Medicare Part D Late Enrollment Penalty
The late enrollment penalty is an amount that’s permanently added to your Medicare Drug Coverage (Part D) premium. You may a late enrollment penalty if you:
- Do not enroll in a Medicare Part D plan when you first have the opportunity (unless you have creditable coverage through your employer)
- If at any time after your Initial Enrollment Period is over there is a period of 63 days or more in a row that you don’t have Medicare Drug Coverage or other creditable prescription drug coverage.
You will generally have to pay the penalty for as long as you have Medicare drug coverage.
How Much Is The Part D Penalty?
The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.
Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($33.06 in 2021) times the number of full, uncovered months you didn’t have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.
The national base beneficiary premium may change each year, so your penalty amount may also change each year.
How Do I Know If I Owe A Penalty
After you join a Medicare drug plan, the plan will tell you if you owe a penalty and what your premium will be. In general, you’ll have to pay this penalty for as long as you have a Medicare drug plan.
What If I Don’t Agree With The Late Enrollment Penalty?
You may be able to ask for a “reconsideration”. Your drug plan will send information about how to request a reconsideration.
Complete the form, and return it to the address or fax number listed on the form. You must do this within 60 days from the date of the letter telling you that you owe a late enrollment penalty. Also send any proof that supports your case, like a copy of your notice of creditable prescription drug coverage from an employer or union plan.
Do I Have To Pay The Penalty Even If I Don’t Agree With It?
By law, the late enrollment penalty is part of the premium, so you must pay the penalty with the premium. You must also pay the penalty even if you’ve asked for a reconsideration. Medicare drug plans can disenroll members who don’t pay their premiums, including the late enrollment penalty portion of the premium.
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