The reasoning behind the penalty is that a drug program only works if healthy people join it too, so Medicare attaches a lasting cost to waiting.
How the penalty works. For every month you were eligible for Part D, went without it, and had no other creditable drug coverage, Medicare adds 1 percent of the national base beneficiary premium to your Part D premium. That amount is recalculated each year and it does not expire. Going without for two years means roughly a 24 percent surcharge for life.
What counts as creditable coverage. Drug coverage from an employer or union plan, TRICARE, or the VA can count as creditable, meaning it is expected to pay at least as much as standard Part D. If you have one of those, keep the notice your plan sends each year. It is the proof that stops the penalty clock.
The other reason to enroll. Prescriptions are not predictable. A single new diagnosis can put a person on a specialty drug that costs more per month than a car payment. In 2026 Part D caps what you pay out of pocket at $2,100 for the year, which is the protection you cannot buy retroactively once you need it.
The exception worth knowing. If you are still working past 65 with employer drug coverage that is creditable, you can delay Part D without penalty and enroll when that coverage ends. Confirm creditable status with your benefits administrator in writing rather than assuming.
Related on this site: Medicare Part D plans · Part D in 2026
Sources
- Costs for Medicare drug coverage (CMS) · accessed September 14, 2026
- Part D late enrollment penalty (CMS) · accessed September 14, 2026
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