In 2026, thousands of Medicare beneficiaries who were on a standalone Part D drug plan lost their coverage when they ignored their premium changing from its previous $0 cost. Since their plans were terminated for non-payment, they will likely go without prescription drug coverage for the rest of the year because they didn’t pay premiums for three months.
Next year, thousands more people enrolled in zero-premium drug plans for 2026 may find themselves in the same situation if their premiums go up and they don’t pay attention. Premiums and other changes for 2027 will be unveiled in September.
Caught off guard
Going without medication can be life-threatening, especially for Medicare beneficiaries. Nearly 90% take one or more prescription drugs, according to the Centers for Disease Control and Prevention. Almost half live with four or more chronic health conditions that can cause functional or cognitive impairments.
Congress added prescription drug coverage to Medicare in 2003. But the coverage is administered by commercial insurance companies, which compete fiercely with one another for the business of about 56 million Medicare beneficiaries enrolled in drug plans.
After a two-month grace period Medicare drug plans can drop customers who don’t pay their premiums, no matter how small the amount.
Surprise bills
The Centers for Medicare & Medicaid Services, which oversees Medicare drug plans, declined to provide the number of members who lost coverage due to unpaid premiums. “The agency does not publicly provide plan-specific disenrollment figures or state-level breakdowns related to the non-payment of premiums,” per Christopher Krepich, a spokesperson.
All Part D plan members receive a CMS-required annual notice of changes in September, before the premium increases took effect.
One example of the Annual Notice of Change booklet sent to members is 21 pages long. The new premium is mentioned twice, along with changes to out-of-pocket costs and how to find updates on covered drugs and network pharmacies.
People who are dropped are not able to reenroll or join another drug plan until the start of the open enrollment period this fall for coverage beginning Jan. 1, unless they qualify for an exception, Krepich said.
And because they will have gone without coverage for at least 63 days, they could be hit with a permanent late-enrollment penalty that increases every year for the rest of their lives.
Many Medicare beneficiaries arrange for their monthly drug plan premium to be automatically deducted from their Social Security benefits, and that many likely thought that choice remained in place until they changed it.
However, members didn’t realize that when the plan was a zero premium in 2025, that stopped the Social Security premium deduction and they would have had to reelect it for 2026.
In other words, even if they mistakenly thought the premium was still zero, Medicare beneficiaries would have needed to somehow allow Social Security to make deductions — something the agency doesn’t do — or else set up a payment plan through their bank or credit card in case payment was necessary.
Krepich said legal requirements for drug plan enrollment and disenrollment limit what CMS can do to help beneficiaries who lose coverage for not paying their premiums.
