: Your Medicare Part D late-enrollment penalty is calculated as the number of months you are without some form of "creditable" prescription drug coverage multiplied by 1% the annual base Medicare Part D premium (for example, $33.19 in 2019 and $35.02 in 2018).
Not a big fan of math? No problem.
The amount of your Medicare Part D late-enrollment premium penalty is calculated each year by the Centers for Medicare and Medicaid
Services (CMS) and then reported by CMS to your Medicare Part D plan or Medicare Advantage plan. Your
Medicare Part D plan will then send you a letter regarding the amount of
your penalty. So, CMS or Medicare will calculate your Part D Late Enrollment Penalty
by totaling the number of months you have been without "creditable"
prescription drug coverage and multiplying the total months by 1% of the
national base average
Medicare Part D premium (this changes each year).
The letter from your Part D plan will also detail how CMS calculated the penalty and explain how
you can ask for a review
of your the Late-Enrollment Penalty (or LEP).
" prescription drug coverage means drug coverage that is at-least-as-good-as basic drug coverage provided by a Medicare Part D plan. If you have employer drug coverage
, your employer health plan administrator will have sent you a letter telling whether your drug coverage is "creditable".
As reference, here are the average national base Medicare Part D premium values used by CMS to calculate the late-enrollment penalties for past years:
- 2019: $33.19
- 2018: $35.02
- 2017: $35.63
- 2016: $34.10
- 2015: $33.13
- 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
You can click here to read more about how CMS calculates Medicare Part D late-enrollment penalties.
2019 Example: How do I estimate my five-year late-enrollment penalty
As shown in the table above, the 2019 national base Medicare Part D premium is $33.19. So, if you were previously without creditable prescription drug coverage for
five years (or 60 months), you would pay, in addition to your monthly
Medicare plan premium, a 2019 monthly penalty of $19.91 (60 x (1% x $33.19)) - or an additional $252 per
year. Using this same example, you would have paid a 2013 monthly
penalty of $18.70 or about $238.92 per year.
Who will pay a late-enrollment penalty?
If you did not enroll into a Medicare Part D prescription drug plan during your initial enrollment period (IEP)
and you did not have other creditable prescription coverage (like VA or
employer benefits), you could be subject to a penalty that is added to
your monthly Medicare Part D premiums. In addition, if you canceled your Medicare Part D plan or were without
creditable prescription drug coverage for more than 63 days, you will
also be subject to the premium penalty.
How can my late-enrollment penalty increase over time?
Here is an example chart showing how a Medicare Part D late-enrollment
penalty can increase over the years. This chart is assuming that the
Medicare beneficiary was eligible for a Medicare Part D plan back in
2006, but decided not to join a Medicare prescription drug plan until
Late-enrollment Penalty Blogs
For more information, you can click here
to review our recent Blog articles detailing the late-enrollment penalty.
Late-enrollment Penalty Frequently Asked Questions (FAQs)
You can also click here if you would like to review more
of our Frequently Asked Question (FAQ) regarding the Medicare Part D late-enrollment penalty.
or see our most recent Blogs on the Late-Enrollment Premium Penalty:
The Late-Enrollment Penalty and the Medicare Part D Extra Help program
Remember, not everyone is subject to the Late-Enrollment Penalty. CMS
provides that there will be no Late Enrollment Penalty "for any
beneficiary eligible for the low income subsidy" or Extra Help program.
CMS late-enrollment penalty tip-sheets.
If you wish to see a few examples of how to calculate a late enrollment penalty you can
click here for the CMS Tip Sheet on Calculating the Late Enrollment Penalty
See other past examples from CMS below:
CMS Tip Sheet - Calculating the Late Enrollment Penalty (2018 Revision)
CMS Tip Sheet - Calculating the Late Enrollment Penalty (2016 Revision)
CMS Tip Sheet - Calculating the Late Enrollment Penalty (2014 Revision)
CMS Tip Sheet - Calculating the Late Enrollment Penalty (2011 Revision)
CMS Tip Sheet - Calculating the Late Enrollment Penalty (2009 Revision)
CMS Tip Sheet - Calculating the Late Enrollment Penalty (2006)