Part D Penalty Calculator

Medicare Part D Late Enrollment Penalty Calculator

Use this calculator to estimate your potential monthly Medicare Part D late enrollment penalty. This penalty is added to your monthly Part D premium if you go without creditable prescription drug coverage for 63 days or more after your Initial Enrollment Period ends.

Understanding the Medicare Part D Late Enrollment Penalty

Medicare Part D provides prescription drug coverage. If you don't enroll in a Part D plan when you're first eligible and don't have other creditable prescription drug coverage for a continuous period of 63 days or more, you may have to pay a late enrollment penalty. This penalty is permanent and will be added to your monthly Part D premium for as long as you have Medicare prescription drug coverage.

Who Gets a Part D Penalty?

You might incur a Part D late enrollment penalty if:

• You didn't join a Medicare Part D plan when you were first eligible.
• You didn't have other creditable prescription drug coverage (like from an employer or union) for at least 63 days in a row after your Initial Enrollment Period ended.
• You dropped your creditable coverage and didn't join a Part D plan within 63 days.

Creditable coverage means your drug coverage is expected to pay, on average, at least as much as Medicare's standard prescription drug coverage.

How the Penalty is Calculated

The penalty is calculated based on two main factors:

1. Number of Months Without Creditable Coverage: Medicare counts the total number of full months you were eligible for Part D but didn't have creditable coverage.
2. National Base Beneficiary Premium (NBBBP): This is a standard amount set by Medicare each year.

The penalty amount is 1% of the NBBBP for each full month you didn't have creditable coverage. This total percentage is then multiplied by the NBBBP to determine your monthly penalty.

Formula: Monthly Penalty = (0.01 * NBBBP) * Number of Months Without Creditable Coverage

Example Scenario:

Let's say the National Base Beneficiary Premium (NBBBP) for the current year is $34.70. If you went 24 full months without creditable Part D coverage:

• Penalty percentage: 24 months * 1% = 24%
• Monthly penalty: 24% of $34.70 = $8.33

This $8.33 would be added to your monthly Part D plan premium.

Important Considerations:

• The penalty is rounded to the nearest ten cents.
• The penalty is permanent; you will pay it for as long as you have Part D coverage.
• If you have questions about your specific situation or creditable coverage, contact Medicare directly or your State Health Insurance Assistance Program (SHIP).