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Medicare Part D Benefit Penalties

If you pay your Medicare tax while you work, when you reach 65-years old, you are entitled to receive Medicare Part A for free. However, to enjoy the benefits of the other parts of Medicare, you must pay monthly premiums associated with the coverage. Medicare Part D is prescription drug insurance, and you can apply for it when you turn 65-years old.

  1. Medicare Part D

    • Medicare Part D is the part of Medicare coverage that helps you pay for the costs of some prescription drugs. Unlike Medicare Part A, you have to pay monthly premiums associated with Medicare Part D coverage and benefits. When you enroll in Medicare Part D, you must choose a plan that fits your needs with prices you can afford, since you will be paying for its coverage every month for the period of time that you have Medicare. The plans for Part D are listed on the Medicare website.

    Medicare Part D Penalty

    • As explained above, you need to pay monthly premiums if you want to receive coverage from Medicare Part D. These monthly premiums are associated with the type of plan you pick and the coverage they offer. However, your monthly premium can be affected by a late penalty if you enroll in Medicare Part D after the initial enrollment period. The initial enrollment period is the period in which you first become eligible to enroll in Medicare and lasts for seven months. It starts three months before you reach 65 years of age, includes your birth month, and ends on the third month after the month you turned 65.

    Avoiding the Penalty

    • If you join a Medicare Part D plan during the period when you become eligible, you do not need to pay this penalty. If you do not join a Part D plan during this time, there are a few other ways in which you do not need to pay the penalty. If you joined another prescription drug plan that is creditable and you now want to join a Medicare Part D plan, you can show Medicare proof of your previous plan, and you will not be required to pay the late penalty. However, do not go without a creditable prescription drug plan for 63 days in a row before you enroll in Part D, because if you do, you will have to pay the late penalty.

    Late Penalty Amount

    • If you decide to enroll in Medicare Part D after the initial enrollment period is over, you have to pay the late penalty for all the time you have Part D. The cost of your penalty is dependent upon the time in which you did not sign up for a prescription drug plan. According to the Medicare publication "Medicare and You 2011," as of 2011, you can determine your late penalty by multiplying one percent of the national base beneficiary premium, which is $32.34, by the number of total months you did not have a prescription plan. The national base beneficiary amount increases every year, causing your penalty to increase as well.

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