The late enrollment penalty is an amount that may be added to your monthly Part D premium. Someone enrolled in a Medicare drug plan may owe a late enrollment penalty if he or she goes without Part D or other creditable prescription drug coverage for any continuous period of 63 days or more after the end of his or her Initial Enrollment Period for Part D coverage.
💡 Helpful tip: We don’t handle Part D enrollment, but we’ve created a guide to make it smoother. Medigap is still our main focus.
How is the Part D late enrollment penalty calculated?
Medicare calculates the late enrollment penalty when a person subject to the penalty first joins a Medicare drug plan. The late enrollment penalty amount typically is 1% of the national base beneficiary premium (also called “base beneficiary premium”) for each full, uncovered month that the person didn’t have Part D or creditable coverage. The national base beneficiary premium is currently $38.99.
For example, if you weren’t enrolled for 4 years (48 months) you would pay 48% extra for your Part D premium. You are usually better off just buying the cheapest plan now, instead of accumulating these extra fees later.
How do I avoid Part D penalties?
The simplest way is to avoid missing your Initial Enrollment, which is a 7-month period starting 3 months before you turn 65 up to 3 months after. If you enroll during this time you will incur no penalties whatsoever.
What if I missed my Initial Enrollment Period for Part D?
If you missed your initial enrollment, you are still able to purchase prescription drug coverage in the future. Medicare’s Annual Election Period (AEP) open enrollment starts every OCTOBER 15th and ends DECEMBER 7th and is the designated time for switching most Medicare Insurance plans or signing up for additional drug or medical coverage for the first time.