What Is the Part D Penalty?

Medicare Part D offers prescription drug coverage through private insurers. If you delay signing up when you’re first eligible and go without creditable coverage for 63 days or more, you may have to pay a late enrollment penalty.

How the Part D Penalty Works

The penalty is calculated based on how long you went without coverage. Medicare multiplies 1% of the national base beneficiary premium by the number of full months you were uncovered.

That amount is added to your monthly Part D premium—for as long as you have Part D.

Example

Let’s say you went 14 months without drug coverage. Your penalty would be: 1% x 14 = 14%
That 14% would be added to your monthly premium.

How to Avoid It

• Enroll in a Part D plan when you first become eligible
• Keep drug coverage that is considered “creditable” (like from an employer or the VA)
• Don’t go 63 consecutive days without drug coverage