What Are Medigap Pricing Methods?
When you shop for a Medicare Supplement (Medigap) plan, you will notice that premiums for the exact same plan letter can vary significantly from one insurance company to another. One of the biggest reasons for this difference is the pricing method the insurer uses to calculate your premium. There are three pricing methods, and the one your insurer uses determines how your premium changes - or does not change - as you age.
Why This Matters
Two people with the same Medigap Plan G in the same ZIP code can pay very different premiums depending on the pricing method their insurer uses. Over 10 to 20 years, the difference can add up to thousands of dollars.
The Three Medigap Pricing Methods
Every Medigap insurer in the United States uses one of the following three methods to set your premium. The coverage is identical regardless of pricing method - only the way your premium is calculated differs.
1. Community-Rated (No-Age-Rated)
With community-rated pricing, every policyholder pays the same base premium regardless of age. A 65-year-old and an 80-year-old with the same plan pay the same amount. Premiums may still increase due to inflation or rising healthcare costs, but your age is never a factor in the calculation.
Your premium does not increase because you get older
Premiums may still rise due to inflation, medical cost trends, or insurer rate adjustments
Tends to start higher than other methods but grows more slowly over time
Best for beneficiaries who plan to keep their policy long-term
Best For
Beneficiaries who want predictable, stable premiums over the long term. If you plan to keep your Medigap policy for 15+ years, community-rated pricing often delivers the lowest total cost.
2. Issue-Age-Rated
Issue-age-rated pricing bases your premium on the age you were when you first purchased (were "issued") the policy. The younger you are when you buy, the lower your starting premium - and your age at purchase is locked in. Your premium will not increase simply because you get older, though it may still rise due to inflation or other non-age factors.
Premium is based on your age at the time of purchase
Enrolling at 65 locks in a lower rate than enrolling at 70
Premiums may still increase for inflation or medical cost trends, but not for aging
Rewards early enrollment - the younger you buy, the more you save
Pro Tip
If you are considering an issue-age-rated plan, enroll during your Medigap Open Enrollment Period (the 6 months starting when you turn 65 and have Part B). This locks in the lowest possible issue-age rate and guarantees acceptance regardless of health.
3. Attained-Age-Rated
Attained-age-rated pricing bases your premium on your current age. Your premium automatically increases as you get older, in addition to any increases from inflation or rising healthcare costs. These plans typically start with the lowest premiums of the three methods but become the most expensive over time.
Premium increases every year as you age
Starts with the lowest premium of all three methods
Can become very expensive by age 75–80+
Additional increases for inflation and medical costs stack on top of age-based increases
Watch Out
Attained-age plans may look like the cheapest option at 65, but by age 80 they are often the most expensive. Always compare the projected 10-year and 20-year total cost, not just the starting premium.
Side-by-Side Comparison
| Feature | Community-Rated | Issue-Age-Rated | Attained-Age-Rated |
|---|---|---|---|
Premium based on | Same for everyone | Age when you bought | Your current age |
Increases with age? | No | No | Yes, every year |
Inflation increases? | Yes | Yes | Yes (on top of age) |
Starting premium at 65 | Highest | Medium | Lowest |
Premium at age 80 | Lowest | Medium | Highest |
Best for | Long-term policyholders | Early enrollees | Short-term coverage |
How Pricing Methods Affect Your Costs Over Time
The following example illustrates how the three pricing methods can play out over 15 years for a Medigap Plan G policyholder. These are illustrative figures based on typical market rates - your actual premiums will vary by insurer and location.
| Your Age | Community-Rated | Issue-Age-Rated | Attained-Age-Rated |
|---|---|---|---|
65 | $175/mo | $140/mo | $110/mo |
70 | $195/mo | $160/mo | $165/mo |
75 | $215/mo | $180/mo | $230/mo |
80 | $240/mo | $200/mo | $310/mo |
*Illustrative example only. Actual premiums vary by insurer, state, and health factors. All figures include estimated 2–3% annual inflation adjustments.
As the table shows, the attained-age plan starts $65/month cheaper than community-rated at age 65 - but by age 80, it costs $70/month more. Over 15 years, the attained-age policyholder pays significantly more in total premiums despite the lower starting price.
How to Find Out Which Pricing Method a Plan Uses
Insurance companies are not always upfront about their pricing method, so you may need to ask directly. Here is how to find out:
Call the insurance company and ask: 'Is this plan community-rated, issue-age-rated, or attained-age-rated?'
Check the plan's outline of coverage document - some insurers disclose the pricing method there
Ask a licensed Medicare insurance agent who can compare pricing methods across multiple carriers in your area
Contact your State Health Insurance Assistance Program (SHIP) for free, unbiased counseling
2026 Average Medigap Premiums by Plan
While premiums vary widely by pricing method, insurer, and location, here are the typical monthly premium ranges for the most popular Medigap plans in 2026:
| Plan | Monthly Premium Range | What It Covers |
|---|---|---|
Plan G | $120–$280/mo | Most comprehensive plan available to new enrollees. Covers everything except the Part B deductible ($283 in 2026). |
Plan N | $90–$200/mo | Lower premiums than Plan G, but you pay up to $20 copay for office visits and up to $50 for ER visits not resulting in admission. |
High-Deductible Plan G | $30–$70/mo | Same coverage as Plan G after you meet the $2,950 annual deductible (2026). |
*Premiums based on a 65-year-old female non-smoker. Your rate may differ based on age, gender, location, tobacco use, and pricing method.
Which Pricing Method Should You Choose?
The right pricing method depends on your age, budget, and how long you plan to keep the policy. Here are some general guidelines:
If you are enrolling at 65 and plan to keep the policy for 15+ years, community-rated or issue-age-rated plans typically offer the best long-term value
If you need the lowest possible premium right now and may switch plans later, an attained-age plan could work - but understand the long-term cost trajectory
If you are enrolling after 65 (for example, after leaving employer coverage), issue-age-rated plans are especially attractive because your rate is locked at your enrollment age
Always compare the projected total cost over 10–15 years, not just the monthly premium at sign-up
Remember: Coverage Is Identical
All three pricing methods deliver the exact same coverage for a given plan letter. A Plan G is a Plan G regardless of whether it is community-rated or attained-age-rated. The only difference is how your premium is calculated over time.
Other Factors That Affect Your Medigap Premium
Beyond the pricing method, several other factors influence your Medigap premium:
Tobacco use - smokers typically pay 10–25% more
Gender - in most states, women pay slightly less than men
Location - premiums vary significantly by ZIP code and state
Household discounts - some insurers offer 5–10% discounts for married couples or household members
Payment method - paying annually or via electronic funds transfer (EFT) can save 2–5%
Health status - during your Medigap Open Enrollment Period, insurers cannot charge more for pre-existing conditions. Outside that window, medical underwriting may apply.
Sources and Further Reading
CMS Medigap Consumer Guide - Official Medicare.gov overview of Medigap plans and how they work
NAIC Medigap Consumer Guide - National Association of Insurance Commissioners guide to Medigap pricing and standardization
SHIP National Technical Assistance Center - Free, unbiased Medicare counseling available in every state
CMS Medigap Enrollment Data - Official CMS data on Medigap plan enrollment and premiums
Frequently Asked Questions
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