Medicare Part D Late Enrollment Penalty

If you’re enrolling in Medicare, you may question whether you really need Part D prescription drug coverage. Beneficiaries pay a monthly premium for Part D, it may feel like an unnecessary expense if you don’t take any prescriptions. You may have other prescription benefits and wonder if you need Part D.*

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Skipping Part D can be a costly decision, depending on your situation. You may find yourself without insurance to cover medications if you suddenly become ill.*

Then, when you finally do enroll, you may pay a Medicare Part D late enrollment penalty. This will be in the form of a higher premium for as long as you have Part D.*

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What is the Medicare Part D Late Enrollment Penalty?

The Part D late enrollment penalty is a penalty that’s added in addition to the national base benefificary Part D premium. The amount is 1% for every month you went without coverage when first eligible. The penalty is in place to encourage beneficiaries to enroll in a Part D plan when first eligible if they don’t already have creditable coverage.

When you first become eligible for Medicare, you have an Initial Enrollment Period to sign up for coverage. Then, you’re eligible for Part D.*

If eligible because you’re turning 65, your Initial Enrollment Period begins three months before your 65th birthday month and ends three months after your birthday month.*

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After that IEP, you’ll pay a Part D late penalty if you go without one of these types of drug plans for 63 days or more:*

  • A Part D plan
  • Prescription coverage through a Medicare Advantage plan
  • Any other Medicare plan that includes Medicare PDP coverage
  • Another healthcare plan that includes prescription drug coverage that is at least as good as the coverage provided by Medicare.

Medicare Part D Late Enrollment Penalty Calculator

The Medicare Part D penalty is based on the number of months you went without PDP coverage. For each month without coverage, you will pay an additional premium of 1 percent of the current “national base beneficiary premium.”*

How to Calculate Your Medicare Late Enrollment Penalties*

For 2022, the average beneficiary premium is $33.*

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This is not a one-time penalty. You’ll pay it every month for as long as you have Medicare prescription coverage. Your Part D penalty will be rounded to the nearest $.10 and added to your Part D premium.*

Since the penalty is always based on the current year’s national beneficiary premium, it may change or go up each year.*

Part D late enrollment penalty calculation can be hard to figure out. So, here’s an example to show how this works.*

Suppose your Initial Enrollment Period ended and you waited 33 months to sign up for Part D. Your Part D penalty would be 33 percent of the national beneficiary premium, one percent for each of the 33 months you waited.*

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This would be calculated as $33.06 x .33 = $10.90. The Part D penalty is rounded to the nearest 10 cents.*

You’ll pay this penalty in addition to your Part D Premium. The best way to avoid paying the Part D late enrollment penalty is to enroll in a Prescription Drug plan as soon as you become Medicare eligible.*

Part D When Collecting Social Security Disability Income

If you don’t enroll in Part D when you’re first eligible, even if you’re eligibility comes from disability, you’re going to incur a penalty. To avoid the penalty, keep up with your Medicare eligibility, know your Part B effective date, and sign up for Part D as soon as possible. Just because you’re not 65, doesn’t mean the penalty doesn’t apply; the penalty DOES apply to anyone with Medicare Part B. So, don’t delay your enrollment.*


What is the Part D penalty cap?
Since this penalty didn’t start until 2006, you can only be penalized starting from that year. The capped amount of months increases each month.
Are there other drawbacks to waiting to enroll in a Part D plan?
You can’t just enroll in Part D whenever you want. After your Initial Enrollment Period ends, you can usually only enroll during the Annual Enrollment Period. That means that if you wait to sign up for Part D, you may find yourself paying full price for expensive medications if you suddenly become ill. It’s better to have coverage before you need it; you wouldn’t buy car insurance after a car accident, so, don’t wait to buy prescription coverage.
What if I already have prescription drug coverage?
If you already have coverage through an employer, union, or another source, you may not have to worry about the Part D penalty. The key is whether the coverage you now have is “creditable”. Creditable coverage is the same as, or better than, the benefits Medicare provides. You will not accumulate any penalties during the time you have other creditable coverage. If you lose this coverage through no fault of your own, you should be eligible for a Special Enrollment Period. When you sign up within 63 days of losing coverage, you will not have to pay penalties. You should receive a notice each year saying whether your coverage is creditable. Save this letter with your important papers – you may have to show it to Medicare to avoid a penalty.

Medicare Part D Late Enrollment Penalty Reconsideration

If you’re penalized by Medicare, you can appeal it. All you must do is complete a reconsideration request form that’s available on*

If you qualify for extra help, you may qualify for assistance paying the Part D penalty. Some lower-income beneficiaries have the penalty waived altogether. You can contact Social Security to apply for Medicare Extra Help.*


How to Get Help Deciding When to Enroll in Part D

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Jagger Esch

Jagger Esch is the Medicare expert for MedicareFAQ and the founder, president, and CEO of Elite Insurance Partners and Since the inception of his first company in 2012, he has been dedicated to helping those eligible for Medicare by providing them with resources to educate themselves on all their Medicare options. He is featured in many publications as well as writes regularly for other expert columns regarding Medicare.

32 thoughts on “Medicare Part D Late Enrollment Penalty

  1. All these articles are written by insurance agents with skin in the game. I will skip part D until I need it. I have not filled a prescription in decades. The penalty is peanuts. YMMV

    1. Hello! No, agents do not write our content. The penalty may not be a lot for some, but if you wait ten years to enroll, the penalty can quickly add up for some.


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