The late enrollment penalty is calculated by multiplying 1% of the “national base beneficiary premium” ($33.19 in 2020) times the number of full, uncovered months the beneficiary didn’t have Part D or other creditable coverage (but were eligible). The penalty amount is rounded to the nearest $0.10 and added to their monthly Part D premium.
Who is affected?
The beneficiary may owe a late enrollment penalty if, for any continuous period of 63 days or more after the Initial Enrollment Period is over, they go without one of these:
- A Medicare Prescription Drug Plan (Part D)
- A Medicare Advantage Plan (Part C) like an HMO or PPO with drug coverage
- Creditable prescription drug coverage through an employer or union
- Dual Eligible/ Extra Help recipients are exempt from paying the penalty
When does the beneficiary find out their penalty amount?
When they enroll in a Medicare Part D plan, the plan will tell them if they owe a penalty and what the total premium, including the penalty, will be. Click here for additional details on the Part D Late Enrollment Penalty, including the process for “reconsideration”.
In addition to the monthly premium