1. Enroll in Medicare drug coverage when you're first eligible.
Even if you don’t take drugs now, you should consider joining a Medicare drug plan or a Medicare Advantage Plan with drug coverage to avoid a penalty. You may be able to find a plan that meets your needs with little to no monthly premiums.
2. Enroll in Medicare drug coverage if you lose other creditable coverage.
Creditable prescription drug coverage could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, the Department of Veterans Affairs, or individual health insurance coverage. Your plan must tell you each year if your non-Medicare drug coverage is creditable coverage. If you go 63 days or more in a row without Medicare drug coverage or other creditable prescription drug coverage, you may have to pay a penalty if you sign up for Medicare drug coverage later.
3. Keep records showing when you had other creditable drug coverage, and tell your plan when they ask about it.
If you don’t tell your Medicare plan about your previous creditable prescription drug coverage, you may have to pay a penalty for as long as you have Medicare drug coverage.
How much more will I pay for a late enrollment penalty?
The cost of the late enrollment penalty depends on how long you didn’t have creditable prescription drug coverage. Currently, the late enrollment penalty is calculated by multiplying 1% of the “national base beneficiary premium” ($34.70 in 2024) ($36.78 in 2025) by the number of full, uncovered months that you were eligible but didn’t enroll in Medicare drug coverage and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium. Since the “national base beneficiary premium” may increase each year, the penalty amount may also increase each year. After you enroll in Medicare drug coverage, the plan will tell you if you owe a penalty and what your premium will be.