Part D Premium Penalty


What’s the Part D late enrollment penalty? The late enrollment penalty is an amount that may be added to a person’s monthly Part D premium.


A person enrolled in a Medicare drug plan may owe a late enrollment penalty if he or she goes without Part D or creditable prescription drug coverage for any continuous period of 63 days or more after the end of his or her Initial Enrollment Period for Part D coverage.


Generally, the late enrollment penalty (also called the “LEP” or “penalty”) is added to the person’s monthly Part D premium for as long as he or she has Medicare prescription drug coverage, even if the person changes his or her Medicare drug plan. The late enrollment penalty amount changes each year. The cost of the late enrollment penalty depends on how long the person went without Part D or creditable prescription drug coverage.


How’s the late enrollment penalty calculated? Medicare, not the plan, calculates the late enrollment penalty when a person subject to the penalty first joins a Medicare drug plan.


The late enrollment penalty amount typically is 1% of the national base beneficiary premium for each full, uncovered month that the person didn’t have Part D or creditable coverage. The monthly penalty is rounded to the nearest $0.10 and added to the monthly Part D premium.

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