Two neighbors can buy the exact same Medigap plan letter from the exact same insurer and pay very different premiums, and the reason usually comes down to one thing: how the policy is priced. Insurers set Medigap premiums using one of three rating methods, and the one your policy uses decides not just what you pay this year but how much your bill climbs as you age. Here's how each method works, why the cheap-looking one can get expensive later, and what to check before you sign.
In This Guide
- Key Takeaways
- Why Two People Pay Different Prices for the Same Plan
- The Three Ways Medigap Premiums Are Priced
- Why Attained-Age Can Get Expensive Later
- How to Compare the Way Medigap Premiums Are Priced
- Frequently Asked Questions
- Learn More
Why Two People Pay Different Prices for the Same Plan
Start with the part that surprises people. Medigap plans are standardized: a Plan G is a Plan G no matter who sells it. Medicare sets the benefit package for each lettered plan, and every insurer selling that letter has to cover exactly the same things. So the coverage isn't where the price difference comes from.
Where it comes from is everything else. Premiums vary by insurance carrier, your state, your age, your gender, whether you smoke, and the insurer's underwriting, and the carriers set those prices, not the government.Centers for Medicare & Medicaid Services. (2026). 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov. Retrieved Jun 22, 2026, from https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles Two people with an identical Plan G can pay very different amounts because of who they are and which company they bought from.
Age deserves its own spotlight, because that's the piece a lot of people don't think about until years later. How an insurer treats your age isn't random. It follows one of three rating methods, and the Medicare guide to choosing a Medigap policy says each policy is priced in one of these three ways.Centers for Medicare & Medicaid Services. (n.d.). CMS Pub. 02110 — Choosing a Medigap Policy (how insurance companies set prices). medicare.gov. Retrieved Jul 10, 2026, from https://www.medicare.gov/publications/02110-medigap-guide-health-insurance.pdf The method your policy uses is the single biggest factor in whether your premium stays flat or creeps up every year you hold it.
Worth a quick reminder of what Medigap is doing for that premium: it fills the gaps Original Medicare leaves behind, like the 20% coinsurance you'd otherwise owe on most outpatient services and the Part B deductible ($283 in 2026).Centers for Medicare & Medicaid Services. (2026). 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov. Retrieved Jun 22, 2026, from https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles The benefits are the same across carriers; the pricing is what you're actually shopping.
The Three Ways Medigap Premiums Are Priced
Here's the short version of each method, then a table to line them up side by side.
Community-rated (sometimes called no-age-rated) means everyone with that policy pays the same premium, regardless of age. A 65-year-old and an 80-year-old on the same plan pay the same rate. Your premium can still rise with inflation, but it won't jump just because you had a birthday.Centers for Medicare & Medicaid Services. (n.d.). CMS Pub. 02110 — Choosing a Medigap Policy (how insurance companies set prices). medicare.gov. Retrieved Jul 10, 2026, from https://www.medicare.gov/publications/02110-medigap-guide-health-insurance.pdf
Issue-age-rated (also called entry-age-rated) sets your premium based on your age when the policy is first issued. Buy at 65 and you lock in a 65-year-old's rate. An issue-age-rated premium can rise with inflation over time, but not because you've entered an older age bracket. Buy the same policy at 72 and you'd start at a higher rate, because you bought in older.Centers for Medicare & Medicaid Services. (n.d.). CMS Pub. 02110 — Choosing a Medigap Policy (how insurance companies set prices). medicare.gov. Retrieved Jul 10, 2026, from https://www.medicare.gov/publications/02110-medigap-guide-health-insurance.pdf
Attained-age-rated ties your premium to your current age, so it automatically increases as you age into new brackets. These policies usually start out the cheapest of the three, which is what makes them tempting. But as the next section explains, that low opening price is the part to be careful about.Centers for Medicare & Medicaid Services. (n.d.). CMS Pub. 02110 — Choosing a Medigap Policy (how insurance companies set prices). medicare.gov. Retrieved Jul 10, 2026, from https://www.medicare.gov/publications/02110-medigap-guide-health-insurance.pdf
| Rating method | How your premium is set | What happens as you age |
|---|---|---|
| Community-rated (no-age-rated) | Everyone on the policy pays the same rate, regardless of age | Can rise with inflation, but not because of your age |
| Issue-age-rated (entry-age-rated) | Based on your age when the policy is first issued | Can rise with inflation, but not from entering an older age bracket |
| Attained-age-rated | Based on your current age | Automatically increases as you move into new age brackets, on top of inflation |
One more thing worth knowing: which of these methods an insurer can offer you depends on where you live. Some states restrict or prohibit attained-age rating altogether.Centers for Medicare & Medicaid Services. (n.d.). CMS Pub. 02110 — Choosing a Medigap Policy (how insurance companies set prices). medicare.gov. Retrieved Jul 10, 2026, from https://www.medicare.gov/publications/02110-medigap-guide-health-insurance.pdf So the three-way choice above may already be narrowed for you before you shop.
Why Attained-Age Can Get Expensive Later
The trouble with attained-age pricing is that it does its damage slowly, and by the time you feel it, switching can be hard.
Because the premium climbs every time you age into a new bracket, an attained-age policy that beat every quote at 65 can quietly become the most expensive one you could be holding at 80. And that increase compounds: the age-based bump lands on top of the inflation and rising-medical-cost increases every Medigap policy is exposed to.Centers for Medicare & Medicaid Services. (n.d.). CMS Pub. 02110 — Choosing a Medigap Policy (how insurance companies set prices). medicare.gov. Retrieved Jul 10, 2026, from https://www.medicare.gov/publications/02110-medigap-guide-health-insurance.pdf A community-rated or issue-age policy takes the inflation hit too, but it doesn't add the separate age escalator on top.
The reason this matters so much is timing. When you first enroll, during your Medigap open enrollment window, insurers can't turn you down or charge you more for your health.Centers for Medicare & Medicaid Services. (2025). Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare (CMS/NAIC, 2025) - Medicare.gov. medicare.gov. Retrieved Jun 23, 2026, from https://www.medicare.gov/publications/02110-medigap-guide-health-insurance.pdf Later on, if you try to switch to a cheaper policy to escape rising attained-age premiums, you may have to pass medical underwriting, and a health condition you've picked up in the meantime can mean a higher price or a flat no. So the low starter rate can turn into a trap: cheap when you're locked out of nothing, expensive once you're stuck.
None of this makes attained-age pricing wrong for everyone. If you're buying later in life, or you don't expect to hold the policy for decades, the lower starting premium can genuinely win. The point is to know which method you're buying, not to be surprised by it.
How to Compare the Way Medigap Premiums Are Priced
Because the benefits are identical within a plan letter, comparing Medigap policies is mostly about comparing price and how that price will behave. A few things to ask before you commit:
- Ask which rating method the policy uses. This is the question most people skip, and it's the one that shapes your bill for the rest of your life. An insurer or agent should tell you plainly whether a quote is community-rated, issue-age-rated, or attained-age-rated.Centers for Medicare & Medicaid Services. (n.d.). CMS Pub. 02110 — Choosing a Medigap Policy (how insurance companies set prices). medicare.gov. Retrieved Jul 10, 2026, from https://www.medicare.gov/publications/02110-medigap-guide-health-insurance.pdf
- Don't shop on the first-year premium alone. The cheapest quote today is often an attained-age policy that will climb fastest. Ask what the same policy costs for someone 10 and 20 years older than you to see the trajectory.
- Compare the same plan letter across carriers. Since a Plan G covers the same things everywhere, line up Plan G against Plan G, not Plan G against Plan N.Centers for Medicare & Medicaid Services. (2026). 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov. Retrieved Jun 22, 2026, from https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
- Check your state's rules first. Your state's insurance department can tell you which rating methods are allowed and whether extra protections, like a yearly window to switch, apply where you live.
If you're weighing Medigap against a Medicare Advantage plan instead, that's a different decision with its own tradeoffs, but within the Medigap world, the rating method is the number that quietly decides what "affordable" means five and ten years from now.
Frequently Asked Questions
What are the three Medigap rating methods?
Community-rated, issue-age-rated, and attained-age-rated. Community-rated charges everyone the same regardless of age; issue-age-rated bases your premium on your age when you buy; attained-age-rated bases it on your current age and rises as you get older. Medicare's guide to choosing a Medigap policy says each policy is priced one of these three ways.
Which Medigap rating method is cheapest?
It depends on how long you'll hold the policy. Attained-age policies are usually cheapest at first, which is why they win a lot of quotes, but they rise the steepest as you age. Over many years, a community-rated or issue-age policy that starts a bit higher can end up costing less, because it doesn't add an age-based increase on top of inflation every year.
Why did my Medigap premium go up if my coverage didn't change?
Medigap benefits are standardized, so a premium increase isn't a coverage change. Premiums can rise with inflation and rising medical costs for any policy, and if yours is attained-age-rated, it also goes up automatically as you move into a new age bracket. Carriers set these prices, not Medicare.
Can I switch to a policy with a different rating method?
Sometimes, but it's not automatic. When you first enroll during your Medigap open enrollment period, you can't be turned down for health reasons.Centers for Medicare & Medicaid Services. (2025). Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare (CMS/NAIC, 2025) - Medicare.gov. medicare.gov. Retrieved Jun 23, 2026, from https://www.medicare.gov/publications/02110-medigap-guide-health-insurance.pdf Later, switching usually means passing medical underwriting, so a new health condition can make a cheaper policy more expensive or unavailable. Some states offer extra windows to change policies, so check your state's rules.
Does the rating method change what my plan covers?
No. Within a plan letter, the benefits are the same across every carrier, so the rating method only affects your premium, not your coverage.
Learn More
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The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.