What it is
The Part D late enrollment penalty is a charge that can be added to your monthly Part D prescription drug plan premium. It generally applies when a person could have joined a Part D plan but did not, and also had no other creditable drug coverage for a period of time.
"Creditable" coverage means drug coverage that is expected to pay at least as much as standard Medicare drug coverage. Some employer, union or other plans may qualify. Your plan or former plan can tell you whether your coverage counted.
Medigap plans do not include prescription drug coverage today. That means people with a Medigap plan generally need a separate Part D plan for drugs. How the penalty is figured and how long it lasts are set by Medicare, so confirm the details at Medicare.gov.
How it’s traditionally been approached
Many people first meet this topic when they turn 65 and join Medicare. They often choose a Part D plan during their first enrollment window, so no penalty applies.
Others delay because they take few medicines, or because they have drug coverage through work or another source. In those cases, keeping proof that the coverage was creditable is a common step. Plans usually send a notice each year about this.
Some people choose Medicare Advantage plans that include drug coverage. Others pair Original Medicare and a Medigap plan with a stand-alone Part D plan. Both approaches are common, and each has real strengths and trade-offs. Some people with limited income may qualify for help through programs run by Medicare or their state.
How the right licensed agent may help
A Medigap agent may help you sort out whether you had creditable coverage, when your enrollment windows were, and what joining a drug plan now might involve. Agents are licensed, and many can compare drug plans from several carriers.
A visit or call is usually a conversation. The agent may ask about your current coverage, your medicines, your pharmacy and when you became eligible for Medicare. Bringing old coverage letters and a medicine list can help.
Good questions to ask include: Did my past coverage count as creditable? Could I have a penalty, and can I dispute it? How would a Part D plan fit with Medigap Plan G or another plan? Rules vary by state and change over time, so also confirm with Medicare.gov or your State Health Insurance Assistance Program (SHIP). Call 1-800-MEDIGAP for more information.
The bigger picture
Worry about a surprise charge can weigh on you. Many people feel better once they understand what applies to them and what does not. Clear information may bring more peace of mind about your budget and your health routine.
Taking medicines as prescribed matters for your wellbeing, so cost concerns should not stay unspoken. If you also want to find care providers, Providers.plus may be a helpful place to look. Every approach to coverage has its place, and the right choice is personal.
Keep in mind
- This page is education only. It is not insurance, legal, tax or medical advice.
- 1-800-MEDIGAP is independent and privately run. It is not connected with or endorsed by the U.S. government or the federal Medicare program. Official information is at Medicare.gov.
- Enrollment windows, creditable coverage rules and help programs can change, so confirm current details before you decide.
- Plans C and F are available only to people who became eligible for Medicare before January 1, 2020. Newly eligible people may look at plans such as A, B, D, G, K, L, M and N.
Take the next step
- Talk with a Medigap agent ↗Jeff Cline on contacts.plus — a person, not a call center.
Not sure where to start? Answer a few gentle questions and choose who you’d like to hear from.
Call 1-800-MEDIGAP for more information
Frequently asked questions
What is the Part D late enrollment penalty?
The Part D late enrollment penalty is an extra amount that may be added to your Part D premium if you went without creditable drug coverage when you could have had it. It is set by Medicare rules. Confirm how it applies to you at Medicare.gov.
Who has to pay the Part D late enrollment penalty?
It may apply to people who join a Part D plan after their first eligibility window and had no creditable drug coverage in between. Not everyone is affected. People who had creditable coverage, or who get certain extra help, may not owe it.
How do I know if my drug coverage was creditable?
Your past plan or employer can tell you. Plans usually send a yearly notice that says whether the coverage was creditable. Keep these letters, since they may help if you ever need to show proof.
Does a Medigap plan cover prescription drugs, so I can skip Part D?
No. Medigap plans sold today do not include drug coverage. People with Medigap generally need a separate Part D plan, and waiting too long to join one may lead to a penalty.
Can I dispute a Part D late enrollment penalty?
Often there is a way to ask for a review if you believe the penalty is wrong. Your plan will generally explain the steps in its notice. A SHIP counselor or a Medigap agent may help you understand the process.
How can a Medigap agent help with the Part D late enrollment penalty?
A Medigap agent may help you review your coverage history and compare Part D plans that could work alongside Medigap. An agent cannot promise a result. Call 1-800-MEDIGAP for more information.
Educational resource. 1-800-MEDIGAP shares general information and connects people with independent licensed agents. It is not professional advice. Talk with a qualified professional about your own situation.