Skip to main content
Home How it works Costs Enrollment Extra help Medigap Dual eligible By state 2026 changes FAQs About
Home / Costs / Late penalty

The late enrollment penalty

If you delay enrolling in Part D without creditable coverage, you'll pay a permanent penalty. Here's how it works and how to avoid it.

This penalty is permanent

Unlike most Medicare penalties, the Part D late enrollment penalty lasts for as long as you have Part D coverage. It's added to your monthly premium and increases each year as the base premium rises.

When does the penalty apply?

You may owe a late enrollment penalty if:

  • You went 63 or more consecutive days without Part D or other creditable prescription drug coverage
  • You didn't enroll during your Initial Enrollment Period when first eligible

How is it calculated?

The penalty is 1% of the national base beneficiary premium for each full month you could have had Part D but didn't. Since the base premium changes each year, your penalty amount can increase over time.

Example: If you went 18 months without coverage, your penalty would be 18% of the current national base premium, added to your monthly Part D premium every month.

How to avoid the penalty

  • Enroll during your IEP — sign up for Part D when you first become eligible for Medicare
  • Maintain creditable coverage — employer drug plans, TRICARE, VA coverage, and some other plans count as creditable. Keep documentation proving you had this coverage
  • Don't let coverage lapse — if you lose creditable coverage, you have 63 days to enroll in Part D without penalty

What is creditable coverage?

Creditable coverage is prescription drug coverage that is at least as good as standard Part D coverage. Employers and other plan providers are required to notify you each year whether your coverage is creditable. Common examples include:

  • Employer or union drug plans
  • TRICARE
  • Veterans Affairs (VA) benefits
  • Federal employee health benefits
  • Indian Health Service coverage

If you're unsure whether your current coverage is creditable, contact your plan administrator or talk to a Local Medicare Agent.