Medicare Part D Penalties


Medicare has many different parts and can be difficult to navigate. If it sounds like a foreign language to you, then you probably aren’t alone. At Empower Brokerage, our goal is to help you understand and navigate through the different parts of Medicare. Let’s go over Part D of Medicare and how to avoid paying a penatly.

Medicare Part D

Medicare Part D deals with prescription drug coverage. It is an optional benefit that is offered to anyone who already has Medicare parts A and B. However, if you do not join a Medicare drug plan when you are first eligible then you will likely pay a penalty.

Late Enrollment Penalty

A penalty is an extra amount that is permanently added to your monthly premium. So, if you miss the initial enrollment period, then you will have a permanent cost increase. Although, there are three different ways that you can avoid paying a penalty.

  • The first is to join a drug plan before the initial enrollment period ends. If you aren’t currently taking any medications, you should still consider joining a plan. You never know when you might need it. A Medicare drug plan or a Medicare Advantage plan both count as creditable coverage.
  • You can receive creditable prescription drug coverage from your employer. However, if you lose that coverage you need to enroll in a Medicare drug plan before 63 days is up. If not then you may be subject to pay a penalty.
  • Keep your records! If you have creditable drug coverage rather than a Medicare drug plan, make sure that you keep a record of it so that you aren’t charged a penalty.

How To Calculate Your Penalty

How much your penalty costs may be different for each person. The cost is based on how long you went without creditable prescription drug coverage. To calculate your penalty multiply $35.02 (which is 1% of the national base beneficiary premium in 2018) by the number of months that you were eligible but did not get coverage. Then add that number to your monthly premium and you have your new total cost. The plan is also subject to increase ever year.

Let us help you keep from having to pay a penalty. If you have any questions, give us a call! We have nationally licensed insurance agents ready and waiting to help you. Call our Medicare Helpline at (888) 446-9157.

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