

If you have any additional questions, contact our team today!