For Medicare Part D drug coverage, what is the late enrollment penalty?

Dr. Michael Roizen, MD
Internal Medicine

The late-enrollment penalty is an added fee you have to pay when you enroll in a Medicare Part D plan if you either 1) didn’t join a Medicare drug plan when you were first eligible for Medicare and you didn’t have prescription drug coverage from an employer, union, etc., or 2) didn’t have any drug coverage (Medicare or otherwise) for 63 days or more in a row.


At least an extra 1 percent of the national average premium will be added to your premium for each month that you delay and are without creditable drug coverage, and you will pay the penalty (which increases each year, along with the average premium) for as long as you have Medicare drug coverage. In other words, if you delay for 20 months, your Part D premiums will always be at least 20 percent more than what other people pay — or what you would have paid if you’d signed up on time.

For 2010, the national average premium is $32. So each month you go without coverage adds 32 cents (1 percent of $32) to your monthly premium. For example, if you sign up for Part D during open enrollment in November or December 2010, and you’ve been without creditable drug coverage for 20 months after first becoming eligible to join Part D, your penalty would be $6.40 a month (or $76.80 for the year) on top of your regular plan premiums. If the national average premium increases in 2011 and subsequent years, your penalty also rises.

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.