Medigap insurers ask state to raise premiums an average of 11%

Insurers are seeking state permission to raise premiums an average of more than 11% in 2025 for supplemental Medicare policies. 

Nearly 461,500 New Yorkers pay private insurers for so-called Medigap plans — policies that cover gaps in traditional Medicare by handling copays, coinsurance and obligations that would otherwise fall to patients. The federal Medicare insurance program covers senior citizens and people with certain disabilities and health conditions.

Long Islanders who rely on Medigap described their monthly subscription fees or premiums as expensive — even before the proposed hikes. Insurers argued they need additional funds to cover increasingly costly hospital stays, outpatient visits and other services in applications filed with the state Department of Financial Services, an agency overseeing the industry. DFS said it would review insurers' applications and the calculations that underlay their requests, and decide this month what type of premium increases were justified in 2025. 

Insurers are seeking an average of 11.5% more in premiums for plans purchased by individual households — though the requested rates vary wildly. 

Six insurers plan to keep premiums flat for some plan types. Highmark Western and Northeastern — which operates in the northern part of the state — even proposed trimming premiums 3.45% for some plans.

EmblemHealth requested the biggest hikes, including a 42.6% bump for one plan.

Carriers requested an average premium bump of 11.1% for group policies, which are offered by employers, unions and AARP and cover roughly 372,870 New Yorkers. The proposed rates varied less — ranging from a dip of 1.04% to a leap of 28%.

Assuming the proposal passes, Marie Gerig, 72, of North Coram, will pay about $450 a month for Medicare part B, which covers outpatient care, and a Medigap policy from UnitedHealthcare and AARP, an organization focused on supporting people age 50 and up. The cost is significant, Gerig said, but having robust coverage makes her feel secure. 

"I'm retired, and I work full-time," said Gerig, who had a job in investment banking, left to focus on raising children and now has a cashier job. "What am I going to do? I put my money into it [the policy] because I'm older. This is when you need the preventive stuff."

Katharina Korkos, 85, pays about $330 a month for a supplemental insurance policy from UnitedHealthcare and AARP, she said.

"It's a lot," said Korkos, of Levittown, who lives off Social Security payments. "At my age, I'm going to hold onto it [the policy]."

Last year, DFS cut back many insurers' requests — usually by up to 4% — and permitted average premium increases of 14.7% for individual policies and 9.4% for group plans. 

Medicare spending per person is expected to grow an average of 5.4% annually from 2020 to 2030, according to KFF, a nonprofit, nonpartisan health policy group. So how much patients are expected to pitch in toward the cost of their care — the very expenses supplemental insurance covers — could be expected to increase a similar amount, said Tricia Neuman, executive director of KFF’s Program on Medicare Policy. Insurers may raise premiums more if they need to build reserves after prior years' losses or are attracting a population that needs more care, she said.

Emblem didn't directly respond to questions about why it seeks to raise premiums up to seven times as much as per-person Medicare spending is expected to grow. Alexis Gomez, an Emblem spokesperson, said the carrier sets premiums based on medical and pharmacy cost trends, and how much care members need.

"We remain extremely mindful of the impact that rate increases have on our members," Gomez said in a statement.

To see specific insurers' requests, visit shorturl.at/WwLif.

By Sarina Trangle

sarina.trangle@newsday.comSarinaTrangle

Sarina Trangle covers affordability and cost of living issues and other business topics. She previously worked as an editor and reporter at amNewYork.