What is a Medicare Part D plan required to do before disenrolling a plan member for not paying premiums?

If a person stops paying their Medicare Part D or Medicare Advantage plan's monthly premium, the Centers for Medicare and Medicaid Services (CMS) allows the Medicare plan to disenroll the member from the plan after at least a two-month grace period and proper notice.

The Medicare Advantage and Part D Enrollment and Disenrollment Guidance,

Section 60.3.1.4 – Disenrollment Processing for Failure to Pay Premiums, states:

Plans must always provide enrollees the opportunity to pay premiums owed before initiating any disenrollment action.

If the plan chooses to disenroll an individual for failure to pay monthly premiums, the steps include:

Plan demonstrates to CMS that it made a reasonable effort to collect the unpaid premium amount.
Plan alerts the enrollee that the premiums are delinquent.
Plan provides the member with a grace period, that is, an opportunity to pay past due premiums in full. The length of the grace period must:
- Be at least two whole calendar months; and
- Begin on the first day of the month for which the premium is unpaid or the first day of the month following the date which premium payment is requested, whichever is later.
Plan explains whether full payment within the grace period is required to avoid termination of enrollment.
Plan provides the individual a notice of the disenrollment within three business days following the last day of the grace period:
- Explains why the individual is being disenrolled and effective date of disenrollment
- Informs of individual's rights under the plan's grievance procedures.
Plan submits the disenrollment transaction to CMS within three business days following the last day of the grace period; however, in no case may the disenrollment notice to the individual be sent after the transaction is submitted to CMS.

Once an individual is disenrolled for failure to pay premiums:

Plan can decline re-enrollment in the plan until payment of any outstanding past due premiums is received.
Re-enrollment or enrollment in another plan must be requested during a valid election period.

Payment of past due premiums after the disenrollment date does not create an opportunity for reinstatement into the plan from which the individual was disenrolled for failure to pay premiums, except that CMS (or an entity acting on behalf of CMS) may reinstate enrollment, without interruption of coverage, if the individual demonstrates good cause and pays all of the overdue premiums within three calendar months of the disenrollment date. For more information on good cause, see § 70.3.5. Likewise, disenrollment for failure to pay premiums does not, in itself, provide the individual an opportunity (SEP) to enroll in a different plan.

Tip: Contact your Medicare plan immediately if your Medicare drug plan notifies you about being disenrolled from the plan for not paying your monthly premiums. The toll-free telephone number for Member Services is found on your plan's Member ID card.

During the minimum two-month grace period, the Medicare plan must:

First, send a bill to the person with Medicare with the amount due and payment due date.
Next, the plan is required to send a notice if the premium isn't paid. The notice must explain that the individual will be disenrolled from the plan if payment hasn't been made by the end of the grace period (no less than two (2) months beginning "on the 1st day of the month for which the premium is unpaid").

A few related Questions and Answers about failing to pay your monthly premium and disenrollment

Question: Will a Medicare plan always disenroll a plan member if they don't pay their premiums?

No. According to the CMS Medicare Part D Enrollment manual (Section 50.3.1)), a Medicare Part D plan has the option to do "nothing" and "allow the member to remain enrolled in the same [Medicare Part D plan]". Section 60.3.1.4 in the post-2024 version of the Enrollment / Disenrollment guidance refers to "If the plan chooses to disenroll and individual for failure to pay monthly premiums..." [emphasis added]

Question: If a person is qualified for the Medicare Part D Extra Help or Low-Income Subsidy program, will they receive addition notification of their unpaid premiums?

Possibly. Medicare allows a Medicare plan to have additional notification options for plan members qualifying for the Low-Income Subsidy (LIS) who fail to pay their monthly premiums.

Medicare allows that a Medicare plan,

"has the discretion to offer this [additional notification] option to individuals who qualify for the low-income subsidy within each of its [Medicare Part D plans]. If the [Medicare plan] offers this option in one of its [Part D plans], it must apply the policy to all such individuals in that [plan].... Plans may also send additional notices or attempt to contact the individual regarding delinquent premiums. If the person with Medicare still doesn't pay the premium, the plan can disenroll them as of the first day of the month following the end of the grace period. When this happens, the plan will send a final notice to the individual about the disenrollment action."

Question: If the plan Member makes a partial premium payment, will this halt disenrollment?

No. The CMS manual notes: "While the sponsor may accept partial payments, it has the right to ask for full payment within the grace period. If the member does not pay the required amount within the grace period, the effective date of disenrollment is the first day of the month after the grace period ends."

Question: If I pay my unpaid Medicare plan premiums after being disenrolled, will the plan then reinstate my Medicare Part D plan coverage?

No. Paying back premiums will not get you back into your Medicare plan - you will still need a valid enrollment period to rejoin a Medicare plan.

Question: Can the Medicare plan attempt to collect any unpaid premiums even after disenrollment?

Yes. CMS allows the Medicare Part D plan "to take action to collect the unpaid premiums from the beneficiary at any point during or after this [collection or disenrollment] process."

Question: If I am disenrolled from my Part D plan for not paying my premium, can the Medicare plan make me pay the past, unpaid premiums if I decide to rejoin the same plan next year?

Yes. The CMS Medicare Part D Enrollment manual notes that if "a member is disenrolled for failure to pay premiums and attempts to re-enroll in the organization, the PDP sponsor may require the individual to pay any outstanding premiums owed to the PDP sponsor before considering the enrollment request to be 'complete.' "

Additional Medicare Safeguards

In addition to the safeguards established by Medicare, the plan may send interim notices of unpaid premiums after the plan has sent the initial non-payment notice. The CMS Enrollment manual notes that the plan's notices must:

"Alert the member that the premiums are delinquent;
Provide the member with an explanation of disenrollment procedures advising the member that failure to pay the premiums within the grace period that began on the 1st of the month for which premium was unpaid will result in termination, and the proposed effective date of this action; and
Explain whether the sponsor requires full payment within the grace period (including the payment of all premiums falling due during the intervening days, when and as they become due, according to the terms of the membership agreement) in order to avoid termination.

If a notice is returned to the organization as un-deliverable, the sponsor should immediately implement its procedure for researching a potential change of address." If the Medicare plan finds that the plan member has moved out of the plan's service area, "the sponsor must disenroll the beneficiary for the earlier disenrollment date" corresponding to when the person left the plan's service area.

Sources include:

2025 Medicare Advantage and Part D Enrollment and Disenrollment Guidance, Section 60.3.1.4 – Disenrollment Processing for Failure to Pay Premiums, Updated: 2024

2024 and prior years: Medicare Prescription Drug Benefit Manual, Chapter 3 - Eligibility, Enrollment and Disenrollment - Updated: August 19, 2011 (Revised: November 16, 2011, August 7, 2012, August 30, 2013, August 30, 2014, July 6, 2015, September 1, 2015, September 14, 2015, December 30, 2015, May 27, 2016, August 25, 2016, June 15, 2017, July 31, 2018 & August 12, 2020)

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