Watch the Video
The Medicare Part D late enrollment penalty applies when you go 63 or more consecutive days without creditable prescription drug coverage after you first become eligible for Part D. Unlike some other penalties, this one is permanent and is recalculated every year based on the national base beneficiary premium.
How the Penalty Is Calculated
The penalty equals 1% of the national base beneficiary premium multiplied by the number of full months you lacked creditable drug coverage. In 2026, the national base beneficiary premium is $38.99/month.
| Months Without Coverage | Penalty % | Monthly Penalty (2026) | Added to Your Premium |
|---|---|---|---|
12 months (1 year) | 12% | ~$4.68 | Yes, permanently |
24 months (2 years) | 24% | ~$9.36 | Yes, permanently |
36 months (3 years) | 36% | ~$14.04 | Yes, permanently |
60 months (5 years) | 60% | ~$23.39 | Yes, permanently |
The Penalty Adjusts Every Year
Unlike the Part B penalty, which is a fixed percentage of the current premium, the Part D penalty is recalculated each year when the national base beneficiary premium changes. This means your penalty amount can increase or decrease slightly year to year.
What Counts as Creditable Coverage?
Creditable drug coverage is coverage that is at least as good as standard Medicare Part D. Examples include employer or union drug coverage, VA drug benefits, TRICARE, and FEHB plans. Your plan must notify you in writing each year before October 15 whether your coverage is creditable. Keep this notice as proof.
How to Avoid the Penalty
Enroll in a Part D plan during your Initial Enrollment Period, or maintain creditable drug coverage through an employer, VA, or other qualifying source. If you lose creditable coverage, enroll in Part D within 63 days to avoid the penalty.
Can the Part D penalty be waived?
In limited cases, yes. If you can show you were given incorrect information by a federal employee that caused you to miss enrollment, you can request a reconsideration. Qualifying for Extra Help (Low-Income Subsidy) also exempts you from the penalty.
Does VA coverage protect me from the Part D penalty?
Yes. VA drug benefits are considered creditable coverage for Part D. As long as you maintain VA drug coverage, you will not accrue a Part D penalty.
What if I never take prescription drugs? Do I still need Part D?
Enrolling in a low-premium Part D plan is generally advisable even if you take no medications. The cost of a $0 or low-premium plan is usually far less than the penalty you would owe if you needed to enroll later.
Need Help Understanding Your Medicare Options?
Our licensed Medicare experts can help you find the right coverage for your needs.