2.6 Million Medicare Advantage Plan Enrollees Will Lose Their Coverage in 2026

Seniors can either stick with traditional Medicare or pick a Medicare Advantage Plan. Advantage Plans are sold by private insurers, and they may offer coverage for more services than traditional Medicare, often with lower coinsurance costs. They do have some downsides, though -- including the potential for retirees to lose the coverage they have signed up for.

Unfortunately, that will happen to millions of seniors this year. Here's why.

Image source: Getty Images.

2.6 million Medicare Advantage Plan enrollees will lose their plans this year

According to analysis from the Kaiser Family Foundation, around 13% of beneficiaries enrolled in a Medicare Advantage Prescription Drug Plan (MA-PD plan) will lose the plan they have signed up for in 2026. That's around 2.6 million people.

These plan enrollees will lose their coverage because the plan they're enrolled in has been terminated for 2026. This is a significant increase in the number of people whose plans have ended. In 2025, just 1.3 million Medicare Advantage enrollees had their plans end.

Many more retirees will also be impacted by changes to their Medicare Advantage plans as well. The Kaiser Family Foundation found that up to 6% of MA-PD enrollees (1.3 million people) are in a plan that is impacted by consolidation. The result of that is that at least some of these 1.3 million people will end up with their insurer automatically moving them into a plan that is different from the one they signed up for.

What happens when your Medicare Advantage Plan is terminated?

If your Medicare Advantage plan is being terminated, you'll receive a notice alerting you to that fact. You have the option to choose another plan.

If you don't select another plan, you'll be enrolled in traditional Medicare by default. However, if you don't have prescription drug coverage from another source, like a former employer or a union, you'll have to select a Medicare Part D prescription drug plan.

The good news is, when your Medicare Advantage Plan stops being offered, you typically have a guaranteed issue right to purchase a Medigap policy without going through medical underwriting, so you can get this supplemental coverage that you need to avoid high out-of-pocket costs under traditional Medicare. Otherwise, those costs could decimate your retirement plans.

You should respond to your notice of termination and make the right moves to get the coverage you need if you're one of the 2.6 million whose Medicare Advantage Plan is no longer offered this year. While Medicare's open enrollment period is over, you can still act if you got a letter saying your plan has ended, as you qualify for a Special Enrollment Period until Feb. 28. But time is running out, so don't wait.

The Motley Fool has a disclosure policy.