How the penalty works
If you go 63 days or more in a row without Part D or other creditable prescription coverage (coverage at least as good as Medicare's standard drug coverage) after you were first eligible, you owe a penalty. It is 1% of the national base beneficiary premium for each full month you were without coverage, rounded to the nearest $0.10, and it is added to your monthly Part D premium for as long as you have coverage.
Examples
| Months without coverage | Penalty percent | 2026 monthly penalty ($38.99 base) | 2027 monthly penalty ($41.33 base) |
|---|---|---|---|
| 12 | 12% | $4.70 | $5.00 |
| 24 | 24% | $9.40 | $9.90 |
| 36 | 36% | $14.00 | $14.90 |
The penalty is recalculated each year using the new base premium, so it rises slowly even if you do not change plans.
How to avoid it
- Join a Part D plan when you are first eligible (your Initial Enrollment Period), even if you take few drugs.
- Keep creditable coverage from an employer, union, or the VA, and keep the notice your plan sends each fall saying whether it is creditable. You will need it if you join Part D later.
- Do not let a gap reach 63 days if you leave a job or lose other coverage. Medicare Advantage plans without drug coverage do not count.
If you get Extra Help
People who receive Extra Help do not pay the late enrollment penalty. Ask about it if you may qualify.
If you disagree with the penalty
If you believe you had creditable coverage, you can ask your plan to reconsider. The notice you get explains the steps and deadline. Keep letters from your previous employer or insurer that show your coverage dates.