Medicare Part D Late Enrollment Penalty: How It’s Calculated (2026)
Reviewed September 29, 2026. The Medicare Part D late enrollment penalty is a permanent monthly surcharge added to your drug plan premium if you went 63 or more days in a row without Part D or other creditable drug coverage after your Initial Enrollment Period ended. It equals 1% of the national base beneficiary premium ($38.99 in 2026) for every full month you were uncovered, rounded to the nearest $0.10.
Quick answer: 14 uncovered months × 1% × $38.99 = about $5.46, which rounds to a $5.50 per month penalty in 2026. CMS has announced a 2027 base beneficiary premium of $41.33, so the same 14-month penalty would be about $5.80 per month in 2027.
How the Part D late enrollment penalty is calculated
Medicare uses a simple formula: the number of full months you went without Part D or creditable coverage, multiplied by 1% of the national base beneficiary premium for the current year. The result is rounded to the nearest $0.10 and added to your monthly Part D premium. See Medicare’s Part D cost page.
Because the base premium is recalculated every year, the dollar amount of your penalty can change each January even though the number of penalty months stays the same.
2026 and 2027 penalty examples
| Months without coverage | Penalty in 2026 (base $38.99) | Estimated penalty in 2027 (base $41.33) |
|---|---|---|
| 6 months | $2.30/month | $2.50/month |
| 12 months | $4.70/month | $5.00/month |
| 14 months | $5.50/month | $5.80/month |
| 24 months | $9.40/month | $9.90/month |
| 36 months | $14.00/month | $14.90/month |
Figures are calculated from the base beneficiary premiums published by CMS for 2026 and 2027. Your plan’s own premium is added on top of the penalty.
When the penalty applies
According to Medicare, you may owe the penalty if, at any time after your Initial Enrollment Period is over, there is a period of 63 or more days in a row when you don’t have Medicare drug coverage or other creditable prescription drug coverage. Read Medicare’s guidance on avoiding penalties.
- You didn’t join a Part D plan (or a Medicare Advantage plan with drug coverage) when you were first eligible, and you had no creditable coverage.
- You dropped Part D later and went 63+ days before getting new coverage.
- Your employer, union or retiree drug coverage was not creditable, meaning it was expected to pay less on average than standard Part D.
Your Initial Enrollment Period is the seven-month window around the month you first become eligible for Medicare. Our turning 65 Medicare checklist walks through that timeline month by month.
How long you pay it
Medicare states that the monthly penalty is added for as long as you have Medicare drug coverage, even if you switch plans. For most people that means the rest of their lives, which is why a small monthly amount can add up to a large total over time.
Who doesn’t pay the penalty
- People with creditable coverage: If your employer, union, TRICARE, VA or other drug coverage was creditable, those months don’t count. Keep the annual “notice of creditable coverage” your plan sends you.
- People who qualify for Extra Help: Medicare says you won’t pay a late enrollment penalty if you qualify for Extra Help with drug costs.
If you are still working at 65, read Working Past 65: Medicare, Employer Coverage, COBRA and HSA Rules before you drop or delay any coverage.
How to challenge a penalty you think is wrong
If your plan tells you that you owe a penalty and you disagree, you can ask for a reconsideration. Medicare’s fact sheet says to return the reconsideration form within 60 days of the date on the letter and to include proof, such as a copy of your notice of creditable prescription drug coverage from an employer or union plan. A Medicare contractor that is not connected with your plan reviews the request. Download Medicare’s Part D penalty fact sheet.
How to avoid the penalty
- Join a Part D plan, or a Medicare Advantage plan that includes drug coverage, during your Initial Enrollment Period, even if you take few medications.
- If you delay, confirm in writing that your other drug coverage is creditable.
- Avoid gaps of 63 days or more when switching or losing coverage.
- Use the fall Open Enrollment Period (October 15 to December 7) to join or change plans if you are eligible. Our guide to the difference between AEP and OEP explains which window applies.
- Check whether you qualify for Extra Help if your income and resources are limited.
Once you have coverage, it helps to know how Part D costs work through the year. In 2026, Part D deductibles can be no higher than $615 and your out-of-pocket drug costs are capped at $2,100; Medicare lists those limits as $700 and $2,400 for 2027. Learn more in Understanding Medicare Part D Drug Coverage Phases and Understanding Medicare Premiums.
Part D penalty vs. Part B penalty
The two penalties are calculated differently. The Part D penalty is 1% per uncovered month. The Part B penalty is an extra 10% for each full 12-month period you could have had Part B but didn’t sign up. Signing up for Part B on time avoids that separate surcharge.
Frequently asked questions
How much is the Part D late enrollment penalty in 2026?
It is 1% of $38.99 (about $0.39) for each full month without creditable coverage, rounded to the nearest $0.10. For example, 12 uncovered months equals a $4.70 monthly penalty in 2026.
Does the Part D penalty ever go away?
Generally, no. Medicare adds it for as long as you have Medicare drug coverage. It doesn’t apply while you qualify for Extra Help.
Is the penalty charged if I have VA or employer drug coverage?
Not if that coverage is creditable. Keep the written notice showing it was creditable in case your Part D plan asks for proof.
Can I appeal a Part D late enrollment penalty?
Yes. Request a reconsideration within 60 days of the date on your penalty letter and include any proof of creditable coverage.
Does a Medicare Advantage plan with drug coverage count?
Yes. A Medicare Advantage plan that includes prescription drug coverage counts as Medicare drug coverage, and any penalty you owe is added to that plan’s premium.
This article is general information, not individual advice. Medicare365 is not affiliated with or endorsed by the U.S. government or the federal Medicare program.