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If I do not enroll in a Medicare Part D prescription drug plan when I am first eligible, does that prevent me from joining a drug plan in future years?

Category: Medicare Part D Enrollment
Updated: Sep, 12 2022

No, but . . .  you may pay a higher premium each month due to your late enrollment penalty.  The Medicare Part D program is voluntary and you are not required to join a drug plan during your Initial Enrollment Period (IEP).

If you later decide to join a Medicare Part D plan, you can enroll during the annual Open Enrollment Period (AEP) that run each year from October 15th through December 7th of each year - with your drug plan coverage starting January 1st of the next year.

You also may be able to join a Medicare Part D outside of the annual Open Enrollment Period if you can take advantage of a Special Election Period.

For example, outside of the AEP, you may be able to use a Special Enrollment Period to join a 5-star Medicare Part D or Medicare Advantage plan if one is available in your area.  You can telephone a Medicare representative at 1-800-Medicare to learn more about any 5-star Medicare plans that may be in your area.

More about the Late-Enrollment Penalty.

Please note that, although you are not required to join a Medicare Part D plan when you first become eligible for Medicare, you may be assessed a permanent late enrollment premium penalty for each month after your initial Medicare eligibility that you do not have some form of creditable prescription drug coverage (such as employer health coverage or VA coverage).

Please also note that no late-enrollment penalties are assessed for people who qualify for the Medicare Part D financial Extra-Help program.

The late-enrollment premium penalty is calculated as a monthly premium increase of 1% of the average annual monthly Medicare Part D premium for each month you are without creditable prescription drug coverage. The average monthly Medicare Part D premium for 2023 is $32.74 - and can change every year.  (Click here to see the changes in the average annual monthly premium since 2006.)

So for example, if you do not have some form of "creditable" prescription drug coverage for 12 months (or wait 12 months beyond your eligibility date before enrolling in a Medicare Part D plan), you will accumulate a permanent penalty amounting to an increased monthly premium of an additional 12% (1% for each month) of the national average monthly Part D plan premium ($32.74 in 2023) - meaning that you will pay an additional $3.90 per month as a penalty ($3.9288 rounded to nearest $0.10). This penalty then will be added to what you are paying for your monthly premium costs.

Again, the penalty is permanent and can change each year - depending on the average Medicare Part D premium.

As reference, here are the national base average premium values used by CMS to calculate the late-enrollment penalties for past years:

  • 2014: $32.42
  • 2013: $31.17
  • 2012: $31.08
  • 2011: $32.34
  • 2010: $31.94
  • 2009: $30.36
  • 2008: $27.93
  • 2007: $27.35
  • 2006: $32.20

2023 Example: How do I estimate my five-year late-enrollment penalty?

As shown in the table above, the 2023 national base Medicare Part D premium is $32.74. So, if you were previously without creditable prescription drug coverage for five years (or 60 months), you would pay, in addition to your monthly premium, a 2023 monthly penalty of $19.60 (60% of $32.74) - or about an additional $235 for the year.  Click here if you would like to read more on the Medicare Part D late-enrollment penalty. Also, you can learn more in our Late-Enrollment Penalty (LEP) articles.

Our suggestion:  Join a low-costing Medicare Part D or Medicare Advantage plan and avoid the penalty.

We often suggest that people who are not using any prescription medications or who may have very limited prescription costs consider enrolling in one of the lower costing Medicare Part D plans that are available in your state - and simply consider the Part D program as the cost of insurance - like your car insurance - and you will have it if you should ever need it.

For instance, here is a link to the 2022 Medicare Part D plans in Florida - you will notice that the lowest costing monthly premium for prescription drug coverage in Florida is $7.70. See: https://PDP-Finder.com/2022/FL.

You can just change the "state" in our PDP-Finder online tool so you can see the monthly plan premiums in your area.

Aside from just looking at the lowest costing monthly premium, you may also want to consider a Medicare Part D plan’s company reputation or the plan’s "formulary / drug list" size and choose to pay a few dollars more for a Medicare Part D plan offered from a familiar company or has a plan that has a more generous drug list.

Still have more questions that we can answer? Click here to let us know.  

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