Medicare Part D is designed to help older adults cover the costs of their prescription drugs. If someone delays enrollment in Part D and doesn't have other prescription drug coverage, they might end up having to pay out of pocket for their medications—and this can be costly. In addition, if they enroll in Part D outside their eligibility window (during their Initial Enrollment Period), they may face a late enrollment penalty.

The Part D late enrollment penalty serves as an incentive for people to enroll when they first become eligible, helping to ensure more older adults have timely access to prescription drug coverage.

When is a Part D enrollment considered "late"?

Generally, an enrollment is considered late if the person did not join within three months after first getting original Medicare (Parts A and B).

People will not be subject to the Part D late enrollment penalty if they:

• Are eligible for Extra Help, also known as the Part D Low-income Subsidy (LIS)
• Have “creditable coverage” (coverage considered as good as Medicare drug coverage), whether received through their job or a spouse’s job, retiree benefits, or the Veterans Administration (VA)

How is the Part D late enrollment penalty calculated?

The Part D late enrollment penalty is a monthly add-on premium calculated as 1% of the current national base beneficiary premium ($34.70 in 2024) multiplied by the number of uncovered months, rounded to the nearest 10 cents. This amount is added to the Part D monthly premium. Each year, the late enrollment penalty is recalculated based on the year's base premium amount.

In most cases, the Medicare Part D penalty is permanent—even if a person switches Part D plans. Enrollees usually have to pay the penalty for as long as they have drug coverage through Medicare.

Can someone with Medicare appeal a Part D late-enrollment penalty?

Part D plan members have a right to appeal decisions they believe to be incorrect about late enrollment penalties. The letter they receive from the plan telling them about the penalty explains how to appeal and includes a form that may be used to file the appeal.

When should someone appeal a late enrollment penalty?

Part D plan members might want to appeal a plan decision if they believe:

• They promptly submitted information about other creditable drug coverage, but the information was not taken into consideration.
• The plan miscalculated the number of months without creditable drug coverage.
• The end date of the Initial Enrollment Period (IEP) was not correctly identified.
• They have Part D Extra Help and their lateenrollment penalty premium was not correctly waived. 
• They failed to enroll in a Part D plan sooner because they did not receive adequate notice that their other drug coverage was not creditable.

Visit Medicare.gov to learn more about the Part D late enrollment penalty and appeals process.