How Your Medicare Part D Late-Enrollment Penalty Is Calculated

Mike Olmos by Mike Olmos | Licensed since 2010

This article was updated on: 05/19/2019

Medicare Part D is prescription drug coverage. It’s optional, but if you delay enrolling in a Medicare Part D Prescription Drug Plan, you may be charged a late-enrollment penalty if you decide to enroll later. Here is how that penalty is calculated and assessed:

  • When you enroll in a Medicare Part D Prescription Drug Plan, the plan will calculate the number of full months you were eligible to enroll in Part D prescription drug coverage, but decided not to enroll and went without other creditable prescription drug coverage (insurance that is as good as Part D) for 63 consecutive days or more.
  • The Part D Prescription Drug Plan then provides that information to the Medicare program.
  • Medicare then determines the late-enrollment penalty by multiplying 1% of the national base beneficiary premium by the number of months you were uncovered. Medicare rounds that number to the nearest $0.10.
  • This amount is added to your Part D Prescription Drug Plan monthly premium.

The national base premium ($33.19 in 2019) may change each year, so your Medicare Part D late-enrollment penalty may vary from year to year.

Note: If you enroll in a Medicare Prescription Drug Plan when you’re first eligible for Medicare, you won’t be subject to a late-enrollment penalty. You also won’t face the penalty if you’ve been continuously enrolled in creditable prescription drug coverage (described above) without any gap longer than 63 days in a row.

Please be aware that you may wind up paying this penalty for as long as you’re enrolled in a Medicare Prescription Drug Plan. There are some exceptions to this. For example, say a disabled individual under the age of 65 was assessed a late-enrollment penalty. Upon turning age 65, that individual would have a subsequent Initial Enrollment Period. And, if he or she is still enrolled in the Part D Prescription Drug Plan, the late-enrollment penalty would be eliminated going forward.

Individuals who qualify for Medicare’s Low-Income Subsidy, also known as the Extra Help program, are exempt from a Part D late-enrollment penalty.

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