Delay Part D Two Years and a Surcharge Rides Every Prescription Bill Forever

A 65-year-old who takes no prescriptions looks at Medicare Part D and does the obvious math: why pay a premium for drug coverage he does not use? He skips it. Two years later, a cardiologist writes him a prescription he now needs for life. He signs up for Part D at the next enrollment window and discovers the premium comes with a surcharge attached to it. Every month. For as long as he has Medicare drug coverage.

This is the trap Part D is quietly best at setting. The penalty is small enough per month to look ignorable, but it is tied to a national base premium that can change every year. That means the dollar penalty can change too.

The Math of a Two-Year Delay

The Part D late enrollment penalty is 1% of the national base beneficiary premium for every full month a person went without Part D or other creditable drug coverage after becoming eligible. In 2026, that base premium is $38.99, according to CMS, up from $36.78 in 2025.

Twenty-four months without coverage means a 24% surcharge. Twenty-four percent of $38.99 works out to roughly $9.40 per month after CMS rounds to the nearest ten cents. Call it about $113 a year, tacked onto whatever Part D plan the person eventually picks.

That figure sounds survivable. The compounding is what does the damage.

Why the Penalty Grows Every Year

The penalty is a percentage of the national base beneficiary premium, and that base premium changes over time. It rose from $36.78 in 2025 to $38.99 in 2026, a roughly 6% increase in one year. A reader assessing the penalty at today’s premium should not assume the dollar amount will stay fixed. If the base premium rises in future years, the surcharge rises with it.

Inflation is doing the same thing to the reader’s other bills. Social Security’s 2026 cost-of-living adjustment was 2.8%, while the Part D national base beneficiary premium rose about 6% from 2025 to 2026. That does not mean the base premium will rise 6% every year. It does mean a permanent 24% surcharge becomes more expensive whenever the national base beneficiary premium increases.

Over 20 years, a person who signed up two years late pays the surcharge 240 times. If the 2026 penalty amount of about $9.40 a month never changed, the surcharge alone would total about $2,256. If the national base beneficiary premium rises over time, the lifetime cost would be higher.

The Creditable Coverage Misunderstanding

The penalty generally applies after a continuous gap of 63 days or more without Part D or other creditable prescription drug coverage after the Medicare Initial Enrollment Period. “Creditable” is a specific designation: the plan is expected to pay, on average, at least as much as standard Medicare drug coverage. Many employer and union plans qualify, and VA drug benefits, TRICARE, and the Federal Employees Health Benefits Program are treated as creditable coverage.

What does not qualify is having no drug coverage at all. A reader who assumes he is safe because he takes no medication can still accrue penalty months. A reader on COBRA needs to check the specific plan; some COBRA drug coverage is creditable and some is not. The plan sponsor should provide a creditable coverage notice. Keep that notice, because it may be needed if a penalty is ever assessed.

Before a Small Part D Penalty Becomes Permanent

• If you are approaching 65 without creditable drug coverage, enroll in the cheapest available Part D plan during your Initial Enrollment Period even if your medicine cabinet is empty. Premiums for a basic plan run well under what the eventual penalty will cost, and enrollment stops the clock on the 63-day gap.
• If you had employer, VA, or retiree drug coverage before Medicare, request the creditable coverage notice from your former plan administrator in writing and save it. When you enroll in Part D later, submitting that documentation prevents Medicare from assessing a penalty for the covered years.
• If Medicare has already assessed a Part D penalty you believe is wrong, file a reconsideration request with MAXIMUS Federal Services within 60 days of the penalty notice. The appeal is free, and providing the creditable coverage documentation from your former plan is often enough to reverse it.

Source: CMS 2026 Medicare Parts A & B Premiums and Deductibles fact sheet; CMS 2026 Medicare Part D Bid Information. Figures reflect 2026 plan year rules.

Contact [email protected] for any questions or corrections.