Resources

Late Enrollment Penalty

The Medicare Part D late enrollment penalty, and how to contest it

The Part D late enrollment penalty (LEP) is charged to people who went 63 or more days in a row without creditable prescription drug coverage after first becoming eligible for Medicare. Creditable means coverage that Medicare considers at least as good as a standard Part D plan — typically an employer, union, retiree, TRICARE or VA plan. The penalty is not a one-time fee. It is added to your Part D premium every month, for as long as you have drug coverage.

How the penalty is calculated

Medicare multiplies 1% of the national base beneficiary premium by the number of full months you went without creditable coverage, then rounds to the nearest 10 cents. For 2026 the national base beneficiary premium is $38.99.

An example: someone who went 24 months without creditable drug coverage pays 24% of $38.99, or about $9.40 extra per month — roughly $113 a year, added on top of whatever their plan costs. The base premium is recalculated every year, so the penalty amount moves with it, and it follows you from plan to plan for life.

When the penalty can be removed

A late enrollment penalty is not always correct, and it can be appealed through a reconsideration request. The situations we see most often:

• You did have creditable coverage and the plan or employer never reported it. A Notice of Creditable Coverage letter from your former plan usually settles it.
• You qualify for Extra Help (the Part D Low Income Subsidy). Extra Help eliminates the penalty going forward, and people on Medi-Cal qualify automatically.
• You were given wrong information by a plan or a federal employee about whether your coverage was creditable.
• The month count is wrong. Gaps shorter than 63 days do not count, and the arithmetic is not always right.

Appeals go to Maximus Federal, the independent review entity contracted by Medicare, and the reconsideration form must generally be returned within 60 days of the notice of penalty. Supporting documents matter more than the explanation you write.

Avoiding it in the first place

If you are turning 65 or leaving employer coverage, ask your plan administrator for the Notice of Creditable Coverage in writing before you drop anything, and keep it. Enroll in a Part D or Medicare Advantage plan with drug coverage within 63 days of losing creditable coverage — even a low-premium plan is far cheaper than a lifetime surcharge.

Hablamos español

Si Medicare le está cobrando una multa por inscripción tardía en la Parte D, revísemos juntos si es correcta. Muchas veces la multa se puede eliminar con una carta de cobertura acreditable o si usted califica para Ayuda Adicional. Llámenos al (619) 361-3591.

Talk to a licensed agent in Chula Vista

Call (619) 361-3591, email info@zulemamedicare.com, or stop by our office at 31 Third Ave, Chula Vista, CA 91910. We are open Monday through Friday, 9:00am to 5:00pm.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Assistance Program (HICAP in California, 1-800-434-0222) to get information on all of your options.