What is Medicare Part D?

How is the Late Enrollment Penalty Figured?

For each month you go without coverage after your enrollment period has ended, you are charged 1% of the National Base Beneficiary Premium. In 2023, that amount is $32.74 per month. Assume your enrollment period ended in January of this year and you did not enroll in a prescription drug plan. Now assume that you wait until the next open enrollment season for Medicare, which begins on October 15. You decide to enroll in Medicare Part D on November 1. You would have gone nine months without coverage. Therefore, you will be charged 9% of $32.74 – which is $2.9466. That amount will be rounded to the nearest $0.10 in either direction and added to your monthly premium. In this case, your penalty would be $2.90 per month.

Yes, you will continue to pay the penalty every month in most cases. Generally speaking, once Medicare has determined a late enrollment penalty for a Medicare Part D prescription drug plan, that penalty will apply to the monthly premium as long as the member is enrolled.