What Is the Part D Late Enrollment Penalty?
Medicare Part D is prescription drug coverage offered through private insurance companies approved by Medicare. It helps cover the cost of medications and is available to anyone with Medicare. You can get Part D either as a standalone plan or as part of a Medicare Advantage plan that includes drug coverage.
When you’re first eligible for Medicare—usually around your 65th birthday—you have a seven-month window called your Initial Enrollment Period (IEP) to sign up for prescription drug coverage. If you don’t enroll in a Part D plan (or another type of creditable drug coverage) during that time, and you go 63 days or more without coverage, you may have to pay a late enrollment penalty when you eventually do sign up.
So basically:
If you delay signing up for Medicare drug coverage and don’t have another plan that’s “good enough” in Medicare’s eyes (called creditable coverage), Medicare will charge you a late fee—and that fee doesn’t go away. You’ll pay it every month for as long as you have Part D. That’s why it’s important to plan ahead, even if you’re not currently taking any medications.
How to Avoid the Part D Late Enrollment Penalty
If you want to avoid paying the Part D penalty, there are three things to be mindful of as you approach Medicare age.
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Enroll in a Medicare Drug Plan When You’re First Eligible
- Even if you don’t currently take prescription medications, enrolling in a Part D plan when you’re first eligible can help you avoid future penalties. Many plans offer low or even $0 monthly premiums, so it’s often worth enrolling for peace of mind.
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Maintain Continuous Creditable Drug Coverage
- Do not go 63 days or more without Medicare Part D or other creditable prescription drug coverage. Creditable coverage includes drug plans from an employer or union, TRICARE, the Department of Veterans Affairs, the Indian Health Service, or other federal programs. Each year, your plan must tell you whether your drug coverage is creditable—usually by letter, benefits summary, or newsletter. Keep this documentation in case you need it when enrolling in Part D later.
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Respond to Plan Requests About Your Coverage History
- If you join a Medicare drug plan and the plan believes you may have had a gap in creditable coverage, they’ll send you a letter with a form asking for your coverage history. Be sure to fill out and return the form by the deadline. If you don’t provide this information, you may be charged the penalty—even if you had qualifying coverage!
Bottom Line: Late enrollment penalties can sneak up on you and cost you extra money every single month. The good news is that avoiding them is totally doable if you plan ahead. Whether you’re turning 65 soon, retiring later, or helping a loved one navigate Medicare, it pays to understand your options early and keep track of your coverage. If you’re unsure whether your current drug coverage is creditable, or when your enrollment window starts and ends, reach out to a licensed Medicare advisor for help. A little preparation now can save you a lot of hassle (and dollars) later.
If you’re a Medicare recipient and wanting to make changes to your current coverage, check out our other article ‘A Beginner’s Guide to Navigating Medicare Open Enrollment.’
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Article updated 5/20/25.