Medicare Advantage Exits Trigger Permanent Prescription Drug Penalties

Enrollees who go 63 days or more without creditable prescription drug coverage after losing their Medicare Advantage plan face a Part D late enrollment penalty that lasts for the duration of their Part D coverage.

This risk emerges because enrollees who are forced out of their plans automatically revert to Original Medicare Parts A and B, which do not include prescription drug coverage.

Forced disenrollment is increasing. Roughly 10 percent of Medicare Advantage enrollees in standard HMO and PPO plans—approximately 2.9 million people—faced forced disenrollment for 2026. In Vermont, 92 percent of Medicare Advantage enrollees were forced to disenroll after insurers exited the state.

Insurer exits are driven by squeezed profit margins resulting from rising medical costs and tightened federal oversight of how insurers calculate patient health risk scores.

Those who lose their plans typically qualify for a Special Enrollment Period from October 15 through the end of February to select a new plan or switch to traditional Medicare.