En español | Part D late penalties are permanent and are calculated according to how many months you had delayed Part D enrollment. But whether you’re liable for penalties depends on your situation.
You will not be liable for Part D late penalties in the following circumstances:
In all other situations, you are liable for Part D late penalties. Here’s how they’re calculated: You pay 1 percent of the national average Part D premium (known formally as the base beneficiary premium) in any given year, multiplied by the number of months you’ve been without creditable drug coverage since enrolling in Part A and/or Part B.
For example, if the national average premium is $36 in a particular year, and you had gone for five full years (60 months) without creditable coverage, your penalty would be 60 x 36 cents (1 percent of $36) = $21.60. This amount would be added every month to your regular Part D premiums for that year. You would continue to pay penalties every year that you remain in the program. If the national average premium goes up or down in any given year, the amount of your penalty changes accordingly.
Before the Part D drug benefit came into effect in 2006, many people had Medigap supplemental insurance policies (labeled H, I or J) that included limited drug coverage. This coverage is not considered creditable. So if you kept one of those policies and now want to sign up for Part D, your late penalties would be calculated according to the number of months that have elapsed since the end of May 2006 (Part D’s first enrollment deadline), unless you qualify for one of the exceptions listed above.