Why Medicare Supplement Prices Are Rising in Colorado

Medicare Supplement (Medigap) plans in Colorado are seeing rising premiums, leaving many beneficiaries wondering why costs are increasing. Several key factors contribute to this trend, impacting the affordability of these plans designed to cover gaps in Original Medicare.

1. Rising Healthcare Costs

The overall cost of healthcare in the U.S. continues to climb due to inflation, advanced medical treatments, and increased demand for services. As hospitals and providers charge more, insurance companies adjust Medigap premiums to cover higher claim expenses. In Colorado, the average premium for a Medicare Supplement plan was around $200 in 2023, reflecting these broader cost increases.

2. Age-Based Pricing

Most Medigap plans in Colorado use attained-age pricing, where premiums increase as policyholders get older. For example, a Plan G premium for a 65-year-old might start at $139.14 per month, but for a 75-year-old, it could rise to $319 or more. This age-based structure, combined with general healthcare inflation, drives annual rate hikes of 5% to 10%.

3. Underwriting and Claims Experience

Insurance companies may raise premiums if they face higher-than-expected claims in a state. Some carriers use lax underwriting to attract more customers, but this can lead to increased claims and subsequent rate hikes to offset losses. In Colorado, with 207,779 beneficiaries enrolled in Medigap plans, claim trends directly influence pricing.

4. Regional Factors

Colorado’s diverse geography, from urban Denver to rural mountain areas, affects healthcare access and costs. Providers in remote regions may charge more due to limited competition, impacting Medigap premiums. Additionally, demographic factors like age and gender influence rates, as women may face different pricing due to longer life expectancies.

How to Mitigate Rising Costs

To manage rising premiums, consider shopping around (if possibly) to lock in better rates with medical underwriting. Comparing plans from providers like Cigna, which offers Plan G for $139.14 monthly, or AARP/UnitedHealthcare, known for competitive rates, and great gym benefits can help find cost-effective options. Understanding these factors can help Colorado residents make informed decisions about their Medicare Supplement plans. 

For personalized assistance, or help shopping carriers and medigap plans contact Besant Benefits at 720-918-6565