For each month you delay enrollment in Medicare Part D, you will have to pay a 1% Part D late enrollment penalty (LEP), unless you:
- Have creditable drug coverage
- Qualify for the Extra Help program
- Prove that you received inadequate information about whether your drug coverage was creditable
In most cases, you will have to pay that penalty every month for as long as you have Medicare. If you are enrolled in Medicare because of a disability and currently pay a premium penalty, once you turn 65 you will no longer have to pay the penalty.
How do you calculate your premium penalty?
Let’s say you delayed enrollment in Part D for seven months (and you do not meet any of the exceptions listed above). Your monthly premium would be 7% higher for as long as you have Part D (7 months x 1%). The national base beneficiary premium in 2020 is $32.74 a month. Your monthly premium penalty would therefore be $2.29 ($32.74 x 1% = $0.3274 x 7 = $2.29) per month, which you would pay in addition to your plan’s premium.
Note: The Part D penalty is always calculated using the national base beneficiary premium. Your penalty will not decrease if you enroll in a Part D plan with a lower premium.