What Is The Part D Late Enrollment Penalty?

Medicare Part D consists of a monthly premium and cost-sharing, which means you pay your part of the cost through a deductible or copayment. When enrolling in Medicare at age 65, it is best to enroll in Medicare Part D Prescription Drug coverage as well, so that you avoid a permanent late enrollment penalty. If you are still employed at 65, however, you are able to avoid this penalty. 

Enrolling in Medicare Part D

There are two ways to get Medicare Part D drug coverage:

1. Medicare drug plans: In order to receive a Medicare drug plan, you must first be enrolled in Medicare Part A (hospital insurance) and/or Medicare Part B (medical insurance). Medicare Part A and B together create Original Medicare, which doesn’t provide prescription drug coverage, except for in special circumstances. It’s recommended that you also add on a Medicare Part D plan to provide prescription drug coverage while enrolled in Original Medicare.
2. Medicare Advantage: You can also enroll in a Medicare Part C, or Medicare Advantage Plan. Most Medicare Advantage Plans provide prescription drug coverage, but be sure to check that your plan offers prescription medication coverage.   

Part D Late Enrollment Penalty 

The Medicare Part D late enrollment penalty is the penalty amount that is permanently added to your Part D monthly premium. There is a possibility of paying this late enrollment penalty if you do not enroll during your Initial Enrollment Period, and if you go 63 or more days without Medicare drug coverage or any other accredited drug coverage. 

How Much Is The Late Enrollment Penalty?

This amount is determined by how long you went without Medicare prescription drug coverage, or any other creditable drug coverage. The penalty is calculated by multiplying 1% of the national premium ($33.06 as of 2021) by the number of months you didn’t have Part D or creditable coverage. This amount is then rounded to the nearest $0.10 and added to your premium.

Your penalty may vary from year to year because the national base beneficiary premium changes each year. 

If you disagree with the penalty, then you may ask for a “reconsideration.” You have 60 days from the date on the paperwork you receive to fill it out and mail or fax it back. It is also important to send any credible paperwork to dispute the late enrollment penalty. 

Need Help Enrolling?

At Cornerstone Senior Advisors, we understand the importance of enrolling on time with any Medicare plan, including Medicare Part D. If you need help understanding the different enrollment periods available to you, reach out to us today and we’ll be happy to help!