As with Medicare Parts A and B, the cost of your penalty depends on how long you delayed enrollment in Part D or failed to have creditable coverage. Unlike A and B, your penalty accumulates monthly. You pay a 1 percent penalty for every month you go without prescription drug coverage. So, 1 percent for one month, 2 percent for two months, etc.

The penalty is calculated using the national base beneficiary premium, which may change every year. In 2023, this is $32.74. The percentage is multiplied by the base beneficiary premium and rounded to the nearest $0.10 to arrive at the penalty.

For example, if you became eligible for Part D in February 2018 but did not enroll until June 2019, and did not have creditable coverage through another source, that represents a 17 percent penalty (17 months without Part D).

The calculation: $32.74 (2023 base beneficiary premium) x 0.17 (17 percent penalty) = $5.5658

Rounded to the nearest $0.10, a penalty of $5.60 will be added to your 2023 monthly premium. If the base beneficiary premium changes in 2024, your penalty also changes.

When you join a Medicare drug plan, it will inform you whether you owe a penalty and what your premium will be. If you disagree with the penalty, you may request a reconsideration. If you do, the drug plan will send the required form and instructions.