Part B Late Enrollment Penalty
Part D Medicare Made Easy
Part B Late Enrollment Penalty
What’s the Part D late enrollment penalty?
The late enrollment penalty (also called the “LEP” or “penalty”) is an amount that may be added to a person’s monthly premium for Medicare drug coverage (Part D). A person enrolled in a Medicare plan may owe a late enrollment penalty
if they go without Part D or other creditable prescription drug coverage for any continuous period of 63 days or more after the end of their Initial Enrollment Period for Part D coverage.
Generally, the late enrollment penalty is added to the person’s monthly Part D premium for as long as they have Medicare drug coverage, even if the person changes their Medicare plan. The late enrollment penalty amount
changes each year. The cost of the late enrollment penalty depends on how long the person went without Part D or other creditable prescription drug coverage.
What’s creditable prescription drug coverage?
Creditable prescription drug coverage (also called “creditable coverage”) is coverage that’s expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage. Most plans that offer prescription
drug coverage, like plans from employers or unions, must send their Part D eligible members a yearly notice explaining how their drug coverage compares to Medicare drug coverage and if it’s creditable coverage. If a person with
Medicare doesn’t get a separate written notice; the person’s plan may provide this information in its benefits handbook. If the person doesn’t know if the drug coverage, they have is creditable, they should contact the plan.
How’s the late enrollment penalty calculated?
Medicare, not the plan, calculates the late enrollment penalty when a person subject to the penalty first gets Medicare drug coverage (Part D). The late enrollment penalty amount typically is 1% of the “national base beneficiary premium” (also called the base beneficiary premium) for each full, uncovered month that the person didn’t have Medicare drug
coverage or other creditable coverage. The national base beneficiary premium for 2022 will be $33.37. The monthly penalty is rounded to the nearest $0.10 and added to the monthly Part D premium.
Example
Mr. Ray joined a Medicare plan before the end of his Part D Initial Enrollment Period in February 2019. However, he disenrolled from that Medicare plan effective December 31, 2019.
If he later joins another Medicare plan in Fall 2021 during the Open Enrollment Period, his coverage with his new plan will be effective January 1, 2022. Between leaving his last Medicare plan and joining the new Medicare plan, there will be a period of 24 full months in which he didn’t have creditable coverage (January 1, 2020–December 31, 2021).
So, starting January 1, 2022, he must pay 24% (1% for each full, uncovered month that he was without creditable prescription drug coverage since leaving his first Medicare plan and joining his current plan) of the base beneficiary premium for 2022 ($33.37). Mr. Ray’s penalty amount is $8.01 each month. Since the monthly penalty is always rounded to the nearest $0.10, he’ll pay $8.00 each month in addition to his plan’s monthly premium in 2022.
Here’s the math:
.24 (24% penalty) x $33.37 (2022 base beneficiary premium) = $8.01
$8.01 rounded to the nearest $0.10 = $8.00
$8.00 = Mr. Ray’s monthly late enrollment penalty
Learn How Medicare Works Here
Need help? Call us for an appointment at (817) 952-3153
Ashford Insurance is an independent health insurance agency specializing in Texas & Oklahoma Medicare insurance. Ashford Insurance is here to help you understand Medicare in simple, plain terms that anyone can understand. We specialize in helping folks who are Medicare eligible to learn about the coverage options available through the Medicare Health Insurance Program.
Ashford Insurance Agents








Our Products
Here is a partial list of the products offered by Ashford Insurance
Medigap Insurance
Medicare Supplements
Medicare Advantage
HMO & PPO
Dual Medicare Plans
Got Medicare & Medicaid?
Chronic Needs
Special Need Plans
Prescriptions
Prescription Drug coverage
Dental Insurance
Dental Insurance Plans
Vision Insurance
Vision Plans
Life Insurance
Life Insurance Plans
Funeral Insurance
Burial Insurance
Short Term Medical
Temporary Insurance Coverage
Health Insurance
ACA FFM Exchange
Notary Services
Notary Public
Contact Form
(817) 952-3153
M-T 9:00 – 4:00
F 9:00- 12:00
Weekends & Evenings by Appointment
Address
1245 Southridge Court Suite 101, Hurst, TX, 76053
* A licensed sales agent may call or e-mail as a result of completing the information to discuss Medicare Advantage, Prescription Drug Plans or Medicare Supplement Insurance.
Newsletter Signup
Recent Blog Articles

How to Pick an Unbiased, Helpful Medicare Adviser
It’s not easy finding a knowledgeable, respected, and trustworthy authority on Medicare. Here are some steps to increase your chances.

Missed Your Medicare Initial Enrollment Period?
If you missed your Initial Enrollment Period (IEP) and need to enroll in Medicare, you will have to enroll during either a Special Enrollment Period (SEP) or the General Enrollment Period (GEP) to enroll in Part B or Premium Part A unless you have limited income and savings and are eligible for a Buy In.

How to File a Grievance
If you are dissatisfied with your Medicare Advantage or Part D prescription drug plan for any reason, you can choose to file a grievance.