What Is the Medicare Part D Late Enrollment Penalty?

It’s important to sign up for a Medicare Part D prescription drug plan when you sign up for Medicare. If you don't, and you decide to get Part D later, you could face a permanent late enrollment penalty.

The Medicare Part D penalty is added to your monthly premiums. It also applies if you drop your Part D plan and go without prescription drug coverage for too long.

Here’s what you need to know about the Medicare Part D late enrollment penalty and how to avoid it.

You’ll have to pay a late enrollment penalty if you go at least 63 days without sufficient prescription drug coverage after the end of your initial Medicare enrollment period

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Centers for Medicare & Medicaid Services. Avoid late enrollment penalties. Accessed Mar 26, 2026. View all sources .

The initial enrollment period is when you’re first eligible for Medicare. It lasts for seven months around your 65th birthday. This includes the three months before your birthday month, your birthday month and the three months after

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Centers for Medicare & Medicaid Services. When Does Medicare Coverage Start?. Accessed Mar 26, 2026. View all sources .

Your best bet to avoid the penalty is to sign up for prescription drug coverage during your initial enrollment period. Make sure you stay enrolled afterward.

Medicare offers two coverage options to choose from:

• Stand-alone Medicare Part D plans.

• Medicare Advantage plans with prescription drug coverage. 

You may be able to delay signing up for Part D if you have creditable prescription drug coverage.

Your Medicare Part D late enrollment penalty gets higher the longer you go without Medicare Part D or other creditable prescription drug coverage. Here’s how it’s calculated:

• The Medicare Part D late enrollment penalty is 1% of the national base beneficiary premium for each full month that you didn’t have Medicare Part D or other creditable prescription drug coverage, rounded to the nearest 10 cents.

• The penalty is calculated in part based on the national base beneficiary premium for Medicare Part D: $38.99 in 2026

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  Centers for Medicare & Medicaid Services. 2026 Medicare Part D Bid Information and Part D Premium Stabilization Demonstration Parameters. Accessed Mar 26, 2026. View all sources .

If you weren’t covered for two years, for example, that’s 24 months. So you would owe 24% of $38.99, or $9.40 (rounded to the nearest 10 cents), each month for 2024, in addition to your premiums for either your Medicare Part D plan or Medicare Advantage plan with prescription drug coverage.

It’s permanent. You’ll continue to owe the penalty with your premiums if you have Medicare Part D or a Medicare Advantage plan with prescription drug coverage

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Centers for Medicare & Medicaid Services. Avoid late enrollment penalties. Accessed Mar 26, 2026. View all sources .

Because the penalty is tied to the national base beneficiary premium, it can change yearly. So even if you don’t go without Part D coverage again after you incur the penalty, your penalty amount could go up as the national base beneficiary premium rises.

If you wait to sign up for Medicare Part D because you already have equivalent or better prescription drug insurance, such as coverage from an employer or a union, you won’t owe the Part D late enrollment penalty^[1]Centers for Medicare & Medicaid Services. Avoid late enrollment penalties. Accessed Mar 26, 2026. View all sources .

For that other insurance to count, your non-Medicare prescription drug coverage has to qualify as “creditable prescription drug coverage” because it pays for at least as much as Medicare’s standard prescription drug coverage, on average.

You don’t need to do the math to determine whether your non-Medicare prescription drug coverage qualifies. Plans must tell you every year whether or not your coverage counts as creditable prescription drug coverage.

Once your drug plan informs you that you will be charged a late enrollment penalty, you have 60 days to ask for reconsideration.

Your plan will provide information on how to request reconsideration, including the evidence you might need to show.

Most reconsideration decisions happen within 90 days

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Centers for Medicare & Medicaid Services. Avoid late enrollment penalties. Accessed Mar 26, 2026. View all sources . Until the decision is made, you need to keep paying the penalty, or you might be dropped from your plan.

If the reconsideration decision says you don’t owe the penalty, you can receive a refund for the penalty you paid when you shouldn’t have needed to.