Seniors See Spike in Costs for Medicare Insurance Supplements

Seniors are feeling a hard financial hit as prices for Medicare insurance supplements climbed in January.

The producer price index for these premiums was at 170.136 in January, up from 167.268 in December. All throughout 2023, Medicare insurance supplements stayed roughly the same, hovering between 166 and 167.

Seniors sometimes pay for Medicare premiums for Part A, B, C or D coverage, with the specific amount varying based on age, health, income and Social Security benefits.

The price uptick in January largely came down to growing healthcare costs, from medical services and treatments to prescription drug price surges, which all affect insurers' premiums. In a typical year, Medicare insurance supplements can rise a few percentage points, but current inflation can make these price changes more difficult for the average senior to sustain.

The sheer number of seniors entering into Medicare plans can also contribute to these higher costs, Rhianna Jones, a Registered Nurse at CanXida, said.

"As the population ages and the number of seniors enrolled in Medicare increases, the demand for Medigap plans also rises," Jones told Newsweek.

When changes in your health status pop up, that could also see premiums shift at a larger scale to be more expensive.

No matter the exact reason for seniors' growing Medicare supplement costs, those on fixed incomes will feel it the most, with many likely to be forced between choosing to pay for healthcare or other essentials like groceries and housing.

"Rising premiums might result in some seniors reconsidering or dropping their Medigap coverage, potentially limiting their access to certain healthcare services or increasing out-of-pocket expenses," Jones said.

If seniors do end up deciding to go without, many could end up without essential lifesaving treatment in the long run.

"The impact on seniors will be the financial strain and burden that it puts on them," Lisamarie Monaco, the co-owner of InsuranceForBurial.com and an independent life insurance sales agent, told Newsweek. "It will also affect and deter seniors from accessing Medigap coverage altogether. This will be detrimental especially if they need medical care, they will be reluctant to go see their doctors due to the costs."

As more Baby Boomers retire, the aging population has become increasingly critical of the Medicare insurance options, including Medicare Advantage, which often boasts lower premiums but hidden difficulties in finding your top choice care provider or treatment approval.

Roughly 4.1 million Americans will turn 65 this year and every year through 2027, an Alliance for Lifetime Income report found, which indicates even more seniors starting Medicare coverage.

"Many of those new retirees are seeing Medicare is not a complete solution to their post-working life healthcare costs, and that increased demand paired with rising costs for labor, equipment, and medication are behind the most recent jump in price," financial literacy instructor Alex Beene told Newsweek.

Beene said, just like car or home insurance, you should shop around to see which provider in your area offers the most affordable option to meet your needs."

Traditionally, the cost of your medical policy will depend on which one you purchased initially, with some increasing in price based on the age you are, and others determined by the age you were when the policy was issued.

"The fact remains, the costs are going up because the cost of healthcare is going up each year at a rate higher than natural inflation," Kevin Thompson, a certified financial planner and founder and CEO of 9i Capital Group, told Newsweek.

He added that Medicare supplements tend to be more predictable over time, meaning any stark change can be a shock to seniors' living situations.

"Seniors are more susceptible not to price increases, but shock price increases which can utterly decimate those on a fixed income," Thompson said.