Key Takeaways

• If you don’t sign up for Medicare prescription drug coverage on time, you may face lifetime penalties that increase your costs.

• Understanding enrollment deadlines and how the penalty is calculated can help you avoid unnecessary expenses and maintain affordable access to medications.

The Price of Missing Medicare Prescription Drug Enrollment

Medicare offers prescription drug coverage under Part D, but it’s not automatically included—you have to enroll. If you skip it or delay signing up when you’re first eligible, you could be making an expensive mistake. The consequences can last for as long as you have Medicare, and the penalties increase the longer you go without coverage.

When Are You Supposed to Sign Up for Medicare Part D?

You first become eligible for Medicare prescription drug coverage when you turn 65. The Initial Enrollment Period (IEP) lasts seven months—starting three months before your 65th birthday, includes your birthday month, and extends three months after. If you miss this window, you could face penalties unless you qualify for a Special Enrollment Period (SEP) or have creditable drug coverage from another source.

What Counts as Creditable Coverage?

Not all prescription drug plans meet Medicare’s standards. To avoid a penalty, you must have drug coverage that is at least as good as Medicare Part D. Employer-sponsored plans, VA benefits, and some union plans often qualify. If your coverage isn’t considered creditable and you delay signing up for Part D, you’ll face penalties later.

How Much Will You Pay in Penalties?

The Medicare Part D late enrollment penalty is permanent and grows the longer you go without coverage. It’s calculated as 1% of the national base beneficiary premium for each month you went without creditable coverage.

For 2025, the base beneficiary premium is $34.70, which means:

• If you go 12 months without coverage, your penalty would be 12% of $34.70, or $4.16 added to your monthly premium.

• If you delay for 3 years (36 months), you’ll pay an extra $12.49 per month on top of your plan’s premium.

• The penalty is lifetime—you’ll pay it every month for as long as you have Medicare Part D.

Since the national base beneficiary premium changes every year, your penalty amount can increase over time.

What If You Never Sign Up for Medicare Part D?

Skipping Medicare prescription drug coverage entirely isn’t a good idea, even if you don’t take medications now. Prescription costs can add up quickly, and you’ll have to pay out of pocket if you don’t have a Part D plan. Plus, if you eventually decide to enroll, the penalty will make your premiums higher for the rest of your life.

Special Enrollment Periods: Can You Avoid the Penalty?

Some people qualify for a Special Enrollment Period (SEP), allowing them to enroll in Part D later without penalties. You may be eligible for an SEP if:

• You had creditable drug coverage and lost it involuntarily.

• You qualify for Extra Help, a federal program that assists with Medicare costs.

• You moved out of your plan’s service area or had other life changes that impact your eligibility.

If you think you qualify for an SEP, be sure to enroll as soon as possible to avoid delays and potential penalties.

Should You Enroll in a Drug Plan Even If You Don’t Need Medications?

Yes! Even if you don’t take prescriptions now, enrolling in a low-cost Medicare Part D plan can help you avoid penalties and ensure you have coverage when you need it. A small monthly premium is often more affordable than facing a lifetime penalty and paying out-of-pocket for medications in the future.

How to Enroll and Avoid Penalties

To avoid penalties, make sure you:

• Sign up during your Initial Enrollment Period if you don’t have creditable coverage.

• Verify if your current coverage is creditable by checking with your employer, union, or plan provider.

• Enroll in a plan during the Annual Enrollment Period (October 15 – December 7) if you missed your first opportunity.

If you’re unsure about your options, talking to a licensed Medicare agent can help you find a plan that fits your needs and budget.

The Bottom Line: Enroll on Time to Save Money

Medicare prescription drug coverage is essential for protecting your health and your wallet. If you delay signing up, you could face permanent penalties that make your coverage more expensive for the rest of your life. Understanding your enrollment periods and ensuring you have creditable coverage can help you avoid these costly mistakes.

Need help choosing the right plan? Get in touch with a licensed agent listed on this website to explore your options and avoid unnecessary penalties.