The Part D late enrollment penalty: 1% a month that never goes away

How the Part D penalty is calculated from the national base premium, what creditable coverage means, and how to avoid or appeal the penalty.

If you go 63 days or more in a row without Part D or other creditable drug coverage after your Initial Enrollment Period ends, you will pay a late enrollment penalty when you do join. It is added to your premium every month for as long as you have Part D.

The formula

Penalty = 1% × national base beneficiary premium × number of full months without coverage, rounded to the nearest $0.10. For 2026 the base premium is $38.99.

Two years without coverage adds about $9.36 a month. Five years adds about $23.39 a month, for life.

Creditable coverage

Drug coverage that is expected to pay at least as much as standard Part D counts as creditable. Employer and union plans tell you each year whether they are creditable, usually in a notice sent before October 15. VA and TRICARE drug coverage are creditable. Many cheap discount cards are not.

Avoiding it

• Join Part D (or Medicare Advantage with drugs) during your IEP, even if you take no medications. The lowest-premium plans in many areas cost little.
• Keep your creditable coverage letters from employers.
• Low-income enrollees with Extra Help do not pay the penalty.

Appealing

If you think the penalty is wrong, for example because you had creditable coverage, you can ask for a reconsideration within 60 days of the penalty notice. Provide proof of coverage dates.

Part B has its own, larger penalty; see the Part B penalty.

Questions people ask

How is the Part D penalty calculated?

1% of the national base premium ($38.99 in 2026) for each full month without creditable coverage.

Does the penalty ever end?

Usually not; it lasts as long as you have Part D, except for people with Extra Help.

Is employer drug coverage creditable?

Often yes; your plan sends a notice each year saying whether it is.

Can I appeal?

Yes, within 60 days of the penalty notice.

Independent educational site. Not affiliated with or endorsed by the U.S. government, the federal Medicare program, or any insurance company. Figures are 2026 amounts published by CMS unless noted; check Medicare.gov for your situation.