A Guide to Part D Penalties

July 23, 2015

What are Medicare Part D penalties?

There is a late penalty premium for not joining a Medicare Part D drug plan when you first become eligible for Medicare. Generally, you are late if you did not join within 3 months after your Medicare Part A or Part B becomes effective.

You do not have to pay the penalty if you are eligible for the Extra Help with costs.

You may not have to pay the penalty if you qualify for a Special Enrollment Period because you had other drug coverage that is as good as Medicare (creditable coverage) at the time you turned 65. Examples of creditable coverage include:

  • Coverage through your job or your spouse’s job, OR
  • Retiree coverage, OR
  • Coverage through the Veterans Administration.

The penalty premium is added onto the regular premium that you pay to your Medicare drug plan. The fee is calculated as 1% of the average monthly prescription drug premium (1% of $33.13 in 2015, or 33 cents) times the number of months you were late, rounded to the nearest 10 cents. This penalty is permanent – you would have to pay it for as long as you have Medicare Prescription Drug Coverage.

Learn more about penalties here.